Advance Auto Parts, Inc. provides automotive replacement parts, accessories, batteries, and maintenance items for domestic and imported cars, vans, sport utility vehicles, and light and heavy duty trucks. The company offers battery accessories; belts and hoses; brakes and brake pads; chassis and 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 offers air conditioning chemicals and accessories; air fresheners; antifreeze and washer fluids; electrical wires 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 oils; oil filters, part cleaners and treatments; and transmission fluids for engine maintenance. Further, it offers battery and wiper installation; engine light scanning and checking; electrical system testing, including batteries, starters, and alternators; oil and battery recycling; and loaner tool program services. Additionally, the company sells its products through its website. It serves professional installers and do-it-yourself customers. The company operates stores under the Advance Auto Parts and Carquest names, as well as branches under the Worldpac name. The company has stores in the United States, Puerto Rico, the U.S. Virgin Islands, and Canada; and independently owned Carquest branded stores in Mexico and various Caribbean Islands. Advance Auto Parts, Inc. was founded in 1929 and is based in Raleigh, North Carolina.

Advance Auto Parts Inc.

Shareholders of Advance Auto Parts Inc (Symbol: AAP) looking to boost their income beyond the stock's 1.7% annualized dividend yield can sell the December 2027 covered call at the $90 strike and collect the premium based on the $8.65 bid, which annualizes to an additional 6.4% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 8.1% annualized rate in the scenario where the stock is not called away. Any upside above $90 would be lost if the stock rises there and is called away, but AAP shares would have to advance 54.5% from current levels for that to occur, meaning that in the scenario where the stock is called, the shareholder has earned a 69.3% return from this trading level, in addition to any dividends collected before the stock was called.
In general, dividend amounts are not always predictable and tend to follow the ups and downs of profitability at each company. In the case of Advance Auto Parts Inc, looking at the dividend history chart for AAP below can help in judging whether the most recent dividend is likely to continue, and in turn whether it is a reasonable expectation to expect a 1.7% annualized dividend yield.
Below is a chart showing AAP's trailing twelve month trading history, with the $90 strike highlighted in red:
The chart above, and the stock's historical volatility, can be a helpful guide in combination with fundamental analysis to judge whether selling the December 2027 covered call at the $90 strike gives good reward for the risk of having given away the upside beyond $90. (Do most options expire worthless? This and six other common options myths debunked). We calculate the trailing twelve month volatility for Advance Auto Parts Inc (considering the last 250 trading day closing values as well as today's price of $57.95) to be 71%. For other call options contract ideas at the various different available expirations, visit the AAP Stock Options page of StockOptionsChannel.com.
In mid-afternoon trading on Friday, the put volume among S&P 500 components was 1.09M contracts, with call volume at 2.02M, for a put:call ratio of 0.54 so far for the day. Compared to the long-term median put:call ratio of .65, that represents very high call volume relative to puts; in other words, buyers are preferring calls in options trading so far today. Find out which 15 call and put options traders are talking about today.
Also see:
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

How To YieldBoost Advance Auto Parts From 1.7% To 8.1% Using Options

Investors in Advance Auto Parts, Inc. AAP need to pay close attention to the stock based on moves in the options market lately. That is because the Sep 19, 2025 $17.5 Call had some of the highest implied volatility of all equity options today.
What is Implied Volatility?
Implied volatility shows how much movement the market is expecting in the future. Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or the other. It could also mean there is an event coming up soon that may cause a big rally or a huge sell-off. However, implied volatility is only one piece of the puzzle when putting together an options trading strategy.
What do the Analysts Think?
Clearly, options traders are pricing in a big move for Advance Auto Parts shares, but what is the fundamental picture for the company? Currently, Advance Auto Parts is a Zacks Rank #3 (Hold) in the Automotive - Retail and Wholesale - Parts industry that ranks in the Bottom 22% of our Zacks Industry Rank. Over the last 30 days, one analyst has increased the earnings estimate for the current quarter, while two analysts have revised their estimates downward. The net effect has taken our Zacks Consensus Estimate for the current quarter from 89 cents per share to 85 cents in that period.
Given the way analysts feel about Advance Auto Parts right now, this huge implied volatility could mean there’s a trade developing. Oftentimes, options traders look for options with high levels of implied volatility to sell premium. This is a strategy many seasoned traders use because it captures decay. At expiration, the hope for these traders is that the underlying stock does not move as much as originally expected.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Is the Options Market Predicting a Spike in Advance Auto Parts Stock?

Advance Auto Parts, Inc. AAP reported adjusted earnings of 69 cents per share for the second quarter of 2025, beating the Zacks Consensus Estimate of 59 cents. The company reported adjusted earnings of 75 cents per share in the year-ago quarter.
Advance Auto generated net revenues of $2.01 billion, which beat the Zacks Consensus Estimate of $1.98 billion. Comparable store sales increased 0.1% year over year. We expected a rise of 0.2% for the same. The top line decreased from $2.68 billion generated in the year-ago quarter.
Advance Auto Parts, Inc. Price, Consensus and EPS Surprise
Gross profit decreased 10% to $874 million (43.4% of net sales). AAP reported operating income of $22 million. SG&A expenses totaled $852 million for second-quarter 2025, down 4.9% year over year.
The company had cash and cash equivalents of $1.66 billion as of July 12, 2025, compared with $1.87 billion as of Dec. 28, 2024. Total long-term debt was $1.49 billion as of July 12, 2025.
Through the second quarter of 2025, net cash used by operating activities and negative free cash flow totaled $106 million and $201 million, respectively.
As of July 12, 2025, the company operated 4,292 stores in the United States, Canada, Puerto Rico and the U.S. Virgin Islands. It also served 842 independently-owned Carquest-branded stores across these locations, in addition to Mexico and various Caribbean islands.
On Aug. 5, AAP declared a dividend of 25 cents per share to be paid on Oct. 24 to its shareholders as of Oct. 10, 2025.
AAP Reiterates 2025 Guidance
Advance Auto expects 2025 net sales from continuing operations in the range of $8.4-$8.6 billion. It aims to open 30 new stores in 2025. Comparable store sales are predicted in the range of 0.5-1.5%. Adjusted operating income margin from continuing operations is envisioned in the range of 2-3%. AAP expects 2025 capex to be approximately $300 million.
Advance Auto’s Zacks Rank & Key Picks
AAP carries a Zacks Rank #3 (Hold) at present.
Some better-ranked stocks in the auto space are PHINIA Inc. PHIN, Gentex Corporation GNTX and Ferrari N.V. RACE. While PHIN and GNTX sport a Zacks Rank #1 (Strong Buy) each, RACE carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for PHIN’s 2025 sales and earnings implies year-over-year flat growth and an 18.13% rise, respectively. EPS estimates for 2025 and 2026 have improved 6 cents and 12 cents, respectively, in the past seven days.
The Zacks Consensus Estimate for GNTX’s 2025 sales and earnings indicates year-over-year growth of 9.24% and 0.57%, respectively. EPS estimates for 2025 and 2026 have improved 9 cents in the past 30 days and 2 cents in the past seven days, respectively.
The Zacks Consensus Estimate for RACE’s fiscal 2025 earnings and sales indicates year-over-year growth of 13.65% and 13.76%, respectively. EPS estimates for fiscal 2025 and 2026 have improved 14 cents and 18 cents, respectively, in the past 30 days.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Advance Auto Q2 Earnings Beat Estimates, Revenues Fall Y/Y

Key Points
Advanced Auto Part's restructuring has returned the company to profitability, and it should start generating cash in the second half.
The stock was recently sold off due to higher interest rate payments impacting profitability.
Investors should look for progress in the company's efforts to improve its inventory in stores and how quickly it sells it compared to paying its suppliers.
It's fair to say the latest earnings report from Advance Auto Parts (NYSE: AAP) was not well received by the market -- the stock was initially sold off by a mid-teens percentage. However, I think there was more good than bad in the actual numbers. That's not to say anyone should get overly excited, because this is still an underperforming company. Still, there are some positives here, and there are some things for the stock's bulls to build on.
The investment case for Advance Auto Parts
The case for buying the stock is well known, and if not, it should be, because the company has been around for over a decade. Simply put, the auto parts retailer's operational metrics are so woefully short of its peers, principally AutoZone and O'Reilly Automotive, that all it will take is some restructuring to get the company somewhere close to its peers' margins, cash flow, and earnings, and a substantial amount of value will be generated for investors.
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That was the gist of the case when activist investor Starboard Value got involved a decade ago (only to exit in 2021), having failed mainly in helping engineer any kind of significant closing of the gap with AutoZone and O'Reilly.
In case you are wondering what I'm referring to, here are a few charts to demonstrate. They show earnings before interest, taxation, depreciation, and amortization (EBITDA) margins, free cash flow (FCF) generated from assets, and finally return on invested capital (ROIC).
None of these metrics has improved over the last decade.
The problem with Advance Auto Parts
The main areas of improvement that Starboard articulated a decade ago still apply today. Auto parts retailing is a business that ensures the right stock is in the right store at the right time. In other words, it's a game of optimizing inventory, building supplier relationships, and above all, logistics management. Time is of the essence in the industry, as customers, whether in the do-it-yourself or especially in the do-it-for-me market, usually demand a part as soon as possible to help repair a vehicle and get it back roadworthy.
It's also a game Advance Auto Parts hasn't played well over the years, as evidenced by its inability to generate good cash flow from its assets in the chart above. Simply put, the company has lagged its peers in converting inventory into cash. It outflows cash by paying its suppliers quicker than it generates cash from the parts it sells to retail customers.
What happened in the recent results
The recent results were in line with what management had pre-announced on July 24, except for one crucial detail.
Management lowered its guidance for full-year adjusted diluted EPS from continuing operations from $1.50-$2.50 to a new range of $1.20-$2.20 "to account for higher net interest expense related to its recent senior notes offering," according to the earnings release. The company recently took on $1.95 billion in debt to redeem existing debt maturing in 2026 and provide it with cash to support its ongoing restructuring.
The good news from the results
On a more positive note, management's restructuring resulted in a return to profitability in the quarter. Furthermore, its full-year guidance for an outflow of $85 million to $25 million implies FCF generation of $116 million to $176 million in the second half, given there was a $201 million outflow in the first six months. These are positive steps, but as management noted on theearnings call "we recognize that we are still in the early phases of our three-year turnaround plan."
Moreover, turning back to the fundamental issue of selling inventory down quicker than paying suppliers, Advance Auto Parts continues to lag its peers. These charts show how many days it takes the company to sell its inventory compared to the days it takes to pay suppliers -- a low number is better.
Investors should monitor this metric closely, as Advance Auto Parts will not be able to demonstrate improvement in its efforts to improve operational performance until it lowers this metric.
Should you invest $1,000 in Advance Auto Parts right now?
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Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The Most Important Thing for Advance Auto Parts Investors to Watch in 2025

Advance Auto Parts(NYSE:AAP) reported second-quarter 2025 results on Aug. 14, 2025, with GAAP net sales of $2 billion, down 8% year-over-year, and adjusted earnings per share (EPS) of $0.69. The company returned to profitability, reaffirmed its full-year sales, operating margin, and free cash flow guidance, and tightened its adjusted EPS outlook due to higher interest expense from a $1.95 billion debt offering. The following highlights focus on cost management, capital structure, and transformation progress.
Cost actions drive margin expansion at Advance Auto Parts
Gross margin from continuing operations expanded by 16 basis points year-over-year to 43.8%, supported by store optimization and ongoing cost reduction initiatives. Tariffs now affect about 40% of cost of goods sold at a blended rate of 30%, increasing the importance of disciplined pricing and vendor negotiations.
"We have completed about two-thirds of our line reviews and continue to march towards our goal of delivering about 50 basis points of annualized cost reductions in 2025. We expect to build on this next year as the remaining activities are completed over the next few months. The groundwork laid by this team over the last year is also supporting productive negotiations with vendors on sharing the tariff burden. As we have indicated previously, approximately 40% of our reported cost of goods is exposed to tariffs at a blended rate of approximately 30%. The dynamic tariff environment has certainly presented challenges across the industry. However, we have been able to navigate through this complex landscape, thanks to our much-improved price management capabilities. Our pricing team has been successful in identifying dutiable components across product lines, which is enabling more effective discussions with vendors around cost increases. Simultaneously, the team has been proactive in exploring alternative sources of supply and diversifying countries of origin to mitigate costs."
— Shane O'Kelly, President and Chief Executive Officer
Advance Auto Parts’ ability to identify tariff exposures, negotiate with vendors, and diversify sourcing is helping to offset inflationary pressures and support sustainable margin improvement despite a challenging macro environment.
Advance Auto Parts strengthens balance sheet with debt overhaul
In August 2025, the company issued $1.95 billion in new senior notes (split between 2030 and 2033 maturities) and replaced its $1 billion revolving facility with a $1 billion asset-backed revolver, resulting in over $3 billion in cash on the balance sheet. Much of this liquidity is allocated to support a $3 billion supply chain financing program, and management now targets a net adjusted debt leverage ratio of 2 to 2.5 times by fiscal 2027.
"Proceeds from the senior notes offering were used to redeem $300 million of outstanding senior notes due 2026. Following this redemption, we expect to carry more than $3 billion of cash on the balance sheet. Up to $2.5 billion of this cash plus other assets, including inventory and accounts receivable, will be used to support the new $1 billion asset-backed revolving credit facility and the $3 billion supply chain financing program. Essentially, we are providing a one-for-one asset support for the new debt capital structure. I would like to note that we expect to operate the supply chain financing program as we did prior to the debt offering. The revolving credit capacity under the new ABL facility provides an additional liquidity source beyond our cash on hand."
— Ryan Grimsland, Executive Vice President and Chief Financial Officer
This proactive capital structure overhaul provides Advance Auto Parts with greater financial flexibility, reduces refinancing risk, and ensures continued support for key supplier relationships during its multi-year turnaround.
Transformation initiatives accelerate sales and operational progress
The company is executing a three-pillar transformation plan focused on merchandising, supply chain consolidation, and store and market hub investments. The rollout of new assortment technology in the top 50 designated market areas (DMAs), covering about 70% of sales, is on track for completion by the end of Q3 2025, and market hubs have delivered an average 100 basis points comparable sales uplift.
"Over the past year, we have made considerable progress on analyzing customer needs, identifying gaps within our assortment, and improving internal processes to introduce new products in the market. This has enabled us to add more than 60,000 new SKUs in our network year to date, which is up nearly 300% compared to last year. Providing faster access to parts enables us to respond to demand signals more quickly, driving more effective placement of SKUs across our network. The progress we have achieved in SKU expansion has also contributed to the improvement in our store availability KPI, which increased by approximately 100 basis points compared to Q1 and is currently in the mid-90s range."
— Shane O'Kelly, President and Chief Executive Officer
Advance Auto Parts’ measurable progress in SKU expansion, product availability, and infrastructure upgrades is enhancing its competitive position with both professional and DIY customers, supporting its goal of consistent sales growth and margin expansion.
Looking Ahead
Management reaffirmed full-year guidance for fiscal 2025 net sales of $8.4 billion to $8.6 billion, comparable sales growth of 50 to 150 basis points, and an adjusted operating income margin of 2% to 3%, with Q3 expected above 4%. Adjusted diluted EPS guidance for fiscal 2025 was revised to $1.20 to $2.20, primarily due to higher interest expense. Free cash flow is projected between negative $85 million and negative $25 million for the year, and the company reiterated its fiscal 2027 targets of approximately 7% adjusted operating income margin and a net adjusted debt leverage ratio of 2 to 2.5 times, with margin gains expected to be nonlinear as transformation initiatives mature.
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This article was created using Large Language Models (LLMs) based on The Motley Fool's insights and investing approach. It has been reviewed by our AI quality control systems. Since LLMs cannot (currently) own stocks, it has no positions in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Advance Auto Parts Returns to Profit in Q2

Key Points
Advance Auto Parts beat earnings in its Q2 report Thursday.
Actual GAAP profits were cut in half, however, and less than half of reported adjusted earnings.
Advance Auto Parts' free cash flow ran negative, and more than 4 times worse than a year ago.
Advance Auto Parts (NYSE: AAP) stock plummeted nearly 16% in early trading Thursday before clawing back some losses in the afternoon. As of 12:15 p.m. ET, Advance Auto Parts stock remains down -- but only 9.5%.
And why is it down? That's an excellent question. Reporting second-quarter earnings this morning, Advance Auto Parts beat forecasts for a $0.58-per-share adjusted profit on less than $2 billion in revenue. In fact, Advance earned $0.69, and sales were precisely $2 billion.
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Advance Auto stock Q2 earnings
But not all the news was good. Revenue beat estimates, for example, but was still down 9% year over year. Gross profit margin slipped 10 basis points, and selling, general, and administrative costs got 130 basis points more expensive.
This all naturally ate into profits, with operating margin falling by more than half to just 1.1%. On the bottom line, the company's earnings as calculated according to generally accepted accounting principles (GAAP) were just $0.25 per share -- barely 36% of the company's adjusted profit -- and less than half the $0.51 per share Advance Auto Parts earned in last year's Q2.
Yes, you read that right: Profits got cut in half. Worse, the company reported negative free cash flow of $201 million in the quarter -- 4 times worse than last year.
Is Advance Auto Parts stock a buy?
These numbers were objectively terrible, and yet CEO Shane O'Kelly insisted "the Advance team delivered solid second-quarter results," which kind of defies common sense.
Management did forecast positive same-store-sales growth this year, about 1% year over year, and promised positive profits and improved (but still negative) free cash flow. With the stock still trading for roughly 29 times current-year earnings, however, I just can't bring myself to recommend buying Advance Auto Parts stock.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Why Advance Auto Parts Crashed Today

Advance Auto Parts (AAP) came out with quarterly earnings of $0.69 per share, beating the Zacks Consensus Estimate of $0.59 per share. This compares to earnings of $0.75 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of +16.95%. A quarter ago, it was expected that this auto parts retailer would post a loss of $0.81 per share when it actually produced a loss of $0.22, delivering a surprise of +72.84%.
Over the last four quarters, the company has surpassed consensus EPS estimates three times.
Advance Auto Parts, which belongs to the Zacks Automotive - Retail and Wholesale - Parts industry, posted revenues of $2.01 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 0.90%. This compares to year-ago revenues of $2.68 billion. The company has topped consensus revenue estimates three times over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
Advance Auto Parts shares have added about 30.7% since the beginning of the year versus the S&P 500's gain of 10%.
What's Next for Advance Auto Parts?
While Advance Auto Parts has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for Advance Auto Parts was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.89 on $2 billion in revenues for the coming quarter and $1.92 on $8.5 billion in revenues for the current fiscal year.
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Automotive - Retail and Wholesale - Parts is currently in the bottom 21% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Ross Stores (ROST), another stock in the broader Zacks Retail-Wholesale sector, has yet to report results for the quarter ended July 2025. The results are expected to be released on August 21.
This discount retailer is expected to post quarterly earnings of $1.52 per share in its upcoming report, which represents a year-over-year change of -4.4%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.
Ross Stores' revenues are expected to be $5.53 billion, up 4.7% from the year-ago quarter.
Should You Invest in Advance Auto Parts, Inc. (AAP)?
Before you invest in Advance Auto Parts, Inc. (AAP), want to know the best stocks to buy for the next 30 days? Check out Zacks Investment Research for our free report on the 7 best stocks to buy.
Zacks Investment Research has been committed to providing investors with tools and independent research since 1978. For more than a quarter century, the Zacks Rank stock-rating system has more than doubled the S&P 500 with an average gain of +24.08% per year. (These returns cover a period from January 1, 1988 through May 6, 2024.)
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Advance Auto Parts (AAP) Q2 Earnings and Revenues Beat Estimates

Key Points
Adjusted earnings per share (EPS) for Q2 FY2025 surpassed estimates, reaching $0.69 compared to the expected $0.56.
Revenue (GAAP) for Q2 FY2025 topped analyst forecasts but remains down compared with the prior year due to store closures.
Despite a return to profitability, free cash flow (non-GAAP) worsened significantly in Q2 FY2025, as ongoing restructuring and debt raising continued to impact results.
Advance Auto Parts (NYSE:AAP), a leading U.S. retailer of automotive replacement parts and accessories, released its second quarter 2025 results on August 14, 2025. The company reported adjusted earnings per share of $0.69, a notable beat over analyst estimates of $0.56 (non-GAAP). Revenue (GAAP) also edged ahead of expectations at $2.00 billion versus a consensus of $1.98 billion. However, this reflects the impact of substantial store closures amid a broad restructuring. The quarter showed stabilization in profit margins and a return to black ink, but ongoing challenges in sales growth, cash generation, and competitive positioning remain.
Metric
Q2 2025
Q2 2025 Estimate
Q2 2024
Y/Y Change
EPS (Non-GAAP)
$0.69
$0.56
$0.62
11.3%
Revenue (GAAP)
$2.01 billion
N/A
$2.18 billion
(7.8%)
Adjusted Operating Income (Non-GAAP)
$61 million
$62 million
(1.6%)
Adjusted Gross Profit Margin
43.8%
43.6%
0.2 pp
Free Cash Flow (Non-GAAP)
$(201) million
$(48) million
(318.8%)
Advance Auto Parts: Who It Is and Where It Stands
Advance Auto Parts operates thousands of stores across North America, serving both professional automotive repair shops and everyday drivers who repair cars themselves. The company supplies replacement parts, batteries, accessories, tools, and maintenance items under brands including its eponymous Advance Auto Parts, Carquest, and DieHard batteries.
Recently, Advance Auto Parts has concentrated on a transformation plan to boost profitability by shutting down hundreds of underperforming locations, trimming corporate layers, and refocusing supply chain efficiency. Key success factors in this period are discipline in cost control, execution of the restructuring plan, and maintaining market relevance as it streamlines operations.
What Shaped the Quarter: Key Developments and Data Points
This quarter's primary story centers on the company’s restructuring effort. Advance Auto Parts completed the closure of 514 stores as part of its multi-year reduction and optimization plan, shrinking its footprint to 4,292 locations as of July 12, 2025, down from nearly 4,800 six months earlier. Operating fewer stores contributed to lower selling, general and administrative (SG&A) expenses, which totaled $819 million on an adjusted (non-GAAP) basis compared to $888 million for Q2 FY2024.
The restructuring delivered results at the margin level: adjusted gross profit margin edged higher to 43.8% from 43.6% a year ago, and adjusted operating income margin rose to 3.0% from 2.8% in Q2 2024. These improvements were achieved despite ongoing restructuring expenses, which remained elevated at $29 million. Net sales (GAAP) dropped to $2.01 billion from $2.18 billion in Q2 2024 as the smaller store base reduced reach. The company attributed much of the margin lift to cost savings after closing less profitable locations, though it continued to face the financial drag of transformation-related outlays.
Sales trends revealed challenges beneath the surface. Comparable store sales, a measure that strips out the effect of newly opened or closed locations, inched up just 0.1%. Management cited “growth in the Pro business”—meaning sales to professional repair shops—and “early signs of stabilization in our DIY business,” which targets retail customers. However, the company did not provide a detailed revenue or margin split by customer type. The overall contraction in total sales reflects the consolidation.
On the product front, there were no significant new offerings or changes in brand portfolio spotlighted in the release. Advance Auto Parts continues to offer more than 23,000 different automotive replacement parts and accessories in its main stores, with owned and external brands such as Bosch, Castrol oil, and DieHard batteries.
Cash Flow Pressures, Capital Moves, and Dividends
Despite the return to profitability, cash flow metrics declined. Free cash flow (non-GAAP), which measures operating cash flow after capital expenditures, was a negative $201 million, worsening from a $48 million outflow in the prior-year period. The cash position (GAAP) ended at $1.657 billion, down from $1.869 billion as of FY2024 close.
The company bolstered its balance sheet by raising $1.95 billion in new debt, securing a new $1.0 billion credit facility, and maintaining an adjusted net leverage ratio of 2.7 times (non-GAAP, debt relative to earnings before interest, taxes, depreciation, amortization, and rent expense—a measure used by retailers with large store bases) for the four quarters ended July 12, 2025. Notably, Advance Auto Parts continued its quarterly dividend at $0.25 per share, declaring the payout on August 5, 2025. There was no change to the dividend rate, even as free cash flow remained negative and the company navigated through restructuring-related financial headwinds.
Looking Forward: Guidance and Investor Considerations
Advance Auto Parts reaffirmed its revenue, margin, and free cash flow guidance for fiscal 2025, targeting annual net sales (GAAP) between $8.4 billion and $8.6 billion. Adjusted operating income margin (non-GAAP) is expected to fall in the range of 2% to 3%. Expectations for comparable store sales growth remain low, at just 0.5% to 1.5% on a 52-week basis. Notably, the company lowered its adjusted diluted EPS forecast to $1.20–$2.20, reducing it by $0.30 from the prior outlook, reflecting higher interest on new debt. The free cash flow forecast (non-GAAP) is negative, ranging from $(85) million to $(25) million.
For investors, the focus in the upcoming quarters will be on how well Advance Auto Parts manages costs after completing most of its restructuring phase, restores steady sales growth in a smaller store network, and deploys capital effectively to support both day-to-day needs and long-term investments. Particular attention should be paid to whether the company can stem the negative cash flow trends and begin to realize the benefits of its leaner operation, given the competitive intensity from both national chain rivals and independent shops as well as internet-based auto parts stores.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
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Advance Auto Parts Posts Q2 EPS Beat

(RTTNews) - While reporting financial results for the first quarter on Thursday, automotive aftermarket parts provider Advance Auto Parts Inc. (AAP) trimmed its adjusted earnings guidance for the full year 2025, while reaffirming net sales and comparable store sales growth outlook.
For fiscal 2025, the company now projects adjusted earnings from continuing operations in the range of $1.20 to $2.20 per share, down from the prior forecast in the range of $1.20 to $2.50 per share.
Net sales from continuing operations are still expected between $8.40 billion and $8.60 billion, with comparable store sales increase in a range of 0.5 to 1.5 percent.
On average, analysts polled expect the company to report earnings of $1.85 per share on sales of $8.52 billion for the year. Analysts' estimates typically exclude special items.
Last week, the company declared a regular cash dividend of $0.25 per share to be paid on October 24, 2025, to all common stockholders of record as of October 10, 2025.
For more earnings news, earnings calendar, and earnings for stocks, visit rttnews.com
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Advance Auto Parts Trims FY25 Adj. EPS Outlook - Update

(RTTNews) - Advance Auto Parts (AAP) released a profit for second quarter that Decreased from last year but beat the Street estimates.
The company's earnings came in at $15 million, or $0.25 per share. This compares with $45 million, or $0.75 per share, last year.
Excluding items, Advance Auto Parts reported adjusted earnings of $42 million or $0.69 per share for the period.
Analysts on average had expected the company to earn $0.58 per share. Analysts' estimates typically exclude special items.
The company's revenue for the period fell 7.7% to $2.010 billion from $2.178 billion last year.
Advance Auto Parts earnings at a glance (GAAP) :
-Earnings: $15 Mln. vs. $45 Mln. last year. -EPS: $0.25 vs. $0.75 last year. -Revenue: $2.010 Bln vs. $2.178 Bln last year.
-Guidance: Full year EPS guidance: $1.20 - $2.20 Full year revenue guidance: $8,400 - $8,600 Mln
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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