Advance Auto Parts Inc
Q1 2026 Earnings
Market Reaction
S&P 500 over the same 30 days: −1.28%.
Did AAP Beat Earnings? Q1 2026 Results
Advance Auto Parts turned in a sharply stronger-than-expected first quarter of fiscal 2026, posting adjusted diluted EPS of $0.77 against a consensus estimate of $0.44, a beat of 75.64%, while revenue of $2.61 billion edged ahead of the $2.57 billion forecast and rose 1.2% year over year. The headline driver was the cycling of significant restructuring headwinds that had weighed on the year-ago period, with comparable store sales advancing 3.5%, led by mid-single-digit growth in the Professional installer channel and low-single-digit gains in the DIY segment. Gross margin expanded 220 basis points to 45.1%, and adjusted operating income swung to $99 million from an adjusted loss of $8 million a year ago, a turnaround that directly addresses the margin concerns analysts had flagged heading into the print. Free cash flow, while still negative at $75 million, improved substantially from negative $198 million in Q1 2025. The company reaffirmed its full-year outlook, guiding for net sales of $8.49 billion to $8.58 billion and adjusted diluted EPS of $2.40 to $3.10.
- Comparable store sales growth of 3.5%, the strongest in five years
- Mid-single-digit growth in Professional installer (Pro) channel
- Low-single-digit growth in DIY channel
- Sequential improvement in transactions driven by customer service focus
- Product margin expansion supported by merchandising initiatives
- Cycling of approximately 90 basis points of atypical margin headwind from 2024 Restructuring Plan store closures
- Cycling of approximately $37 million in SG&A expenses from prior-year store closures
- Adjusted operating income margin expanded 410 bps year-over-year to 3.8%
“2026 is off to a solid start and we remain on track to execute our strategic priorities for the year. During the quarter, comparable sales grew by 3.5% including mid-single-digit growth in Pro and low-single-digit growth in DIY. These results were driven by a sequential improvement in transactions reflecting the unwavering focus of our team to deliver strong customer service. I thank the Advance team for their hard work in the quarter and their commitment to strong operational execution, which is driving stronger asset productivity and margin expansion.”
Advance Auto Parts CEO, on the earnings call
Forward Guidance & Outlook
Advance Auto Parts reaffirmed its full-year 2026 guidance: net sales of $8,485 million to $8,575 million, comparable store sales growth of 1.0% to 2.0% (on an adjusted 52-week basis), adjusted operating income margin of 3.80% to 4.50%, adjusted diluted EPS of $2.40 to $3.10, capital expenditures of approximately $300 million, and free cash flow of approximately $100 million. The company expects pre-tax interest expense of approximately $210 million and pre-tax interest income of approximately $80 million. Store openings are planned at 40–45 and market hub openings at 10–15 for the year.
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Figures from SEC filings and company reports. Not investment advice.