Advance Auto Parts' Q1 operational performance remained weak with continued losses, margin challenges, and rising overhead costs. Turnaround efforts, like store closures and the Worldpac sale, improved the balance sheet but haven't yet translated into improved profitability or positive free cash flow. I am not convinced that the company will be able to meet its 2025 guidance given weak margins, negative sales trends, and past lack of execution.
Advance Auto Parts, Inc. (NYSE:AAP ) Q1 2025 Earnings Conference Call May 22, 2025 8:00 AM ET Company Participants Lavesh Hemnani - Vice President, Investor Relations Shane O'Kelly - President & Chief Executive Officer Ryan Grimsland - Executive Vice President & Chief Financial Officer Conference Call Participants Simeon Gutman - Morgan Stanley Seth Sigman - Barclays Chris Horvers - JPMorgan Michael Lasser - UBS Zach Fadem - Wells Fargo Scot Ciccarelli - Truist Steven Zaccone - Citigroup Steven Forbes - Guggenheim Operator Welcome to the Advanced Auto Parts First Quarter 2025 Earnings Conference Call. I would now like to turn it over to Lavesh Hemnani, Vice President of Investor Relations.
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Although the revenue and EPS for Advance Auto Parts (AAP) give a sense of how its business performed in the quarter ended March 2025, it might be worth considering how some key metrics compare with Wall Street estimates and the year-ago numbers.
Advance Auto Parts (AAP) shares popped nearly 40% Thursday morning after the company maintained its full-year outlook despite the impact of tariffs.
AAP reports narrower-than-expected loss for the first quarter, while its revenues decline year over year.
Advance Auto Parts (AAP) came out with a quarterly loss of $0.22 per share versus the Zacks Consensus Estimate of a loss of $0.81. This compares to earnings of $0.67 per share a year ago.
On Thursday, the company said it'll handle the extra costs tied to the current tariff regime and still deliver its full-year earnings targets.
We rate Advance Auto Parts (AAP) Strong Buy with an $81 PT, citing rapid restructuring and operational reset unlocking durable growth. Management's accelerated closure of 700+ stores ahead of schedule streamlines the business, enabling margin stabilization and topline recovery above consensus. Insider equity purchases and disciplined cost actions signal alignment and credibility, supporting a valuation re-rating as the turnaround gains traction.
Looking beyond Wall Street's top -and-bottom-line estimate forecasts for Advance Auto Parts (AAP), delve into some of its key metrics to gain a deeper insight into the company's potential performance for the quarter ended March 2025.
This week's rally is particularly encouraging for investors who like to invest in small-cap stocks. The Russell 2000 index, widely considered to be the small-cap index, is up about 3.8% for the week.
Advance Auto Parts (AAP) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.