Advance Auto Parts (AAP) Q2 2026 earnings summary

Executive summary

• Q2 2026 net sales were $2.0 billion, down 0.5% year-over-year, with comparable store sales also down 0.5%; Pro channel grew in low single digits while DIY declined due to tighter household budgets and weather impacts.

• Adjusted operating margin expanded to 5.6%, up over 250 basis points year-over-year, driven by merchandising and supply chain initiatives.

• Gross profit margin rose to 46.2%, up 240–267 basis points year-over-year, aided by $26 million in IEEPA tariff refunds.

• Positive free cash flow of $120 million year-to-date, reversing two years of outflows.

• Strategic focus remains on merchandising, supply chain, and store operations, with expanded assortment and operational improvements.

Financial highlights

• Net sales for Q2 2026 were $2.0 billion, with Pro channel delivering low single-digit growth and DIY declining in the low double digits.

• Adjusted gross profit was $923 million (46.2% of sales), up from $874 million (43.5%) in Q2 2025; tariff refunds contributed $26 million.

• Adjusted operating income was $112 million (5.6% of sales), up 260 bps year-over-year.

• Adjusted diluted EPS was $1.03, up from $0.69 last year; diluted EPS including non-GAAP items was $0.90.

• Free cash flow YTD was $120 million, compared to a $201 million outflow last year.

Outlook and guidance

• Full-year 2026 net sales guidance is $8.485–$8.575 billion, with comparable sales growth of 1%–2%.

• Adjusted operating margin guidance reaffirmed at 3.8%–4.5%, with 130–200 bps margin expansion.

• Gross margin expected to expand 110–150 bps to ~45%, driven by merchandising initiatives.

• Adjusted diluted EPS guidance raised to $2.60–$3.30.

• Free cash flow guidance reaffirmed at ~$100 million; capex for 2026 expected at $300 million, with 30–35 new stores and 15–20 new market hubs planned.