Advance Auto Parts (NYSE:AAP) Issues Earnings Results

by · The Markets Daily

Advance Auto Parts (NYSE:AAP – Get Free Report) released its quarterly earnings data on Thursday. The company reported $1.03 earnings per share for the quarter, beating analysts’ consensus estimates of $0.81 by $0.22, FiscalAI reports. Advance Auto Parts had a return on equity of 8.95% and a net margin of 0.51%.The company had revenue of $2 billion for the quarter, compared to the consensus estimate of $2.04 billion. During the same period in the previous year, the business earned $0.69 earnings per share. The company’s quarterly revenue was down .5% on a year-over-year basis. Advance Auto Parts updated its FY 2026 guidance to 2.600-3.300 EPS.

Here are the key takeaways from Advance Auto Parts’ conference call:

  • DIY demand weakened sharply: Second-quarter comparable sales declined slightly as low-double-digit DIY declines outweighed low-single-digit Pro growth, with tighter household budgets, deferred large-ticket repairs, and milder weather creating an estimated 100–150 basis-point comp headwind.
  • Profitability and cash flow improved materially: Adjusted operating margin reached 5.6%, or 4.3% excluding tariff refunds, while year-to-date free cash flow returned to positive territory at $120 million versus a $201 million outflow last year. Net leverage improved to 2.1x after the company repurchased approximately $30 million of debt.
  • Main Street Pro is gaining momentum: Main Street Pro comparable sales outpaced total Pro by more than 200 basis points, with both existing and new accounts contributing. Advance expects national-account headwinds to be roughly half as severe in the second half as it laps prior optimization actions.
  • Operational initiatives are showing progress: NPS improved to nearly 80 from the high 60s a year ago, attachment rates rose to nearly 30%, and Pro order delivery times remained below 40 minutes. The company also completed its distribution-center consolidation and plans to accelerate market-hub openings to 15–20 this year.
  • Full-year guidance was reaffirmed, but the recovery depends on execution: Advance maintained its $8.5 billion sales outlook, 1%–2% comparable-sales growth, 3.8%–4.5% adjusted operating margin, and approximately $100 million of free cash flow, while raising adjusted EPS guidance to $2.60–$3.30 due largely to higher interest income. Management expects improved transaction trends in the second half despite continued DIY pressure, higher commodity costs, freight headwinds, and a difficult 53rd-week comparison.

Advance Auto Parts Price Performance

Shares of AAP stock opened at $42.37 on Friday. The firm’s 50 day moving average price is $56.94 and its two-hundred day moving average price is $55.43. The company has a debt-to-equity ratio of 1.54, a quick ratio of 0.85 and a current ratio of 1.78. Advance Auto Parts has a 52-week low of $37.89 and a 52-week high of $65.21. The stock has a market cap of $2.56 billion, a PE ratio of 58.85, a PEG ratio of 0.93 and a beta of 1.03.

Advance Auto Parts Dividend Announcement

The firm also recently disclosed a quarterly dividend, which will be paid on Friday, October 23rd. Investors of record on Friday, October 9th will be issued a $0.25 dividend. This represents a $1.00 annualized dividend and a yield of 2.4%. The ex-dividend date is Friday, October 9th. Advance Auto Parts’s dividend payout ratio is currently 138.89%.

Hedge Funds Weigh In On Advance Auto Parts

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in the stock. Caitong International Asset Management Co. Ltd acquired a new stake in shares of Advance Auto Parts in the 3rd quarter valued at approximately $31,000. Smartleaf Asset Management LLC raised its holdings in Advance Auto Parts by 290.3% in the second quarter. Smartleaf Asset Management LLC now owns 925 shares of the company’s stock worth $43,000 after purchasing an additional 688 shares during the period. Headlands Technologies LLC bought a new position in shares of Advance Auto Parts during the second quarter worth $101,000. Kestra Advisory Services LLC bought a new position in shares of Advance Auto Parts during the fourth quarter worth $107,000. Finally, LGT Financial Advisors LLC acquired a new position in shares of Advance Auto Parts in the 3rd quarter valued at $123,000. Institutional investors own 88.70% of the company’s stock.

Wall Street Analyst Weigh In

A number of analysts have weighed in on AAP shares. The Goldman Sachs Group increased their price objective on Advance Auto Parts from $49.00 to $54.00 and gave the stock a “sell” rating in a research note on Friday, May 22nd. Deutsche Bank Aktiengesellschaft raised shares of Advance Auto Parts to a “buy” rating in a report on Friday, May 22nd. Royal Bank Of Canada lifted their price target on shares of Advance Auto Parts from $65.00 to $67.00 and gave the company a “sector perform” rating in a report on Thursday, August 13th. Evercore set a $65.00 price target on Advance Auto Parts in a report on Tuesday, August 4th. Finally, Weiss Ratings raised Advance Auto Parts from a “sell (d+)” rating to a “hold (c-)” rating in a research note on Friday, May 29th. Two equities research analysts have rated the stock with a Buy rating, seventeen have given a Hold rating and one has given a Sell rating to the stock. Based on data from MarketBeat, the company has an average rating of “Hold” and an average price target of $57.21.

View Our Latest Stock Report on AAP

Key Headlines Impacting Advance Auto Parts

Here are the key news stories impacting Advance Auto Parts this week:

  • Positive Sentiment: AAP reported adjusted second-quarter earnings of $1.03 per share, well above the $0.81 analyst consensus and up from $0.69 a year earlier. Gross margin improved to 46.2% from 43.5%, while operating income rose substantially. Advance Auto Parts Q2 Earnings Surpass Estimates
  • Positive Sentiment: Management raised or maintained its full-year adjusted EPS outlook at $2.60-$3.30 and is continuing to reduce leverage. The company repaid approximately $30 million of debt principal during the quarter, lowering net leverage to 2.1 times from 2.4 times. Advance Auto Parts Q2 Takes a Hit on Weak DIY Demand
  • Positive Sentiment: The company declared a quarterly dividend of $0.25 per share, providing an annualized yield of approximately 2.4% at the reported price level.
  • Neutral Sentiment: Some analysts view the selloff as a potential near-term opportunity, while institutional trading was mixed, with several funds adding shares and others reducing or exiting positions. Advance Auto Parts Upgrade
  • Negative Sentiment: Revenue of approximately $2.0 billion missed estimates near $2.04 billion, declined year over year, and comparable-store sales fell 0.5%. Investors were particularly concerned about weaker do-it-yourself demand and “constrained” customer spending. Cash-Strapped DIY Customers Tap the Brakes
  • Negative Sentiment: Bank of America analyst Robert Ohmes reiterated a Sell/Underperform rating with a $48 price target, citing ongoing DIY weakness and execution risks. Bank of America Sell Rating

About Advance Auto Parts

(Get Free Report)

Advance Auto Parts, Inc (NYSE: AAP) is a leading distributor of automotive aftermarket parts, accessories, and maintenance items. The company operates a network of stores and distribution centers across North America, serving both do-it-yourself (DIY) customers and professional service providers. Advance Auto Parts focuses on offering a comprehensive selection of replacement parts, batteries, engine components, and performance products for cars and light trucks.

The company’s product portfolio includes engine oils and lubricants, cooling system components, brake and suspension parts, filters, belts, hoses, and diagnostic tools.

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