Key Highlights
- Advance Auto Parts delivered Q1 adjusted earnings of $0.77 per share, surpassing analyst expectations of $0.43 by $0.34.
- Quarterly revenue reached $2.61 billion, topping Wall Street’s $2.57 billion projection.
- Comparable-store sales increased 3.5% versus the prior year — marking the retailer’s best comp growth in half a decade.
- The company’s full-year adjusted EPS guidance midpoint of $2.75 trailed the Street’s $2.80 estimate, limiting upside momentum.
- Shares have climbed approximately 30% year-to-date in 2026, marking a reversal from four consecutive years of double-digit percentage losses.
Advance Auto Parts kicked off 2026 with its strongest comparable-store sales performance in half a decade, though management’s conservative annual forecast dampened investor enthusiasm.
The automotive aftermarket retailer delivered first-quarter adjusted earnings of $0.77 per share, significantly exceeding the $0.43 consensus estimate from analysts. Total revenue hit $2.61 billion against projections of $2.57 billion, while comparable-store sales climbed 3.5% from the year-ago period.
Shares surged 8.5% during premarket hours on Thursday following the earnings release. Year-to-date, AAP has gained approximately 30% in 2026, representing a sharp turnaround after experiencing double-digit percentage losses annually from 2022 through 2025.
The first-quarter outperformance extended across business segments. The professional installer channel delivered mid-single-digit comparable sales growth, while the do-it-yourself segment contributed low-single-digit growth.
Gross margin expanded to 45.1% from 42.9% in the same quarter last year. Adjusted operating income margin widened by 410 basis points year-over-year to reach 3.8%, benefiting from enhanced product margins and lapping challenges related to the company’s 2024 store optimization initiative.
CEO Shane O’Kelly characterized the results as a “solid start” to the fiscal year, highlighting increased transaction volumes as validation that the organization’s emphasis on customer service excellence is translating into measurable performance improvements.
Annual Forecast Comes Up Short of Expectations
Notwithstanding the impressive first-quarter performance, the company’s full-year outlook gave the market reason to pause. AAP maintained its fiscal 2026 adjusted EPS guidance range of $2.40 to $3.10. The midpoint of $2.75 sits marginally below the analyst consensus of $2.80. Similarly, revenue guidance spanning $8.49 billion to $8.58 billion aligned with but didn’t exceed expectations, with the $8.54 billion midpoint trailing the $8.55 billion Street estimate by a slim margin.
Several market observers noted a 5.8% intraday decline in the shares following the announcement, as the guidance framework disappointed despite the quarterly outperformance. Trading activity throughout the session reflected mixed investor sentiment.
For fiscal 2026, AAP anticipates comparable-store sales growth ranging from 1% to 2% and intends to open between 40 and 45 new store locations.
Industry Peers Show Minimal Reaction
Larger competitors AutoZone and O’Reilly Automotive experienced limited impact from Advance Auto Parts’ results. AutoZone shares advanced approximately 2% in premarket activity, while O’Reilly declined 0.8%.
Quarterly Dividend Announcement
The company announced a quarterly cash dividend of $0.25 per share, scheduled for payment on July 24 to stockholders of record as of July 10.
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