Overview

• US automotive parts provider's Q1 sales saw slight growth, slightly beating analyst expectations

• Adjusted EPS for Q1 beat analyst expectations

• Company Q1 comparable sales grew 3.5%, driven by improved transactions and merchandising

Outlook

• Advance Auto Parts reaffirms 2026 net sales guidance of $8.49 bln to $8.58 bln

• Company expects 2026 comparable store sales growth of 1% to 2%

• Advance Auto Parts sees 2026 adjusted diluted EPS between $2.40 and $3.10

Result Drivers

• TRANSACTION IMPROVEMENT - Co said Q1 comparable sales growth was driven by improved transaction volumes and customer service focus

• MERCHANDISING INITIATIVES - Gross margin expansion was attributed to product margin improvements and merchandising actions

• RESTRUCTURING IMPACT - Gross margin benefited from cycling prior-year margin headwinds related to store closures under 2024 restructuring plan

Company press release: ID:nBw1Bcs9Ha

Key Details

Metric	Beat/Miss	Actual	Consensus Estimate
Q1 Sales	Slight Beat*	$2.60 bln	$2.58 bln (20 Analysts)
Q1 Adjusted EPS	Beat	$0.77	$0.45 (21 Analysts)
Q1 EPS		$0.39
Q1 Gross Margin		45.10%
Q1 Comparable Sales Growth		3.50%

*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 2 "strong buy" or "buy", 23 "hold" and 3 "sell" or "strong sell"

• The average consensus recommendation for the auto vehicles, parts & service retailers peer group is "buy."

• Wall Street's median 12-month price target for Advance Auto Parts Inc is $57.50, about 12.2% above its May 20 closing price of $51.24

• The stock recently traded at 16 times the next 12-month earnings vs. a P/E of 18 three months ago

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