The situation: The average age of vehicles on US roads continues to climb, reaching 12.8 years in 2024, per S&P Global Mobility.
- As cars age, the need for maintenance and repairs increases—creating a tailwind for aftermarket retailers like Advance Auto Parts.
- That trend helped the company steer past macroeconomic challenges in Q1, beat expectations, and maintain its full-year guidance—even assuming the current tariff policies remain in place.
The numbers:
- The adjusted loss of 22 cents per share was a sharp drop from earnings of 33 cents last year but far better than the expected 69-cent loss.
- Revenues fell 6.8% to $2.58 billion but still topped the $2.51 billion estimate.
- Comparable sales declined 0.6%, beating projections of a 2.01% dip.
For the full year, the company expects revenues between $8.4 billion and $8.6 billion, comp growth of 0.5% to 1.5%, and adjusted EPS of $1.50 to $2.50.
The context: Advance Auto is in the thick of a turnaround.
- It just wrapped its store footprint optimization, closing hundreds of locations to ensure that 75% of its stores are in markets where it ranks first or second in density. It plans to build on that by opening more than 100 stores over the next three years.
- On the supply chain side, the company is consolidating to 12 large distribution centers averaging 500,000 square feet by 2026—six of this year’s 12 planned closures are already complete.
- The strategy is starting to show results. Q1’s upside came largely from the Pro channel, where stronger transaction growth helped lift comps—an encouraging sign that professionals are increasingly turning to Advance Auto for their needs.
Our take: Advance Auto still has work to do, but it is showing signs of stabilization. With a focused strategy and improving execution, it’s slowly building back credibility in a challenging environment.
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