How did Advance Auto Parts (NYSE:AAP) perform in Q1 2026?

Advance Auto Parts reported flat net sales of $2.6 billion for Q1 2026, but achieved a strong turnaround in profitability, generating $69 million in operating income compared to a $131 million loss in Q1 2025.

What drove the profitability turnaround?

The improvement was fueled by a 220-basis-point expansion in gross margin to 45.1%, cost cycling from prior store closures, stronger product margins, and reductions in administrative overhead.

How did comparable store sales perform?

Core retail momentum remained firm, with comparable store sales rising 3.5% for the quarter, indicating healthy underlying demand across active locations.

How did gross margins change?

Gross profit increased to $1.2 billion, lifting the gross margin to 45.1% from 42.9% in Q1 2025, supported by improved product margins and the resolution of prior cost disruptions.

How did SG&A expenses impact results?

Selling, general, and administrative expenses fell to $1.1 billion (42.5% of net sales) from 48% a year earlier. Adjusted SG&A dropped further to 41.3% of net sales, strengthening operating leverage.

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Advance Auto Parts swings back to operating profit on resilient same-store sales

Written by Heidi Cuthbert Published May. 21 2026Last Updated May. 21 2026

Advance Auto Parts (NYSE:AAP) reported a significant turnaround in operating profitability for the first quarter of 2026, leveraging steady retail transactions and a cleaner operational cost profile to move past heavy restructuring expenses from the prior year.

The Raleigh, North Carolina-based automotive aftermarket supplier generated total net sales of $2.6 billion for the first quarter ended April 25, 2026, remaining flat in absolute terms compared to the same period last year.

However, the top-line baseline was net of a $51 million revenue headwind from the prior year linked to locations systematically shut down under the firm’s 2024 restructuring program.

Stripping out the structural footprints, core retail momentum was firm, with comparable store sales climbing 3.5% for the quarter.

Strategic merchandising programs and a stable pricing environment allowed the distributor to significantly strengthen its unit economics.

First-quarter gross profit reached $1.2 billion, equating to a gross margin of 45.1% of net sales, up from 42.9% in the first quarter of 2025.

The 220-basis-point margin expansion was primarily fueled by underlying improvements in product margins and the successful cycling of approximately 90 basis points of one-time cost disruptions from the store optimization initiative wrapped up in early 2025.

This structural improvement absorbed minor supply chain variations and reinforced profitability across both professional installer and do-it-yourself commercial channels.

The improvement in gross profitability was further amplified by aggressive reductions in administrative overhead.

Selling, general, and administrative (SG&A) expenses fell to $1.1 billion, or 42.5% of net sales, compared to 48% in the prior year's period, aided by the elimination of operating costs from shuttered storefronts and improved overall sales productivity.

Adjusted SG&A expenses dropped down to 41.3% of net sales.

This combined discipline pushed core earnings numbers out of negative territory.

Advance Auto Parts generated an operating income of $69 million, compared to a steep operating loss of $131 million in the first quarter of 2025.

On an adjusted basis, operating income climbed to $99 million.

While higher GAAP tax adjustments left baseline diluted earnings per share slightly lower at $0.39 compared to $0.40 last year, adjusted diluted earnings per share soared to $0.77, soundly reversing an adjusted loss of $(0.22) reported in the prior year's opening quarter.