Advance Auto Parts (NYSE:AAP) Posts Quarterly Earnings Results, Beats Expectations By $0.22 EPS

Advance Auto Parts (NYSE:AAP) announced its quarterly earnings data on Thursday. The company reported $1.03 EPS for the quarter, beating the consensus estimate of $0.81 by $0.22, FiscalAI reports. The firm had revenue of $2 billion during the quarter, compared to analysts’ expectations of $2.04 billion. Advance Auto Parts had a net margin of 0.97% and a return on equity of 9.84%. The business’s revenue for the quarter was down .5% compared to the same quarter last year. During the same quarter last year, the business earned $0.69 earnings per share. 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 Stock Up 1.1%

Shares of NYSE:AAP opened at $42.85 on Friday. The company has a quick ratio of 0.85, a current ratio of 1.75 and a debt-to-equity ratio of 1.50. Advance Auto Parts has a 52-week low of $37.89 and a 52-week high of $65.21. The stock’s fifty day simple moving average is $56.58 and its 200-day simple moving average is $55.35. The company has a market capitalization of $2.59 billion, a P/E ratio of 31.28, a P/E/G ratio of 0.71 and a beta of 1.03.

Advance Auto Parts Announces Dividend

The business also recently declared a quarterly dividend, which will be paid on Friday, October 23rd. Stockholders of record on Friday, October 9th will be issued a $0.25 dividend. This represents a $1.00 dividend on an annualized basis and a dividend yield of 2.3%. The ex-dividend date of this dividend is Friday, October 9th. Advance Auto Parts’s payout ratio is 72.99%.

Institutional Trading of Advance Auto Parts

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in AAP. Price T Rowe Associates Inc. MD lifted its holdings in Advance Auto Parts by 18.9% in the 4th quarter. Price T Rowe Associates Inc. MD now owns 7,474,546 shares of the company’s stock valued at $293,751,000 after purchasing an additional 1,190,094 shares in the last quarter. Federated Hermes Inc. boosted its stake in shares of Advance Auto Parts by 4.4% during the 4th quarter. Federated Hermes Inc. now owns 2,811,675 shares of the company’s stock worth $110,499,000 after purchasing an additional 117,648 shares during the last quarter. State Street Corp grew its holdings in shares of Advance Auto Parts by 3.9% during the fourth quarter. State Street Corp now owns 2,499,981 shares of the company’s stock worth $98,249,000 after buying an additional 92,861 shares in the last quarter. Maple Rock Capital Partners Inc. grew its holdings in shares of Advance Auto Parts by 42.1% during the fourth quarter. Maple Rock Capital Partners Inc. now owns 1,352,240 shares of the company’s stock worth $53,143,000 after buying an additional 400,450 shares in the last quarter. Finally, Bank of America Corp DE raised its position in shares of Advance Auto Parts by 6.5% in the second quarter. Bank of America Corp DE now owns 947,754 shares of the company’s stock valued at $44,061,000 after buying an additional 57,900 shares during the last quarter. Hedge funds and other institutional investors own 88.70% of the company’s stock.

Trending Headlines about Advance Auto Parts

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

• Positive Sentiment: Adjusted earnings beat expectations. Advance Auto Parts reported second-quarter adjusted EPS of $1.03, above the $0.81 consensus estimate and up from $0.69 a year earlier. The company also raised its FY2026 adjusted EPS guidance to $2.60–$3.30, while maintaining its sales outlook. Advance Auto Parts Analysts Cut Their Forecasts After Q2 Results
• Positive Sentiment: Margins and balance-sheet metrics improved. A $26 million tariff refund helped support quarterly margins, while gross margin expanded to 46.2% from 43.5% a year earlier. Advance also reduced net leverage to 2.1x from 2.4x and repaid approximately $30 million of debt. Advance Auto Parts Rebounds After Tariff Refund Boosts Q2 Margins
• Neutral Sentiment: Analyst targets remain mixed. JPMorgan lowered its target to $55, Morgan Stanley and RBC each moved to $52, and Citigroup cut its target to $45; all maintained neutral or equivalent ratings. These targets imply upside from recent levels, but Goldman Sachs reduced its target to $40 and assigned a Sell rating. Benzinga analyst updates
• Neutral Sentiment: The dividend provides shareholder support. Advance Auto Parts declared a quarterly dividend of $0.25 per share, with payment scheduled for October 23 to shareholders of record on October 9. The dividend yield is approximately 2.4%.
• Negative Sentiment: Sales momentum remains the main concern. Second-quarter revenue of approximately $2.0 billion missed estimates near $2.04 billion, while comparable-store sales declined 0.5%. Weak demand from cost-conscious, lower-income do-it-yourself customers and a volatile spending environment raised concerns about the pace of sales acceleration and required reinvestment. Advance Auto Parts Posts Disappointing Q2 Comparable Sales
• Negative Sentiment: Broad target reductions underscore execution risk. Goldman Sachs’s Sell rating and Bank of America’s reiterated Sell/Underperform view highlight concerns over weak DIY demand and the company’s ability to execute its turnaround, even after the earnings beat. Bank of America Reiterates Sell Rating

Wall Street Analyst Weigh In

A number of research analysts have issued reports on the stock. Deutsche Bank Aktiengesellschaft raised shares of Advance Auto Parts to a “buy” rating in a report on Friday, May 22nd. Roth Capital set a $48.00 price target on Advance Auto Parts in a research note on Friday. The Goldman Sachs Group set a $49.00 price target on Advance Auto Parts in a report on Friday. UBS Group dropped their price objective on Advance Auto Parts from $65.00 to $47.00 and set a “neutral” rating for the company in a research note on Friday. Finally, TD Cowen reduced their price objective on Advance Auto Parts from $61.00 to $45.00 and set a “hold” rating for the company in a report on Thursday. Two analysts have rated the stock with a Buy rating, nineteen have assigned a Hold rating and one has assigned a Sell rating to the stock. Based on data from MarketBeat, the company has a consensus rating of “Hold” and an average target price of $50.80.

Advance Auto Parts Company Profile

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.