Advance Auto Parts Inc
Q2 2026 Earnings
Tariff refunds contributed approximately $0.31 to Q2 2026 adjusted diluted EPS; Non-GAAP adjustments exclude $4 million in restructuring and other related expenses, $6 million in impairments and write-downs, and $1 million in other items
Market Reaction
Did AAP Beat Earnings? Q2 2026 Results
Advance Auto Parts delivered a sharply mixed second quarter, posting adjusted diluted EPS of $1.03 against a consensus estimate of $0.81, a beat of 27.87% that extended the company's streak of topping consensus EPS estimates to four consecutive quarters, even as revenue of $2.00 billion fell just short of the $2.04 billion analysts had expected and edged down 0.5% year over year. The profitability outperformance was meaningfully shaped by $26.00 million in tariff refunds related to duties previously paid under IEEPA, which contributed approximately $0.31 to the quarter's adjusted EPS; even so, underlying merchandising execution drove adjusted operating income margin to expand over 250 basis points to 5.6%. The revenue shortfall traced to a weakening DIY channel, where tighter household budgets weighed on spending in the final weeks of the quarter, though the Professional channel held up with low-single-digit comparable sales growth. Heading into the second half, management raised adjusted diluted EPS guidance to $2.60 to $3.30 from $2.40 to $3.10, while reaffirming full-year net sales of $8.49 billion to $8.58 billion and free cash flow of approximately $100.00 million.
- Adjusted operating income margin expanded over 250 basis points year-over-year to 5.6%
- Product margin expansion supported by merchandising initiatives
- $26 million in IEEPA tariff refunds boosted Q2 2026 adjusted gross profit
- Low-single-digit growth in Pro channel in line with expectations
- Main Street Pro trends outpaced overall Pro trends
- DIY channel underperformed due to tighter household budgets, especially in last four weeks of quarter
- Comparable store sales decreased 0.5%
- Return to positive year-to-date free cash flow of $120 million, following two years of outflows
“During the second quarter, the Advance team maintained focus on executing our strategic initiatives to achieve solid profitability, while navigating a volatile demand environment and I thank the team for their hard work and commitment to serving our customers.”
Advance Auto Parts CEO, on the earnings call
Forward Guidance & Outlook
The company reaffirmed full-year 2026 guidance for net sales of $8,485–$8,575 million, comparable store sales growth of 1.0%–2.0%, adjusted operating income margin of 3.8%–4.5%, capital expenditures of approximately $300 million, and free cash flow of approximately $100 million. Adjusted diluted EPS guidance was revised upward to $2.60–$3.30 (from $2.40–$3.10) to reflect higher pre-tax interest income. Full year guidance includes pre-tax interest expense of approximately $210 million and pre-tax interest income of approximately $100 million. Store openings were revised to 30–35 (from 40–45) and market hub openings were revised to 15–20 (from 10–15). Guidance considers first-half performance including tariff refunds and revised second-half operating expectations.
AAP YoY Financials
Figures from SEC filings and company reports. Not investment advice.