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

Key Points

• Advance Auto Parts beat earnings expectations, reporting EPS of $1.03 versus the $0.81 consensus, while quarterly revenue of about $2.0 billion fell short of the $2.04 billion estimate.
• Profitability improved significantly, with operating income rising to $101 million and gross margin expanding to 46.2%; the company also reduced net leverage to 2.1x and repurchased $30 million of debt principal.
• Demand remained a concern: comparable-store sales declined 0.5%, and shares fell 1.1%. Analysts maintained a consensus “Hold” rating, with an average price target of $58.91.

Advance Auto Parts (NYSE:AAP - Get Free Report) posted its earnings results on Thursday. The company reported $1.03 EPS for the quarter, topping the consensus estimate of $0.81 by $0.22, FiscalAI reports. Advance Auto Parts had a net margin of 0.51% and a return on equity of 8.95%. The company had revenue of $2 billion during the quarter, compared to the consensus estimate of $2.04 billion. Advance Auto Parts updated its FY 2026 guidance to 2.600-3.300 EPS.

Advance Auto Parts Stock Down 1.1%

AAP stock opened at $56.35 on Thursday. The stock's fifty day simple moving average is $57.30 and its two-hundred day simple moving average is $55.47. The company has a current ratio of 1.78, a quick ratio of 0.85 and a debt-to-equity ratio of 1.54. Advance Auto Parts has a 1-year low of $37.89 and a 1-year high of $65.21. The stock has a market cap of $3.40 billion, a P/E ratio of 78.26, a P/E/G ratio of 0.94 and a beta of 1.03.

Advance Auto Parts News Summary

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

• Positive Sentiment: Second-quarter earnings were stronger than expected, with diluted EPS of $0.90 versus $0.25 a year earlier; another reported EPS measure was $1.03, above the $0.81 consensus estimate. Advance Auto Parts Reports $55 Million Second-Quarter Profit as Sales Hold at $2 Billion
• Positive Sentiment: Profitability improved materially: operating income rose to $101 million, or 5.1% of sales, from $22 million, or 1.1%, a year earlier, while gross margin expanded to 46.2% from 43.5%. The company also reduced net leverage to 2.1x from 2.4x and repurchased $30 million of debt principal. Advance Auto Parts Reports Second Quarter 2026 Results
• Neutral Sentiment: Advance Auto Parts reaffirmed its full-year 2026 sales guidance of $8.485 billion to $8.575 billion, offering some stability despite the weaker quarterly sales trend. Advance Auto Parts Reports $55 Million Second-Quarter Profit as Sales Hold at $2 Billion
• Negative Sentiment: Comparable-store sales fell 0.5% in the quarter, a surprise decline that investors viewed as evidence that consumers are cutting back on discretionary automotive purchases. Advance Auto Parts Stock Sinks After Earnings as Same-Store Sales Decline
• Negative Sentiment: Revenue was approximately $2.0 billion, below analysts’ $2.04 billion estimate. With a net margin of only 0.51%, the sales shortfall and continued pressure on demand remain important risks despite the earnings beat. Advance Auto Parts Earnings Results

Institutional Investors Weigh In On Advance Auto Parts

Large investors have recently modified their holdings of the stock. Hsbc Holdings PLC raised its holdings in shares of Advance Auto Parts by 3.1% in the 2nd quarter. Hsbc Holdings PLC now owns 6,306 shares of the company's stock worth $293,000 after purchasing an additional 191 shares during the period. LPL Financial LLC lifted its stake in Advance Auto Parts by 2.0% in the fourth quarter. LPL Financial LLC now owns 19,410 shares of the company's stock valued at $763,000 after purchasing an additional 380 shares during the last quarter. Caitong International Asset Management Co. Ltd bought a new position in Advance Auto Parts during the third quarter valued at $31,000. CANADA LIFE ASSURANCE Co grew its holdings in Advance Auto Parts by 1.0% during the fourth quarter. CANADA LIFE ASSURANCE Co now owns 53,936 shares of the company's stock valued at $2,119,000 after purchasing an additional 527 shares during the period. Finally, California State Teachers Retirement System increased its position in Advance Auto Parts by 1.1% in the second quarter. California State Teachers Retirement System now owns 55,187 shares of the company's stock worth $2,566,000 after buying an additional 604 shares during the last quarter. Hedge funds and other institutional investors own 88.70% of the company's stock.

Wall Street Analysts Forecast Growth

A number of research firms have issued reports on AAP. JPMorgan Chase & Co. cut their price target on Advance Auto Parts from $64.00 to $59.00 and set a "neutral" rating for the company in a research note on Friday, May 15th. UBS Group raised their target price on Advance Auto Parts from $60.00 to $65.00 and gave the company a "neutral" rating in a report on Friday, May 22nd. Evercore set a $65.00 target price on Advance Auto Parts in a research report on Tuesday, August 4th. Weiss Ratings upgraded Advance Auto Parts from a "sell (d+)" rating to a "hold (c-)" rating in a report on Friday, May 29th. Finally, BMO Capital Markets increased their price target on Advance Auto Parts from $60.00 to $65.00 and gave the company a "market perform" rating in a research report on Friday, May 22nd. Two investment analysts have rated the stock with a Buy rating, seventeen have assigned a Hold rating and one has assigned a Sell rating to the company. According to MarketBeat.com, the stock presently has a consensus rating of "Hold" and an average target price of $58.91.

About Advance Auto Parts

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.

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