Advance Auto Parts Inc. (NYSE:AAP) stock fell in Thursday’s premarket trading after the auto parts retailer reported third-quarter 2026 results that included an earnings beat and a modest revenue miss.
The company reported adjusted earnings of 79 cents per share, beating Wall Street’s estimate of 77 cents. However, earnings declined from 92 cents per share a year earlier.
Revenue fell 1.2% year over year to $2.012 billion, slightly below analysts’ estimate of $2.043 billion.
Advance Auto Parts Reports Improving Sales Trends
Comparable-store sales declined 1.2%. However, sales trends improved throughout the quarter.
Sales fell at a low-single-digit rate during the first eight weeks before turning positive in the final four weeks.
The professional installer channel recorded low-single-digit sales growth, while do-it-yourself sales declined at a similar rate.
CEO Shane O’Kelly said the company’s strategic initiatives were starting to gain traction.
Gross profit increased to $897 million from $881 million. Gross margin improved to 44.6% from 43.3%.
However, adjusted gross margin slipped to 44.7% from 44.8%, reflecting changes in product and channel mix and higher supply chain expenses relative to sales.
Adjusted selling, general and administrative expenses declined to $808 million from $823 million.
Adjusted operating income rose to $91 million from $90 million, while adjusted operating margin improved to 4.5% from 4.4%.
Net income reached $15 million, compared with a $1 million loss a year earlier.
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Advance Auto Parts Narrows 2026 Outlook
Advance Auto Parts narrowed its fiscal 2026 adjusted earnings guidance to $2.75 to $3.10 per share, from its previous range of $2.60 to $3.30. Analysts expect earnings of $2.96 per share.
The company also narrowed its full-year sales forecast to $8.5 billion, from its earlier range of $8.485 billion to $8.575 billion. Wall Street expects revenue of $8.523 billion.
It also lowered its comparable-store sales growth forecast to approximately 1%, from the previous range of 1% to 2%.
Cash Flow And Balance Sheet
Advance Auto Parts raised its full-year free cash flow forecast to approximately $150 million from $100 million.
Free cash flow reached $109 million during the first 40 weeks of 2026, compared with negative $277 million a year earlier.
As of Oct. 10, the company held $3.085 billion in cash and cash equivalents and reported total debt of $3.388 billion.
Advance Auto Parts maintained its plans to open 30–35 new stores and 15–20 market hubs this year. It also expects capital expenditures of approximately $300 million.
The company operated 4,325 stores as of Oct. 10.
AAP Price Action: Advance Auto Parts shares were down 4.43% at $48.50 during premarket trading on Thursday, according to Benzinga Pro data.
Photo by Ken Wolter via Shutterstock