SAN DIEGO & RALEIGH, N.C.--(BUSINESS WIRE)--Shareholder rights law firm Robbins LLP announces that it is investigating the officers and directors of Advance Auto Parts, Inc. (NYSE: AAP) for breaches of fiduciary duties, unjust enrichment, and violations of the Securities Exchange Act of 1934. AAP provides automotive replacement parts, accessories, batteries, and maintenance items for domestic and imported vehicles.
If you suffered a loss as a result of AAP's misconduct, click here.
Advance Auto Parts, Inc. (AAP) Accused of Misleading Investors
According to the pending class action lawsuit filed against AAP, in September 2015, AAP was still struggling to reap benefits from its acquisition of General Parts International and its stock price had sunk from the slowdown in its year-over-year growth. Consequently, activist investor Starboard Value LP acquired a $460 million stake in AAP and publicly pronounced it could turn AAP around if given the opportunity to install its own slate of managers and directors. AAP quickly conceded. Yet, six months after Starboard took control, AAP reported successive quarters of disappointing earnings and negative comp stores sales. Eager to reverse the declining stock price, AAP announced "[f]or 2017, [AAP] would deliver positive sales comp growth and a modest increase in operating margin" and promised 500 basis points of margin expansion by 2021. AAP continued to affirm this promise to the market despite dismal internal projections. In May 2017, AAP revealed comp sales of negative 2.7%, blaming the "weather" and assuring that AAP had "seen a dramatic improvement in [its] comps." However, by August 2017, AAP was forced to revise its guidance, stating that comp sales for 2017 would actually be negative 1 to 3% and margins would decrease by 200 to 300 basis points. On this news, AAP stock fell more than 20% per share, erasing $1.64 billion of market capitalization.
Advance Auto Parts, Inc. (AAP) Shareholders Have Legal Options
Want to be notified if a class action against AAP settles? Want to receive free alerts about companies engaged in wrongdoing? Sign up for Stock Watch today.
Attorney Advertising. Past results do not guarantee a similar outcome.