Advance Auto Parts (NYSE:AAP) shares fell 5.8% after the company reported first-quarter results ahead of analyst expectations but maintained a full-year earnings outlook that came in below Wall Street forecasts.
The automotive parts retailer posted adjusted earnings per share of US$0.77 for the quarter, exceeding analyst estimates of US$0.43 by US$0.34.
Revenue totaled US$2.6 billion, slightly above the consensus forecast of US$2.57 billion and broadly unchanged from the same period last year.
Comparable store sales increased 3.5%, marking the company’s strongest comparable sales performance in five years.
The company said growth was supported by mid-single-digit gains in its professional installer business, while do-it-yourself sales posted low-single-digit growth.
Despite the stronger quarterly performance, investors reacted negatively to the company’s forward guidance.
Advance Auto Parts reaffirmed fiscal 2026 adjusted earnings per share guidance of between US$2.40 and US$3.10.
The midpoint of the range, US$2.75 per share, came in below the analyst consensus forecast of US$2.80.
The company also maintained its full-year revenue outlook of between US$8.49 billion and US$8.58 billion, with the midpoint of US$8.54 billion slightly below Wall Street expectations of US$8.55 billion.
First-quarter adjusted operating margin improved by 410 basis points year-on-year to 3.8%, helped by stronger product margins linked to merchandising initiatives and easier comparisons following the company’s 2024 store optimisation programme.
Gross profit margin increased to 45.1%, up from 42.9% in the same quarter last year.
“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.”
Advance Auto Parts also declared a regular quarterly dividend of US$0.25 per share, payable on July 24 to shareholders on record as of July 10.
For fiscal 2026, the company expects comparable store sales growth of between 1% and 2% and plans to open between 40 and 45 new stores.