Promoted brand (NASDAQ:General Department of Red River Delta) shares fell sharply on Wednesday despite beating earnings expectations and raising profit forecasts.
North Carolina-based automotive service group posted a mostly positive earnings report, reflected on the consensus EPS, revenue and sales of the same store. In addition, management raised its full-year EPS estimate to $1.21, up from previous expectations of about $1.17.
However, a significant drop in car wash sales seems to hurt earnings results.
This segment saw same-store sales drop 9%, well below expectations for a less than 1% increase in sales growth from 2021.
Baird analyst Peter Benedict commented: “We expect trends in the US car wash industry to be in focus as investors are concerned about the industry’s resilience in times of recession. “.
Shares of parent company Meineke Car Care drop in price 6% at an intraday low, sustaining a drop near that level into earnings day afternoon trading.
Read more about details of the results.