10-Q · May 21, 2026
Advance Auto Parts reported strong Q1 2026 results with net sales of $2.614 billion, reflecting a 1.2% increase from the same period last year. Gross margin improved to 45.1% from 42.9%, and adjusted EPS of $0.77…
Earnings analysis · 10-Q
AAP earnings analysis
Filed August 20, 2026 · Our reading of the company's report
The latest report
Advance Auto Parts delivered a mixed but materially improved quarter: revenue fell 0.5% year over year to $2.000 billion, while gross margin rose 267 basis points to 46.2%, operating margin increased to 5.1%, and…
Read full summary
Advance Auto Parts delivered a mixed but materially improved quarter: revenue fell 0.5% year over year to $2.000 billion, while gross margin rose 267 basis points to 46.2%, operating margin increased to 5.1%, and diluted EPS climbed to $0.90 from $0.25. Operating cash flow improved to $252 million for the first 28 weeks, supporting stable cash of $3.120 billion and modest debt reduction. However, weak comparable-store sales, reliance on a $26 million tariff refund, and geopolitical and supply-chain uncertainty temper the profitability and liquidity improvements.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.9
- Segment
- Advance Auto Parts/Carquest: $2.000 billion of revenue in Q2 fiscal 2026 versus $2.010 billion in Q2 fiscal 2025; the company has one reportable segment.
What stood out
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Margins and EPS Improved Despite Sales Decline
Q2 net sales were $2.000 billion, down $10 million, or 0.5%, from $2.010 billion a year ago. Comparable-store sales also decreased 0.5%, indicating limited top-line momentum.
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Gross Margin Expanded 267 Basis Points
Gross margin expanded to 46.2% from 43.5%, a 267-basis-point improvement. Management attributed the increase to product-margin expansion and $26 million of IEEPA tariff refunds recognized as a benefit to cost of sales.
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Operating Profitability Strengthened
Operating margin improved to 5.1% from 1.1%, while restructuring expense declined to $10 million from $29 million. SG&A excluding restructuring fell to 40.6% of sales from 40.9%.
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Diluted EPS Beat Consensus
Diluted EPS increased to $0.90 from $0.25 in the prior-year quarter, an increase of $0.65 per share. The filing’s reported EPS exceeded the provided $0.81 consensus estimate by $0.09.
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Operating Cash Flow Turned Positive
Operating cash flow for the first 28 weeks was $252 million, an improvement of $358 million from the prior-year period. Management attributed the change to lower cash restructuring charges and working-capital changes.
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Liquidity Remained Strong
Cash remained essentially stable at $3.120 billion versus $3.123 billion at fiscal year-end, while debt declined to $3.387 billion from $3.412 billion. The company also had $894 million of ABL borrowing availability and no outstanding ABL borrowings.
What to watch
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Sales Momentum Remained Weak
Q2 net sales declined 0.5% to $2.000 billion and comparable-store sales fell 0.5%. Management also identifies consumer behavior, purchasing power, competition, miles driven and economic uncertainty as potential demand headwinds.
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Tariff Refund Benefit May Not Repeat
Reported gross margin benefited from a $26 million IEEPA tariff refund in Q2. The company recognizes future refunds only when received or realizable, making the benefit timing-dependent and non-recurring in nature.
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Geopolitical and Supply-Chain Exposure
Management warns that Middle East geopolitical events have disrupted oil and refined-product flows and could cause volatility in prices, supply, credit and capital markets, consumer behavior and the supply chain. Supplier-finance obligations also increased to $2.6 billion from $2.5 billion at fiscal year-end.
Management's outlook
The 10-Q provides no numeric revenue or EPS guidance. Management states that cash and cash equivalents plus liquidity sources should satisfy requirements for at least the next 12 months and thereafter for the foreseeable future, and expects approximately $10 million-$20 million of additional restructuring expenses through fiscal 2026.
Earlier filings 4
10-K · February 13, 2026
Advance Auto Parts is executing a multi-year turnaround focused on merchandising, supply chain and store operations, having completed its footprint optimization (39 stores opened, 522 closed) and sold the Worldpac…
10-Q · October 30, 2025
Advance Auto Parts reported net sales of $2,036 million for the twelve weeks ended October 4, 2025, a decline from $2,148 million a year earlier, while diluted EPS improved to $(0.02) from $(0.42). Liquidity increased…
10-Q · November 14, 2024
Advance Auto Parts reported quarterly net sales of $2,147,991,000 and a diluted (loss) EPS of $(0.10). Gross profit improved to $907,898,000 and operating income turned slightly positive at $403,000 versus an operating…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.