Advance Auto Parts Inc. (NYSE:AAP) reported first-quarter results that surpassed analyst expectations, yet shares dropped 5.8% as its full-year earnings guidance disappointed investors.
The automotive aftermarket parts provider posted adjusted EPS of $0.77, beating the $0.43 consensus. Revenue hit $2.6 billion, slightly above the $2.57 billion estimate. Comparable store sales rose 3.5%, the strongest in five years, driven by mid-single-digit growth in professional installer sales and low-single-digit DIY growth.
However, the company's fiscal 2026 adjusted EPS guidance of $2.40 to $3.10 (midpoint $2.75) fell below the consensus of $2.80. Revenue guidance was maintained at $8.49-$8.58 billion, with the $8.54 billion midpoint slightly under the $8.55 billion estimate.
First-quarter adjusted operating margin expanded 410 bps YoY to 3.8%, thanks to improved product margins. Gross profit margin rose to 45.1% from 42.9% a year earlier.
"2026 is off to a solid start," said CEO Shane O'Kelly. The company declared a quarterly dividend of $0.25 per share and expects comparable store sales growth of 1%-2% for fiscal 2026, with 40-45 new stores planned.
