Advance Auto Parts (AAP) Misled Investors Regarding its Strategic Pricing Initiatives
A shareholder filed a class action lawsuit on behalf of persons and entities that purchased or otherwise acquired Advance Auto Parts, Inc. (NYSE: AAP) between November 16, 2022 and May 30, 2023. AAP is a retailer specializing in automobile parts and accessories, serving both automobile professionals and non-professional consumers.
According to the complaint, on November 16, 2022, the Company held its quarterly earnings call for investors wherein AAP president and CEO Thomas R. Greco announced “strategic pricing initiatives” aimed to help propel margins growth in 2023. On May 31, 2023, AAP held its quarterly earnings call for 2023 first quarter, wherein Greco noted that AAP’s “financial results in the first quarter were well below expectations.” The Company consequently revised downward its 2023 guidance to an operating margin of 5% to 5.3% from the previously announced 7.8% to 9.2% margins. On this news, the price of AAP shares closed at $72.89, down $39.31, or 35%, from the prior day.
Plaintiff alleges that during the class period, defendants (1) misrepresented the efficacy of AAP’s strategic pricing initiative and the impact of price reductions; (2) omitted and/or concealed the negative impacts of the pricing initiative; (3) provided investors with an overly optimistic perception of AAP’s operations; and (4) created the false impression that inflation and macroeconomic factors had an insubstantial impact on the Company’s margins.
What Now: Similarly situated shareholders may be eligible to participate in the class action against Advance Auto Parts, Inc. Shareholders who want to act as lead plaintiff for the class must file their motion for lead plaintiff by December 8, 2023. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery. If you choose to take no action, you can remain an absent class member. For more information, click here.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.
