Advance Auto (NYSE: AAP) lifts Q1 margins and reaffirms 2026 outlook

Rhea-AI Filing Summary

Advance Auto Parts reported first-quarter 2026 results showing modest sales growth but a major turnaround in profitability. Net sales were $2.61 billion, up slightly from $2.58 billion a year earlier, while comparable store sales increased 3.5%, with mid-single-digit growth in professional customers and low-single-digit growth in DIY.

Gross profit margin improved to 45.1% of net sales from 42.9%, and operating results swung from a $131 million loss to $69 million of operating income. Adjusted operating income reached $99 million, or 3.8% of net sales, versus an adjusted operating loss of $8 million in 2025. Diluted EPS was $0.39 and adjusted diluted EPS rose to $0.77 from a loss of $(0.22). The company reaffirmed its full-year 2026 guidance, including net sales of $8.49–$8.58 billion, adjusted operating margin of 3.8–4.5%, adjusted EPS of $2.40–$3.10, and approximately $100 million of free cash flow, and declared a quarterly dividend of $0.25 per share.

Positive

• Profitability turnaround: Operating income improved from a Q1 2025 loss of $131 million to income of $69 million, with adjusted operating margin rising from (0.3)% to 3.8% of net sales.
• Guidance reaffirmed: The company maintained full-year 2026 guidance, including adjusted diluted EPS of $2.40–$3.10 and free cash flow of approximately $100 million, signaling confidence in its outlook.

Negative

• None.

Insights

Equity research analyst

Q1 shows meaningful margin recovery and guidance reaffirmation.

Advance Auto Parts delivered flat headline revenue but a sharp profitability rebound. Net sales were $2.61 billion, with 3.5% comparable sales growth, while gross margin expanded to 45.1%, helped by stronger product margin and lapping prior optimization headwinds.

Operating results improved from a loss of $131 million to income of $69 million, and adjusted operating margin reached 3.8%. Adjusted diluted EPS moved from a loss of $(0.22) to $0.77, reflecting lower restructuring and impairment charges plus tighter SG&A.

Full-year 2026 guidance was reaffirmed, targeting net sales of $8.49–$8.58 billion, adjusted operating margin of 3.8–4.5% and adjusted EPS of $2.40–$3.10. Management also projects about $100 million of free cash flow and approximately $300 million of capital expenditures, framing expectations for the remainder of 2026.

8-K Event Classification

2 items: 2.02, 9.01

2 items

Item 2.02 Results of Operations and Financial Condition Financial

Disclosure of earnings results, typically an earnings press release or preliminary financials.

Item 9.01 Financial Statements and Exhibits Exhibits

Financial statements, pro forma financial information, and exhibit attachments filed with this report.

Key Figures

Net sales Q1 2026: $2.61 billion Comparable store sales growth: 3.5% Gross profit margin: 45.1% +5 more

8 metrics

Net sales Q1 2026 $2.61 billion Sixteen weeks ended April 25, 2026

Comparable store sales growth 3.5% First quarter 2026

Gross profit margin 45.1% Q1 2026 vs 42.9% in Q1 2025

Operating income $69 million Q1 2026, vs $(131) million in Q1 2025

Adjusted operating margin 3.8% Q1 2026, adjusted basis

Adjusted diluted EPS $0.77 Q1 2026, vs $(0.22) in Q1 2025

2026 net sales guidance $8.49–$8.58 billion Full year 2026 outlook as of May 21, 2026

Quarterly dividend $0.25 per share Declared May 19, 2026, payable July 24, 2026

Key Terms

Comparable store sales, Adjusted operating income margin, Free cash flow, Non-GAAP, +2 more

6 terms

Comparable store sales financial

"Comparable store sales for the first quarter 2026 increased 3.5%."

Comparable store sales measure the change in revenue generated by stores that have been open for a certain period, typically at least one year. It helps assess how well a business is growing by showing whether existing stores are attracting more customers and sales, rather than just counting new store openings. Investors use this figure to gauge the true health and performance of a company's core operations over time.

Adjusted operating income margin financial

"Adjusted first quarter 2026 operating income was $99 million or 3.8% of net sales"

Adjusted operating income margin is the percentage of revenue that a company keeps as profit from its normal, day-to-day business after removing one-time events, restructuring costs, and other unusual or accounting-only items. Investors use it to see how efficiently the core business turns sales into operating profit — like judging a car’s fuel efficiency after ignoring occasional detours — because it gives a clearer view of underlying profitability and comparability over time.

Free cash flow financial

"Free cash flow | | Approx. $100"

Free cash flow is the amount of money a company has left over after paying all its expenses and investing in its business, like buying equipment or updating facilities. It shows how much cash is available to reward shareholders, pay down debt, or save for future growth. This helps investors understand if a company is financially healthy and able to grow.

Non-GAAP financial

"Adjusted operating income margin, Adjusted diluted EPS and Free cash flow are Non-GAAP measures."

Non-GAAP refers to financial measures that companies use to show their earnings or performance without including certain expenses or income that are often added back to give a different picture. It matters because it can make a company's results look better or more favorable, but it may also hide important costs, so investors need to look at both GAAP (official rules) and non-GAAP numbers to get a full understanding.

Adjusted EBITDAR financial

"Reconciliation of Adjusted Net Debt to Adjusted EBITDAR(1)"

Adjusted EBITDAR is a company’s reported profit measure that starts with operating earnings and then adds back interest, taxes, depreciation, amortization and rent, plus any one‑time items companies exclude. It aims to show how much cash a business generates from its core operations before the costs of financing, non‑cash accounting charges and property leases, like comparing two stores’ underlying sales by ignoring rent and loan payments. Investors use it to compare operating performance across firms and assess ability to cover fixed obligations, but companies may calculate it differently, so comparisons require caution.

Restructuring and other related expenses financial

"Restructuring and other related expenses includes $13 million for reserves on independent loans"

Earnings Snapshot

Revenue: $2.61 billion · Guidance included

Q1 2026

Revenue $2.61 billion

Net income $24 million

Diluted EPS $0.39

Adjusted diluted EPS $0.77

Comparable store sales 3.5%

Guidance

For full year 2026, the company guides to net sales of $8.485–$8.575 billion, comparable store sales growth of 1.0–2.0%, adjusted operating income margin of 3.8–4.5%, adjusted diluted EPS of $2.40–$3.10, capital expenditures of approximately $300 million, and free cash flow of approximately $100 million.

Understanding 8-K Material Events →

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 21, 2026

Advance Auto Parts, Inc.

(Exact name of Registrant as Specified in Its Charter)

Delaware			001-16797	54-2049910
(State or Other Jurisdiction of Incorporation)			(Commission File Number)	(IRS Employer Identification No.)
4200 Six Forks Road
Raleigh, North Carolina				27609
(Address of Principal Executive Offices)				(Zip Code)

Registrant’s Telephone Number, Including Area Code: (540) 362-4911

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.0001 par value		AAP		New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

INFORMATION TO BE INCLUDED IN THE REPORT

Item 2.02 Results of Operations and Financial Condition.

On May 21, 2026, Advance Auto Parts, Inc. (the "Company") issued a press release setting forth its financial results for its first quarter ended April 25, 2026. The press release is furnished as Exhibit 99.1 to this Report and is hereby incorporated by reference in this Item 2.02.

As provided in General Instruction B.2 of Form 8-K, the information and exhibit contained in this Item 2.02 shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Exhibit Description
99.1	Press Release, dated May 21, 2026, issued by Advance Auto Parts, Inc.
101.1	Pursuant to Rule 406 of Regulation S-T, the cover page to this Current Report on Form 8-K is formatted in Inline XBRL.
104.1	Cover Page Interactive Data File (embedded within the Inline XBRL document included in Exhibit 101.1)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		ADVANCE AUTO PARTS, INC.
May 21, 2026		/s/ Ryan P. Grimsland
		Ryan P. Grimsland
		Executive Vice President, Chief Financial Officer

Exhibit 99.1

Advance Auto Parts Reports First Quarter 2026 Results; Reaffirms Full Year 2026 Guidance

l Q1'26 Comparable Sales Growth Of 3.5%; Strongest Performance in Five Years

l Q1'26 Adjusted Operating Income Margin Expands 410 bps Year-over-Year to 3.8%

RALEIGH, N.C., May 21, 2026 — Advance Auto Parts, Inc. (NYSE: AAP), a leading automotive aftermarket parts provider in North America, that serves both professional installer and do-it-yourself customers, announced its financial results for the first quarter ended April 25, 2026.

"2026 is off to a solid start and we remain on track to execute our strategic priorities for the year,” said Shane O'Kelly, president and chief executive officer. "During the quarter, comparable sales grew by 3.5% including mid-single-digit growth in Pro and low-single-digit growth in DIY. These results were driven by a sequential improvement in transactions reflecting the unwavering focus of our team to deliver strong customer service. I thank the Advance team for their hard work in the quarter and their commitment to strong operational execution, which is driving stronger asset productivity and margin expansion."

First Quarter 2026 Results (1)

First quarter 2026 net sales totaled $2.6 billion, compared with $2.6 billion in the first quarter of the prior year. First quarter 2025 net sales included approximately $51 million related to sales at stores closed during Q1'25 as a result of our optimization program associated with our 2024 Restructuring Plan. Comparable store sales for the first quarter 2026 increased 3.5%.

The Company's first quarter 2026 gross profit was $1.2 billion, or 45.1% of net sales compared with $1.1 billion, or 42.9% in the first quarter of 2025. Adjusted gross profit was $1.2 billion, or 45.1% of net sales compared with $1.1 billion, or 42.9% in the first quarter of 2025. The increase in gross profit as a percentage of net sales compared to the first quarter of 2025, was primarily driven by expansion in product margin supported by our merchandising initiatives and cycling of approximately 90 basis points of atypical margin headwind related to the store optimization program associated with our 2024 Restructuring Plan, that was completed in the first quarter of 2025.

The Company's first quarter 2026 selling, general and administrative (SG&A) expenses were $1.1 billion, or 42.5% of net sales compared with $1.2 billion, or 48.0% of net sales in the first quarter of 2025. Adjusted SG&A expenses were $1.1 billion, or 41.3% of net sales in the first quarter of 2026 compared with $1.1 billion, or 43.2% of net sales in the first quarter of 2025. The reduction in SG&A expenses as a percentage of net sales compared to the first quarter of 2025, was driven by cycling of approximately $37 million in expenses related to stores closed during the first quarter of 2025 as a result of our optimization program associated with our 2024 Restructuring Plan; and stronger sales performance compared to the first quarter of 2025.

The Company's first quarter 2026 operating income was $69 million, or 2.6% of net sales, compared with operating loss of $131 million, or (5.1)% of net sales in the first quarter of 2025. Adjusted first quarter 2026 operating income was $99 million or 3.8% of net sales, compared with a loss of $8 million or (0.3)% of net sales in the first quarter of 2025.

The Company's diluted earnings per share was $0.39, compared with $0.40 in the first quarter of 2025. The Company's adjusted diluted earnings per share was $0.77, compared with loss of $(0.22) in the first quarter of 2025.

Capital Allocation

On May 19, 2026, the Company declared a regular cash dividend of $0.25 per share to be paid on July 24, 2026 to all common stockholders of record as of July 10, 2026.

(1)The Company calculates comparable store sales based on the change in store sales starting once a location has been open for approximately one year and by including e-commerce sales and excluding sales fulfilled by distribution centers to independently owned Carquest locations. The Company includes sales from relocated stores in comparable store sales from the original date of opening. Closed stores are not included in the comparable store sales calculation. Comparable store sales is intended only as supplemental information and is not a substitute for Net sales presented in accordance with accounting principles generally accepted in the United States of America ("GAAP").

Full Year 2026 Guidance(1)

		As of May 21, 2026
($ in millions, except per share data)		Low		High
Net sales		$8,485		$8,575
Comparable store sales (52 weeks)(2)		1.00%		2.00%
Adjusted operating income margin		3.80%		4.50%
Adjusted diluted EPS(3)		$2.40		$3.10
Capital expenditures		Approx. $300
Free cash flow		Approx. $100
Store growth
Store Openings		40 - 45
Market hub openings		10 - 15

(1)Adjusted operating income margin, Adjusted diluted EPS and Free cash flow are Non-GAAP measures. For a better understanding of the Company's Non-GAAP adjustments, refer to the reconciliation of Non-GAAP financial measures in the accompanying financial tables. The Company is not able to provide a reconciliation of these forward-looking Non-GAAP measures presented herein because it is unable to predict with reasonable accuracy the value of certain adjustments and as a result, the comparable GAAP measures are unavailable without unreasonable efforts.

(2)Comparable store sales for fiscal 2026 is calculated based on an adjusted fiscal 2025 baseline to account for the 53rd week. The Company calculates comparable store sales based on the change in store sales starting once a location has been open for approximately one year and by including e-commerce sales and excluding sales fulfilled by distribution centers to independently owned Carquest locations. The Company includes sales from relocated stores in comparable store sales from the original date of opening. Comparable store sales is intended only as supplemental information and is not a substitute for Net sales presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

(3)Includes pre-tax interest expense of approximately $210 million and pre-tax interest income of approximately $80 million.

Investor Conference Call

The Company will detail its results for the first quarter and full year 2026 via a webcast scheduled to begin at 8 a.m. Eastern Time on Thursday, May 21, 2026. The webcast will be accessible via the Investor Relations page of the Company's website (ir.AdvanceAutoParts.com).

To join by phone, please pre-register online for dial-in and passcode information. Upon registering, participants will receive a confirmation with call details and a registrant ID. While registration is open through the live call, the Company suggests registering a minimum 10 minutes before the start of the call. A replay of the conference call will be available on the Company's Investor Relations website for one year.

About Advance Auto Parts

Advance Auto Parts, Inc. is a leading automotive aftermarket parts provider that serves both professional installer and do-it-yourself customers. As of April 25, 2026, Advance operated 4,308 stores primarily within the United States, with additional locations in Canada, Puerto Rico and the U.S. Virgin Islands. The Company also served 797 independently owned Carquest branded stores across these locations in addition to Mexico and various Caribbean islands. Additional information about Advance, including employment opportunities, customer services, and online shopping for parts, accessories and other offerings can be found at www.AdvanceAutoParts.com.

Investor Relations Contact:	Media Contact:
Lavesh Hemnani	Nicole Ducouer
T: (919) 227-5466	T: (984) 389-7207
E: invrelations@advance-auto.com	E: AAPcommunications@advance-auto.com

Forward-Looking Statements

Certain statements herein are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are usually identifiable by words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast, “guidance,” “intend,” “likely,” “may,” “plan,” “position,” “possible,” “potential,” “probable,” “project,” “should,” “strategy,” “target,” “will,” or similar language. All statements other than statements of historical fact are forward-looking statements, including, but not limited to, statements about the Company’s strategic initiatives, future business and financial performance, revenue, earnings, cash flow, liquidity, restructuring and asset optimization plans, financial objectives, debt capital structure, operational plans and objectives, capital expenditures, organizational changes, cost reductions, expectations for macroeconomic conditions, marketing strategies, inflation, impairments, consumer behavior and preferences, labor costs and availability, supply chain and merchandising strategies and effects, technology investments, effective tax rates, regulatory changes and impacts, anticipated impacts of tariffs and other trade barriers, compliance with debt covenants, statements about the status of, and capacity and utilization under, the Company’s supply chain financing arrangements and statements about the Company’s future credit ratings and outlook as well as statements regarding underlying assumptions related thereto. Forward-looking statements reflect the Company’s views based on historical results, current information and assumptions related to future developments. Except as may be required by law, the Company undertakes no obligation to update any forward-looking statements made herein. Forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those projected or implied by the forward-looking statements. They include, among others, the Company’s ability to hire, train and retain qualified employees, the timing and implementation of strategic initiatives, risks associated with the Company’s restructuring and asset optimization plans, risks relating to incurrence of indebtedness and increased leverage, risks relating to the Company's credit ratings or perceived creditworthiness, deterioration of general macroeconomic conditions, geopolitical factors, including increased tariffs, petroleum supply and prices, and trade restrictions, the highly competitive nature of the industry, demand for the Company’s products and services, risks relating to the impairment of assets, including intangible assets such as goodwill, access to financing on favorable terms, complexities in the Company’s inventory and supply chain, implementation and operation of information and technology systems and innovative technologies, and challenges with transforming and growing its business. Please refer to “Item 1A. Risk Factors” of the Company’s most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”), as updated by the Company’s subsequent filings with the SEC, for a description of these and other risks and uncertainties that could cause actual results to differ materially from those projected or implied by the forward-looking statements.

Advance Auto Parts, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in millions), (unaudited)(1)

Assets		April 25, 2026				January 3, 2026
Current assets:
Cash and cash equivalents		$	2,956			$	3,123
Receivables, net			402				380
Inventories, net			3,815				3,646
Other current assets			128				141
Total current assets			7,301				7,290
Property and equipment, net			1,253				1,269
Operating lease right-of-use assets			2,131				2,157
Goodwill			600				600
Other intangible assets, net			399				400
Other assets			115				110
Total assets		$	11,799			$	11,826
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable		$	3,054			$	2,977
Accrued expenses			630				756
Other current liabilities			423				443
Total current liabilities			4,107				4,176
Long-term debt			3,414				3,412
Operating lease liabilities			1,813				1,812
Deferred income taxes			153				142
Other long-term liabilities			99				86
Total liabilities			9,586				9,628
Total stockholders' equity			2,213				2,198
Total liabilities and stockholders' equity		$	11,799			$	11,826

(1) This condensed consolidated balance sheet has been prepared on a basis consistent with the Company's previously prepared balance sheets filed with the Securities and Exchange Commission ("SEC"), but does not include the footnotes required by accounting principles generally accepted in the United States of America (“GAAP”).

Advance Auto Parts, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(in millions, except per share data), (unaudited)(1)

	Sixteen Weeks Ended
	April 25, 2026				April 19, 2025
Net sales	$	2,614			$	2,583
Cost of sales		1,434				1,474
Gross profit		1,180				1,109
Selling, general and administrative expenses, exclusive of restructuring expenses		1,079				1,122
Restructuring and related expenses		32				118
Selling, general and administrative expenses		1,111				1,240
Operating income (loss)		69				(131	)
Other, net:
Interest expense		(65	)			(27	)
Other income, net		31				27
Total other, net		(34	)			-
Income (loss) before income tax expense		35				(131	)
Income tax expense (benefit)		11				(155	)
Net income	$	24			$	24
Basic earnings per common share	$	0.40			$	0.40
Basic weighted-average common shares outstanding		60.1				59.8
Diluted earnings per common share	$	0.39			$	0.40
Diluted weighted-average common shares outstanding		60.9				60.2

(1) These condensed consolidated statements of operations have been prepared on a basis consistent with the Company's previously prepared statements of operations filed with the SEC, but does not include the footnotes required by GAAP.

Advance Auto Parts, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in millions), (unaudited)(1)

		Sixteen Weeks Ended
		April 25, 2026				April 19, 2025
Cash flows from operating activities:
Net income		$	24			$	24
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization			74				89
Share-based compensation			12				11
Loss on sale and impairment of long-lived assets			3				10
Expected future credit losses, net			4				9
Provision for deferred income taxes			11				(22	)
Other, net			18				3
Net change in:
Receivables, net			(25	)			42
Inventories, net			(171	)			(114	)
Operating lease right-of-use assets			24				50
Other assets			6				(69	)
Accounts payable			78				14
Accrued expenses			(52	)			(119	)
Operating lease liabilities			(36	)			(81	)
Other liabilities			11				(3	)
Net cash used in operating activities			(19	)			(156	)
Cash flows from investing activities:
Purchases of property and equipment			(56	)			(42	)
Proceeds from sales of property and equipment			1				15
Other, net			(2	)			-
Net cash used in investing activities of continuing operations			(57	)			(27	)
Net cash used in investing activities of discontinued operations			(55	)			-
Net cash used in investing activities			(112	)			(27	)
Cash flows from financing activities:
Dividends paid			(30	)			(15	)
Other, net			(7	)			(2	)
Net cash used in financing activities			(37	)			(17	)
Effect of exchange rate changes on cash			1				3
Net decrease in cash and cash equivalents			(167	)			(197	)
Cash and cash equivalents, beginning of period			3,123				1,869
Cash and cash equivalents, end of period		$	2,956			$	1,672

(1) This condensed consolidated statement of cash flows has been prepared on a basis consistent with the Company's previously prepared statements of operations filed with the SEC, but does not include the footnotes required by GAAP.

Reconciliation of Non-GAAP Financial Measures

The Company uses certain Non-GAAP financial measures described below to supplement the Company's unaudited condensed consolidated financial statements prepared and presented in accordance with GAAP and to understand and evaluate the Company's core operating performance. These Non-GAAP financial measures, which may be different than similarly titled measures used by other companies, are presented as the Company believes that such Non-GAAP financial measures provide useful information about our financial performance, enhance the overall understanding of our past performance and future prospects, and allow for greater transparency with respect to important metrics used by management for financial and operational decision-making. The Company is presenting these Non-GAAP metrics to provide investors insight to the information used by our management to evaluate our business and financial performance. The Company believes that these measures provide investors increased comparability of our core financial performance over multiple periods with other companies in our industry. The Company's Non-GAAP financial measures include Adjusted Gross Profit, Adjusted Gross Profit Margin, Adjusted Selling, General and Administrative expense (“Adjusted SG&A”), Adjusted SG&A Margin, Adjusted Operating Income (loss), Adjusted Operating Income (loss) Margin, Adjusted Net Income (loss), Adjusted Diluted Earnings (loss) Per Share (“Adjusted Diluted EPS”), Free Cash Flow and Adjusted Net Debt to Adjusted EBITDAR ("Net Leverage Ratio"), and should not be used as a substitute for GAAP financial measures, or considered in isolation, for the purpose of analyzing operating performance, financial position or cash flows.

The Company has presented these Non-GAAP financial measures as the Company believes that the presentation of the financial results that exclude the categories of expenses and income listed below provide useful and indicative information about the performance of the Company's base operations because the expenses and income vary from period to period in terms of size, nature and significance. The Company also adjusts for the income tax impact of these Non-GAAP adjustments using the estimated tax rate in effect for the respective Non-GAAP adjustments. Included below is a description of the categories of expenses and income that the Company has determined are not normal, recurring cash operating expenses necessary to operate the Company’s business.

•Restructuring and other related expenses: Expenses directly incurred relating to announced restructuring initiatives. These expenses include severance expense, retention bonuses, incremental reserves related to the collectibility of receivables (inclusive of notes receivable) and third-party professional services expenses incurred for services provided in assisting in the development and execution of the plan(s). These expenses also include certain costs related to the distribution network optimization plan for the conversion of the stores and distribution centers to market hubs, including realized losses on liquidated inventory, temporary labor, nonrecurring professional service fees and team member severance.

•Impairments and write-down of assets: Expenses relating to the impairment of certain assets, including operating lease right-of-use ("ROU") assets, property and equipment, goodwill and intangible assets. These expenses also include incremental depreciation as a result of accelerating long-lived assets over a shorter useful life, ROU asset amortization after store closure, and incremental lease abandonment expenses as a result of accelerating ROU asset amortization for leases the Company expects to exit before the end of the contractual term, net of gains on lease terminations.

•Other items: Expenses primarily relating to nonrecurring services rendered by third-party vendors engaged to perform strategic business review and transformational activities, expense incurred related to acquisitions and divestitures including third-party transaction related expenses, transition services agreement expenses and income, and certain other expenses not viewed as normal cash operating expenses. In fiscal 2025, these expenses also included a non-cash charge related to expected future credit losses on vendor receivables due from a vendor that filed voluntary petitions for Chapter 11 bankruptcy protection. Other items also include certain tax items, both expenses and benefits, that are unrelated to the fiscal year in which they are recorded and are excluded in order to provide a clearer understanding of the Company’s ongoing Non-GAAP tax rate and after-tax earnings.

Reconciliation of GAAP Results to Non-GAAP Results:

	Q1 2026
	GAAP Results			GAAP Margin(1)			Restructuring and Other Related Expenses(2)			Impairments and Write-downs of assets(3)			Other Items(4)			Non-GAAP Adjusted Results			Non-GAAP Adjusted Margin(1)
Net sales	$	2,614					$	-		$	-		$	-		$	2,614
Cost of sales		1,434						(2	)		-			-			1,436
Gross Profit		1,180			45.1	%		(2	)		-			-			1,178			45.1	%
Selling, general and administrative		1,111			42.5	%		19			8			5			1,079			41.3	%
Operating income		69			2.6	%		17			8			5			99			3.8	%
Other income (expense)		(34	)					-			-			1			(33	)
Income tax expense (benefit)(5)		11						(5	)		(2	)		(1	)		19
Net Income	$	24					$	12		$	6		$	5		$	47
Diluted earnings per share	$	0.39														$	0.77
Diluted weighted-average common shares outstanding		60.9															60.9

(1) These GAAP and Non-GAAP measures are calculated as a percentage of net sales.

(2) Restructuring and other related expenses includes $13 million for reserves on independent loans and $4 million of other related expenses associated with location closures.

(3) The Company recorded incremental accelerated depreciation and amortization for property and equipment and ROU assets of $5 million and impairment charges for property and equipment and ROU assets of $3 million, net of gains on sale.

(4) Other items includes $5 million of nonrecurring services rendered by third-party vendors.

(5) The income tax impact of Non-GAAP adjustments is calculated using the estimated tax rate in effect for the respective Non-GAAP adjustments.

	Q1 2025
	GAAP Results			GAAP Margin(1)			Restructuring and Other Related Expenses			Impairments and Write-downs of assets			Other Items			Non-GAAP Adjusted Results			Non-GAAP Adjusted Margin(1)
Net sales	$	2,583					$	-		$	-		$	-		$	2,583
Cost of sales		1,474						-			-			-			1,474
Gross Profit		1,109			42.9	%		-			-			-			1,109			42.9	%
Selling, general and administrative		1,240			48.0	%		66			45			12			1,117			43.2	%
Operating income (loss)		(131	)		(5.1	)%		66			45			12			(8	)		(0.3	)%
Other income (expense)		-						-			-			(4	)		(4	)
Income tax expense (benefit)		(155	)					(16	)		(11	)		(129	)		1
Net Income (loss)	$	24					$	50		$	34		$	(121	)	$	(13	)
Diluted earnings per share	$	0.40														$	(0.22	)
Diluted weighted-average common shares outstanding(2)		60.2															59.8

(1) These GAAP and Non-GAAP measures are calculated as a percentage of net sales.

(2) Non-GAAP diluted weighted-average common shares outstanding excludes 0.4 million of anti-dilutive share-based awards.

Details of Non-GAAP adjustment amounts included in the Non-GAAP reconciliation for the prior period are included in the press release for that period.

Reconciliation of Free Cash Flow:

		Sixteen Weeks Ended
(in millions)		April 25, 2026				April 19, 2025
Cash flows from continuing operations(1)		$	(19	)		$	(156	)
Purchases of property and equipment			(56	)			(42	)
Free cash flow		$	(75	)		$	(198	)

(1) The sixteen weeks ended April 25, 2026 and April 19, 2025, included approximately $6 million and $90 million, respectively, of cash charges related to restructuring and other related expenses under our 2024 Restructuring Plan.

Reconciliation of Adjusted Net Debt to Adjusted EBITDAR(1)

	Four Quarters Ended
(in millions, except adjusted debt to EBITDAR ratio)	April 25, 2026
Total Debt (GAAP)	$	3,414
Add: Operating lease liabilities		2,211
Less: Cash & cash equivalents		(2,956	)
Adjusted Net Debt (Non-GAAP)	$	2,669
Net income (GAAP)	$	69
Depreciation and amortization		257
Interest expense		177
Other income, net		(94	)
Income tax benefit		6
Rent expense		533
Share-based compensation		37
Transformation and other charges(2)		144
Adjusted EBITDAR (Non-GAAP)	$	1,129
Debt to Net income (GAAP)		49.5
Adjusted Net Debt to Adjusted EBITDAR (Non-GAAP)		2.4

(1) Management believes its Adjusted Net Debt to Adjusted EBITDAR ratio (“net leverage ratio”) is a key financial metric for debt securities, as reviewed by rating agencies, and believes its debt levels are best analyzed using this measure. The Company’s goal is to re-establish an investment grade rating. The Company's credit rating could impact the Company's ability to obtain additional funding. A negative change in the Company's investment rating, could negatively impact future performance and limit growth opportunities. The net leverage ratio calculated by the Company is a Non-GAAP measure and should not be considered a substitute for debt to net income, as determined in accordance with GAAP. The Company adjusts the calculation to deduct available cash & cash equivalents and to add back the Company’s existing operating lease liabilities related to their right-of-use assets to provide a more meaningful comparison with the Company’s peers and to account for differences in debt structures and leasing arrangements. The Company also adjusts the calculation to remove rent expense and transformational and other non-cash charges. The Company’s calculation of its net leverage ratio may not be calculated in the same manner as other companies, and thus may not be comparable to similarly titled measures used by other companies.

(2) The adjustments to the four quarters ended April 25, 2026 primarily include expenses associated with restructuring and related activities, including non-cash impairments, in addition to other items, including a charge for expected future credit losses related to vendor receivables due from a vendor that filed petitions for Chapter 11 bankruptcy protection on September 28, 2025, the Company's material weakness remediation efforts, professional fees and executive turnover.

Store Information:

During the sixteen weeks ended April 25, 2026, four stores were opened and one store was closed, resulting in a total of 4,308 stores as of April 25, 2026, compared with a total of 4,305 stores as of January 3, 2026.

The below table summarizes the changes in the number of company-operated stores during the sixteen weeks ended April 25, 2026:

	Sixteen Weeks Ended
	AAP				CARQUEST				Total
January 3, 2026		4,066				239				4,305
New		4				-				4
Closed		-				(1	)			(1	)
April 25, 2026		4,070				238				4,308

FAQ

How did Advance Auto Parts (AAP) perform financially in Q1 2026?

Advance Auto Parts generated net sales of $2.61 billion in Q1 2026, up slightly from $2.58 billion a year earlier. Comparable store sales rose 3.5%, and operating results improved from a $131 million loss to $69 million of operating income.

What were Advance Auto Parts’ earnings per share for Q1 2026?

In Q1 2026, Advance Auto Parts reported diluted EPS of $0.39. On an adjusted basis, which excludes restructuring, impairments and other items, adjusted diluted EPS was $0.77, compared with an adjusted loss of $(0.22) in the prior-year quarter.

How did margins change for Advance Auto Parts in Q1 2026?

Gross profit margin increased to 45.1% of net sales in Q1 2026 from 42.9% a year earlier. Adjusted operating margin improved to 3.8%, versus an adjusted operating loss margin of (0.3)% in Q1 2025, reflecting better product margin and lower SG&A burden.

What full-year 2026 guidance did Advance Auto Parts provide?

Advance Auto Parts reaffirmed 2026 guidance for net sales of $8.49–$8.58 billion and comparable store sales growth of 1.0–2.0%. It expects adjusted operating income margin of 3.8–4.5%, adjusted diluted EPS of $2.40–$3.10, and free cash flow of approximately $100 million.

What is Advance Auto Parts’ cash dividend based on this update?

The company declared a regular cash dividend of $0.25 per share on May 19, 2026. This dividend is payable on July 24, 2026 to common stockholders of record as of July 10, 2026, continuing its practice of returning cash to shareholders.

How did Advance Auto Parts’ cash flow and free cash flow look in Q1 2026?

For the sixteen weeks ended April 25, 2026, cash flows from continuing operations were $(19) million. After $56 million of capital expenditures, free cash flow was $(75) million, an improvement from $(198) million in the prior-year period.

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