What happened

Shares of high-performance auto parts manufacturer Holley (HLLY -10.95%) were getting crushed in trading on Friday after the company provided a business update for the second quarter in which it also slashed its guidance for full-year sales and adjusted earnings. The stock was down 35.7% as of 12:40 p.m. ET today.

So what

Holley said supply chain challenges and the ongoing computer chip shortage affected its quarterly results by preventing it from shipping many of its most popular products. That will cause sales to drop 7% to $179.4 million, and adjusted profits will plunge by 31% to $37.2 million.

CEO Tom Tomlinson said worsening economic conditions and weak consumer demand also affected the business. Because conditions deteriorated even more during the period, Holley was forced to revise its outlook downward.

Now what

Holley now says it expects 2022 sales will be in a range of $700 million to $725 million, an 8.4% drop at the midpoint from its previous guidance of $765 million to $790 million. Forecasts for adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) are being knocked down from a range of $186 million to $194 million to a span of $135 million to $145 million, a 26% reduction at the midpoint.

While sales and profits are being cut, Holley's line items for capital expenditures and depreciation and amortization will remain unchanged. Interest expense will rise, though.

Holley's stock, which had been in positive territory for 2022, is now down 2.5% for the year after today's car wreck.