Advance Auto Parts Reports 1.2% Net Sales Increase in Q1 Fiscal 2026

Advance Auto Parts, Inc. reported its financial results for the first quarter of fiscal 2026, revealing a net sales increase of 1.2% to $2.614 billion compared to $2.583 billion in the same period last year. The company's gross profit margin improved to 45.1%, up 221 basis points from 42.9% in the prior year, driven by higher product margins and a reduction in lower-margin liquidation sales associated with its restructuring efforts. Despite these gains, net income remained flat at $24 million, resulting in diluted earnings per share of $0.39, slightly down from $0.40 in the previous year.

The company experienced a decrease in selling, general, and administrative (SG&A) expenses, which were 41.3% of net sales, down from 43.4% in the prior year. This reduction was attributed to the elimination of operating costs from stores closed as part of the 2024 Restructuring Plan, which aimed to enhance profitability and streamline operations. Restructuring expenses totaled $32 million, significantly lower than the $118 million recorded in the same quarter last year, indicating that the majority of costs related to the restructuring have been incurred.

Operationally, Advance Auto Parts maintained a total of 4,308 stores as of April 25, 2026, having opened four new locations while closing one. The company continues to serve both professional installers and do-it-yourself customers, with comparable store sales increasing by 3.5%. The company’s inventory levels rose to $3.815 billion, reflecting ongoing adjustments in response to market conditions and strategic initiatives. The company also reported a cash and cash equivalents balance of $2.956 billion, down from $3.123 billion at the beginning of the fiscal year, primarily due to working capital payments and capital expenditures.

Looking ahead, Advance Auto Parts remains focused on improving customer experience and operational efficiency while navigating challenges such as inflationary pressures and supply chain disruptions. The company has not recognized any amounts related to potential tariff recoveries from the overturned IEEPA tariffs, citing uncertainty regarding their recoverability. The company anticipates incurring additional restructuring expenses of approximately $20 million to $30 million through the remainder of fiscal 2026 as it continues to optimize its operations and adapt to changing market dynamics.