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Stock to Watch: Advance Auto Parts (AAP - Free Report) Advance Auto Parts, Inc. operates in the U.S. automotive aftermarket industry and is primarily engaged in selling replacement parts (excluding tires), accessories, batteries and maintenance items for domestic and imported cars, vans, sport utility vehicles, light and heavy-duty trucks. It is a leading automotive parts provider in North America, serving both the do-it-yourself or DIY and professional installers (professional) as well as independently owned operators.
AAP is a #3 (Hold) on the Zacks Rank, with a VGM Score of A.
It also boasts a Value Style Score of A thanks to attractive valuation metrics like a forward P/E ratio of 14.84; value investors should take notice.
For fiscal 2026, seven analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.04 to $2.98 per share. AAP boasts an average earnings surprise of +64.7%.
With a solid Zacks Rank and top-tier Value and VGM Style Scores, AAP should be on investors' short list.
Key Takeaways Advance Auto is returning to selective expansion, with 30 to 35 new stores planned for fiscal 2026.Main Street Pro sales are gaining traction, aided by broader assortment, market hubs and faster delivery.Distribution efficiencies and merchandising gains are lifting margins, while DIY weakness remains a concern. Advance Auto Parts, Inc.’s (AAP - Free Report) selective expansion, stronger Main Street Pro sales, distribution efficiencies and improving product margins support profitability. However, weaker DIY demand, inflation, national-account challenges and elevated capital spending could constrain near-term sales growth, margins and cash flow.
Let’s dig deeper and see why this Zacks Rank #3 (Hold) stock is worth retaining in your portfolio.
Selective Expansion, Margin Improvement Aid Advance AutoAfter completing planned location closures in the first quarter of 2025, Advance Auto is returning to selective expansion. It plans 30 to 35 new store openings in fiscal 2026 and uses population, vehicle profiles, competition and real-estate economics in site selection. This supports measured network growth after the footprint reset.
Advance Auto continues to gain traction with Main Street Pro customers, its preferred professional segment. In the second quarter of fiscal 2026, Pro sales grew at a low-single-digit rate, while Main Street Pro comparable sales exceeded total Pro growth by more than 200 basis points. The growth is coming from both existing accounts and customers that previously gave Advance Auto limited business. Broader assortment, market hubs and delivery times below 40 minutes are helping the company compete for first-call status.
Advance Auto completed its distribution-center consolidation in the second quarter of fiscal 2026 and now operates 15 DCs on one warehouse system. The company opened five market hubs in the first half, reaching 38, and raised fiscal 2026 hub-opening plans to 15 to 20 from 10 to 15. It still targets 60 hubs by mid-2027. About 25% of identified DC process changes are complete, with the remainder planned by mid-2027. It also expects to consolidate volume with 70% fewer carriers, generating tens of millions of dollars in transportation savings that support margin expansion in 2027.
Strategic sourcing, better assortment and tighter pricing are improving product economics. Adjusted gross margin rose 240 bps year over year to 46.2% in the second quarter of 2026, including a 130-bps benefit from tariff refunds. Merchandising initiatives added around 100 bps to product margins in the first half, with further gains expected. Full-year adjusted operating margin is expected to expand 130-200 bps, while gross margin is guided near 45%, supporting the medium-term 7% operating margin target.
Reduced Consumer Budget, Higher Capital Requirement Ail AAPTighter household budgets reduced DIY spending in the second quarter of fiscal 2026. DIY sales declined at a low-single-digit rate, with weaker large-ticket projects and discretionary purchases contributing to a 100 to 150 basis-point drag on comparable sales together with milder weather. The company still expects full-year comparable sales growth of 1% to 2%, but that outlook assumes transaction volumes recover from second-quarter levels. If value-focused behavior persists, DIY traffic and mix could continue to constrain sales growth and profitability.
Cost inflation remains another important pressure on AAP’s profitability. Higher oil and commodity prices are pressuring margins, and elevated freight and fuel costs are expected to continue affecting margins during the second half. These costs are particularly challenging because the company is simultaneously trying to maintain competitive pricing. The company expects gross margin of approximately 44-45% in the second half, with freight, fuel and channel mix acting as offsets to merchandising gains.
Although Main Street Pro is performing well, AAP continues to face headwinds from national accounts. The company is transitioning its Pro mix toward Main Street customers, creating some noise in reported results. Main Street is viewed as a larger addressable opportunity, but winning these customers is relationship-driven and can take weeks of repeated interactions before AAP becomes the customer’s first call. This means the benefits from market hubs, better assortment and improved service may take time to fully translate into revenues. While the company remains confident in the strategy, the transition creates near-term uncertainty around Pro growth and the pace at which share gains can offset national-account weakness.
Advance Auto still expects about $300 million of capital expenditures in fiscal 2026. Although free cash flow reached $120 million through the second quarter, the company maintained full-year guidance of about $100 million because of planned operating expenses and timing. Spending on stores, market hubs and infrastructure therefore continues to constrain near-term cash generation.
Price Performance, Valuation and Estimates AAP has underperformed the Zacks Automotive - Retail and Wholesale – Parts industry in the last six months. Its shares have lost 19.7% compared to the industry’s decline of 9.7%.
Image Source: Zacks Investment Research
From a valuation perspective, AAP appears undervalued. Going by its price/sales ratio, the company is trading at a forward sales multiple of 0.3, lower than the industry’s 3.33.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for AAP’s 2026 and 2027 EPS has improved 3 cents and fallen 14 cents, respectively, in the past 30 days.
Image Source: Zacks Investment Research
Stocks to ConsiderSome better-ranked stocks in the auto space are China Yuchai International Limited (CYD - Free Report) and Garrett Motion Inc. (GTX - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for CYD’s 2026 sales and earnings implies year-over-year growth of 58.6% and 68.6%, respectively.
The Zacks Consensus Estimate for GTX’s 2026 sales and earnings implies year-over-year growth of 7.2% and 25.7%, respectively. The EPS estimate for 2026 and 2027 has improved 5 cents and 4 cents, respectively, over the past 30 days.
Stein Mart (OTCMKTS:SMRTQ – Get Free Report) and Advance Auto Parts (NYSE:AAP – Get Free Report) are both consumer discretionary companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, dividends, risk, valuation, earnings and institutional ownership.
Profitability This table compares Stein Mart and Advance Auto Parts’ net margins, return on equity and return on assets.
Net Margins Return on Equity Return on Assets Stein Mart N/A N/A N/A Advance Auto Parts 0.97% 9.84% 1.83% Insider and Institutional Ownership 88.7% of Advance Auto Parts shares are owned by institutional investors. 39.4% of Stein Mart shares are owned by company insiders. Comparatively, 0.8% of Advance Auto Parts shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Valuation & Earnings This table compares Stein Mart and Advance Auto Parts”s revenue, earnings per share (EPS) and valuation. Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio Stein Mart N/A N/A N/A N/A N/A Advance Auto Parts $8.62 billion 0.31 $44.00 million $1.37 31.79 Advance Auto Parts has higher revenue and earnings than Stein Mart.
Analyst Recommendations This is a summary of current recommendations and price targets for Stein Mart and Advance Auto Parts, as reported by MarketBeat.com.
Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score Stein Mart 0 0 0 0 0.00 Advance Auto Parts 1 19 2 0 2.05 Advance Auto Parts has a consensus price target of $50.80, indicating a potential upside of 16.65%. Given Advance Auto Parts’ stronger consensus rating and higher probable upside, analysts clearly believe Advance Auto Parts is more favorable than Stein Mart.
Summary Advance Auto Parts beats Stein Mart on 8 of the 9 factors compared between the two stocks.
Advance Auto Parts, Inc. provides automotive replacement parts, accessories, batteries, and maintenance items for domestic and imported cars, vans, sport utility vehicles, and light and heavy duty trucks. The company offers battery accessories; belts and hoses; brakes and brake pads; chassis and climate control parts; clutches and drive shafts; engines and engine parts; exhaust systems and parts; hub assemblies; ignition components and wires; radiators and cooling parts; starters and alternators; and steering and alignment parts. It also offers air conditioning chemicals and accessories; air fresheners; antifreeze and washer fluids; electrical wires and fuses; electronics; floor mats, seat covers, and interior accessories; hand and specialty tools; lighting products; performance parts; sealants, adhesives, and compounds; tire repair accessories; vent shades, mirrors and exterior accessories; washes, waxes and cleaning supplies; and wiper blades. In addition, the company offers air filters; fuel and oil additives; fuel filters; grease and lubricants; motor oils; oil filters, part cleaners and treatments; and transmission fluids for engine maintenance. Further, it offers battery and wiper installation; engine light scanning and checking; electrical system testing, including batteries, starters, and alternators; oil and battery recycling; and loaner tool program services. Additionally, the company sells its products through its website. It serves professional installers and do-it-yourself customers. The company operates stores under the Advance Auto Parts and Carquest names, as well as branches under the Worldpac name. The company has stores in the United States, Puerto Rico, the U.S. Virgin Islands, and Canada; and independently owned Carquest branded stores in Mexico and various Caribbean Islands. Advance Auto Parts, Inc. was founded in 1929 and is based in Raleigh, North Carolina.
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Advance Auto Parts Inc (NYSE:AAP) Thursday reported mixed second-quarter results
Here are the key analyst takeaways:
RBC Capital Markets analyst Steven Shemesh reiterated a Sector Perform rating, while trimming the price target from $67 to $52. DA Davidson analyst Michael Baker maintained a Neutral rating, while slashing the price target from $58 to $48. Guggenheim Securities analyst Steven Forbes reaffirmed a Neutral rating on the stock. Check out other analyst stock ratings.
RBC Capital Markets: Advance Auto Parts posted disappointing results, with a comp miss and lower-than-anticipated profits excluding tariff refunds, Shemesh said in a note.
Although adjusted operating margin expanded by 260 basis points (bps) year-on-year to 5.6% and came in better than consensus of 4.6%, this flowed through from merchandising initiatives and tariff refunds, he added.
Investors are likely to be concerned whether more reinvestment is needed to drive an inflection in the company’s topline, the analyst stated.
Although Advance Auto Parts has made progress on improving its margin, revenues are unlikely to accelerate in the back half as the company will be up against "its toughest compares" with its core consumer base still "dealing with rising transportation costs," he further wrote.
DA Davidson: Advance Auto Parts reported a comp miss due to its exposure to lower-end customers, Baker said. He added that the "outsized negative reaction" of investors was triggered by more than the comp miss and was due to:
The stock having climbed 44% year to date, before the release. The lower margin outlook after excluding tariff refunds. The margin outlook may have fueled concerns around the company’s long-awaited margin recovery being further delayed and that "the gap versus others won’t narrow," the analyst stated. "A silver lining is that 3Q trends seem better so far," with overall comps up around 1% in the first two months of the quarter, he further wrote.
Guggenheim Securities: Although Advance Auto Parts delivered a disappointing comp performance, management noted the large deceleration in DIY spending and unfavorable weather accounted for 100-150 bps of comp headwind during the quarter, Forbes said.
He added that management largely reiterated their 2026 guidance:
Sales of $8.475-$8.575 billion Comps of 1%-2% Gross margin expansion of 110-150 bps year-over-year SG&A expense leverage of 20-50 bps Adjusted EBIT margin of 3.80%-4.50% Despite reaffirming these, the company raised its full-year earnings outlook to $2.60-$3.30 per share, from the prior $2.40-$3.10 per share due to around $20 million of incremental pre-tax interest income, the analyst noted.
AAP Price Action: Shares of Advance Auto Parts had risen by 1.32% to $43.01 at the time of publication on Friday.
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Advanced Auto Parts NYSE: AAP's August price plunge looks like an opportunity to buy because the causes of the plunge are out of the company’s control, while the factors in its control continue to show improvement.
Advance Auto Parts Today
AAP
Advance Auto Parts
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The catalyst for the plunge was weaker-than-expected DIY sales, sales which were expected to decline as cash-strapped consumers pulled back on projects.
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However scary as the news is, the likely scenario is that AAP’s tepid Q2 results were a one-off, possibly echoed in the reports of other major auto parts dealers, as results from Target NYSE: TGT, Walmart NYSE: WMT, and The TJX Companies NYSE: TJX all showed strengths.
The takeaway from their reports is that consumers are spending across a broad range of categories. For AAP, weakness was concentrated in the final week of the quarter, as end-of-summer budgets were squeezed.
Advanced Auto Parts: A Short Squeeze in the Making?A primary cause for the steepness of the plunge is short interest. The market was nearly 20% short going into the release, with short interest trending near long-term highs on expectations of weakness. However, consumer weakness can only last so long, and the company is demonstrating a strong recovery strategy.
Advanced Auto Parts shifted gears years ago to improve operational quality and cash flow, achieving its goal in Q2. The company returned to year-to-date free cash flow in Q2 and expects to continue building on the improvement.
This sets it up to sustain balance sheet improvements, strengthen the dividend outlook, and, potentially, resume share buybacks. Altogether, the improvements pave the way for accelerated earnings growth in upcoming quarters and years and are a catalyst for short covering; it's only a matter of time.
Q2 Weaknesses Overshadow Advanced Auto Parts Margin ImprovementAdvanced Auto Parts had a tough quarter, with the DIY segment contracting by more than expected. The weakness offset strength in the Pro segment, which advanced by a low single-digit figure, leaving revenue down incrementally year-over-year (YOY) at $2 billion. The topline also underperformed versus the consensus, setting the stage for short sellers to lean into their trade and drive shares lower. Internally, comps were down about 0.5%, offset by store count growth.
The silver lining was margin. While IEEPA tariff refunds are in the mix, refunds alone didn't account for the strength. Gross, adjusted gross, operating, and adjusted operating margins all expanded, enabling bottom-line growth despite the weak top line. With the tariff refund stripped out, earnings per share of 72 cents came in below expectations but was up more than 4% YOY, providing additional evidence the company's strategy is working.
Other evidence the strategy is working is the impact on the balance sheet. Cash flow improvements enabled quarterly debt reduction while sustaining cash and building inventory. The net result was an incremental increase in equity and improved shareholder leverage. Assuming the company can sustain this improvement, it will likely continue to reduce debt and strengthen its balance sheet and profitability in future quarters.
Advanced Auto Parts: Limited Downside With Robust Long-Term PotentialAnalysts and institutional trends suggest AAP has hit its bottom and the downside is limited in 2026. MarketBeat tracks 20 analysts with current ratings; they rate the stock a Hold with 85% bias and predict considerable upside.
The earnings-induced price decline put the stock below their low-end target and deep into the range where institutions have been buying. Institutional data reflects a solid, accumulating support base: they own about 88% of the shares, have bought on balance each quarter this year, and accelerated activity in early Q3. The Q2 results are unlikely to trigger buying, but the 20% stock price discount is.
Advance Auto Parts, Inc. (AAP) Price Chart for Friday, August, 21, 2026
The risk for investors is that the consumer rebound will take a long time to take effect. In this scenario, AAP shares may be range-bound near current levels indefinitely. The offset is the dividend and improving capacity for capital return. The dividend yields more than 2.4% with the stock in the low $40-range, double the S&P 500 average, and its safety is improving. The hope is that AAP can resume annual distribution increases and share buybacks, either of which would be a catalyst for price action.
The most visible near-term catalyst is margin improvement. While the market focused on near-term noise, it is overlooking the company's guidance, which was reaffirmed at the top end and improved at the bottom. Hurdles and weaknesses aside, Advanced Auto Parts is well on the way with its turnaround strategy and poised to build value for its shareholders.
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Advance Auto Parts Inc. (NYSE:AAP) on Thursday reported mixed second-quarter results.
Adjusted EPS of $1.03 beat the consensus of 81 cents. Meanwhile, sales of $2.00 billion fell short of the $2.039 billion estimate.
The company raised its fiscal year 2026 adjusted EPS guidance to $2.60-$3.30 from $2.40-$3.10, compared with the $2.92 estimate, while maintaining its sales outlook of $8.485 billion-$8.575 billion versus the $8.581 billion estimate.
Advance Auto reaffirmed its full-year outlook for comparable sales growth of 1%-2% while continuing to focus on merchandising, supply chain and store operations.
“During the second quarter, the Advance team maintained focus on executing our strategic initiatives to achieve solid profitability, while navigating a volatile demand environment and I thank the team for their hard work and commitment to serving our customers,” said Shane O’Kelly, president and chief executive officer.
Advance Auto Parts shares closed at $42.39 on Thursday.
These analysts made changes to their price targets on Advance Auto Parts following earnings announcement.
DA Davidson analyst Michael Baker maintained the stock with a Neutral and lowered the price target from $58 to $48. RBC Capital analyst Steven Shemesh maintained the stock with a Sector Perform and cut the price target from $67 to $52. Trending
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Shares of Advance Auto Parts (AAP -24.55%) plunged on Thursday after the automotive aftermarket parts supplier warned of a slowdown in consumer spending.
Image source: Getty Images.
DIY customers are curtailing their spending Advance Auto Parts' net sales were flat year over year at $2 billion in its fiscal second quarter, which ended on July 18.
The company's comparable store sales, which measure revenue from stores open for at least a year, declined by 0.5%.
CEO Shane O'Kelly said Advance Auto Parts saw low-single-digit growth in its Pro channel, which serves professional automotive service providers. But sales to do-it-yourself customers lagged "as tighter household budgets constrained spending more than we anticipated, especially during the last four weeks of the quarter."
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Still, tariff refunds helped drive Advance Auto Parts' adjusted operating income up more than 80% to $112 million. Its adjusted diluted earnings per share, in turn, increased 49% to $1.03.
Advance Auto Parts also generated positive free cash flow of $120 million over the twenty-eight weeks ended July 18, a notable improvement after two years of outflows.
This higher cash flow production enabled the automotive parts purveyor to pay down roughly $30 million in debt.
Short-term pain should transition into long-term gains Despite acknowledging that it's currently facing a "volatile demand environment," Advance Auto Parts reiterated its full-year financial forecast, including:
Net sales of roughly $8.5 billion Comparable store sales growth of 1% to 2% Free cash flow of $100 million "The consumer is stressed, but think a little bit longer term, because I don't think we're going to be permanently in this state of affairs," O'Kelly said during a conference call with analysts. "If you think longer term, the backdrop of the industry that we're in remains very attractive."
Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Advance Auto Parts (AAP) is facing significant pressure following the release of its Q2 results. While the adjusted earnings per share (EPS) of $1.03 surpassed
Shares of car parts retailer Autozone (AZO -3.99%) slipped 4.4% through 12:25 p.m. ET Thursday after its smaller rival Advance Auto Parts (AAP -25.88%) reported stronger-than-expected earnings -- but missed on sales and issued weak guidance this morning.
Image source: Getty Images.
What Advance Auto Parts said Analysts expected Advance Auto Parts to earn $0.81 per share in the quarter, and it beat that number, reporting a $1.03 per share profit. Problem was, Advance's $2 billion in sales fell just short of expectations for $2.04 billion.
Worse, Advance said full-year sales missed Wall Street's $8.6 billion forecast. And now investors are wondering if this means Autozone, too, might have bad news to report when its own earnings come out next month. (Sept. 22, to be precise.)
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What's next for Autozone After all, according to a running tally kept by Yahoo! Finance, Advance Auto Parts had been on something of a roll, beating earnings forecasts seven straight quarters in a row (including this one), versus just two wins in a row for Autozone. If something has happened to break Advance's winning streak, it's logical to worry that the same might hold true for Autozone.
And yet, I would not worry.
Why not? Well, for one thing, the $8.53 billion in sales Advance is forecasting for fiscal 2026 isn't too far off from the $8.58 billion that Wall Street was looking for, for one thing. Also, Advance reaffirmed that things are going basically according to plan this year -- which suggests the same might hold true for Autozone.
Speaking of which, at a valuation of only 21.1 times earnings, Autozone already looks like a better bargain than Advance stock, which costs nearly 51 times earnings. If I had to own only one auto parts stock, I'd pick Autozone over Advance.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Advance Auto Parts is upgraded to "Buy" after a 25% share price drop, as margin recovery is underappreciated. Despite DIY channel weakness and flat sales, AAP's gross margin expanded by 240 bps and operating margin nearly doubled to 5.6%. Free cash flow turned positive at $120 million YTD, with net leverage reduced to 2.1x and a highly secure 2.2% dividend yield.
For the quarter ended June 2026, Advance Auto Parts (AAP - Free Report) reported revenue of $2 billion, down 0.5% over the same period last year. EPS came in at $1.03, compared to $0.69 in the year-ago quarter.
The reported revenue represents a surprise of -1.66% over the Zacks Consensus Estimate of $2.03 billion. With the consensus EPS estimate being $0.81, the EPS surprise was +27.16%.
While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance.
Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance.
Here is how Advance Auto Parts performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:
Comparable store sales - YoY change: -0.5% versus 1.2% estimated by seven analysts on average.Number of stores (Retail) - Total: 4,311 versus 4,320 estimated by three analysts on average.Number of stores - AAP: 4,072 versus the three-analyst average estimate of 4,084.Number of stores opened: 5 versus the two-analyst average estimate of 13.Number of stores (BOP): 4,308 versus the two-analyst average estimate of 4,308.Number of stores - CARQUEST: 239 compared to the 238 average estimate based on two analysts.View all Key Company Metrics for Advance Auto Parts here>>>
Shares of Advance Auto Parts have returned +1.2% over the past month versus the Zacks S&P 500 composite's +3.5% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term.
3 Under-the-Radar Earnings Surprises Could Signal a New TrendAdvance Auto Parts NYSE: AAP reported second-quarter 2026 net sales of $2 billion as comparable sales declined slightly, with growth in its professional customer business offset by a larger-than-expected drop in do-it-yourself sales. The company reaffirmed its full-year sales, operating-margin and free-cash-flow outlook while raising its adjusted earnings-per-share guidance.
President and Chief Executive Officer Shane O’Kelly said demand conditions were volatile during the quarter. The Pro channel posted low-single-digit sales growth, including continued outperformance from its Main Street Pro business, while DIY sales fell in the low-double-digit range.
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From Rust to Riches: 2 Auto Parts Names Built for 2026“Within Pro, the Main Street business continued to outpace overall growth, supporting share gains in that segment,” O’Kelly said. He added that tighter household budgets weighed on DIY consumer spending, particularly in the final four weeks of the quarter.
Sales trends and customer demand Executive Vice President and Chief Financial Officer Ryan Grimsland said comparable sales rose about 1% during the first eight weeks of the quarter, when Pro sales grew at a low-single-digit rate and DIY sales were roughly flat. Trends weakened in the final four weeks as the company faced difficult comparisons, price increases tied to commodity costs and softer DIY volumes.
Advance Auto Parts is A Great Risk/Reward Play If EPS DeliversManagement estimated that reduced DIY spending, deferred large-ticket projects, lower discretionary spending and milder weather together created a 100- to 150-basis-point comparable-sales headwind during the quarter. Weather-sensitive categories including cooling and climate control products, fluids and chemicals underperformed.
Average ticket increased during the quarter, aided by approximately 4% same-SKU inflation, up from about 3% in the first quarter. Grimsland attributed the acceleration to market pricing actions and higher commodity costs, including those affecting motor oil and other petroleum products.
In DIY, maintenance and failure categories such as filters, motor oil and batteries performed better than hard-parts categories, which management said could reflect more selective spending and the deferral of larger projects. In Pro, hard parts including brakes and undercar components outperformed as parts availability and delivery consistency improved.
Main Street Pro comparable sales exceeded total Pro comparable sales by more than 200 basis points, helping offset pressure from the company’s optimization of national accounts. Grimsland said national-account pressure in the second half is expected to be about half the level seen in the first half as the company begins lapping those changes.
Margins improve, aided by tariff refunds Adjusted gross profit was $924 million, or 46.2% of net sales, representing about 240 basis points of year-over-year gross-margin expansion. Tariff refunds contributed $26 million, or 130 basis points, to gross margin.
Excluding tariff refunds, the company’s margin improvement was primarily driven by product-margin gains. Management said the merchandising initiatives contributed approximately 100 basis points to product-margin expansion year to date.
However, Advance Auto Parts faced about 20 basis points of pressure from sales mix as DIY sales declined and another 20 basis points of deleverage from supply-chain expenses, including freight and fuel costs. These headwinds were offset by roughly 40 basis points of favorable LIFO and warehousing costs compared with the prior year.
Adjusted selling, general and administrative expense declined about 1% from a year earlier to $812 million, or 40.6% of sales. The company said store-task simplification, labor productivity initiatives and indirect-spend management helped reduce expenses while allowing reinvestment in priority areas.
Adjusted operating income was $112 million, representing an adjusted operating margin of 5.6%, up about 260 basis points from the prior-year period. Excluding the benefit from IEEPA tariff refunds, O’Kelly said adjusted operating margin expanded nearly 130 basis points to 4.3%.
Adjusted diluted earnings per share rose to $1.03 from $0.69 a year earlier.
Cash flow, debt and full-year outlook The company generated $120 million in free cash flow year to date, compared with an outflow of $201 million in the prior-year period. Grimsland said the improvement reflected higher profitability, working-capital management, reduced cash spending tied to last year’s store optimization actions and tariff refunds.
Advance Auto Parts ended the quarter with approximately $3.1 billion in cash and used about $30 million to repurchase a portion of its 2028 senior notes. Net debt leverage fell to 2.1 times from 2.4 times in the prior quarter, within the company’s 2.0- to 2.5-times target range.
The company reaffirmed its 2026 outlook for approximately $8.5 billion in net sales, comparable-sales growth of 1% to 2%, adjusted operating margin of 3.8% to 4.5%, capital expenditures of about $300 million and free cash flow of about $100 million. It now expects full-year same-SKU inflation of approximately 3%.
Advance Auto Parts raised adjusted diluted EPS guidance to a range of $2.60 to $3.30, citing an expected $100 million of interest income, up $20 million from prior expectations. The company continues to plan for approximately $210 million of pretax interest expense.
For the second half, Grimsland said gross margin is expected to range from 44% to 45%, with third-quarter gross margin higher than fourth-quarter levels because of seasonal product mix. The outlook assumes continued pressure from freight, fuel and channel mix, while management does not expect material additional tariff refunds in the second half.
Supply chain and store initiatives Advance Auto Parts completed its distribution-center consolidation in the second quarter, reducing its network from nearly 40 distribution centers to 15 facilities supported by a unified warehouse system. The company also opened five market hubs year to date, bringing its total to 38, and increased its full-year market-hub opening plan to 15 to 20 locations.
Management expects to open nine market hubs in the third quarter and remains on track to operate 60 locations by mid-2027. O’Kelly said market-hub markets consistently outperform areas without hubs, and the locations improve same-day parts availability.
The company has completed 25% of identified distribution-center process improvements and expects to finish the remaining actions by mid-2027. It is also rebidding carrier contracts and expects to reduce the number of transportation providers by 70%, an effort management said could generate tens of millions of dollars in savings beginning in 2027.
At the store level, net promoter scores improved to nearly 80 points from the high-60-point range a year earlier, while attachment rates improved to nearly 30% from the mid-to-high 20% range. Average Pro delivery time remained below 40 minutes each week during the second quarter.
O’Kelly said the company is implementing a focused action plan for the second half that includes targeted DIY marketing, Advance Rewards engagement, paid-search optimization, store incentives and expanded value offerings, including its ARGOS private-brand products.
About Advance Auto Parts (NYSE:AAP)Advance Auto Parts, Inc NYSE: AAP is a leading distributor of automotive aftermarket parts, accessories, and maintenance items. The company operates a network of stores and distribution centers across North America, serving both do-it-yourself (DIY) customers and professional service providers. Advance Auto Parts focuses on offering a comprehensive selection of replacement parts, batteries, engine components, and performance products for cars and light trucks.
The company's product portfolio includes engine oils and lubricants, cooling system components, brake and suspension parts, filters, belts, hoses, and diagnostic tools.
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SummaryAdvance Auto Parts, Inc. is rated a speculative Buy after a sharp share decline, despite ongoing operational struggles and competitive pressure.AAP's Q2 results showed flat sales and negative comparable sales, but gross margins improved 320 basis points, and SG&A as a percentage of sales declined.EPS guidance was raised to $2.60–$3.30, aided by tariff refunds; AAP free cash flow is now positive and expected at $100 million for the year.Despite years of underperformance and better long-term prospects for peers AZO and ORLY, AAP offers a short-term rebound opportunity due to valuation and operational turnaround.Looking for a portfolio of ideas like this one? Members of BAD BEAT Investing get exclusive access to our subscriber-only portfolios. Learn More » Sila Damrongsaringkan/iStock via Getty Images
Advance Auto Parts, Inc. (AAP) has been struggling. For a number of quarters, shares declined on weak results. We did get some reprieve here in 2026 from the lows, as free cash flow has trended positive and
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Advance Auto Parts, Inc. (NYSE: AAP), a leading automotive aftermarket parts provider in North America, that serves both professional installer and do-it-yourse
Advance Auto Parts (AAP - Free Report) came out with quarterly earnings of $1.03 per share, beating the Zacks Consensus Estimate of $0.81 per share. This compares to earnings of $0.69 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of +27.16%. A quarter ago, it was expected that this auto parts retailer would post earnings of $0.39 per share when it actually produced earnings of $0.77, delivering a surprise of +97.44%.
Over the last four quarters, the company has surpassed consensus EPS estimates four times.
Advance Auto Parts, which belongs to the Zacks Automotive - Retail and Wholesale - Parts industry, posted revenues of $2 billion for the quarter ended June 2026, missing the Zacks Consensus Estimate by 1.66%. This compares to year-ago revenues of $2.01 billion. The company has topped consensus revenue estimates three times over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
Advance Auto Parts shares have added about 43% since the beginning of the year versus the S&P 500's gain of 12.6%.
What's Next for Advance Auto Parts?While Advance Auto Parts has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for Advance Auto Parts was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.88 on $2.05 billion in revenues for the coming quarter and $2.94 on $8.58 billion in revenues for the current fiscal year.
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Automotive - Retail and Wholesale - Parts is currently in the top 22% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
One other stock from the broader Zacks Retail-Wholesale sector, Casey's General Stores (CASY - Free Report) , is yet to report results for the quarter ended July 2026. The results are expected to be released on September 8.
This convenience store chain is expected to post quarterly earnings of $6.59 per share in its upcoming report, which represents a year-over-year change of +14.2%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.
Casey's General Stores' revenues are expected to be $5.65 billion, up 23.8% from the year-ago quarter.
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Advance Auto Parts, Inc. (NYSE:AAP) will release its second quarter earnings report before the opening bell on Thursday, Aug. 20.
Analysts expect the Raleigh, North Carolina-based company to report quarterly earnings of 81 cents per share, up from 69 cents per share in the year-ago period. The consensus estimate for AAP’s quarterly revenue is $2.04 billion. It reported $2.01 billion last year, according to Benzinga Pro.
On May 21, Advance Auto Parts reported better-than-expected first-quarter financial results.
Shares of Advance Auto Parts fell 1.4% to close at $56.18 on Wednesday.
Benzinga readers can access the latest analyst ratings on the Analyst Stock Ratings page. Readers can sort by stock ticker, company name, analyst firm, rating change or other variables.
Let’s have a look at how Benzinga’s most-accurate analysts have rated the company in the recent period.
Citigroup analyst Steven Zaccone maintained a Neutral rating and cut the price target from $60 to $57 on Aug. 13, 2026. This analyst has an accuracy rate of 53%. RBC Capital analyst Steven Shemesh maintained a Sector Perform rating and raised the price target from $65 to $67 on Aug. 13, 2026. This analyst has an accuracy rate of 60%. Evercore ISI Group analyst Greg Melich maintained an In-Line rating and cut the price target from $70 to $65 on Aug. 4, 2026. This analyst has an accuracy rate of 73%. Wells Fargo analyst Zachary Fadem maintained an Equal-Weight rating and raised the price target from $50 to $60 on May 22, 2026. This analyst has an accuracy rate of 78%. Truist Securities analyst Scott Ciccarelli maintained a Hold rating and raised the price target from $55 to $62 on May 22, 2026. This analyst has an accuracy rate of 75%. Latest Private Market Opportunities
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Victoria’s Secret & Co. (NYSE:VSXY – Get Free Report) and Advance Auto Parts (NYSE:AAP – Get Free Report) are both mid-cap consumer discretionary companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, institutional ownership, valuation, risk, analyst recommendations, earnings and profitability.
Insider & Institutional Ownership 90.3% of Victoria’s Secret & Co. shares are held by institutional investors. Comparatively, 88.7% of Advance Auto Parts shares are held by institutional investors. 0.5% of Victoria’s Secret & Co. shares are held by company insiders. Comparatively, 0.8% of Advance Auto Parts shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Volatility and Risk Victoria’s Secret & Co. has a beta of 2.06, meaning that its share price is 106% more volatile than the S&P 500. Comparatively, Advance Auto Parts has a beta of 1.03, meaning that its share price is 3% more volatile than the S&P 500.
Earnings & Valuation This table compares Victoria’s Secret & Co. and Advance Auto Parts”s gross revenue, earnings per share and valuation. Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio Victoria’s Secret & Co. $6.55 billion 1.02 $161.00 million $1.86 45.34 Advance Auto Parts $8.60 billion 0.40 $44.00 million $0.72 78.96 Victoria’s Secret & Co. has higher earnings, but lower revenue than Advance Auto Parts. Victoria’s Secret & Co. is trading at a lower price-to-earnings ratio than Advance Auto Parts, indicating that it is currently the more affordable of the two stocks.
Profitability This table compares Victoria’s Secret & Co. and Advance Auto Parts’ net margins, return on equity and return on assets.
Net Margins Return on Equity Return on Assets Victoria’s Secret & Co. 3.11% 38.03% 6.10% Advance Auto Parts 0.51% 8.95% 1.70% Analyst Ratings This is a summary of recent ratings for Victoria’s Secret & Co. and Advance Auto Parts, as reported by MarketBeat.com.
Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score Victoria’s Secret & Co. 0 6 6 1 2.62 Advance Auto Parts 1 17 2 0 2.05 Victoria’s Secret & Co. presently has a consensus price target of $88.70, indicating a potential upside of 5.17%. Advance Auto Parts has a consensus price target of $58.91, indicating a potential upside of 3.62%. Given Victoria’s Secret & Co.’s stronger consensus rating and higher probable upside, analysts plainly believe Victoria’s Secret & Co. is more favorable than Advance Auto Parts.
Summary Victoria’s Secret & Co. beats Advance Auto Parts on 12 of the 15 factors compared between the two stocks.
(Get Free Report)
Victoria’s Secret & Co. operates as a lingerie, clothing and beauty retailer. It offers bras, panties, lingerie, pajamas, sleep, sport and swim apparel, and beauty products. The company was founded in 1963 and is headquartered in Reynoldsburg, OH.
About Advance Auto Parts (Get Free Report)
Advance Auto Parts, Inc. provides automotive replacement parts, accessories, batteries, and maintenance items for domestic and imported cars, vans, sport utility vehicles, and light and heavy duty trucks. The company offers battery accessories; belts and hoses; brakes and brake pads; chassis and climate control parts; clutches and drive shafts; engines and engine parts; exhaust systems and parts; hub assemblies; ignition components and wires; radiators and cooling parts; starters and alternators; and steering and alignment parts. It also offers air conditioning chemicals and accessories; air fresheners; antifreeze and washer fluids; electrical wires and fuses; electronics; floor mats, seat covers, and interior accessories; hand and specialty tools; lighting products; performance parts; sealants, adhesives, and compounds; tire repair accessories; vent shades, mirrors and exterior accessories; washes, waxes and cleaning supplies; and wiper blades. In addition, the company offers air filters; fuel and oil additives; fuel filters; grease and lubricants; motor oils; oil filters, part cleaners and treatments; and transmission fluids for engine maintenance. Further, it offers battery and wiper installation; engine light scanning and checking; electrical system testing, including batteries, starters, and alternators; oil and battery recycling; and loaner tool program services. Additionally, the company sells its products through its website. It serves professional installers and do-it-yourself customers. The company operates stores under the Advance Auto Parts and Carquest names, as well as branches under the Worldpac name. The company has stores in the United States, Puerto Rico, the U.S. Virgin Islands, and Canada; and independently owned Carquest branded stores in Mexico and various Caribbean Islands. Advance Auto Parts, Inc. was founded in 1929 and is based in Raleigh, North Carolina.
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The upcoming report from Advance Auto Parts (AAP - Free Report) is expected to reveal quarterly earnings of $0.81 per share, indicating an increase of 17.4% compared to the year-ago period. Analysts forecast revenues of $2.03 billion, representing an increase of 1.2% year over year.
The consensus EPS estimate for the quarter has been revised 0.6% lower over the last 30 days to the current level. This reflects how the analysts covering the stock have collectively reevaluated their initial estimates during this timeframe.
Before a company announces its earnings, it is essential to take into account any changes made to earnings estimates. This is a valuable factor in predicting the potential reactions of investors toward the stock. Empirical research has consistently shown a strong correlation between trends in earnings estimate revisions and the short-term price performance of a stock.
While investors usually depend on consensus earnings and revenue estimates to assess the business performance for the quarter, delving into analysts' forecasts for certain key metrics often provides a more comprehensive understanding.
Bearing this in mind, let's now explore the average estimates of specific Advance Auto Parts metrics that are commonly monitored and projected by Wall Street analysts.
According to the collective judgment of analysts, 'Number of stores (Retail) - Total' should come in at 4,320 . Compared to the present estimate, the company reported 4,292 in the same quarter last year.
It is projected by analysts that the 'Number of stores - AAP' will reach 4,084 . The estimate compares to the year-ago value of 4,055 .
Based on the collective assessment of analysts, 'Number of stores opened' should arrive at 13 . Compared to the current estimate, the company reported 8 in the same quarter of the previous year.
The collective assessment of analysts points to an estimated 'Number of stores (BOP)' of 4,308 . The estimate compares to the year-ago value of 4,285 .
Analysts forecast 'Number of stores - CARQUEST' to reach 238 . Compared to the present estimate, the company reported 237 in the same quarter last year.
View all Key Company Metrics for Advance Auto Parts here>>>
Advance Auto Parts shares have witnessed a change of +6.4% in the past month, in contrast to the Zacks S&P 500 composite's +3.3% move. With a Zacks Rank #3 (Hold), AAP is expected closely follow the overall market performance in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .
The market expects Advance Auto Parts (AAP - Free Report) to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended June 2026. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.
The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on August 20. On the other hand, if they miss, the stock may move lower.
While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise.
Zacks Consensus EstimateThis auto parts retailer is expected to post quarterly earnings of $0.81 per share in its upcoming report, which represents a year-over-year change of +17.4%.
Revenues are expected to be $2.03 billion, up 1.2% from the year-ago quarter.
Estimate Revisions TrendThe consensus EPS estimate for the quarter has been revised 0.59% lower over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.
Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts.
Price, Consensus and EPS Surprise
Earnings WhisperEstimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. This insight is at the core of our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction).
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.
Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.
A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.
Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).
How Have the Numbers Shaped Up for Advance Auto Parts?For Advance Auto Parts, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company's earnings prospects. This has resulted in an Earnings ESP of +8.04%.
On the other hand, the stock currently carries a Zacks Rank of #3.
So, this combination indicates that Advance Auto Parts will most likely beat the consensus EPS estimate.
Does Earnings Surprise History Hold Any Clue?While calculating estimates for a company's future earnings, analysts often consider to what extent it has been able to match past consensus estimates. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.
For the last reported quarter, it was expected that Advance Auto Parts would post earnings of $0.39 per share when it actually produced earnings of $0.77, delivering a surprise of +97.44%.
Over the last four quarters, the company has beaten consensus EPS estimates four times.
Bottom LineAn earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.
That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
Advance Auto Parts appears a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
Investors choosing between Advance Auto Parts (AAP +1.08%) and Lucid Group (LCID -2.39%) must weigh the steady potential of a retail recovery against the high-octane risks of a growing luxury electric vehicle manufacturer.
Advance Auto Parts serves as a legacy provider of aftermarket car components, while Lucid designs premium electric vehicles. They represent two different ways to play the evolution of transportation. One relies on maintaining existing cars on the road, while the other bets on the future of high-end electrification.
The case for Advance Auto PartsAdvance Auto Parts sells automotive replacement parts, accessories, and maintenance items to two distinct customer groups. The company operates in a competitive environment among retail stocks where scale and logistics are critical. Professional sales to garages and service stations account for approximately 50% of revenue, while the company also supports hundreds of independently owned Carquest stores.
In FY 2025, revenue reached nearly $8.6 billion. This represented a decrease of roughly 5.4% compared to the prior year. Despite the sales decline, the company reported net income of approximately $44.0 million, and the net margin, which indicates how much profit is generated from each dollar of revenue, was nearly 0.5%.
As of its January 2026 balance sheet, the debt-to-equity ratio was 2.4x. This metric, which measures total debt against shareholder equity, suggests a reliance on borrowing to fund operations. The current ratio, a gauge of the company ability to cover short-term debts with short-term assets, was approximately 1.7x, while free cash flow was negative $298.0 million.
The case for LucidLucid Group focuses on the luxury electric vehicle market, designing and selling high-performance models like the Lucid Air and Lucid Gravity. The company operates through its own studios and service centers rather than traditional dealerships to maintain control over the customer experience. A major component of its demand relies on an agreement with the Government of Saudi Arabia to purchase up to 100,000 vehicles, which adds a significant layer of customer concentration risk.
In FY 2025, revenue reached nearly $1.4 billion. This was a sharp increase of approximately 67.6% from the prior year as the company ramped up deliveries. However, the company reported a net loss of $2.7 billion, and the net margin, indicating how much the company loses for every dollar of sales, was negative 199.3%.
As of its December 2025 balance sheet, the debt-to-equity ratio was 4.05x. The current ratio was approximately 1.3x, providing a moderate cushion for immediate obligations. Free cash flow, the cash remaining after paying for capital expenditures, was negative $3.8 billion, reflecting the massive costs associated with building out manufacturing capacity and developing new vehicle platforms.
Risk profile comparisonAdvance Auto Parts faces significant risks while executing its post-restructuring strategy, including potential unforeseen costs and supply chain inefficiencies. The company operates in a competitive environment where internet-based retailers and mass merchandisers like Walmart may have superior scale or lower cost structures. Volatility in global supply chains and reliance on complex technology systems also create vulnerabilities for the business.
Lucid Group carries substantial financial risks due to its history of net losses and the persistent need for additional capital to fund its expensive operations. Scaling production for the Lucid Air and Lucid Gravity remains a challenge, as supply chain disruptions and logistics hurdles have previously delayed timelines. The luxury electric vehicle market is also highly competitive, with established players like Tesla and Rivian Automotive exerting downward price pressure.
Valuation comparisonAdvance Auto Parts offers a lower P/S ratio, measuring price against revenue, while only the legacy retailer has a Forward P/E based on future earnings estimates.
MetricAdvance Auto PartsLucidForward P/E19.7xN/AP/S ratio0.4x1.7xValuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.
I'd go with Advance Auto Parts, and it's a closer call than it might appear. Lucid builds impressive vehicles, with the Air and Gravity earning top awards. The technology is legitimately advanced. But Lucid is losing money on every car it sells, burning through enormous amounts of cash, and diluting shareholders with repeated capital raises to stay afloat. The path to profitability stretches well into the future.
Advance Auto Parts, meanwhile, is showing real signs of life after years of underperformance. Comparable sales growth just hit its strongest level in five years, margins are expanding, and management reaffirmed its full-year outlook. The auto parts market is large, durable, and not going anywhere, and Advance sits in the middle of it with a motivated leadership team working to close the gap with its competitors.
Advance Auto Parts is generating revenue, improving its margins, and operating in a stable market. For a long-term investor, that is a more comfortable foundation than a luxury EV company still years away from profitability.
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What are the Zacks Style Scores? The Zacks Style Scores is a unique set of guidelines that rates stocks based on three popular investing types, and were developed as complementary indicators for the Zacks Rank. This combination helps investors choose securities with the highest chances of beating the market over the next 30 days.
Each stock is given an alphabetic rating of A, B, C, D or F based on their value, growth, and momentum qualities. With this system, an A is better than a B, a B is better than a C, and so on, meaning the better the score, the better chance the stock will outperform.
The Style Scores are broken down into four categories:
Value ScoreFor value investors, it's all about finding good stocks at good prices, and discovering which companies are trading under their true value before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to help pick out the most attractive and discounted stocks.
Growth ScoreGrowth investors are more concerned with a stock's future prospects, and the overall financial health and strength of a company. Thus, the Growth Style Score analyzes characteristics like projected and historic earnings, sales, and cash flow to find stocks that will see sustainable growth over time.
Momentum ScoreMomentum traders and investors live by the saying "the trend is your friend." This investing style is all about taking advantage of upward or downward trends in a stock's price or earnings outlook. Employing factors like one-week price change and the monthly percentage change in earnings estimates, the Momentum Style Score can indicate favorable times to build a position in high-momentum stocks.
VGM ScoreIf you like to use all three kinds of investing, then the VGM Score is for you. It's a combination of all Style Scores, and is an important indicator to use with the Zacks Rank. The VGM Score rates each stock on their shared weighted styles, narrowing down the companies with the most attractive value, best growth forecast, and most promising momentum.
How Style Scores Work with the Zacks Rank A proprietary stock-rating model, the Zacks Rank utilizes the power of earnings estimate revisions, or changes to a company's earnings outlook, to help investors create a successful portfolio.
It's highly successful, with #1 (Strong Buy) stocks producing an unmatched +23.94% average annual return since 1988. That's more than double the S&P 500. But because of the large number of stocks we rate, there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.
But it can feel overwhelming to pick the right stocks for you and your investing goals with over 800 top-rated stocks to choose from.
That's where the Style Scores come in.
To maximize your returns, you want to buy stocks with the highest probability of success. This means picking stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you find yourself looking at stocks with a #3 (Hold) rank, make sure they have Scores of A or B as well to ensure as much upside potential as possible.
As mentioned above, the Scores are designed to work with the Zacks Rank, so any change to a company's earnings outlook should be a deciding factor when picking which stocks to buy.
Here's an example: a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one with Style Scores of A and B, still has a downward-trending earnings outlook, and a bigger chance its share price will decrease too.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: Advance Auto Parts (AAP - Free Report) Advance Auto Parts, Inc. operates in the U.S. automotive aftermarket industry and is primarily engaged in selling replacement parts (excluding tires), accessories, batteries and maintenance items for domestic and imported cars, vans, sport utility vehicles, light and heavy-duty trucks. It is a leading automotive parts provider in North America, serving both the do-it-yourself or DIY and professional installers (professional) as well as independently owned operators.
AAP is a #3 (Hold) on the Zacks Rank, with a VGM Score of B.
It also boasts a Value Style Score of B thanks to attractive valuation metrics like a forward P/E ratio of 19.66; value investors should take notice.
For fiscal 2026, one analyst revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.01 to $2.94 per share. AAP boasts an average earnings surprise of +62.1%.
With a solid Zacks Rank and top-tier Value and VGM Style Scores, AAP should be on investors' short list.
Advance Auto Parts is executing a major restructuring plan to streamline its supply chain and enhance store efficiency. BWX Technologies maintains a dominant position in the nuclear propulsion market with a massive revenue backlog from government contracts.
Investors often weigh the stability of industrial giants against the recovery potential of consumer retail players. Choosing between Advance Auto Parts Inc (AAP +5.19%) and Caterpillar Inc (CAT +7.27%) requires balancing niche retail resilience with heavy-equipment market dominance.
Advance Auto Parts focuses on the automotive aftermarket, selling essential components to keep older vehicles on the road. Caterpillar operates on a massive scale, providing the machinery that builds infrastructure and extracts global resources. Both companies face distinct macroeconomic headwinds, making their current valuations a critical factor for any investment decision in the coming year.
The case for Advance Auto PartsAdvance Auto Parts operates as a specialized provider in the automotive aftermarket, serving both professional mechanics and do-it-yourself enthusiasts. This dual-track strategy allows the company to capture demand from local repair shops and individual car owners looking for parts. The company is currently leveraging technology to improve its competitive position among retail stocks, recently expanding a partnership with OneRail to provide AI-powered same-day delivery across its store network.
In FY 2025, revenue reached $8.6 billion, representing a year-over-year decline of approximately 5.4%. Despite the sales dip, the company managed to report a net income of $44 million, resulting in a net margin of approximately 0.5% for the fiscal year. The company is currently implementing a multi-year restructuring plan to optimize its supply chain, reduce costs, and enhance its competitive position in a fragmented market.
As of its January 2026 balance sheet, the debt-to-equity ratio is nearly 2.4x. This metric compares total debt to shareholder equity and indicates a significant reliance on borrowed capital to fund operations. Free cash flow for the year was negative $298 million, defined as cash from operations minus capital expenditures.
The case for CaterpillarCaterpillar operates through a global, independent dealer network that serves customers in the construction, mining, and energy industries. The company is actively expanding its technology footprint through recent acquisitions of mining software providers to enhance its digital service offerings. By integrating data-driven solutions into its machinery, the firm aims to provide higher value to its global customer base in nearly 190 countries.
During FY 2025, revenue reached nearly $67.6 billion, indicating a growth rate of approximately 4.3% over the prior year. The company generated net income of roughly $8.9 billion, though this was a notable decrease from the $10.8 billion earned in 2024. This resulted in a net margin of approximately 13.1% for the year.
As of its December 2025 balance sheet, the debt-to-equity ratio is approximately 2.0x. This means total liabilities are twice the size of shareholder equity, a common structure for large-scale manufacturers with significant physical assets. Furthermore, Caterpillar generated roughly $10.1 billion in free cash flow during FY 2025, providing ample capital for dividends and reinvestment.
Risk profile comparisonThe automotive aftermarket is a crowded field where Advance Auto Parts faces pressure from internet-based retailers and national chains. Intense competition from rivals using generative AI for logistics and faster store expansion puts pressure on the company's net margin. Additionally, the company manages risks from its global supply chain, where geopolitical unrest or labor shortages can disrupt inventory availability and increase costs.
Caterpillar is highly sensitive to the broader economic cycle, as demand for heavy machinery often falls when commodity prices or infrastructure spending decline. The company is also involved in high-stakes legal battles, including a patent infringement dispute with Doosan Bobcat over construction technology. Furthermore, its financial services division remains vulnerable to interest rate changes and the creditworthiness of its global customer base.
Valuation comparisonAdvance Auto Parts currently trades at a significantly lower sales multiple, while Caterpillar carries a higher premium reflecting its stronger net margin and cash generation.
MetricAdvance Auto PartsCaterpillarForward P/E21.3x33.3xP/S ratio0.4x5.4xValuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.
Advance Auto Parts is in the midst of turning around the struggles it has experienced over the past few years around sales growth, margins, and market share. The aftermarket auto parts business has been in a slump, due largely to a mix of factors: weak do-it-yourselfer demand, vehicle electrification, intense competition, and general pocketbook pressures on consumers.
Company management has been addressing the business’ issues by rolling out a new multi-year turnaround program. That started in late 2024, including closing stores, optimizing store footprints, and overhauling its supply chain. To date, the program has largely been a success, especially with first-quarter fiscal 2026 results that were much better than expected, with revenue of $ 2.6 billion and net income of $25 million. Analysts see sales for full year 2026 a little lower at $8.57 billion but with improving net income, expected to come in at $167 million, roughly four times 2025.
Perhaps it shouldn’t be a surprise that Caterpillar is yet another business benefiting from the AI data center explosion. That not only has driven robust demand for its power generation products but also for construction equipment.
Helping the case for Caterpillar are expectations on the street that the macroeconomic environment is improving enough that the company will see more demand for its equipment from non-AI-related endeavors. For the full year fiscal 2026, analysts’ consensus is for a 13% growth in sales to $76.6 billion, with net income jumping some 25% to $11.2 billion.
So which stock is the better buy? Caterpillar is a stalwart U.S. industrials stock. There is a good chance this year comes in worse than projected, given the uncertainties over how the Iran war will continue to affect economic activity. Still, the business is in better shape than Advance Auto Parts which, while it is profitable, competes in the cut-throat retail sector. For 2026, go with Caterpillar.
Choosing between an automotive retailer and an industrial power manager requires a look at two very different business cycles. You must decide if Advance Auto Parts Inc (AAP +5.19%) or Eaton Corporation (ETN +1.67%) fits your strategy.
Advance Auto Parts serves a mix of professional mechanics and everyday drivers across North America. Eaton provides complex electrical and mechanical systems for everything from massive data centers to commercial jets. While one seeks a turnaround, the other is riding a wave of infrastructure spending.
The case for Advance Auto PartsAdvance Auto Parts is a major provider in the aftermarket parts industry, serving both professional installers and do-it-yourself customers. Professional sales account for approximately 50% of total revenue, illustrating its importance to local repair shops. The company is currently focused on an AI-powered delivery partnership with OneRail to speed up its fulfillment across retail stocks in the automotive space.
In FY 2025, revenue reached $8.6 billion, representing a year-over-year decline of approximately 5.4%. Despite the sales dip, the company managed to report a net income of $44 million, resulting in a net margin of approximately 0.5% for the fiscal year. The company is currently implementing a multi-year restructuring plan to optimize its supply chain, reduce costs, and enhance its competitive position in a fragmented market.
As of its January 2026 balance sheet, the debt-to-equity ratio is nearly 2.4x. This metric compares total debt to shareholder equity and indicates a significant reliance on borrowed capital to fund operations. Free cash flow for the year was negative $298 million, representing the cash remaining after paying for all operations and capital equipment.
The case for Eaton CorporationEaton focuses on intelligent power management, serving critical sectors like data centers, utilities, and aerospace. The company manages a diverse customer base, though it faces some concentration, with six major customers accounting for roughly 22% of its electrical segment sales. To stay ahead, Eaton recently expanded its reach into digital power systems through new partnerships with companies like VoltServer.
In FY 2025, revenue reached nearly $27.5 billion, reflecting a healthy growth rate of approximately 10%. The company generated net income of just about $4.1 billion during this same period. This led to a net margin of roughly 15%, which indicates the percentage of total revenue that remains as profit after all expenses are paid.
As of its December 2025 balance sheet, the debt-to-equity ratio was approximately 0.6x. This lower ratio suggests a more conservative use of debt compared to its equity base. The current ratio stood at roughly 1.1x, while free cash flow for FY 2025 was approximately $3.55 billion. This strong cash generation provides the company with significant flexibility for dividends, acquisitions, or reinvesting in the business.
Risk profile comparisonAdvance Auto Parts faces significant operational risks as it implements a complex supply chain transformation. This multi-year strategy requires high capital investment and could lead to unforeseen restructuring costs. The company also faces intense competition from internet-based retailers like Amazon.com Inc (AMZN -2.43%) and established chains like AutoZone Inc (AZO +1.10%). Additionally, the business must manage vulnerabilities related to global supply chain instability and potential data security threats.
Eaton is currently managing the execution risk of a $5.1 billion spin-off of its Mobility division into a jointly owned business with Dana Inc (DAN +0.58%). Such large transactions can distract management and may not always deliver the expected financial benefits. The company also faces the risk of technological disruption, particularly in rapidly changing markets like data centers. Furthermore, global operations mean it must navigate material shortages and inflationary pressures that could impact its profitability if costs are not passed on to customers.
Valuation comparisonAdvance Auto Parts trades at a significant sales discount, while Eaton commands a higher premium given its stronger profitability and higher future earnings estimates.
MetricAdvance Auto PartsEatonForward P/E21.3x31.1xP/S ratio0.4x5.7xValuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.
Eaton is a blue chip industrial company that is benefiting from megatrends, including energy transition, electrification, digitalization, and infrastructure spending. The company has been experiencing strong orders and record backlogs, which has investors believing top line sales and profits should steadily increase. In particular, data centers have been a high-growth area for Eaton, with orders up more than threefold in 2026 and an order backlog that extends out 12 years. Management also foresees good growth in aerospace and utility end markets.
Advance Auto Parts, meanwhile, is in the midst of turning around the struggles it has experienced over the past few years, including sales growth, margins, and market share. The aftermarket auto parts business has been in a slump, largely due to a mix of factors: weak do-it-yourself demand, vehicle electrification, intense competition, and general pocketbook pressures on consumers.
Company management has been addressing the business’s issues by rolling out a new multi-year turnaround program. That started in late 2024, including closing stores, optimizing store footprints, and overhauling its supply chain. To date, the program has largely been a success, especially with first-quarter fiscal 2026 results that were much better than expected, with revenue of $2.6 billion and net income of $25 million. Analysts see full-year 2026 sales slightly lower at $8.57 billion, with net income improving to $167 million, roughly four times 2025.
For its part, Eaton is expected to see revenue growth of 19% in the current fiscal year, with net income growing more slowly, at about 5%.
In short, Eaton is a business firing on all cylinders right now, with expanding end markets and growing profits. Advance Auto Parts is doing admirably in its turnaround, but Eaton is the stock to go with in 2026, even at its premium price ratios.
Advance Auto Parts focuses on professional sales and an AI-powered delivery partnership with OneRail to improve fulfillment. Delta Air Lines leverages strong demand for premium travel and a lucrative loyalty partnership with American Express.
Dimensional Fund Advisors LP boosted its holdings in Advance Auto Parts, Inc. (NYSE: AAP) by 15.3% in the undefined quarter, according to the company in its most recent 13F filing with the Securities and Exchange Commission (SEC). The fund owned 2,127,948 shares of the company's stock after purchasing an additional 282,591 shares during
On July 23, 2026, Advance Auto Parts Inc (AAP) shares fell 3.7%, closing at $53.42. This price is situated within a 52-week range of $37.89 to $70.00. The recen
Have you been searching for a stock that might be well-positioned to maintain its earnings-beat streak in its upcoming report? It is worth considering Advance Auto Parts (AAP - Free Report) , which belongs to the Zacks Automotive - Retail and Wholesale - Parts industry.
This auto parts retailer has seen a nice streak of beating earnings estimates, especially when looking at the previous two reports. The average surprise for the last two quarters was 103.60%.
For the most recent quarter, Advance Auto Parts was expected to post earnings of $0.39 per share, but it reported $0.77 per share instead, representing a surprise of 97.44%. For the previous quarter, the consensus estimate was $0.41 per share, while it actually produced $0.86 per share, a surprise of 109.76%.
Price and EPS Surprise
For Advance Auto Parts, estimates have been trending higher, thanks in part to this earnings surprise history. And when you look at the stock's positive Zacks Earnings ESP (Expected Surprise Prediction), it's a great indicator of a future earnings beat, especially when combined with its solid Zacks Rank.
Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better produce a positive surprise nearly 70% of the time. In other words, if you have 10 stocks with this combination, the number of stocks that beat the consensus estimate could be as high as seven.
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.
Advance Auto Parts currently has an Earnings ESP of +8.04%, which suggests that analysts have recently become bullish on the company's earnings prospects. This positive Earnings ESP when combined with the stock's Zacks Rank #2 (Buy) indicates that another beat is possibly around the corner.
With the Earnings ESP metric, it's important to note that a negative value reduces its predictive power; however, a negative Earnings ESP does not indicate an earnings miss.
Many companies end up beating the consensus EPS estimate, though this is not the only reason why their shares gain. Additionally, some stocks may remain stable even if they end up missing the consensus estimate.
Because of this, it's really important to check a company's Earnings ESP ahead of its quarterly release to increase the odds of success. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
Two factors often determine stock prices in the long run: earnings and interest rates. Investors can't control the latter, but they can focus on a company's earnings results every quarter.
We know earnings results are vital, but how a company performs compared to bottom line expectations can be even more important when it comes to stock prices, especially in the near-term. This means that investors might want to take advantage of these earnings surprises.
Now that we know how important earnings and earnings surprises are, it's time to show investors how to take advantage of these events to boost their returns by utilizing the Zacks Earnings ESP filter.
The Zacks Earnings ESP, ExplainedThe Zacks Earnings ESP, or Expected Surprise Prediction, aims to find earnings surprises by focusing on the most recent analyst revisions. The basic premise is that if an analyst reevaluates their earnings estimate ahead of an earnings release, it means they likely have new information that could possibly be more accurate.
With this in mind, the Expected Surprise Prediction compares the Most Accurate Estimate (being the most recent) against the overall Zacks Consensus Estimate. The percentage difference provides the ESP figure. The system also utilizes our core Zacks Rank to provide a stronger system for identifying stocks that might beat their next quarterly earnings estimate and possibly see the stock price climb.
In fact, when we combined a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, stocks produced a positive surprise 70% of the time. Perhaps most importantly, using these parameters has helped produce 28.3% annual returns on average, according to our 10 year backtest.
Most stocks, about 60%, fall into the #3 (Hold) category, and they are expected to perform in-line with the broader market. Stocks with a #2 (Buy) and #1 (Strong Buy) rating, or the top 15% and top 5% of stocks, respectively, should outperform the market, with Strong Buy stocks outperforming more than any other rank.
Should You Consider Advance Auto Parts?Now that we understand what the ESP is and how beneficial it can be, let's dive into a stock that currently fits the bill. Advance Auto Parts (AAP - Free Report) earns a #2 (Buy) right now and its Most Accurate Estimate sits at $0.88 a share, just 21 days from its upcoming earnings release on August 13, 2026.
AAP has an Earnings ESP figure of +8.04%, which, as explained above, is calculated by taking the percentage difference between the $0.88 Most Accurate Estimate and the Zacks Consensus Estimate of $0.81. Advance Auto Parts is one of a large database of stocks with positive ESPs. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
AAP is part of a big group of Retail and Wholesale stocks that boast a positive ESP, and investors may want to take a look at Cracker Barrel Old Country Store (CBRL - Free Report) as well.
Cracker Barrel Old Country Store is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on September 16, 2026. CBRL's Most Accurate Estimate sits at -$0.20 a share 55 days from its next earnings release.
The Zacks Consensus Estimate for Cracker Barrel Old Country Store is -$0.33, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +38.78%.
AAP and CBRL's positive ESP figures tell us that both stocks have a good chance at beating analyst expectations in their next earnings report.
Find Stocks to Buy or Sell Before They're ReportedUse the Zacks Earnings ESP Filter to turn up stocks with the highest probability of positively, or negatively, surprising to buy or sell before they're reported for profitable earnings season trading. Check it out here >>
Advance Auto Parts urges drivers across the Northeast and Midwest to check their cabin air filters as air quality worsens across the region
, /PRNewswire/ -- Wildfire smoke is choking the Northeast and Midwest. Residents are sealing windows, running air purifiers, and checking home air filters. And while their cars already have built-in protection, few know it – and even fewer maintain it.
According to national data1 released earlier this year by Advance Auto Parts, Inc. (NYSE: AAP), half of American drivers don't realize their vehicle has a cabin air filter at all. Another 54% have never replaced theirs.
The Filter You're Ignoring Right Now
Your cabin air filter traps smoke particles, pollen and other pollutants before they enter your cabin through the HVAC system. When wildfires rage and air quality plummets, a clean filter is the difference between breathing protected air or smoke-filled air during your commute. When neglected, filters clog and smoke gets through.
The Numbers Drivers Should Know
The data reveals a glaring gap in how people protect themselves on the road:
71% of allergy sufferers swap out their home air filters every 90 days, but only 51% have ever replaced a car cabin filter 68% of drivers care about air quality inside their vehicles but don't act on it 55% of drivers spend 4+ hours weekly in their cars What to Do This Week
Locate your filter. Check your owner's manual. It's usually behind the glove box or under the hood. Your manual shows exactly how to access it safely. Inspect it. Hold it up to light. If it looks gray, brown, or visibly clogged with dust, it needs replacing today. Clean filters appear relatively white or light-colored. Replace on schedule. Most cabin air filters need changing every 12,000 to 15,000 miles or at least once per year, depending on driving conditions and air quality. Use recirculation mode. During heavy smoke days, activate your vehicle's recirculation setting to block outside air and maximize filter protection. Advance Auto Parts stocks cabin air filters for every make and model. Visit AdvanceAutoParts.com or your local store to find the right cabin air filter for your vehicle.
Atomik Research1
About Advance Auto Parts:
Advance Auto Parts, Inc. is a leading automotive aftermarket parts provider that serves both professional installer and do-it-yourself customers. As of April 25, 2026, Advance operated 4,308 stores primarily within the United States, with additional locations in Canada, Puerto Rico and the U.S. Virgin Islands. The Company also served 797 independently owned Carquest branded stores across these locations in addition to Mexico and various Caribbean islands. Additional information about Advance, including employment opportunities, customer services, and online shopping for parts, accessories and other offerings can be found at www.AdvanceAutoParts.com.
1 Atomik Research surveyed 1,000 adult vehicle owners and operators, 50% of whom manage seasonal allergies in their households. Margin of error: +/- 3 percentage points at 95% confidence level.
Taking full advantage of the stock market and investing with confidence are common goals for new and old investors, and Zacks Premium offers many different ways to do both.
Featuring daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, the research service can help you become a smarter, more self-assured investor.
Zacks Premium also includes the Zacks Style Scores.
What are the Zacks Style Scores? Developed alongside the Zacks Rank, the Zacks Style Scores are a group of complementary indicators that help investors pick stocks with the best chances of beating the market over the next 30 days.
Each stock is given an alphabetic rating of A, B, C, D or F based on their value, growth, and momentum qualities. With this system, an A is better than a B, a B is better than a C, and so on, meaning the better the score, the better chance the stock will outperform.
The Style Scores are broken down into four categories:
Value ScoreFinding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to highlight the most attractive and discounted stocks.
Growth ScoreWhile good value is important, growth investors are more focused on a company's financial strength and health, and its future outlook. The Growth Style Score takes projected and historic earnings, sales, and cash flow into account to uncover stocks that will see long-term, sustainable growth.
Momentum ScoreMomentum traders and investors live by the saying "the trend is your friend." This investing style is all about taking advantage of upward or downward trends in a stock's price or earnings outlook. Employing factors like one-week price change and the monthly percentage change in earnings estimates, the Momentum Style Score can indicate favorable times to build a position in high-momentum stocks.
VGM ScoreIf you like to use all three kinds of investing, then the VGM Score is for you. It's a combination of all Style Scores, and is an important indicator to use with the Zacks Rank. The VGM Score rates each stock on their shared weighted styles, narrowing down the companies with the most attractive value, best growth forecast, and most promising momentum.
How Style Scores Work with the Zacks Rank The Zacks Rank is a proprietary stock-rating model that harnesses the power of earnings estimate revisions, or changes to a company's earnings expectations, to help investors build a successful portfolio.
It's highly successful, with #1 (Strong Buy) stocks producing an unmatched +23.94% average annual return since 1988. That's more than double the S&P 500. But because of the large number of stocks we rate, there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.
This totals more than 800 top-rated stocks, and it can be overwhelming to try and pick the best stocks for you and your portfolio.
That's where the Style Scores come in.
To maximize your returns, you want to buy stocks with the highest probability of success. This means picking stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you find yourself looking at stocks with a #3 (Hold) rank, make sure they have Scores of A or B as well to ensure as much upside potential as possible.
As mentioned above, the Scores are designed to work with the Zacks Rank, so any change to a company's earnings outlook should be a deciding factor when picking which stocks to buy.
A stock with a #4 (Sell) or #5 (Strong Sell) rating, for instance, even one with Scores of A and B, will still have a declining earnings forecast, and a greater chance its share price will fall too.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: Advance Auto Parts (AAP - Free Report) Advance Auto Parts, Inc. operates in the U.S. automotive aftermarket industry and is primarily engaged in selling replacement parts (excluding tires), accessories, batteries and maintenance items for domestic and imported cars, vans, sport utility vehicles, light and heavy-duty trucks. It is a leading automotive parts provider in North America, serving both the do-it-yourself or DIY and professional installers (professional) as well as independently owned operators.
AAP is a #3 (Hold) on the Zacks Rank, with a VGM Score of A.
It also boasts a Value Style Score of B thanks to attractive valuation metrics like a forward P/E ratio of 17.7; value investors should take notice.
For fiscal 2026, 11 analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.17 to $2.94 per share. AAP boasts an average earnings surprise of +62.1%.
With a solid Zacks Rank and top-tier Value and VGM Style Scores, AAP should be on investors' short list.
On July 10, 2026, Advance Auto Parts Inc (AAP) shares rose 5.4% to $57.95. Despite today's positive movement, the stock has experienced a decline of 5.4% over t
On July 06, 2026, Advance Auto Parts Inc (AAP) shares fell 8.4% today, closing at $56.33. This decline comes after a week of losses, with the stock down 8.6% ov
Taking full advantage of the stock market and investing with confidence are common goals for new and old investors, and Zacks Premium offers many different ways to do both.
Featuring daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, the research service can help you become a smarter, more self-assured investor.
Zacks Premium also includes the Zacks Style Scores.
What are the Zacks Style Scores? Developed alongside the Zacks Rank, the Zacks Style Scores are a group of complementary indicators that help investors pick stocks with the best chances of beating the market over the next 30 days.
Each stock is given an alphabetic rating of A, B, C, D or F based on their value, growth, and momentum qualities. With this system, an A is better than a B, a B is better than a C, and so on, meaning the better the score, the better chance the stock will outperform.
The Style Scores are broken down into four categories:
Value ScoreFor value investors, it's all about finding good stocks at good prices, and discovering which companies are trading under their true value before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to help pick out the most attractive and discounted stocks.
Growth ScoreGrowth investors, on the other hand, are more concerned with a company's financial strength and health, and its future outlook. The Growth Style Score examines things like projected and historic earnings, sales, and cash flow to find stocks that will experience sustainable growth over time.
Momentum ScoreMomentum traders and investors live by the saying "the trend is your friend." This investing style is all about taking advantage of upward or downward trends in a stock's price or earnings outlook. Employing factors like one-week price change and the monthly percentage change in earnings estimates, the Momentum Style Score can indicate favorable times to build a position in high-momentum stocks.
VGM ScoreWhat if you like to use all three types of investing? The VGM Score is a combination of all Style Scores, making it one of the most comprehensive indicators to use with the Zacks Rank. It rates each stock on their combined weighted styles, which helps narrow down the companies with the most attractive value, best growth forecast, and most promising momentum.
How Style Scores Work with the Zacks Rank The Zacks Rank is a proprietary stock-rating model that harnesses the power of earnings estimate revisions, or changes to a company's earnings expectations, to help investors build a successful portfolio.
Investors can count on the Zacks Rank's success, with #1 (Strong Buy) stocks producing an unmatched +23.94% average annual return since 1988, more than double the S&P 500's performance. But the model rates a large number of stocks, and there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.
With more than 800 top-rated stocks to choose from, it can certainly feel overwhelming to pick the ones that are right for you and your investing journey.
That's where the Style Scores come in.
To have the best chance of big returns, you'll want to always consider stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B, which will give you the highest probability of success. If you're looking at stocks with a #3 (Hold) rank, it's important they have Scores of A or B as well to ensure as much upside potential as possible.
As mentioned above, the Scores are designed to work with the Zacks Rank, so any change to a company's earnings outlook should be a deciding factor when picking which stocks to buy.
Here's an example: a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one with Style Scores of A and B, still has a downward-trending earnings outlook, and a bigger chance its share price will decrease too.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: Advance Auto Parts (AAP - Free Report) Advance Auto Parts, Inc. operates in the U.S. automotive aftermarket industry and is primarily engaged in selling replacement parts (excluding tires), accessories, batteries and maintenance items for domestic and imported cars, vans, sport utility vehicles, light and heavy-duty trucks. It is a leading automotive parts provider in North America, serving both the do-it-yourself or DIY and professional installers (professional) as well as independently owned operators.
AAP is a #3 (Hold) on the Zacks Rank, with a VGM Score of B.
Momentum investors should take note of this Retail-Wholesale stock. AAP has a Momentum Style Score of B, and shares are up 10.1% over the past four weeks.
10 analysts revised their earnings estimate higher in the last 60 days for fiscal 2026, while the Zacks Consensus Estimate has increased $0.17 to $2.94 per share. AAP also boasts an average earnings surprise of +62.1%.
With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, AAP should be on investors' short list.
Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
Taking full advantage of the stock market and investing with confidence are common goals for new and old investors, and Zacks Premium offers many different ways to do both.
The research service features daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, all of which will help you become a smarter, more confident investor.
It also includes access to the Zacks Style Scores.
What are the Zacks Style Scores? Developed alongside the Zacks Rank, the Zacks Style Scores are a group of complementary indicators that help investors pick stocks with the best chances of beating the market over the next 30 days.
Each stock is given an alphabetic rating of A, B, C, D or F based on their value, growth, and momentum qualities. With this system, an A is better than a B, a B is better than a C, and so on, meaning the better the score, the better chance the stock will outperform.
The Style Scores are broken down into four categories:
Value ScoreFor value investors, it's all about finding good stocks at good prices, and discovering which companies are trading under their true value before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to help pick out the most attractive and discounted stocks.
Growth ScoreGrowth investors are more concerned with a stock's future prospects, and the overall financial health and strength of a company. Thus, the Growth Style Score analyzes characteristics like projected and historic earnings, sales, and cash flow to find stocks that will see sustainable growth over time.
Momentum ScoreMomentum investors, who live by the saying "the trend is your friend," are most interested in taking advantage of upward or downward trends in a stock's price or earnings outlook. Utilizing one-week price change and the monthly percentage change in earnings estimates, among other factors, the Momentum Style Score can help determine favorable times to buy high-momentum stocks.
VGM ScoreIf you like to use all three kinds of investing, then the VGM Score is for you. It's a combination of all Style Scores, and is an important indicator to use with the Zacks Rank. The VGM Score rates each stock on their shared weighted styles, narrowing down the companies with the most attractive value, best growth forecast, and most promising momentum.
How Style Scores Work with the Zacks Rank The Zacks Rank, which is a proprietary stock-rating model, employs earnings estimate revisions, or changes to a company's earnings expectations, to make building a winning portfolio easier.
#1 (Strong Buy) stocks have produced an unmatched +24% average annual return since 1988, which is more than double the S&P 500's performance over the same time frame. However, the Zacks Rank examines a ton of stocks, and there can be more than 200 companies with a Strong Buy rank, and another 600 with a #2 (Buy) rank, on any given day.
With more than 800 top-rated stocks to choose from, it can certainly feel overwhelming to pick the ones that are right for you and your investing journey.
That's where the Style Scores come in.
To maximize your returns, you want to buy stocks with the highest probability of success. This means picking stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you find yourself looking at stocks with a #3 (Hold) rank, make sure they have Scores of A or B as well to ensure as much upside potential as possible.
As mentioned above, the Scores are designed to work with the Zacks Rank, so any change to a company's earnings outlook should be a deciding factor when picking which stocks to buy.
A stock with a #4 (Sell) or #5 (Strong Sell) rating, for instance, even one with Scores of A and B, will still have a declining earnings forecast, and a greater chance its share price will fall too.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: Advance Auto Parts (AAP - Free Report) Advance Auto Parts, Inc. operates in the U.S. automotive aftermarket industry and is primarily engaged in selling replacement parts (excluding tires), accessories, batteries and maintenance items for domestic and imported cars, vans, sport utility vehicles, light and heavy-duty trucks. It is a leading automotive parts provider in North America, serving both the do-it-yourself or DIY and professional installers (professional) as well as independently owned operators.
AAP is a #3 (Hold) on the Zacks Rank, with a VGM Score of A.
It also boasts a Value Style Score of B thanks to attractive valuation metrics like a forward P/E ratio of 18.63; value investors should take notice.
10 analysts revised their earnings estimate upwards in the last 60 days for fiscal 2026. The Zacks Consensus Estimate has increased $0.20 to $2.94 per share. AAP boasts an average earnings surprise of +62.1%.
With a solid Zacks Rank and top-tier Value and VGM Style Scores, AAP should be on investors' short list.
RALEIGH, N.C. & ORLANDO, Fla.--(BUSINESS WIRE)--Advance Auto Parts (NYSE: AAP), a leading automotive aftermarket parts provider in North America serving both professional installers and do-it-yourself customers, and OneRail, the AI-native technology platform orchestrating unified commerce for enterprise retailers, wholesalers and distributors, today announced an expanded partnership that will broaden Advance’s use of OneRail’s delivery orchestration platform to support same-day fulfillment across its store network.
The expanded partnership supports Advance’s ongoing investments in supply chain modernization, inventory availability, market hubs and store-based fulfillment. By leveraging OneRail’s orchestration technology, Advance aims to more dynamically coordinate deliveries across internal fleet assets and third-party delivery providers, helping improve flexibility, reliability, and operational efficiency.
“In our industry, speed and availability are what earn customer loyalty, and our customers’ expectations have never been higher,” said Ron Gilbert, Senior Vice President of Supply Chain at Advance Auto Parts. “OneRail is helping us improve delivery execution while giving us greater flexibility in how we serve customers. As we continue expanding same-day fulfillment capabilities, this partnership will help us leverage our growing store and market hub network more effectively to deliver a better customer experience.”
The partnership builds on more than four years of collaboration between the companies. During that time, OneRail has supported delivery orchestration across more than 4,000 locations throughout the Advance network, helping coordinate tens of millions of annual deliveries through a combination of internal fleet resources and third-party delivery capacity.
“OneRail's role is to help enterprise retailers turn inventory availability into fulfillment capability,” said Bill Catania, Founder and CEO of OneRail. “Advance Auto Parts has made significant investments in its supply chain and store network, and we're proud to help connect those investments with a flexible fulfillment model that can scale with customer demand.”
The expanded partnership further supports Advance’s work to deliver a seamless customer experience across professional and consumer channels and create a more agile and responsive fulfillment network.
About OneRail
OneRail is the AI technology platform that orchestrates profitable same-day delivery for enterprise retailers, wholesalers and distributors. Powered by its OmniPoint® platform and backed by a 24/7 U.S.-based Exceptions Assist™ team, OneRail connects inventory, transportation and the customer experience in a single real-time transaction, giving leading brands the delivery infrastructure to compete at scale without building it themselves. In March 2026, FedEx selected OneRail as the technology and network partner powering FedEx SameDay® Local. OneRail built OmniSTAR, the first AI-powered mode-agnostic delivery decisioning platform, in collaboration with NVIDIA. OneRail is headquartered in Orlando, Florida, with global operations. To learn more, visit onerail.com.
About Advance Auto Parts
Advance Auto Parts, Inc. is a leading automotive aftermarket parts provider that serves both professional installer and do-it-yourself customers. As of April 25, 2026, Advance operated 4,308 stores primarily within the United States, with additional locations in Canada, Puerto Rico and the U.S. Virgin Islands. The Company also served 797 independently owned Carquest branded stores across these locations in addition to Mexico and various Caribbean islands. Additional information about Advance, including employment opportunities, customer services, and online shopping for parts, accessories and other offerings, can be found at www.AdvanceAutoParts.com.
Advance Auto Parts (AAP - Free Report) came out with quarterly earnings of $0.77 per share, beating the Zacks Consensus Estimate of $0.39 per share. This compares to a loss of $0.22 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of +95.23%. A quarter ago, it was expected that this auto parts retailer would post earnings of $0.41 per share when it actually produced earnings of $0.86, delivering a surprise of +109.76%.
Over the last four quarters, the company has surpassed consensus EPS estimates four times.
Advance Auto Parts, which belongs to the Zacks Automotive - Retail and Wholesale - Parts industry, posted revenues of $2.61 billion for the quarter ended March 2026, surpassing the Zacks Consensus Estimate by 2.08%. This compares to year-ago revenues of $2.58 billion. The company has topped consensus revenue estimates four times over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
Advance Auto Parts shares have added about 30.4% since the beginning of the year versus the S&P 500's gain of 8.6%.
What's Next for Advance Auto Parts?While Advance Auto Parts has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for Advance Auto Parts was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.85 on $2.04 billion in revenues for the coming quarter and $2.77 on $8.55 billion in revenues for the current fiscal year.
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Automotive - Retail and Wholesale - Parts is currently in the bottom 34% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Another stock from the same industry, CarMax (KMX - Free Report) , has yet to report results for the quarter ended May 2026.
This used car dealership chain is expected to post quarterly earnings of $0.94 per share in its upcoming report, which represents a year-over-year change of -31.9%. The consensus EPS estimate for the quarter has been revised 9.3% lower over the last 30 days to the current level.
CarMax's revenues are expected to be $7.58 billion, up 0.5% from the year-ago quarter.
3 Under-the-Radar Earnings Surprises Could Signal a New TrendAdvance Auto Parts NYSE: AAP reported what executives described as a solid start to fiscal 2026, with first-quarter comparable sales rising 3.5%, the company’s strongest quarterly growth in five years.
President and Chief Executive Officer Shane O’Kelly said the results were driven primarily by the company’s Pro channel, particularly its focus on Main Street professional customers, along with improved parts availability and customer service. The DIY channel also returned to positive growth after softness in the prior quarter.
Get Advance Auto Parts alerts:
From Rust to Riches: 2 Auto Parts Names Built for 2026“Our Q1 performance reflects continued improvement in parts availability and customer service, which is helping us respond to favorable industry dynamics,” O’Kelly said on the company’s earnings call.
Sales Improve as Pro Business Leads Executive Vice President and Chief Financial Officer Ryan Grimsland said net sales for the quarter were $2.6 billion, up 1% from the prior year. Comparable sales increased 3.5%, offset in part by a two-point headwind from cycling $51 million in liquidation sales tied to store optimization activity completed in the first quarter of last year.
Advance Auto Parts is A Great Risk/Reward Play If EPS DeliversGrimsland said the quarter included early benefits from winter storms, which drove sales of failure-related items, though temporary store closures and delayed maintenance spending also caused some disruption. Sales trends improved beginning in mid-February as consumers used tax refunds and resumed maintenance spending amid better weather in March. Overall, he said weather was not a material driver of first-quarter results.
By channel, Pro comparable sales grew in the mid-single-digit range, with monthly growth consistently in that range. Grimsland said the company’s Main Street Pro business outperformed the overall Pro comp by more than 200 basis points, even as Advance continues to optimize its large national account Pro business.
The DIY channel posted low double-digit comparable sales growth, though Grimsland said performance remains tempered by inflation and stretched household budgets. Ticket was positive, with same-SKU inflation of about 3%, in line with expectations. Transaction volumes improved in both channels, and units per transaction continued to rise.
Margins Expand on Merchandising Initiatives Adjusted gross profit was approximately $1.2 billion, or 45.1% of net sales, representing more than 210 basis points of gross margin expansion from the prior year. Grimsland attributed the improvement mainly to product margin expansion and merchandising initiatives.
Adjusted SG&A was approximately $1.1 billion, or 41.3% of net sales, providing roughly 200 basis points of leverage. SG&A declined 3% year over year as the company cycled about $37 million in expenses tied to last year’s store optimization project. Adjusted operating income was $99 million, or 3.8% of net sales, up 410 basis points year over year. Adjusted diluted earnings per share were $0.77, compared with a loss of $0.22 in the prior-year period.
Free cash outflow improved to $75 million from an outflow of $198 million a year earlier, which Grimsland attributed to stronger operating performance, improved working capital management and lower cash restructuring costs. Inventory rose about 5% from year-end 2025 as the company invested in product depth and breadth across its network.
Company Reaffirms 2026 Outlook Advance Auto Parts reaffirmed its full-year guidance. The company expects net sales of approximately $8.5 billion and comparable sales growth of 1% to 2%, with each quarter expected to deliver positive same-store sales growth. Management said the first half should be stronger due to easier comparisons and first-quarter performance.
Same-SKU inflation is expected to be in the 2% to 3% range for the year, and Grimsland said recent tariff regulations have not changed the company’s inflation expectations. The company expects Pro to outperform DIY, with both channels contributing positively to comparable sales growth.
For 2026, Advance expects adjusted operating income margin of 3.8% to 4.5%, representing 130 to 200 basis points of year-over-year expansion. Gross margin is expected to expand 110 to 150 basis points to approximately 45%, driven mainly by merchandising initiatives, including strategic vendor sourcing and pricing and promotions optimization.
The company also projected adjusted diluted EPS of $2.40 to $3.10, capital expenditures of approximately $300 million, and free cash flow of about $100 million. Advance plans to open 40 to 45 new stores and 10 to 15 market hubs during the year.
Strategic Priorities Focus on Merchandising, Supply Chain and Stores O’Kelly said Advance’s strategy remains built on three pillars: merchandising, supply chain and store operations. He said the company continues to work toward a medium-term target of 7% adjusted operating margin.
In merchandising, O’Kelly cited improved vendor relationships, better internal processes and a new assortment framework intended to improve product placement. He said expanded assortment in brakes and undercar categories is helping the company capture more Main Street Pro business.
The company also launched its owned oil brand, ARGOS, which O’Kelly said has met expectations and is now one of Advance’s top brands in the category. The brand has expanded beyond motor oil into hydraulic oils, antifreeze, performance chemicals and washer fluid.
Advance also replaced its Speed Perks loyalty program with Advance Rewards during the quarter. O’Kelly said new member sign-ups, program penetration and total transactions from loyalty members have increased since launch.
On supply chain, O’Kelly said the consolidation of distribution centers is nearing completion, allowing the company to focus on standardizing operations and improving productivity. He said the company expects supply chain process improvements to support gross margin expansion in 2027 and beyond.
Advance has opened two additional market hubs so far this year, bringing its total to 35. The company is targeting 60 market hubs in 2027. Grimsland said markets with a hub ecosystem are performing about 100 basis points better than those without one.
Executives Caution on Consumer Spending During the question-and-answer portion of the call, executives said second-quarter comparable sales are expected to moderate from the first quarter and remain in line with the company’s guidance range. Grimsland said Advance does not expect major tax refund tailwinds to continue and is monitoring potential volatility in consumer spending, particularly as households face pressure from elevated gas prices.
Grimsland said the period between tax refunds and peak driving season can be difficult to gauge, and the company will watch consumer behavior after Memorial Day. Still, he noted that less than 10% of the company’s business is discretionary.
“This is a needs-based business,” Grimsland said. “The cars need to start, they have to stop.”
O’Kelly said the company’s first-quarter growth was “roughly in line with the market” and reflected progress in parts availability, service and execution. He said Advance remains focused on continuing its strategic plan and improving operational productivity.
About Advance Auto Parts NYSE: AAPAdvance Auto Parts, Inc NYSE: AAP is a leading distributor of automotive aftermarket parts, accessories, and maintenance items. The company operates a network of stores and distribution centers across North America, serving both do-it-yourself (DIY) customers and professional service providers. Advance Auto Parts focuses on offering a comprehensive selection of replacement parts, batteries, engine components, and performance products for cars and light trucks.
The company's product portfolio includes engine oils and lubricants, cooling system components, brake and suspension parts, filters, belts, hoses, and diagnostic tools.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].
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U.S. stocks were lower, with the Nasdaq Composite falling over 200 points on Thursday.
Shares of Advance Auto Parts Inc (NYSE:AAP) rose sharply as the company reported better-than-expected first-quarter financial results.
Advance Auto Parts reported quarterly earnings of 77 cents per share which beat the analyst consensus estimate of 45 cents per share. The company reported quarterly sales of $2.614 billion which beat the analyst consensus estimate of $2.579 billion.
Advance Auto Parts shares jumped 16.4% to $59.61 on Thursday.
Here are some other big stocks recording gains in today’s session.
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Advance Auto Parts (AAP - Free Report) reported $2.61 billion in revenue for the quarter ended March 2026, representing a year-over-year increase of 1.2%. EPS of $0.77 for the same period compares to -$0.22 a year ago.
The reported revenue compares to the Zacks Consensus Estimate of $2.56 billion, representing a surprise of +2.08%. The company delivered an EPS surprise of +95.23%, with the consensus EPS estimate being $0.39.
While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health.
Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance.
Here is how Advance Auto Parts performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:
Comparable store sales - YoY change: 3.5% versus the six-analyst average estimate of 1.6%.Number of stores (Retail) - Total: 4,308 versus the three-analyst average estimate of 4,317.Number of stores - AAP: 4,070 versus the three-analyst average estimate of 4,077.Number of stores opened: 4 versus the two-analyst average estimate of 13.Number of stores (BOP): 4,305 versus 4,305 estimated by two analysts on average.Number of stores - CARQUEST: 238 versus the two-analyst average estimate of 241.View all Key Company Metrics for Advance Auto Parts here>>>
Shares of Advance Auto Parts have returned -14% over the past month versus the Zacks S&P 500 composite's +4.6% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term.
Key Takeaways Initial Jobless Claims Lower Slightly to 209KHousing Starts & Building Permits Were Up, All on Multi-FamilyPhilly Fed Slips to Negative First Time in 2026WMT Beats by a Penny; AAP, WSM Also Outperform Thursday, May 21st, 2026
It’s a big morning for data ahead of the stock market open today. Employment, housing and manufacturing data join key earnings reports as investors sort through the importance of higher bond yields and whether a peace agreement is really forthcoming from the Iran War. Early trading is in the red by -0.30% (Dow) to -0.66% (Russell 2000).
Jobless Claims Steadily Lower: 209K, 1.78M
Like any normal Thursday morning, Weekly Jobless Claims are hitting the tape today. Initial Jobless Claims ticked down to +209K from a slightly upwardly revised +212K the prior week. These remain on the low side of the range going back to Labor Day of last year — +259K — and late April’s multi-decade low of +190K.
Continuing Claims bumped up a tad, but to the exact headline numbers we saw last week: +1.782 million. The previous week was adjusted downward to 1.776 million, and is now the fourth-straight sub-1.8 million print. This is the first such stretch at these low levels in two years.
Housing Starts/Building Permits Improve in April
New Housing Starts for April came in nicely ahead of expectations: +1.465 million seasonally adjusted, annualized units versus +1.42 million anticipated. That said, it’s still the softest month since February; the March revision improved slightly to +1.507 million. Building Permits, conversely, posted its best headline since February: +1.442 million, versus +1.39 million analysts were looking for.
However, the breakdown among different styles of homebuilding is key: all of the gains last month came on the Multi-family side; Single-family homes slid -9% on new starts, -5.5% on permits. Multi-family, on the other hand, rose +14.3% on new starts and +11.5% on permits. High mortgage rates are keeping demand lower for single-family homes; multi-family is ratcheting up production from its lowest levels since 2011.
Philly Fed Slips to Negative in MayThe May Philly Fed Manufacturing Index is also out this morning. It’s the first negative print of 2026, -0.4%, and below expectations for +19.0. This follows the strongest month since January of 2025 at an unrevised +26.7. Prices paid came down for the month as well, which is something of a deflationary point, while business owners in the country’s 6th biggest city (Philadelphia) see business conditions improving six months from now.
Q1 Earnings at a Glance: WMT, AAP
Walmart (WMT - Free Report) posted Q1 results this morning, slightly outpacing earnings results by a penny to $0.66 per share, on $177.75 billion in revenues which improved on the Zacks consensus by +1.83% and the year-ago tally of $165.6 billion. Shares are down -3.5% ahead of the opening bell, dialing back some of the biggest-of-the-Big-Box-retailer’s gains of +17.5% year to date. Guidance was a tad shaky, taking higher fuel costs into account. For more on WMT’s earnings, click here.
Advance Auto Parts (AAP - Free Report) posted a big earnings surprise in its Q1 report this morning: +97% to $0.77 per share (the Zacks consensus had been $0.39). The company also posted its best sales growth in five years to $2.61 billion, a +2.08% positive surprise above expectations. AAP’s margin recovery turnaround plan appears on-point from this vista. For more on AAP’s earnings, click here.
Williams-Sonoma (WSM - Free Report) shares are up +3% on its Q1 earnings release ahead of the open: earnings of $1.93 per share easily surpassed the $1.80 analysts were expecting, while revenues of $1.81 billion narrowly bettered the $1.80 billion in the Zacks consensus. Comps rose +4.8%, with revenue growth leading at its West Elm stores: +8.5%. Shares are up modestly year to date, but off its all-time highs back in February of this year.
Questions or comments about this article and/or author? Click here>>
Advance Auto Parts delivered strong Q1 results, with EPS of $0.77 and 3.5% same-store sales growth, signaling tangible turnaround progress. Gross margin improved 130bps to 45.1%, and operating margin expanded 410bps to 3.8%, reflecting successful merchandising and cost control initiatives. AAP maintained conservative full-year guidance despite Q1 outperformance, with EPS expected at $2.40-$3.10 and same-store sales growth of 1%-2%.
Management also pointed to gains from merchandising initiatives, stronger parts availability and customer engagement efforts, while signaling caution around consumer spending pressure, elevated gas prices and geopolitical uncertainty.
Quarterly DetailsThe company reported first-quarter adjusted earnings per share of 77 cents, beating the analyst consensus estimate of 45 cents. Quarterly sales of $2.614 billion outpaced the Street view of $2.579 billion.
First-quarter 2025 net sales included approximately $51 million from stores closed during the first quarter of 2025 under the company's optimization program tied to its 2024 restructuring plan.
Comparable-store sales increased 3.5% in the first quarter of 2026.
Adjusted gross profit rose to $1.2 billion in the first quarter from $1.1 billion a year earlier, while adjusted gross margin expanded to 45.1% of net sales from 42.9%.
The margin expansion was primarily driven by higher product margins supported by merchandising initiatives.
Results also benefited from cycling approximately 90 basis points of atypical margin headwinds tied to the store optimization program under the company's 2024 restructuring plan.
Adjusted operating income for the first quarter of 2026 was $99 million, compared with a loss of $8 million in the prior-year quarter, while adjusted operating margin was 3.8% of net sales, versus a negative 0.3% in the first quarter of 2025.
Short InterestAdvance Auto Parts (NYSE:AAP) currently has a short interest of approximately 29.79% of its basic outstanding shares, according to Benzinga Pro data.
This represents roughly 11.55 million shares sold short, making it one of the most heavily shorted stocks in its sector as investors weigh its ongoing business turnaround.
Conference Call TakeawaysThe company said merchandising initiatives, expanded assortment availability and stronger customer service helped drive higher transaction volumes across both Pro and DIY channels.
Management highlighted strong early traction from its ARGOS-owned-brand rollout and newly launched Advance Rewards loyalty program, which boosted customer engagement and transaction counts.
Advance Auto said it is closely monitoring consumer spending trends, elevated gas prices and broader geopolitical volatility that could pressure demand and supply-chain costs in the coming quarters.
The company added that recent tariff regulations have not changed its inflation expectations, while ongoing investments in supply chain operations, market hubs and store upgrades are expected to support long-term growth.
DividendOn May 19, the company declared a regular cash dividend of 25 cents per share to be paid on July 24, 2026, to all common stockholders of record as of July 10, 2026.
OutlookAdvance Auto Parts affirmed fiscal 2026 adjusted EPS guidance of $2.40 to $3.10, compared with the analyst estimate of $2.76.
The company also maintained its fiscal 2026 sales outlook of $8.485 billion to $8.575 billion versus the Street estimate of $8.556 billion.
AAP Price Action: Advance Auto Parts shares were up 18.53% at $60.73 at the time of publication on Thursday, according to Benzinga Pro data.
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