Shares in Repco, the largest retailer of car parts and accessories in Australia and New Zealand, plunged to their lowest since listing in November 2003 after the company cut its profit forecast on "disappointing" sales.
The stock slumped as much as 18 per cent after Repco downgraded its earnings guidance
for the year ending June 30 to A$75 million ($89.5 million), a drop of as much as 16 per cent from a year earlier, according to Credit Suisse Group.
"Sustained higher petrol prices have resulted in reduced vehicle usage and deferred servicing," Repco's chief financial officer Gary West told the Australian Stock Exchange after the market closed on Wednesday.
The downgrade comes after a revision of the trading outlook for the past quarter and disappointing sales through the Easter period. Falling consumer confidence and higher interest rates in New Zealand contributed to the slide, West said.
Shares in Repco slid 36c, or 16 per cent, to A$1.90 at the close of trading in Sydney, their biggest ever one-day slide.
Lachlan Drummond, an analyst at Credit Suisse, cut his recommendation on the stock to "underperform" from "outperform," a two-tier cut.
"Self-inflicted wounds" contributed to the result as the opening of new stores raised costs above the level of sales increases, he said.
Chris Sleep, an analyst at ABN Amro Australia, cut his recommendation on the shares to "sell" from "hold".
On February 24, Repco said trading in December had improved relative to October and November, though demand remained "variable".
- BLOOMBERG
