Auto parts and accessories retailer Advance Auto Parts (NYSE: AAP) reported Q1 CY2026 results topping the market’s revenue expectations, with sales up 1.2% year on year to $2.61 billion. The company expects the full year’s revenue to be around $8.53 billion, close to analysts’ estimates. Its non-GAAP profit of $0.77 per share was 75.6% above analysts’ consensus estimates.
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Advance Auto Parts (AAP) Q1 CY2026 Highlights:
- Revenue: $2.61 billion vs analyst estimates of $2.58 billion (1.2% year-on-year growth, 1.1% beat)
- Adjusted EPS: $0.77 vs analyst estimates of $0.44 (75.6% beat)
- Adjusted EBITDA: $155 million vs analyst estimates of $155.1 million (5.9% margin, in line)
- The company reconfirmed its revenue guidance for the full year of $8.53 billion at the midpoint
- Management reiterated its full-year Adjusted EPS guidance of $2.75 at the midpoint
- Operating Margin: 2.6%, up from -5.1% in the same quarter last year
- Free Cash Flow was -$75 million compared to -$198 million in the same quarter last year
- Locations: 4,308 at quarter end, up from 4,285 in the same quarter last year
- Same-Store Sales rose 3.5% year on year (-0.6% in the same quarter last year)
- Market Capitalization: $3.09 billion
Company Overview
Founded in Virginia in 1932, Advance Auto Parts (NYSE: AAP) is an auto parts and accessories retailer that sells everything from carburetors to motor oil to car floor mats.
Revenue Growth
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul.
With $8.63 billion in revenue over the past 12 months, Advance Auto Parts is a mid-sized retailer, which sometimes brings disadvantages compared to larger competitors benefiting from better economies of scale.
As you can see below, Advance Auto Parts struggled to generate demand over the last three years. Its sales dropped by 6.5% annually as it closed stores.
This quarter, Advance Auto Parts reported modest year-on-year revenue growth of 1.2% but beat Wall Street’s estimates by 1.1%.
Looking ahead, sell-side analysts expect revenue to remain flat over the next 12 months. Although this projection indicates its newer products will catalyze better top-line performance, it is still below average for the sector.
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Store Performance
Number of Stores
The number of stores a retailer operates is a critical driver of how quickly company-level sales can grow.
Advance Auto Parts listed 4,308 locations in the latest quarter and has generally closed its stores over the last two years, averaging 5.1% annual declines.
When a retailer shutters stores, it usually means that brick-and-mortar demand is less than supply, and it is responding by closing underperforming locations to improve profitability.
Same-Store Sales
A company's store base only paints one part of the picture. When demand is high, it makes sense to open more. But when demand is low, it’s prudent to close some locations and use the money in other ways. Same-store sales provides a deeper understanding of this issue because it measures organic growth at brick-and-mortar shops for at least a year.
Advance Auto Parts’s demand within its existing locations has barely increased over the last two years as its same-store sales were flat. This performance isn’t ideal, and Advance Auto Parts is attempting to boost same-store sales by closing stores (fewer locations sometimes lead to higher same-store sales).
In the latest quarter, Advance Auto Parts’s same-store sales rose 3.5% year on year. This growth was an acceleration from its historical levels, which is always an encouraging sign.
Key Takeaways from Advance Auto Parts’s Q1 Results
It was good to see Advance Auto Parts beat analysts’ EPS expectations this quarter. We were also happy its revenue narrowly outperformed Wall Street’s estimates. On the other hand, its full-year EPS guidance missed. Overall, this print had some key positives. The stock traded up 8.1% to $55.40 immediately after reporting.
Should you buy the stock or not? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).
