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NEW YORK - Shares of Advanced Auto Parts Inc. fell Thursday on concerns about prospects for sales, especially after third-quarter sales at stores open at least one year for the car parts retailer missed Wall Street expectations.
In midday trading, shares fell $2.05, or 5.1 percent, to $38.24.
The Roanoke, Va., company said late Wednesday third-quarter net income rose to $62 million, or 65 cents per share, from $56.2 million, or 58 cents per share, a year ago.
Excluding one-time items, profit was 69 cents per share, which beat the 66 cents per share expected by analysts surveyed by Thomson Reuters.
Sales rose 6.3 percent to $1.26 billion, exactly what Wall Street expected, from $1.19 billion a year ago.
While Advanced Auto Parts beat earnings expectations and matched overall sales expectations, a 4.7 percent improvement in sales at stores open at least one year disappointed Wall Street.
Sales at stores open at least a year are a key measure of retailer performance because they measure growth at existing stores rather than from newly opened ones.
Stifel Nicolaus analyst David Schick said he was looking for a 5.6 percent improvement, especially in view of how much is being invested in such assets.
"What's worrying ... is Advanced Auto Parts' business did not pop against easy comparisons. Moreover Advanced Auto Parts has the easiest long-term comparisons in the business (less sales per foot than competitor AutoZone Inc.) and so should be comping better with investments but is not," he said.
"If Advanced Auto Parts continues to lag in comp but keep investing — it brings long-term competitive questions to the forefront."
Oppenheimer analyst Brian Nagel said prospects for more weak comparisons to year-earlier quarters could weigh on the stock.
"Prospects for weaker sales trends near term could chase more 'cyclically-focused' money out of Advanced Auto Parts and into shares of discretionary chains better leveraged to an improving economy," he said.
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