Advance Auto Parts CEO says he's still optimistic after difficult year
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Advance Auto Parts' stock price remains in a slump as the Raleigh-based company tries to get back on track financially.
Why it matters: Advance, one of Raleigh's two Fortune 500 companies, has been trying to reverse its financial performance since hiring Shane O'Kelly as its CEO in 2023. Since then, the company has closed 700 stores, mainly on the West Coast, and is selling off its Worldpac division as part of a three-year plan to return to growth.
- Advance Auto's stock price peaked in 2021 at $239 a share and has since fallen nearly 85% to $36.
- The company has struggled to compete with other auto parts retailers after facing rising costs and supply chain issues during the pandemic. Analysts have said Advance Auto's competitors were able to navigate those issues better.
Driving the news: Shares fell after the company projected last week that 2025 revenue numbers would be between $8.4 billion and $8.6 billion, below expectations and under the $9.1 billion it reported in revenue last year.
Zoom in: Advance Auto's headquarters are based in North Hills, where an entire tower is named after the company.
- Advance has around 700 workers in Raleigh — though it has had to lay off corporate workers in recent years and cancel an incentives agreement with the state to hire more in Raleigh.
What they're saying: O'Kelly repeatedly told investors during its fourth quarter earnings call that 2024 had been a "difficult," "tough" and "hard" year but that he remains optimistic about the company making a turnaround.
- "I remain optimistic about the future of Advance," he told investors. "We are in the early stages of stabilizing our operations and expect results to gradually improve as we move through 2025."
What's next: Part of that recovery requires fine-tuning its supply chain, says O'Kelly, which will mean consolidating its distribution centers into 12 large facilities by next year and opening new market hubs to deliver parts faster to stores.
- The company is also trying to standardize store operations to manage labor costs and parts deliveries, and Advance is hopeful that it will be able to open 30 stores this year and 50 to 70 stores by 2027.
