Core Viewpoint - Advance Auto Parts, Inc. reported strong fourth-quarter earnings that exceeded analyst expectations, indicating positive momentum and a potential recovery in sales growth Group 1: Fourth Quarter Performance - The company delivered adjusted earnings per share of $0.86, significantly above the consensus estimate of $0.43 [1] - Revenue totaled $2.0 billion, surpassing analyst projections of $1.95 billion [1] - Comparable sales increased by 1.1% in the fourth quarter, reflecting positive momentum during the final eight weeks of the period [2] - An extra week in the quarter contributed approximately $132 million to net sales and added $0.08 to adjusted EPS [2] Group 2: Full-Year 2025 Results - For full-year 2025, Advance Auto Parts recorded a 0.8% increase in comparable store sales, marking a return to positive growth after three consecutive years of declines [3] - The company expanded its adjusted operating income margin by more than 200 basis points to 2.5%, consistent with its full-year guidance [3] Group 3: Fiscal 2026 Projections - Looking ahead to fiscal 2026, the company projected comparable sales growth of 1.0% to 2.0% [4] - Adjusted operating income margin is expected to range between 3.8% and 4.5% [4] - Earnings per share are anticipated to range from $2.40 to $3.10, compared to the analyst consensus of $2.63 [4] - Revenue is forecasted between $8.49 billion and $8.58 billion, slightly below the consensus estimate of $8.67 billion [4]

Core Insights - The company returned to positive comparable sales growth in 2025 after three years of declines, driven by a renewed focus on the 'blended box' model for Pro and DIY customers [1] Financial Performance - The company successfully rationalized its asset footprint by exiting over 500 corporate and 200 independent locations, resulting in approximately $70 million in operating cost savings [1] Supply Chain Improvements - A substantial overhaul of the supply chain was completed, consolidating the U.S. distribution center network from nearly 40 locations in 2023 to 16 currently [1] - Parts availability improved to the high 90% range by expanding the assortment by 100,000 new SKUs and implementing a data-driven assortment framework [1] Service Enhancements - The Pro channel service levels were enhanced by reducing average delivery times by over 10 minutes through a new store operating model and optimized labor allocation [1] Margin Expansion - Margin expansion was attributed to 'merchandising excellence,' specifically through strategic sourcing, product cost reductions of 70 basis points, and smarter pricing intelligence [1] Leadership Strengthening - The leadership team was strengthened with key internal promotions and external hires to oversee supply chain efficiency and store transformation initiatives [1]

Advance Auto Parts (NYSE:AAP) Q4 2025 Earnings call February 13, 2026 08:00 AM ET Speaker4Welcome to the Advance Auto Parts fourth quarter and full year 2025 earnings conference call. I would now like to turn it over to Lavesh Hemnani, Vice President of Investor Relations.Speaker2Good morning, and thank you for participating in today's call. I'm joined by Shane O'Kelly, President and Chief Executive Officer, and Ryan Grimsland, Executive Vice President and Chief Financial Officer. During today's call, we wi ...

Core Viewpoint - The main reason to consider buying Advance Auto Parts stock is the potential for the company to improve its performance to match competitors like AutoZone and O'Reilly Automotive, which could lead to strong value for the stock. Although past attempts have not yielded lasting results, the latest turnaround plan shows promise with early signs of improvement [1]. Group 1: Company Strategy and Restructuring - Under the leadership of CEO Shane O'Kelly, who was appointed in September 2023, Advance Auto Parts has closed over 700 locations to refocus operations in areas where it holds a "No. 1 or No. 2 position based on store density" [3]. - The company plans to open 100 new stores by 2027, in addition to the 30 already opened in 2025 [3]. - The new strategy includes opening "market hub" stores that carry 3 to 4 times the stock-keeping units (SKUs) compared to typical Advance stores, and enhancing same-day delivery of auto parts, which is particularly important in the professional market [4]. Group 2: Financial Performance and Valuation - Advance Auto Parts stock is considered exceptionally cheap on a price-to-sales basis, but this is due to its inability to generate EBITDA margins in line with its peers [2]. - There has been a slight uptick in profit margin, indicating that the current restructuring efforts may be effective [5]. - The stock is viewed as suitable for deep-value investors who are willing to take on some risk for significant upside potential [5].

Q3 2025 Performance Highlights - Comparable store sales grew by 30% year-over-year[39] - Adjusted gross margin increased to 448%, a 257 basis points increase year-over-year[39] - Adjusted SG&A margin improved to 404%, a 110 basis points decrease year-over-year[45] - Adjusted operating income margin was 44%, a 368 basis points increase year-over-year[45] - Adjusted diluted earnings per share reached $092[42] - Net sales reached $20 billion, a 52% decrease year-over-year[39] Strategic Initiatives - Store availability targeted to reach the high 90%s range, with Q3 2025 achieving 96% to 97%[22] - Distribution center consolidation plan aims for 16 DCs by the end of 2025, compared to 38 at the end of 2023[25] - Market hub expansion is accelerating, with 14 openings planned in 2025, totaling 33 hubs by the end of 2025 and targeting 60 by mid-2027[30] - The company expects to open at least 100 new stores over the next two years[35] FY 2025 Guidance - Net sales are projected to be between $8550 million and $8600 million[48] - Comparable store sales are expected to grow by 070% to 130%[48]

Financial Data and Key Metrics Changes - The company reported a 5.6% increase in comparable store sales for Q3 2025, with total sales increasing by $341 million [4][26] - Operating income increased by 9%, and diluted earnings per share rose by 12% [5] - The updated diluted earnings per share guidance is now in the range of $2.90 to $3.00, reflecting a year-over-year increase of 9% [13][14] - Free cash flow for the first nine months of 2025 was $1.2 billion, down from $1.7 billion in the same period in 2024 [28] Business Line Data and Key Metrics Changes - The professional business saw a comparable store sales increase of just over 10%, significantly contributing to overall sales growth [6][7] - DIY comparable store sales growth was in the low single digits, driven by average ticket benefits but partially offset by pressure on transaction counts [7][8] - Same-skew inflation during Q3 was just over 4%, impacting both professional and DIY segments [8] Market Data and Key Metrics Changes - The company updated its full-year comparable store sales guidance from 3%-4.5% to 4%-5% [10][11] - The effective tax rate for Q3 was 21.4%, slightly lower than the previous year's rate of 21.5% [26][28] Company Strategy and Development Direction - The company plans to open 225 to 235 net new stores in 2026, building on its growth in the U.S., Mexico, and Canada [23][50] - The focus remains on maintaining strong supplier relationships and managing risks associated with supplier health [19][60] - The company aims to provide exceptional service and industry-leading availability to continue gaining market share [12][18] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding consumer spending due to economic uncertainty but noted that DIY consumers are still willing to invest in vehicle maintenance [9][12] - The company remains optimistic about its ability to navigate the current tariff environment and maintain competitive pricing [11][17] - Management highlighted the importance of customer service and product availability in retaining and growing market share [12][18] Other Important Information - The company opened 55 net new stores in Q3, bringing the year-to-date total to 160 [22] - Capital expenditures for the first nine months of 2025 were $900 million, with a revised full-year guidance of $1.1-$1.2 billion [24][25] Q&A Session All Questions and Answers Question: Regarding the 4% same-skew inflation, will there be any residuals in the next quarters? - Management indicated that there may still be a tailwind from same-skew inflation moving into Q4 and Q1, but most adjustments needed have been made [34][35] Question: What has been observed historically regarding price elasticity, particularly on the DIY side? - Historically, larger ticket jobs can be deferred during economic shocks, but the company remains confident in the overall strength of both professional and DIY segments [36][37] Question: Is the elasticity function getting worse, and why wouldn't comps be higher than expected inflation? - Management noted that various factors, including weather and consumer behavior, contribute to the cautious outlook for comps, but they remain optimistic about overall trends [42][46] Question: Can you discuss the potential for U.S. store growth and international expansion? - Management expressed confidence in U.S. store growth potential and highlighted Mexico and Canada as significant opportunities for future expansion [47][50] Question: Are there notable differences in geographic performance due to weather patterns? - Management reported no material differences in regional performance during Q3, aligning with internal expectations [56] Question: What is the company's exposure to the First Brands situation? - The company indicated that First Brands represents a small portion of COGs, and they have multiple sourcing strategies in place to mitigate risks [58][60]

Group 1 - O'Reilly Automotive, Inc. is set to release its third-quarter earnings results on October 22, with analysts expecting earnings of 83 cents per share, an increase from 76 cents per share in the same period last year [1] - The consensus estimate for quarterly revenue is $4.69 billion, compared to $4.36 billion a year earlier [1] - In the second quarter, O'Reilly Automotive reported in-line earnings and raised its FY25 sales guidance, leading to a 0.3% increase in share price to close at $101.31 [2] Group 2 - Analysts have maintained positive ratings for O'Reilly Automotive, with Wells Fargo raising the price target from $105 to $115 [4] - UBS increased its price target from $115 to $120, while TD Cowen raised it from $112 to $125 [4] - Evercore ISI Group and DA Davidson also maintained positive ratings, with price targets increased to $110 and $115 respectively [4]

Core Insights - THOR Industries, Inc. reported earnings of $2.31 per share for Q4 fiscal 2025, exceeding the Zacks Consensus Estimate of $1.16 and up from $1.68 in Q4 fiscal 2024 [1] - The company achieved revenues of $2.52 billion in Q4, surpassing the Zacks Consensus Estimate of $2.31 billion, although this represented a 0.4% decline year over year [1] Segmental Results - North American Towable RVs generated revenues of $888.7 million, a decrease of 4.6% year over year, but exceeded the estimate of $825.6 million [2] - North American Motorized RVs reported revenues of $557.4 million, an increase of 7.8% year over year, surpassing the estimate of $504 million [4] - European RVs revenues were $923 million, down 2.2% year over year, yet above the estimate of $856.3 million [5] Financial Performance - Gross profit for the company totaled $118.6 million, reflecting a 1% year-over-year increase due to reduced warranty and promotional expenses [3] - Pretax income rose to $74.5 million from $50.9 million in the previous year, driven by improved gross profits [3] - As of July 31, 2025, THOR had cash and cash equivalents of $586.6 million and long-term debt of $919.6 million [6] Guidance for Fiscal 2026 - THOR projects consolidated net sales for fiscal 2026 to be between $9 billion and $9.5 billion, down from $9.6 billion in fiscal 2025 [7] - Expected EPS for fiscal 2026 is projected to be in the range of $3.75 to $4.25, compared to $4.84 in fiscal 2025 [7]

Group 1 - AutoZone is set to release its fourth-quarter earnings on September 23, with expected earnings of $50.95 per share, a decrease from $51.58 per share in the same period last year [1] - The company projects quarterly revenue of $6.25 billion, slightly up from $6.21 billion a year earlier [1] - In the third quarter, AutoZone reported earnings per share of $35.36, missing the analyst consensus estimate of $37.17, while quarterly sales reached $4.46 billion, reflecting a 5.4% year-over-year increase [2] Group 2 - AutoZone's same-store sales grew by 3.2%, driven by strength in the domestic segment [2] - Analysts have provided various ratings and price target adjustments for AutoZone, with Raymond James raising the price target to $4,900 and maintaining a Strong Buy rating [5] - Other analysts, including those from JP Morgan, Wells Fargo, Barclays, and UBS, have also raised their price targets, indicating a generally positive outlook for the stock [5]

Q2 2025 Results - Net sales were $20 billion, a decrease of 77% year-over-year[36] - Comparable store sales growth was +01% year-over-year[36] - Adjusted gross margin was 438%[36] - Adjusted SG&A margin was 407%, a decrease of 3 bps year-over-year[42] - Adjusted operating income margin was 30%, an increase of 19 bps year-over-year[42] - Adjusted diluted earnings per share were $069[39] - Net leverage ratio was 27x[41] Strategic Initiatives - Store availability reached the mid-90%s, an increase of 100 bps quarter-over-quarter[18, 21] - Distribution center consolidation is expected to result in 16 DCs by the end of 2025, compared to 28 at the end of 2024 and 38 at the end of 2023[26] - Market hub locations are expected to expand to 29 by the end of 2025, compared to 19 at the end of 2024, with an average 100 bps comp sales uplift[26] FY2025 Guidance - Net sales are projected to be between $84 billion and $86 billion[49] - Comparable store sales (52 weeks) are expected to grow by 050% - 150%[49] - Adjusted operating income margin is projected to be between 200% and 300%[49] - Adjusted diluted EPS is projected to be between $120 and $220[49]