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Customer vehicles sit parked outside an Advance Auto Parts automotive supply store in La Grange, Kentucky.
Luke Sharrett | Bloomberg | Getty Images

Shares of Advance Auto Parts plummeted nearly 30% during premarket trading Wednesday after the company’s first-quarter earnings significantly missed Wall Street’s expectations and executives slashed the retailer’s yearly guidance and quarterly dividend.

The Raleigh-based auto parts supplier blamed its dismal first-quarter results and bleaker outlook on higher-than-expected costs for its professional sales, inflationary pressure, supply chain problems and lower, unfavorable product mix.

The company’s earnings per share for the period came in at just 72 cents, compared with an expected $2.57 per share, according to average analyst estimates compiled by Refintiv. Its quarterly revenue of $3.42 billion slightly missed expectations of $3.43 billion.

“We expect the competitive dynamics we faced in the first quarter to continue, resulting in a shortfall to our 2023 expectations. We have reduced our full-year guidance and our board of directors made the difficult decision to reduce our quarterly dividend,” CEO Tom Greco said in a statement.

On Tuesday, the company declared a dividend of 25 cents per share to be paid out in July. In its prior-quarter earnings release, Advance Auto Parts declared a dividend of $1.50 per share.

Advance Auto Parts also cut its full-year profit outlook and now expects earnings per share of between $6 and $6.50, down from a previously stated range of $10.20 to $11.20. That’s despite lowering its net sales expectations by a range of just $200 million to $300 million, signaling operational problems with margins.

For the first quarter, the company’s net sales rose 1.3% to $3.4 billion compared to a year ago. Its gross profit declined by 2.4% to $1.5 billion.

Net income for the period was $42.7 million, or 72 cents per share, down from $139.8 million, or, $2.28 per share, a year earlier.

“While we anticipated the first quarter would be challenging, our results were below our expectations,” Greco said.

This story is developing. Please check back for updates.

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