Advance Auto Parts Inc. (NYSE: AAP) shares tumbled more than 15% in premarket trading after the auto parts retailer reported second-quarter revenue that fell short of expectations and provided fiscal 2026 guidance below analyst projections.
The company posted adjusted earnings per share of $1.03, exceeding the $0.81 consensus estimate, but revenue totaled $2.0 billion, missing the $2.04 billion forecast and matching the prior-year period. Comparable store sales declined 0.5% for the quarter. Adjusted operating income margin expanded by over 250 basis points year-over-year to 5.6%, supported by $26 million in tariff refunds, which contributed approximately $0.31 to adjusted EPS.
Management reaffirmed full-year revenue guidance in a range of $8.485 billion to $8.575 billion, with a midpoint of $8.53 billion below the $8.58 billion consensus. Adjusted EPS guidance was raised to $2.60–$3.30 from $2.40–$3.10, with the midpoint of $2.95 slightly above the $2.93 consensus estimate.
Free cash flow turned positive at roughly $120 million for the first 28 weeks of fiscal 2026, compared with a negative $201 million in the prior-year period. Net leverage improved to 2.1x from 2.4x in the first quarter. The company declared a quarterly dividend of $0.25 per share, payable on October 23, 2026.
Chief Executive Shane O’Kelly noted that Pro channel sales grew in the low-single digits as expected, but total enterprise sales were constrained by weaker DIY demand due to tighter household budgets, particularly in the final four weeks of the quarter.
