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Advance Auto Parts, Inc.
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$2.7B
Market Cap
50.7
P/E
1.08
PEG
-0.6%
ROCE
—
ROE
2.38
D/E
4.3%
OPM
-27.7%
% from 52W High
33
α RS
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About

Advance Auto Parts, Inc. provides automotive aftermarket parts. The company offers batteries and battery accessories; belts and hoses; brakes and brake pads; chassis parts; climate control parts; clutches and drive shafts; engines and engine parts; exhaust systems and parts; hub assemblies; ignition components and wires; radiators and cooling parts; starters and alternators; and steering and alignment parts. It also provides air conditioning chemicals and accessories; air fresheners; antifreeze and washer fluid; electrical wire and fuses; electronics; floor mats, seat covers, and interior accessories; hand and specialty tools; lighting products; performance parts; sealants, adhesives, and compounds; tire repair accessories; vent shades, mirrors, and exterior accessories; washes, waxes, and cleaning supplies; and wiper blades. In addition, the company offers air filters; fuel and oil additives; fuel filters; grease and lubricants; motor oil; oil filters; part cleaners and treatments; and transmission fluid. Further, it provides battery and wiper installation; engine light scanning; electrical system testing, including batteries, starters, and alternators; oil and battery recycling; and loaner tool program services. The company serves professional installers and do-it-yourself customers. It operates stores and independently owned branded stores in the United States, Canada, Puerto Rico, the U.S. Virgin Islands, Mexico, and various Caribbean islands primarily under the Advance Auto Parts and Carquest trade brands. The company also offers its products online. The company was founded in 1929 and is based in Raleigh, North Carolina.

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Good quarter Investor Presentation One-Pager? Q1 2026
Revenue
$2.6B
+1% YoY
Operating Income (adj)
$99M
+$107M YoY
Operating Margin (adj)
3.8%
+410bps YoY
Gross Margin (adj)
45.1%
+210bps YoY
What Went Right
  • Comparable sales growth of 3.5%, the strongest in five years.
  • Adjusted operating margin expanded 410 bps to 3.8%.
  • Pro channel grew mid-single-digit and DIY low double-digit, driven by improved parts availability and service.
What to Watch
  • National account optimization is a headwind to overall Pro comps, though Main Street Pro outperforms.
  • Potential consumer demand variability from elevated gas prices and stretched household budgets.
  • LIFO expense of $17 million weighed on gross margin, and tariff regulations add uncertainty.
Management Guidance
  • Full year net sales ~$8.5B with comparable store sales growth of 1% to 2%.
  • Adjusted operating income margin of 3.8% to 4.5% for full year 2026.
  • Adjusted diluted EPS of $2.40 to $3.10 for full year 2026.
Investor Lens
The thesis is stronger after this call. Advance Auto Parts delivered its best quarterly comp in five years, demonstrating that its merchandising, supply chain, and store initiatives are gaining traction. However, management's cautious tone on the consumer outlook and the deliberate headwind from national account rationalization temper near-term enthusiasm. The path to the 7% operating margin target appears more credible but still requires execution on supply chain productivity over the next few years.
From investor presentation · AI-generated analysis · Not investment advice
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📈 STRONG Strongest comp growth in five years at 3.5%.
Revenue
Net sales were $2.6B, up 1% YoY, with comparable sales growth of 3.5%. The Pro channel grew mid-single-digit and DIY grew low double-digit, with Main Street Pro outperforming the overall Pro comp by over 200 bps.
Profitability
Adjusted operating income was $99M compared to a loss of $8M in Q1 last year. Adjusted diluted EPS was $0.77 versus a loss of $0.22, driven by strong margin expansion.
Margins
Adjusted gross margin expanded 210 bps to 45.1%, fueled by merchandising initiatives. Adjusted operating margin expanded 410 bps to 3.8%, with SG&A leverage also contributing.
Balance Sheet
Cash balance at quarter end was approximately $3B. Free cash outflow was $75M (seasonal trough), and net debt leverage was stable at 2.4x. Capital expenditures for the year are guided to ~$300M.
Key Risks
Management flagged potential consumer demand variability from elevated gas prices and the ongoing headwind from national account rationalization. Tariff regulations and LIFO expense are also watch items.
Outlook
Full year guidance is reaffirmed: net sales ~$8.5B, comps 1-2%, adjusted operating margin 3.8-4.5%. Q2 comps are expected to moderate from Q1's level, consistent with planned cadence.
Generated by AI · Q1 2026 results · Not investment advice
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✓ 📞 Earnings Call Transcripts (6 quarters) submit a missing quarter
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📞 Earnings Call Transcripts (6)
Q2 2026 Q2 2026 2026-08-20
Q2 saw margin and cash flow improvements despite a slight sales decline, with Pro channel strength offsetting DIY weakness. Guidance for sales, margins, and cash flow is reaffirmed, supported by merchandising and supply chain initiatives, while Main Street Pro continues to outperform.
Q1 2026 Q1 2026 2026-05-21
Q1 2026 saw the strongest comp sales growth in five years, with both Pro and DIY channels contributing and significant margin expansion driven by merchandising and operational improvements. Full-year guidance is reaffirmed, with ongoing investments in supply chain, technology, and market hubs supporting long-term growth.
Q4 2025 Q4 2025 2026-02-13
Positive comparable sales growth and significant margin expansion marked 2025, driven by operational improvements, store optimization, and new product launches. 2026 guidance anticipates continued margin gains, positive free cash flow, and strategic investments in stores and supply chain.
Q3 2025 Q3 2025 2025-10-30
Strong margin expansion and 3% comp sales growth marked the best quarter in over two years, driven by both Pro and DIY channels. Strategic initiatives in merchandising, supply chain, and technology are progressing, with robust liquidity and a positive outlook for continued margin gains.
Q2 2025 Q2 2025 2025-08-14
Q2 results showed a return to profitability, with pro business strength and DIY stabilization. Guidance for 2025 was reaffirmed, despite tariff and consumer headwinds, and a proactive debt restructuring enhanced financial flexibility.
Q1 2025 Q1 2025 2025-05-22
First-quarter results exceeded expectations, driven by Pro channel growth and operational improvements, despite a 7% sales decline due to store optimization. Guidance for 2025 is reaffirmed, with sequential margin and sales improvement expected, and tariff impacts managed through mitigation strategies.
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Financial Model
Projections are built from each company's audited annual financials (Income Statement, Balance Sheet, Cash Flow) over the last 5 fiscal years. Forward assumptions — revenue growth %, EBITDA margin, D&A (USD millions), interest expense, tax rate, and capex — are AI-generated using historical context and refreshed twice a year: after the December results season and after the September/Q4 results season.

DCF Valuation
Fair Value = Σ(FCFt / (1+WACC)t) + Terminal Value. Terminal Value uses the Gordon Growth Model: FCF5 × (1+g) / (WACC−g). Default WACC: 10% (US risk-free ~4.5%, equity risk premium ~5.5%). Default terminal growth: 3% (long-run US nominal GDP proxy).

CAGR Tracker
Expected 5-year CAGR = (DCF Fair Value / Current Price)1/5 − 1. Assumes fair value is reached in exactly 5 years — a mechanical estimate only.

Data Sources & Limitations
Financial statements sourced from public filings. Prices updated daily. Forward assumptions are AI-generated. All monetary values in USD millions. Non-US ADR companies may have currency conversion inaccuracies. Models are point-in-time and do not update intra-quarter or account for M&A, macro shocks, or extraordinary items.

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Investment Risk:
Investing in securities, including US equities and ETFs, involves inherent risks including the potential loss of principal. All investments are subject to market fluctuations, economic conditions, regulatory changes, and other factors that may affect their value. Past performance is not indicative of future results. This analysis is provided for informational and educational purposes only and should not be construed as investment advice under any circumstances.

No Investment Recommendation:
This analysis does not constitute, nor should it be interpreted as, an offer, solicitation, or recommendation to buy, sell, or hold any securities or financial products. Investors are strongly advised to conduct their own independent research and due diligence and to consult with a licensed financial advisor or an SEC-registered investment adviser before making any investment decisions, taking into account their individual financial situation, risk tolerance, and investment objectives.

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Information Sources:
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