Advance Auto Parts falls on weak full-year guidance

Investing.com -- Advance Auto Parts Inc. (NYSE: AAP) reported first-quarter results that exceeded analyst expectations, but shares fell 5.8% as the company's full-year earnings outlook disappointed investors.

The automotive aftermarket parts provider posted adjusted earnings per share of $0.77 for the first quarter, beating the analyst consensus of $0.43 by $0.34. Revenue reached $2.6 billion, slightly above the $2.57 billion estimate and flat compared to the prior-year period. Comparable store sales increased 3.5%, marking the company's strongest performance in five years, with mid-single-digit growth in its professional installer segment and low-single-digit growth in do-it-yourself sales.

However, the company's full-year guidance fell short of Wall Street expectations. Advance Auto Parts reaffirmed its fiscal 2026 adjusted EPS guidance of $2.40 to $3.10, with a midpoint of $2.75 that sits below the analyst consensus of $2.80. The company also maintained its revenue outlook of $8.49 billion to $8.58 billion, with the $8.54 billion midpoint slightly below the $8.55 billion consensus.

First-quarter adjusted operating income margin expanded 410 basis points YoY to 3.8%, driven by improved product margins from merchandising initiatives and cycling past headwinds from the company's 2024 store optimization program. Gross profit margin improved to 45.1% from 42.9% in the prior-year quarter.

"2026 is off to a solid start and we remain on track to execute our strategic priorities for the year," said Shane O'Kelly, president and chief executive officer. "These results were driven by a sequential improvement in transactions reflecting the unwavering focus of our team to deliver strong customer service."

The company declared a regular quarterly dividend of $0.25 per share, payable July 24 to shareholders of record as of July 10. For fiscal 2026, Advance Auto Parts expects comparable store sales growth of 1% to 2% and plans to open 40 to 45 stores.

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