Advance Auto Parts falls on revenue miss, weak guidance

Investing.com -- Advance Auto Parts Inc. (NYSE: AAP) reported second-quarter results that beat earnings expectations but missed on revenue, while its full-year guidance disappointed investors, sending shares down more than 15% premarket.

The automotive aftermarket parts provider posted adjusted earnings per share of $1.03 for the second quarter, surpassing the analyst consensus of $0.81. However, revenue of $2.0 billion fell short of the $2.04 billion estimate and was flat compared to $2.01 billion in the prior-year period. Comparable store sales declined 0.5% in the quarter.

The company's adjusted operating income margin expanded by over 250 basis points YoY to 5.6%, aided by $26 million in tariff refunds that contributed approximately $0.31 to adjusted EPS.

For fiscal 2026, Advance Auto Parts reaffirmed its revenue guidance of $8.485 billion to $8.575 billion, with a midpoint of $8.53 billion below the analyst consensus of $8.58 billion. The company raised its adjusted EPS guidance to $2.60-$3.30 from a prior range of $2.40-$3.10, though the midpoint of $2.95 remains just above the consensus of $2.93.

"Our second quarter comparable sales results reflected low-single-digit growth in the Pro channel, which performed in line with expectations," said Shane O'Kelly, president and chief executive officer. "However, total enterprise sales performance was impacted by the DIY channel as tighter household budgets constrained spending more than we anticipated, especially during the last four weeks of the quarter."

The company achieved positive free cash flow of approximately $120 million for the first twenty-eight weeks of fiscal 2026, compared to negative $201 million in the prior-year period. Net leverage improved to 2.1x from 2.4x in the first quarter.

Advance Auto Parts declared a quarterly dividend of $0.25 per share, payable on October 23, 2026.

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