The earnings call highlighted significant progress in strategic initiatives, better-than-expected performance in Q1 2025, and operational improvements. However, challenges remain with a decline in net sales, struggles in the DIY channel, and a negative free cash flow position. The positives seem to slightly outweigh the negatives, with a focus on future growth and strategic positioning.

Company Guidance -

Q2 2025

During the Advance Auto Parts First Quarter 2025 Earnings Conference Call, the company provided several key metrics and guidance updates. For the first quarter, net sales from continuing operations were reported at $2.6 billion, reflecting a 7% decrease compared to the previous year. The company experienced a comparable store sales decline of 60 basis points, excluding $51 million from liquidation sales related to store optimization activities. Despite the decline, the company's Pro business grew in the low single-digit range, with 8 consecutive weeks of positive comparable sales growth in the U.S. The adjusted operating loss was $8 million or negative 30 basis points of net sales, while the adjusted diluted loss per share from continuing operations was $0.22. The company reaffirmed its full-year 2025 guidance, expecting net sales between $8.4 billion and $8.6 billion, with a comparable sales growth of 50 to 150 basis points on a 52-week basis. Adjusted operating income margin is projected to be between 2% and 3%, with adjusted diluted EPS ranging from $1.50 to $2.50. Free cash flow is anticipated to be between negative $85 million and negative $25 million, factoring in cash expenses related to store and distribution center optimization activities.

Better-than-Expected Q1 2025 Performance

Advance Auto Parts delivered better-than-expected first quarter results, with Pro business growing in the low single-digit range and 8 consecutive weeks of positive comparable sales growth in the U.S.

Store Footprint Optimization Completion

The company completed its store footprint optimization program, with approximately 75% of the store footprint now concentrated in markets where Advance holds the #1 or #2 position based on store density.

Strategic Initiatives for Growth

Advance Auto Parts plans to open more than 100 new stores over the next 3 years and aims to establish 60 market hubs by mid-2027 to strengthen its competitive position.

Operational Improvements

The company reported stronger profitability with near breakeven adjusted operating margin and is on track to deliver positive operating margins starting in Q2 2025.

Improved Inventory and Merchandising

Advance Auto Parts expanded its new assortment framework to 10 additional DMAs, leading to an estimated uplift of nearly 50 basis points in comparable sales growth within these DMAs.

Advance Auto Parts (AAP) Earnings, Revenues Date & History

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AAP Earnings History

Report Date	Fiscal Quarter	Forecast / EPS	Last Year's EPS	EPS YoY Change	Slides	Play Transcript
Aug 26, 2025	2025 (Q2)	0.53 / -	0.75	―	―	―
May 22, 2025	2025 (Q1)	-0.82 / -0.22	0.67	-132.84% (-0.89)	―
Feb 26, 2025	2024 (Q4)	-1.25 / -1.18	-0.59	-100.00% (-0.59)	―
Nov 14, 2024	2024 (Q3)	0.50 / -0.10	-0.82	87.80% (+0.72)	―
Aug 22, 2024	2024 (Q2)	0.92 / 0.75	1.43	-47.55% (-0.68)	―
May 29, 2024	2024 (Q1)	0.68 / 0.67	0.72	-6.94% (-0.05)	―
Feb 28, 2024	2023 (Q4)	0.21 / -0.59	2.88	-120.49% (-3.47)	―
Nov 15, 2023	2023 (Q3)	1.44 / -0.82	2.84	-128.87% (-3.66)	―
Aug 23, 2023	2023 (Q2)	1.66 / 1.43	3.74	-61.76% (-2.31)	―
May 31, 2023	2023 (Q1)	2.56 / 0.72	3.57	-79.83% (-2.85)	―

The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.

Beat

Missed

AAP Earnings-Related Price Changes

Report Date	Price 1 Day Before	Price 1 Day After	Percentage Change
May 22, 2025	$31.31	$49.17	+57.04%
Feb 26, 2025	$45.52	$37.41	-17.82%
Nov 14, 2024	$40.40	$40.66	+0.64%
Aug 22, 2024	$60.69	$50.09	-17.47%

Earnings announcements can affect a stock’s price. This table shows the stock's price the day before and the day after recent earnings reports, including the percentage change.