Advance Auto Parts reported a third-quarter loss, slashed its full-year outlook, and announced plans to close stores and distribution centers by summer 2025. The top automotive aftermarket parts provider for professionals and do-it-yourself consumers was pressured by soft demand for vehicle parts, as elevated inflation and broader economic pressures left fewer consumers repairing their vehicles. 

For the third quarter ending October 5, Advance Auto reported a narrowed quarterly loss of $6 million, or 10 cents per share, compared to $62 million, or $1.04 per share, in the same quarter one year ago. Analysts tracked by FactSet had forecast a profit of 49 cents per share for the quarter, making the loss a notable surprise.

Sales fell 3% to $2.15 billion, missing the FactSet consensus of $2.62 billion. Comparable sales slid 2.3%, while higher labor costs dented margins, but only partially offset by a reduction in marketing expenses. 

For the balance of 2024, Advance Auto provided investors with a downshift in guidance and now sees comparable sales -1%, versus the previous guidance of -1% to 0%. 

Advance Auto's board approved a restructuring plan to reduce its US footprint by 700 stores and four distribution centers by mid-2025. Plans to slash jobs were also in place, yet official figures were not given. Th company has about 5,000 stores nationwide.

"We are pleased to have made progress on our strategic actions, including the completion of the sale of Worldpac and a comprehensive operational productivity review of our business," Shane O'Kelly, president and chief executive officer, wrote in a statement. 

O'Kelly noted, "We are charting a clear path forward and introducing a new three-year financial plan, with a focus on executing core retail fundamentals to improve the productivity of all our assets and to create shareholder value."

Shares in New York were marginally lower in premarket trading. The company has lost 33% of its market value year-to-date (as of Wednesday's close). Three years of steep annual losses. 

Shares are trading at 15-year lows. 

Goldman's Kate McShane remains "Neutral" on Advanced Auto with a 12-month price target of $60. 

Meanwhile, inflationary headwinds and increasing competition from Chinese automakers have crushed the Western auto industry. 

Part suppliers such as BorgWarner and Aptiv have recently slashed annual sales forecasts due to lower vehicle production and consumers dialing back on spending. 

The takeaway appears to be consumers are opting out of repairing their cars. This comes as subprime consumers hit a proverbial brick wall.