Advance Auto Parts(AAP) - 2025 Q4 - Annual Results

Sales Performance - Q4 2025 comparable sales growth was 1.1%, with positive sales performance in the last eight weeks[1] - Full year 2025 net sales were $8.6 billion, down from $9.1 billion in 2024, with comparable store sales increasing by 0.8%[12] - Q4 2025 net sales totaled $2.0 billion, with an additional week contributing approximately $132 million[5] - Net sales for the thirteen weeks ended January 3, 2026, were $1,973 million, a slight decrease of 1.2% compared to $1,996 million for the same period in 2024[29] Profitability - Q4 2025 gross profit was $0.9 billion, or 44.0% of net sales, compared to 17.4% in the prior year[6] - Full year 2025 adjusted operating margin expanded by over 200 basis points to 2.5%[3] - Full year 2025 adjusted operating income was $216 million, or 2.5% of net sales, compared to $35 million, or 0.4% in the prior year[15] - Operating income for the thirteen weeks ended January 3, 2026, was $44 million, a significant recovery from an operating loss of $820 million in the same period last year[29] - Net income from continuing operations for the fifty-three weeks ended January 3, 2026, was $68 million, compared to a loss of $587 million in the previous year[31] Cash Flow and Debt - Cash and cash equivalents increased to $3,123 million at the end of the period, up from $1,869 million at the beginning, marking a 67% increase[31] - Long-term debt rose to $3,412 million as of January 3, 2026, compared to $1,789 million in the previous year, indicating a 90.8% increase[27] - Free cash flow for the fifty-three weeks ended January 3, 2026, was $(298) million, which includes approximately $140 million of cash charges related to restructuring[46] - Total debt (GAAP) as of January 3, 2026, was $3,412 million, with adjusted net debt (Non-GAAP) at $2,536 million[47] Store Operations - The company plans to open 40 to 45 new stores and 10 to 15 market hubs in 2026[19] - As of January 3, 2026, the company operated a total of 4,305 stores, a decrease from 4,788 stores as of December 28, 2024, reflecting a net closure of 522 stores over the fifty-three weeks[49] - During the fifty-three weeks ended January 3, 2026, the company opened 39 new stores while closing 522, resulting in a net loss of 483 stores[49] - For the thirteen weeks ended January 3, 2026, the company opened 13 new stores, with a net increase of 5 stores after accounting for closures[49] Restructuring and Expenses - The company incurred $23 million in restructuring and related expenses during the most recent quarter, down from $288 million in the prior year[29] - The company recorded restructuring and related expenses of $1 million for the thirteen weeks ended January 3, 2026, associated with the 2024 Restructuring Plan[38] - The adjustments for the four quarters ended January 3, 2026, include expenses related to transformation and restructuring, as well as charges for expected future credit losses due to a vendor's Chapter 11 bankruptcy[48] Earnings Per Share - The company reported a basic earnings per share of $0.50 for the thirteen weeks ended January 3, 2026, compared to a loss of $10.20 per share in the same period last year[29] - Adjusted net income (loss) (Non-GAAP) for the thirteen weeks ended January 3, 2026, was $52 million, while the adjusted diluted earnings per share (Non-GAAP) was $0.86[37]