Advance Auto Q4 Earnings Beat Expectations, Revenues Decline Y/Y

Advance Auto Parts, Inc. AAP reported adjusted earnings of 86 cents per share for the fourth quarter of 2025, beating the Zacks Consensus Estimate of 41 cents. The company incurred an adjusted loss of $1.18 per share in the year-ago quarter.

Advance Auto generated net revenues of $1.97 billion, which beat the Zacks Consensus Estimate of $1.95 billion. Comparable store sales increased 1.1% year over year. We expected a rise of 3.3% for the same. The top line, however, decreased from $1.99 billion generated in the year-ago quarter.

Advance Auto Parts, Inc. Price, Consensus and EPS Surprise

Advance Auto Parts, Inc. price-consensus-eps-surprise-chart | Advance Auto Parts, Inc. Quote

Gross profit increased 150.4% to $869 million (44% of net sales). AAP reported operating income of $44 million against an operating loss of $820 million incurred in the corresponding quarter of 2024. SG&A expenses totaled $825 million for fourth-quarter 2025, down 29.3% year over year.

The company had cash and cash equivalents of $3.12 billion as of Jan. 3, 2026, compared with $1.87 billion as of Dec. 28, 2024. Total long-term debt was $3.41 billion as of Jan. 3, 2026.

Through the fourth quarter of 2025, net cash used by operating activities and negative free cash flow totaled $46 million and $298 million, respectively.

As of Jan. 3, 2026, the company operated 4,305 stores in the United States, Canada, Puerto Rico and the U.S. Virgin Islands. It also served 809 independently-owned Carquest-branded stores across these locations, in addition to Mexico and various Caribbean islands.

On Feb. 10, 2026, AAP declared a dividend of 25 cents per share to be paid on April 24, 2026, to its shareholders as of April 10, 2026.

Advance Auto Provides 2026 Guidance

AAP expects 2026 net sales in the range of $8,485-$8,575 million compared with $8.60 billion in 2025. It aims to open 40-45 new stores in 2026. Comparable store sales are predicted in the range of 1-2% compared with 0.8% in 2025. Adjusted operating income margin is envisioned in the range of 3.8-4.5% compared 2.5% in 2025. AAP expects 2026 capex to be approximately $300 million.

AAP’s Zacks Rank & Key Picks

Advance Auto carries a Zacks Rank #3 (Hold) at present. 

Some better-ranked stocks in the auto space are Modine Manufacturing Company MOD, Strattec Security Corporation STRT and PHINIA Inc. PHIN. While MOD and STRT sport a Zacks Rank #1 (Strong Buy) each at present, PHIN carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for MOD’s fiscal 2026 sales and earnings implies year-over-year growth of 21.2% and 18.8%, respectively. The EPS estimate for fiscal 2026 and 2027 has improved 18 cents and 72 cents, respectively, in the past seven days. 

The Zacks Consensus Estimate for STRT’s fiscal 2026 sales and earnings implies year-over-year growth of 2.1% and 16.2%, respectively. EPS estimates for fiscal 2026 and 2027 have improved $1.05 and 48 cents, respectively, in the past seven days. 

The Zacks Consensus Estimate for PHIN’s 2025 sales and earnings implies year-over-year growth of 1.1% and 33.4%, respectively. EPS estimates for 2025 and 2026 have improved 45 cents and 81 cents, respectively, in the past 60 days. 

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This article originally published on Zacks Investment Research (zacks.com).

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