Why Advance auto parts stock froze on Friday

A few executive resignations led to a slight sell-off Advance Auto Parts (AAP -0.51%) actions on Friday. The company’s shares ended the day 0.5% lower on the news, as investors worried that the company’s management structure might not be completely stable. By comparison, the benchmark S&P 500 the index landed in positive territory with an increase of 0.9%.

Double resignation

Before the market opened that day, Advance disclosed in a regulatory filing that senior vice president of finance and treasurer Anthony Iskander and chief accounting officer Elizabeth Dreyer both notified the auto parts retailer of their resignations.

Iskander, who served a brief stint as interim CFO late last year, told the Advance that his resignation will be effective next Friday, Oct. 11. Dreyer will leave early; its effective date is Saturday, October 5. She is expected to serve as an advisor moving forward until mid-January next year to help ensure a smooth transition. Current CFO Ryan Grimsland will take over as chief accountant until Dreyer’s permanent successor is found.

In the disclosure, Advance took pains to say that the resignation of both executives “is not the result of any disagreement over the company’s financial reporting or accounting policies, procedures, estimates or judgments.”

Not the popular car in the race

That may be true, but it hasn’t necessarily been comforting to investors. Advance has been in the market basket since mid-August, when it reported second-quarter results that were well below analysts’ expectations for profitability. Hopefully, for the company’s shareholders, it can transition smoothly to new executives who can help improve its fundamentals.