Advance Auto Parts reports mixed Q2, raises full-year earnings outlook

Advance Auto Parts Inc (NYSE: AAP ) Thursday reported mixed second-quarter results Here are the key analyst takeaways: RBC Capital Markets analyst Steven Shemesh reiterated a Sector Perform rating, while trimming the price target from $67 to $52.

DA Davidson analyst Michael Baker maintained a Neutral rating, while slashing the price target from $58 to $48.

Guggenheim Securities analyst Steven Forbes reaffirmed a Neutral rating on the stock.

Check out other analyst stock ratings.

RBC Capital Markets: Advance Auto Parts posted disappointing results, with a comp miss and lower-than-anticipated profits excluding tariff refunds, Shemesh said in a note.

Although adjusted operating margin expanded by 260 basis points (bps) year-on-year to 5.6% and came in better than consensus of 4.6%, this flowed through from merchandising initiatives and tariff refunds, he added.

Investors are likely to be concerned whether more reinvestment is needed to drive an inflection in the company’s topline, the analyst stated.

Although Advance Auto Parts has made progress on improving its margin, revenues are unlikely to accelerate in the back half as the company will be up against "its toughest compares" with its core consumer base still "dealing with rising transportation costs," he further wrote.

DA Davidson: Advance Auto Parts reported a comp miss due to its exposure to lower-end customers, Baker said.

He added that the "outsized negative reaction" of investors was triggered by more than the comp miss and was due to: The stock having climbed 44% year to date, before the release.

The lower margin outlook after excluding tariff refunds.

The margin outlook may have fueled concerns around the company’s long-awaited margin recovery being further delayed and that "the gap versus others won’t narrow," the analyst stated. "A silver lining is that 3Q trends seem better so far," with overall comps up around 1% in the first two months of the quarter, he further wrote.

Guggenheim Securities: Although Advance Auto Parts delivered a disappointing comp performance, management noted the large deceleration in DIY spending and unfavorable weather accounted for 100-150 bps of comp headwind during the quarter, Forbes said.

He added that management largely reiterated their 2026 guidance: Sales of $8.475-$8.575 billion Comps of 1%-2% Gross margin expansion of 110-150 bps year-over-year SG&A expense leverage of 20-50 bps Adjusted EBIT margin of 3.80%-4.50% Despite reaffirming these, the company raised its full-year earnings outlook to $2.60-$3.30 per share, from the prior $2.40-$3.10 per share due to around $20 million of incremental pre-tax interest income, the analyst noted.

AAP Price Action: Shares of Advance Auto Parts had risen by 1.32% to $43.01 at the time of publication on Friday.

Read Also: Advance Auto Parts Rebounds After 25% Plunge as $26 Million Trump Tariff Refund Boosts Q2 Margins, SKU Catalog Expands