Advance Auto Parts Tumbles On Weak Outlook, Margin Concerns

Author: Nabaparna Bhattacharya | August 14, 2025 01:04pm

Advance Auto Parts Inc. (NYSE:AAP) shares are trading lower on Thursday.

The company reported second-quarter adjusted earnings per share of 69 cents, beating analysts' consensus estimate of 57 cents. Quarterly sales of $2.01 billion outpaced the Street view of $1.978 billion.

Comparable store sales for the second quarter increased 0.1%.

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Following the results, Goldman Sachs analyst Kate McShane reiterated the Sell rating on the company, with a price forecast of $43.

McShane said they expect a positive market reaction to the stronger-than-expected second-quarter results but noted that the larger-than-anticipated reduction in fiscal year 2025 earnings per share guidance, due to higher interest expense, could offset that optimism.

The analyst said they will monitor quarter-to-date trends and the company's outlook for the remainder of fiscal year 2025.

They will also look for updates on the turnaround plan, tariff impacts, supply chain consolidation, inventory levels, pricing conditions, and the health of the DIY consumer, including any signs of demand deferral or trading down.

In addition, the analyst will assess expectations for same-SKU inflation, margin performance, and the free cash flow outlook.

Upside risks include stronger-than-expected same-store sales growth, supported by DIFM share gains and a rebound in DIY sales. Faster-than-anticipated expense reductions could also lift margins above expectations.

This would improve visibility toward a more sustainable margin recovery.

Price Action: AAP shares are trading lower by 9.16% to $55.95 at last check Thursday.

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Posted In: AAP