Advance Auto Parts (AAP) Q1 2026 earnings summary

Executive summary

• Q1 2026 delivered the strongest comparable sales growth in five years at 3.5%, driven by both Pro and DIY channels, with Pro led by Main Street accounts and DIY rebounding to low double-digit growth.

• Net sales for Q1 2026 were $2.6 billion, up 1.2% year-over-year, with improved comparable store sales due to store optimization.

• Strategic initiatives in merchandising, supply chain, and store operations are yielding improved parts availability, customer service, and operational productivity.

• Adjusted operating margin expanded by 410 basis points to 3.8%, reflecting effective merchandising and expense leverage.

• Adjusted diluted EPS rose to $0.77 from a loss of $0.22 in Q1 2025.

Financial highlights

• Net sales for Q1 were $2.6 billion, up 1.2% year-over-year, with comparable sales up 3.5%.

• Adjusted gross profit reached $1.2 billion (45.1% of net sales), expanding gross margin by over 210 basis points year-over-year.

• Adjusted operating income was $99 million (3.8% of net sales), up 410 basis points year-over-year.

• Adjusted diluted EPS was $0.77, compared to a loss of $0.22 last year.

• Free cash outflow improved to $75 million from $198 million last year, driven by better operating performance and working capital management.

Outlook and guidance

• Full-year 2026 net sales guidance: $8,485–$8,575 million, with comparable sales growth of 1.0%–2.0%.

• Adjusted operating income margin expected between 3.8% and 4.5%, with gross margin expansion of 110–150 basis points to ~45%.

• Adjusted diluted EPS guidance is $2.40–$3.10.

• Capital expenditures planned at ~$300 million for new stores, market hubs, and infrastructure upgrades; free cash flow for 2026 expected at ~$100 million.

• Store openings planned: 40–45 new stores and 10–15 market hub openings.