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Advance Auto Q1 Earnings Beat Estimates on Strong Comps Growth
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Key Takeaways
AAP earned 77 cents per share in Q1, topping estimates as comparable sales rose 3.5%.
Advance Auto Parts expanded gross margin to 45.1% on merchandising gains and lower restructuring costs.
AAP reaffirmed 2026 sales and earnings guidance while planning up to 45 new stores in 2026.
Advance Auto Parts, Inc. (AAP - Free Report) delivered adjusted earnings of 77 cents per share in the first quarter of 2026, beating the Zacks Consensus Estimate of 39 cents by 95.2%. The company had incurred an adjusted loss of 22 cents in the year-ago quarter.
Net sales were $2.61 billion, which increased 1.2% year over year and came ahead of the Zacks Consensus Estimate of $2.56 billion by 2.1%. Comparable store sales increased 3.5% in the quarter, marking the strongest quarterly comp in five years.
Advance Auto Parts, Inc. Price, Consensus and EPS Surprise
AAP’s top line reflected improving trends as the quarter progressed, supported by better parts availability and customer service. The Pro channel was the primary sales driver, with mid-single-digit comparable growth tied to its focus on “Main Street Pro,” while DIY posted low-single-digit growth. The company’s category strength was in brakes, undercar and engine management.
Advance Auto Parts Widens Gross Margin on Merchandising
Profitability improved sharply in the quarter. Gross profit was $1.18 billion, translating to a gross margin of 45.1% compared with 42.9% in the prior-year period. AAP attributed the margin expansion primarily to product margin gains supported by merchandising initiatives, alongside the benefit of cycling margin headwinds tied to its store optimization program that concluded in the first quarter of 2025.
The company reported LIFO-related cost pressure during the quarter. Even with that headwind, the gross margin improvement was meaningful, setting up a stronger earnings flow-through versus last year.
AAP Shows Expense Discipline as Restructuring Costs Fade
Operating performance swung notably year over year. Operating income was $69 million versus an operating loss of $131 million a year ago. Restructuring and related expenses fell to $32 million from $118 million in the year-ago quarter, reflecting the reduced burden from prior optimization actions.
On an adjusted basis, operating income was $99 million, producing an adjusted operating margin of 3.8% versus an adjusted loss margin of 0.3% a year earlier. Adjusted SG&A expenses were 41.3% of sales, down from 43.2% in the prior-year quarter, aided by lapping expenses from closed stores and stronger sales performance.
Advance Auto Parts Liquidity Remains Ample
As of April 25, 2026, AAP had $2.96 billion in cash and cash equivalents, down from $3.12 billion as of Jan. 3, 2026. Inventories rose to $3.82 billion from $3.65 billion as of Jan, 3, 2026, reflecting higher investment in availability. Long-term debt stood at $3.41 billion.
Cash flow trends improved from last year. Net cash used in operating activities was $19 million versus $156 million in the prior-year quarter, while capital spending totaled $56 million. AAP also paid $30 million in dividends during the period.
AAP Reaffirms 2026 Guideposts and Growth Plans
AAP reaffirmed its full-year 2026 outlook. The company continues to expect net sales of $8.49-$8.58 billion, with comparable store sales growth of 1-2% (52 weeks). It projects an adjusted operating income margin of 3.8-4.5% and adjusted earnings of $2.40-$3.10 per share.
Capital deployment remains geared toward network and infrastructure initiatives. AAP expects capital expenditures of approximately $300 million and free cash flow of about $100 million, alongside plans to open 40-45 stores and 10-15 market hubs in 2026. As of April 25, 2026, Advance Auto has 4,308 stores mainly across the United States, along with locations in Canada, Puerto Rico and the U.S. Virgin Islands. The company also supported 797 independently owned Carquest stores in these markets, as well as in Mexico and several Caribbean islands.
The company also declared a regular quarterly dividend of 25 cents per share, payable July 24, 2026, to shareholders of record as of July 10, 2026.
O'Reilly Automotive, Inc. (ORLY - Free Report) reported first-quarter 2026 results on April 29. It reported adjusted EPS of 72 cents, which beat the Zacks Consensus Estimate of 69 cents by 4.18%. The bottom line increased from 62 cents in the prior-year quarter. The automotive parts retailer registered quarterly revenues of $4.56 billion, which surpassed the Zacks Consensus Estimate of $4.47 billion by 2.1%. The top line also rose 10.2% year over year.
The quarter was driven by strong demand, with comparable store sales rising 8.1%. Growth in both the professional and DIY segments, along with careful cost control, supported the overall performance. The company opened 59 stores in the United States, Mexico and Canada in the first quarter. The total store count was 6,644 as of March 31, 2026.
Genuine Parts Company (GPC - Free Report) reported first-quarter 2026 results on April 21. It posted adjusted earnings of $1.77 per share, which missed the Zacks Consensus Estimate of $1.81 by 1.94%. The bottom line improved 1.1% from the year-ago quarter’s adjusted earnings of $1.75 per share.
The company posted revenues of $6.27 billion, which beat the Zacks Consensus Estimate of $6.17 billion by 1.5% and increased 6.8% year over year. The performance was driven by solid sales growth across business segments and a 20-basis-point improvement in gross margin to 37.3%.
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Advance Auto Q1 Earnings Beat Estimates on Strong Comps Growth
Key Takeaways
Advance Auto Parts, Inc. (AAP - Free Report) delivered adjusted earnings of 77 cents per share in the first quarter of 2026, beating the Zacks Consensus Estimate of 39 cents by 95.2%. The company had incurred an adjusted loss of 22 cents in the year-ago quarter.
Net sales were $2.61 billion, which increased 1.2% year over year and came ahead of the Zacks Consensus Estimate of $2.56 billion by 2.1%. Comparable store sales increased 3.5% in the quarter, marking the strongest quarterly comp in five years.
Advance Auto Parts, Inc. Price, Consensus and EPS Surprise
Advance Auto Parts, Inc. price-consensus-eps-surprise-chart | Advance Auto Parts, Inc. Quote
AAP Builds Momentum in Pro and DIY Demand
AAP’s top line reflected improving trends as the quarter progressed, supported by better parts availability and customer service. The Pro channel was the primary sales driver, with mid-single-digit comparable growth tied to its focus on “Main Street Pro,” while DIY posted low-single-digit growth. The company’s category strength was in brakes, undercar and engine management.
Advance Auto Parts Widens Gross Margin on Merchandising
Profitability improved sharply in the quarter. Gross profit was $1.18 billion, translating to a gross margin of 45.1% compared with 42.9% in the prior-year period. AAP attributed the margin expansion primarily to product margin gains supported by merchandising initiatives, alongside the benefit of cycling margin headwinds tied to its store optimization program that concluded in the first quarter of 2025.
The company reported LIFO-related cost pressure during the quarter. Even with that headwind, the gross margin improvement was meaningful, setting up a stronger earnings flow-through versus last year.
AAP Shows Expense Discipline as Restructuring Costs Fade
Operating performance swung notably year over year. Operating income was $69 million versus an operating loss of $131 million a year ago. Restructuring and related expenses fell to $32 million from $118 million in the year-ago quarter, reflecting the reduced burden from prior optimization actions.
On an adjusted basis, operating income was $99 million, producing an adjusted operating margin of 3.8% versus an adjusted loss margin of 0.3% a year earlier. Adjusted SG&A expenses were 41.3% of sales, down from 43.2% in the prior-year quarter, aided by lapping expenses from closed stores and stronger sales performance.
Advance Auto Parts Liquidity Remains Ample
As of April 25, 2026, AAP had $2.96 billion in cash and cash equivalents, down from $3.12 billion as of Jan. 3, 2026. Inventories rose to $3.82 billion from $3.65 billion as of Jan, 3, 2026, reflecting higher investment in availability. Long-term debt stood at $3.41 billion.
Cash flow trends improved from last year. Net cash used in operating activities was $19 million versus $156 million in the prior-year quarter, while capital spending totaled $56 million. AAP also paid $30 million in dividends during the period.
AAP Reaffirms 2026 Guideposts and Growth Plans
AAP reaffirmed its full-year 2026 outlook. The company continues to expect net sales of $8.49-$8.58 billion, with comparable store sales growth of 1-2% (52 weeks). It projects an adjusted operating income margin of 3.8-4.5% and adjusted earnings of $2.40-$3.10 per share.
Capital deployment remains geared toward network and infrastructure initiatives. AAP expects capital expenditures of approximately $300 million and free cash flow of about $100 million, alongside plans to open 40-45 stores and 10-15 market hubs in 2026. As of April 25, 2026, Advance Auto has 4,308 stores mainly across the United States, along with locations in Canada, Puerto Rico and the U.S. Virgin Islands. The company also supported 797 independently owned Carquest stores in these markets, as well as in Mexico and several Caribbean islands.
The company also declared a regular quarterly dividend of 25 cents per share, payable July 24, 2026, to shareholders of record as of July 10, 2026.
AAP currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Peer Releases
O'Reilly Automotive, Inc. (ORLY - Free Report) reported first-quarter 2026 results on April 29. It reported adjusted EPS of 72 cents, which beat the Zacks Consensus Estimate of 69 cents by 4.18%. The bottom line increased from 62 cents in the prior-year quarter. The automotive parts retailer registered quarterly revenues of $4.56 billion, which surpassed the Zacks Consensus Estimate of $4.47 billion by 2.1%. The top line also rose 10.2% year over year.
The quarter was driven by strong demand, with comparable store sales rising 8.1%. Growth in both the professional and DIY segments, along with careful cost control, supported the overall performance. The company opened 59 stores in the United States, Mexico and Canada in the first quarter. The total store count was 6,644 as of March 31, 2026.
Genuine Parts Company (GPC - Free Report) reported first-quarter 2026 results on April 21. It posted adjusted earnings of $1.77 per share, which missed the Zacks Consensus Estimate of $1.81 by 1.94%. The bottom line improved 1.1% from the year-ago quarter’s adjusted earnings of $1.75 per share.
The company posted revenues of $6.27 billion, which beat the Zacks Consensus Estimate of $6.17 billion by 1.5% and increased 6.8% year over year. The performance was driven by solid sales growth across business segments and a 20-basis-point improvement in gross margin to 37.3%.