AZO AutoZone Inc

Advance Auto Parts Inc. posted a worse-than-anticipated decline in profit in the most recent quarter as weak same-store sales continued to drag on the top line.

"Our second-quarter results were not acceptable and we are moving thoughtfully and swiftly to make the necessary changes across a number of critical areas within the organization," said Chief Executive Tom Greco. "We are taking decisive actions to deliver near-term improvement with a focus on accelerating our commercial growth and improving our execution."

Starboard Value LP, whose stake in the seller of automotive parts was revealed in September by The Wall Street Journal, has pushed the company to improve its bottom line, which the hedge fund has said trails peers AutoZone Inc. and O'Reilly Automotive Inc.

Starboard built a stake in Advance Auto and said the company didn't do a good enough job of stocking its shelves every day, which the fund said can cost it sales.

During the June quarter, the company said it earned $124.6 million, or $1.68 a share, down from $150 million, or $2.03 a share, a year earlier. Results were dented 14 cents a share by amortization of acquired intangible assets and 26 cents a share by integration and restructuring costs, primarily associated with the acquisition of General Parts International Inc. Excluding those items, adjusted earnings fell to $1.90 a share from $2.27, and sharply below analysts' forecasts for $2.12 a share.

Revenue slid 4.8% to $2.26 billion—just above analysts' expectations for $2.24 billion—driven by a 4.1% decline in same-store sales as well as store closures.

Gross margin fell to 44.8% in the quarter from 45.9% a year ago, mostly owing to supply chain expense deleveraging due to the comparable-store sales decline and higher supply chain operating expenses.

Shares in the company, inactive premarket, have risen 11% so far this year.

Write to Anne Steele at Anne.Steele@wsj.com

(END) Dow Jones Newswires

August 16, 2016 07:35 ET (11:35 GMT)

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