10-Q · August 20, 2026
Advance Auto Parts delivered a mixed but materially improved quarter: revenue fell 0.5% year over year to $2.000 billion, while gross margin rose 267 basis points to 46.2%, operating margin increased to 5.1%, and…
Earnings analysis · 10-Q
AAP earnings analysis
Filed November 5, 2026 · Our reading of the company's report
The latest report
Advance Auto Parts delivered improved Q3 profitability, with gross margin up 131 basis points to 44.6%, operating margin up to 2.3%, and diluted EPS improving to $0.25 from a $0.02 loss. However, sales fell 1.2% to…
Read full summary
Advance Auto Parts delivered improved Q3 profitability, with gross margin up 131 basis points to 44.6%, operating margin up to 2.3%, and diluted EPS improving to $0.25 from a $0.02 loss. However, sales fell 1.2% to $2,012 million and comparable-store sales declined 1.2%, indicating continued demand pressure. Liquidity is strong at $3,085 million of cash plus $894 million of ABL availability, but the company remains exposed to $3.4 billion of debt, elevated interest expense and ongoing restructuring costs.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.25
- Segment
- Advance Auto Parts/Carquest: single reportable segment; Q3 net sales were $2,012 million versus $2,036 million prior year, down $24 million or 1.2%.
What stood out
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Sales Declined Year Over Year
Q3 net sales declined 1.2% year over year to $2,012 million from $2,036 million, while comparable-store sales also decreased 1.2%.
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Gross Margin Expanded 131 Bps
Gross margin expanded to 44.6% from 43.3%, a 131-basis-point improvement, driven primarily by product-margin expansion despite unfavorable channel and product mix.
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Operating Profitability Improved
Operating margin improved to 2.3% from 1.1%, while diluted EPS increased to $0.25 from a diluted loss of $0.02 in the prior-year quarter.
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Operating Cash Flow Turned Positive
Year-to-date operating cash flow was $311 million, offset by $200 million of net property-and-equipment spending, a $55 million Worldpac working-capital payment, $45 million of dividends and $29 million of debt repayment.
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Liquidity Remains Substantial
Cash declined modestly to $3,085 million from $3,123 million at January 3, 2026. The company also had $894 million of ABL borrowing availability and no outstanding ABL borrowings at October 10, 2026.
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Cost Savings Continued
SG&A excluding restructuring fell to 40.2% of sales from 40.6%, reflecting operating-cost savings from restructuring plans; the company had opened 26 stores and closed six, ending with 4,325 stores.
What to watch
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Restructuring Charges Persist
Q3 restructuring and related expenses increased to $42 million, or 2.1% of sales, from $33 million, or 1.6%, and included a $33 million non-cash impairment charge for right-of-use assets. Management expects another $5 million to $10 million of restructuring expenses through fiscal 2026.
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Debt and Interest Burden
Outstanding long-term debt principal was $3.4 billion, including $350 million due within the next 12 months. Interest expense rose to $46 million from $40 million in Q3 and to $160 million from $86 million year to date.
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Macro and Tariff Uncertainty
The company identified continuing geopolitical disruption in the Middle East as a potential source of oil, commodity, supply-chain and capital-market volatility. Separately, it recorded $26 million of tariff refunds in Q2, while subsequent refunds were immaterial and future recoveries are not expected to be material.
Management's outlook
The 10-Q does not provide explicit full-year revenue or EPS guidance. Management expects approximately $5 million to $10 million of additional restructuring expenses through the remainder of fiscal 2026 and believes liquidity will satisfy requirements for at least the next 12 months and thereafter for the foreseeable future.
Earlier filings 4
10-Q · May 21, 2026
Advance Auto Parts reported strong Q1 2026 results with net sales of $2.614 billion, reflecting a 1.2% increase from the same period last year. Gross margin improved to 45.1% from 42.9%, and adjusted EPS of $0.77…
10-K · February 13, 2026
Advance Auto Parts is executing a multi-year turnaround focused on merchandising, supply chain and store operations, having completed its footprint optimization (39 stores opened, 522 closed) and sold the Worldpac…
10-Q · October 30, 2025
Advance Auto Parts reported net sales of $2,036 million for the twelve weeks ended October 4, 2025, a decline from $2,148 million a year earlier, while diluted EPS improved to $(0.02) from $(0.42). Liquidity increased…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.