Advance Auto Parts finds a new CEO, plans business review

RALEIGH – Advance Auto Parts shares have dropped 54% since the beginning of the year. The stock has fallen 66% in the last 12 months. Its CEO has been planning to retire. Its chief financial officer left the North Raleigh-based company on Aug. 18. But on Wednesday morning Advance could be on its way to a rebound.

A new CEO is coming on board as of Sept. 11.

And for the time being Advance has an interim CFO.

Here’s what’s happening:

The new CEO

Advance (NYSE: AAP) named Shane O’Kelly – a former Home Depot executive – as president and chief executive officer as of Sept. 11, replacing Tom Greco who had been the top executive since April 2016. Greco said he wanted to retire in February. He will remain an advisor “to ensure a seamless transition,” the company said.

O’Kelly knows he faces a challenge, saying he joins Advance at an “inflection point.”

“I am honored to be joining Advance at such an important inflection point for the company. I have great respect for the talented team members at Advance and all that has been accomplished, including the team’s relentless focus on delivering for customers while navigating the challenging competitive and macroeconomic environment,” he said in a statement. “As we undertake an operational and strategic review of the business, I look forward to working alongside the entire Advance team and our board of directors to drive growth, operational excellence and value for all stakeholders.”

Advance Auto Parts tumble 30% after financials miss, slash in earnings forecast

O’Kelly also joins the Advance board. He most recently served as CEO of HD Supply, a Home Depot subsidiary. He’s a West Point graduate and earned an MBA at Harvard Business School.

“Following an extensive search over the past several months, we are confident that Shane’s robust operational background leading complex supply chain organizations makes him the ideal next leader for Advance,” interim board chair Gene Lee said in a statement. “His proven leadership, commitment to serving customers, and strong track record of disciplined execution across multi-unit businesses will enable him to lead Advance in the next chapter and help drive long-term value for our shareholders.”

Interim CFO

The interim CFO is Tony Iskander, who replaces Jeff Shepherd. Iskander is an Advance veteran, having worked for the company since 2017.

He’ll oversee finances for the company that has some 60,000 employees, operates nearly 5,000 stores and has annual revenues topping $10 billion.

Earnings miss

The executive changes were announced as Advance disclosed its latest earnings of $85.4 million.

On a per-share basis, the company said it had profit of $1.43.

The results missed Wall Street expectations. The average estimate of nine analysts surveyed by Zacks Investment Research was for earnings of $1.72 per share.

The auto parts retailer posted revenue of $2.69 billion in the period, which beat Street forecasts. Eight analysts surveyed by Zacks expected $2.67 billion.

Advance expects full-year earnings to be $4.50 to $5.10 per share, with revenue in the range of $11.25 billion to $11.35 billion.

The Associated Press contributed to this report.