The company reported an EPS loss of $(0.82), missing the analyst consensus of $1.45.

Comparable store sales increased to 1.2%. Gross profit decreased 16.3% to $1 billion. 

Gross profit margin was 36.3%, significantly lower than 44.6% a year ago, primarily driven by a change in estimate for inventory reserves that resulted in a one-time impact of approximately $119 million. 

In addition, the company incurred higher product costs that were not fully covered by pricing actions and elevated supply chain costs. 

The company's operating loss was $(43.7) million, or (1.6)% of net sales, compared with 6.5% in the year-ago period.

AAP exited the quarter with cash and equivalents worth $317.52 million.

"We are launching a new cost reduction program that we expect will generate at least $150 million in savings on an annualized basis," said Shane O'Kelly, president and chief executive officer. 

"We expect to reinvest up to $50 million of these savings in our team members with a clear focus on improving the retention of our frontline team members," O'Kelly added.  

Divestment Plans: The company has initiated separate sale processes for Worldpac and its Canada business. The company has not set a timetable for the conclusion of the sale processes.

On October 31, 2023, the company declared a regular cash dividend of $0.25 per share to be paid on January 26, 2024, to all common stockholders of record as of January 12, 2024.

The company revised the FY23 revenue outlook to $11.250 billion-$11.300 billion versus the $11.27 billion estimate (Prior View: $11.25 billion - $11.35 billion ).

Comparable store sales are expected to grow in the range of (0.5)%-0.0%, against the prior view of (0.5)%-0.5%.

Tony Iskander, interim chief financial officer, said, "Our updates include the impact of non-recurring expenses in Q3 as well as continued pressure in Q4 from higher product costs that we do not expect to offset with price."

Price Action: AAP shares are trading lower by 5.65% at $55.10 in premarket on the last check Wednesday.