RALEIGH – Advance Auto Parts (AAP) shares are being hammered today with shares down more than 30% despite reporting before the market that it had net income of nearly $43 million or 72 cents a share. Those didn’t meet Wall Street expectations nor those of its CEO. Adding further to its woes: Advance cut earnings expectations by nearly 50%.

Said Tom Greco, president and chief executive officer, in a statement: “While we anticipated the first quarter would be challenging, our results were below our expectations. Net sales grew 1.3% in the quarter. Our operating margin rate of 2.6% in the quarter was well below expectations due to higher than planned investments to narrow competitive price gaps in the professional sales channel as well as unfavorable product mix.”

Shares tumbled more than 30% to $77.31 in late-morning trading. A year ago shares traded at nearly $190 a share.

One analyst in a research note expressed concern that problems at Advance, which has its headquarters in Raleigh’s North Hills, are not systemic to the industry.

“In our view, AAP issues are, likely, largely its own, and could suggest improved market share opportunities for Outperform-rated AutoZone (AZO) and O’Reilly Auto (ORLY),” Oppenheimer analyst Brian Nagel said in an investor note Wednesday as reported by CNBC.

Greco acknowledged the competitive landscape and said the company was lowering its expectations and will pay a lower dividend.

“We remain focused on improving inventory availability while sustaining competitive price targets to improve topline sales. We expect the competitive dynamics we faced in the first quarter to continue, resulting in a shortfall to our 2023 expectations,” he said. We have reduced our full-year guidance and our board of directors made the difficult decision to reduce our quarterly dividend.”

In his statement in the earnings report, Greco, who is planning to retire, said he’s getting some help to manage the situation.

“[I]n connection with my pending retirement, our board’s independent chair, Gene Lee, has assumed an expanded role as interim executive chair. Gene will be providing additional operational oversight and support to our management team to enable a seamless CEO transition,” Greco said. “He has helped me immensely during my time as CEO and I look forward to working with him to improve the trajectory of our business in the months ahead.”

The average estimate of 11 analysts surveyed by Zacks Investment Research was for earnings of $2.60 per share.

The auto parts retailer posted revenue of $3.42 billion in the period, which also missed Street forecasts. Nine analysts surveyed by Zacks expected $3.43 billion.

Advance Auto Parts expects full-year earnings to be $6 to $6.50 per share, with revenue in the range of $11.2 billion to $11.3 billion. CNBC noted that Advance previously expected earnings of up to $11.20.

Advance Auto Parts shares have dropped 24% since the beginning of the year. The stock has declined 42% in the last 12 months.