Advance Auto Q2 Earnings Beat Estimates, Revenues Fall Y/Y

Core Insights - Advance Auto Parts, Inc. (AAP) reported adjusted earnings of 69 cents per share for Q2 2025, exceeding the Zacks Consensus Estimate of 59 cents, but down from 75 cents in the same quarter last year [1][9] - The company generated net revenues of $2.01 billion, surpassing the Zacks Consensus Estimate of $1.98 billion, but decreased from $2.68 billion in the prior year [2][9] - Comparable store sales increased by 0.1% year over year, slightly below the expected rise of 0.2% [2] Financial Performance - Gross profit decreased by 10% to $874 million, representing 43.4% of net sales [2] - Operating income was reported at $22 million, with SG&A expenses totaling $852 million, down 4.9% year over year [2] - As of July 12, 2025, cash and cash equivalents stood at $1.66 billion, down from $1.87 billion at the end of 2024, with total long-term debt at $1.49 billion [3] Operational Highlights - The company operated 4,292 stores across the U.S., Canada, Puerto Rico, and the U.S. Virgin Islands, in addition to serving 842 independently-owned Carquest-branded stores [4] - AAP declared a dividend of 25 cents per share, payable on October 24, 2025, to shareholders as of October 10, 2025 [4] Future Guidance - AAP expects 2025 net sales from continuing operations to be in the range of $8.4 billion to $8.6 billion, with plans to open 30 new stores [5] - Comparable store sales are projected to increase between 0.5% and 1.5%, with adjusted operating income margin anticipated to be between 2% and 3% [5] - Capital expenditures for 2025 are expected to be approximately $300 million [5] Market Position - AAP currently holds a Zacks Rank of 3 (Hold) [6] - Other notable stocks in the auto sector include PHINIA Inc. (PHIN), Gentex Corporation (GNTX), and Ferrari N.V. (RACE), with PHIN and GNTX rated as 1 (Strong Buy) and RACE rated as 2 (Buy) [6]