Advance Auto Parts said Thursday it will close about 500 stores by mid-2025 and cut some jobs under a restructuring effort, as demand for vehicle parts takes a hit from fewer consumers opting to repair their cars.
Shares of the auto parts retailer were up about 2% despite also reporting a surprise third-quarter adjusted loss of 4 cents per share.
Analysts on average were expecting a profit of 49 cents, according to data compiled by LSEG.
The automotive industry has had a difficult second half of the year, burdened by inflationary headwinds and stiff competition from Chinese automakers putting out affordable yet feature-packed vehicles.
Auto suppliers such as Aptiv PLC and BorgWarner cut their annual sales forecasts last month on expectations of lower vehicle production as consumers cut back on purchases.
As part of its turnaround efforts, Advance Auto Parts announced plans to close 523 corporate stores, exit 204 independent locations, and shutter four distribution centers by mid-2025.
The company aims to improve its adjusted operating income margin by over 500 basis points through fiscal 2027.
It expects to incur about $350 million to $750 million of total costs related to the restructuring.
Separately, the North Carolina-based company said it expects 2024 earnings from continuing operations of between a loss of 60 cents per share and breakeven, compared with estimates for an adjusted profit of $2.16 per share.