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Advance Auto Parts Flags Demand Volatility, Tops First-Quarter Views

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Advance Auto Parts Flags Demand Volatility, Tops First-Quarter Views

Advance Auto Parts (AAP) cautioned that demand for auto parts and vehicle maintenance could fluctuate amid high gasoline prices, while the company's first-quarter results came in stronger than expected.

The auto parts retailer continues to expect adjusted earnings of $2.40 to $3.10 per share for fiscal 2026, it said Thursday. The consensus on FactSet is for non-GAAP EPS of $2.80. The revenue outlook was unchanged at $8.49 billion to $8.58 billion, versus the Street's $8.56 billion view.

"Our outlook considers the potential for some near-term demand variability related to continued pressure on the consumer, which is now being intensified by elevated gas prices," Chief Financial Officer Ryan Grimsland said on an earnings call, according to a FactSet transcript.

Gasoline prices in the US have surged as supply disruptions caused by the Middle East conflict pushed crude oil costs higher. Consumers don't yet see an immediate relief as the Strait of Hormuz, the most important chokepoint for energy flows, remains largely shut due to the US-Israel war with Iran.

"We are closely monitoring consumer spending patterns as we transition beyond the recent tax refund tailwinds that have shaped trends in recent months," Chief Executive Shane O'Kelly told analysts. "While higher gas prices may introduce temporary fluctuations in demand, we remain confident in our long-term growth prospects."

For the quarter ended April 25, Advance Auto Parts swung to adjusted earnings of $0.77 per share from a loss of $0.22 a year ago, compared with analysts' $0.43 EPS view. Revenue rose to $2.61 billion from $2.58 billion, topping the average analyst estimate of $2.57 billion.

The company's stock surged 19% in Thursday trading, and is up 55% so far this year.

Comparable sales grew by 3.5% in the first quarter, marking the strongest quarterly performance in five years, Advance Auto Parts said.

The professional segment's comparable sales rose by mid-single digits, while the do-it-yourself channel logged low-single-digit growth, O'Kelly said in a statement.

"We aim to stabilize market share in the near term while positioning ourselves for share gain in the future," O'Kelly told analysts.

Price: $60.00, Change: $+8.76, Percent Change: +17.10%

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