Advance Auto Parts

AAP

Market cap $3.2B

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The auto parts supplier is seeing a trend of growth in same-store sales. Advance Auto Parts has returned to profitability after a loss in 2024.

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Earnings season is winding down, and more than three-quarters of the companies in the S&P 500 have reported their latest results. According to FactSet, roughly 74% of firms reporting so far have beaten analysts' EPS estimates, and 73% have beaten revenue estimates.

Advance Auto Parts Inc. (NYSE: AAP) posted a stronger-than-expected fourth quarter on Friday.

As far as economic reports go, the good news just keeps on coming. Seemingly running on a separate track from investor fears about AI's future role in the economy, today's latest inflation read came in as well as anyone has the right to expect.

Advance Auto Parts (AAP) is executing a turnaround, with shares up 30% over the past year and Q4 margins rebounding sharply. Gross margin expanded 520bps to 44.2% in Q4, driven by inventory optimization, cost cuts, and store closures, though sales growth remains modest. AAP's balance sheet is stable with net leverage at 2.4x, supporting restructuring and a secure 1.7% dividend, but buybacks are unlikely before 2027.

AAP tops Q4 earnings estimates as margins rebound and losses narrow, even as revenues dip and 2026 sales outlook signals caution.

Advance Auto Parts, Inc. (AAP) Q4 2025 Earnings Call Transcript