Key Highlights
- The company delivered Q1 adjusted earnings per share of $0.77, significantly exceeding Wall Street’s $0.43 projection by $0.34.
- Revenue reached $2.61 billion, surpassing analyst expectations of $2.57 billion.
- Same-store sales climbed 3.5% compared to the prior year — marking the retailer’s most robust comparable performance in half a decade.
- The company’s full-year adjusted EPS guidance midpoint of $2.75 fell short of Wall Street’s $2.80 forecast, limiting stock gains.
- Shares have climbed approximately 30% year-to-date in 2026, rebounding from four consecutive years of double-digit percentage losses.
Advance Auto Parts kicked off 2026 with its strongest same-store sales performance in half a decade, though management’s measured full-year forecast quickly dampened investor optimism.
The automotive aftermarket retailer announced first-quarter adjusted profit of $0.77 per share, substantially beating the Street’s $0.43 consensus estimate. Sales totaled $2.61 billion against forecasts of $2.57 billion, with same-store sales advancing 3.5% versus last year.
Shares surged 8.5% during Thursday’s premarket session following the earnings announcement. AAP has now gained roughly 30% in 2026, staging a recovery after declining by double-digit percentages annually from 2022 through 2025.
The first-quarter outperformance was widespread across business units. The professional segment targeting commercial installers achieved mid-single-digit comparable growth, while the do-it-yourself category expanded at a low-single-digit rate.
Gross margin strengthened to 45.1% from 42.9% in the year-ago period. Adjusted operating margin widened by 410 basis points year-over-year to 3.8%, benefiting from enhanced product profitability and the lapping of difficulties related to the retailer’s 2024 store rationalization initiative.
Chief Executive Shane O’Kelly characterized the quarter as a “solid start” to fiscal 2026, highlighting increased transaction counts as proof that the organization’s emphasis on customer experience is beginning to translate into measurable results.
Annual Forecast Disappoints Street
Notwithstanding the impressive first quarter, the company’s full-year projection gave Wall Street reason for concern. AAP maintained its fiscal 2026 adjusted EPS guidance spanning $2.40 to $3.10. The range’s midpoint — $2.75 — landed marginally below analyst expectations of $2.80. The revenue outlook of $8.49 billion to $8.58 billion similarly aligned with but didn’t exceed forecasts, with the $8.54 billion midpoint trailing the $8.55 billion Street consensus.
Several market reports noted a 5.8% decline in the shares following the announcement, as the guidance underwhelmed despite the quarterly beat. The stock’s movement throughout the trading day showed mixed behavior depending on the session.
For fiscal 2026, AAP anticipates comparable-store sales expansion of 1% to 2% and intends to launch 40 to 45 new stores.
Competitor Stocks Show Muted Response
Bigger industry players AutoZone and O’Reilly Automotive experienced minimal impact from AAP’s results. AutoZone shares advanced roughly 2% in premarket activity, while O’Reilly declined 0.8%.
Quarterly Dividend Announced
The retailer announced a quarterly cash dividend of $0.25 per share, scheduled for payment on July 24 to stockholders of record as of July 10.
