Advance Auto Parts, Inc., a leading automotive aftermarket parts provider in North America , announced its financial results for the second quarter ended July 12, 2025 and its return to profitability.

“The Advance team delivered solid second-quarter results, with both sales and operating margin at the upper end of our expectations. I want to thank the team for their dedication and hard work throughout the quarter,” said Shane O’Kelly, president and chief executive officer.

“Our comparable sales performance was fueled by growth in the Pro business, and we are encouraged by the early signs of stabilization in our DIY business. Our strategic plan is designed to establish a strong foundation for consistently delivering exceptional customer service, and I am pleased with the progress being made by the team. Q2 also marked an important milestone with Advance returning to profitability. Over the past year, we have taken decisive actions aimed at creating long-term value for our shareholders, and we remain focused on positioning the Company for sustained, profitable growth.”

Advance operates 4,292 stores primarily within the United States and in additional locations including Canada–it owns and operates Carquest Canada.–as well as supporting independently owned Carquest branded stores.

During the call with investors, members of the Advance executive team shared insights on the moves taken and the path forward with particular note in a tariff environment.

“Approximately a year ago, the merchandising team embarked on a transformation journey following the appointment of our Chief Merchant, Bruce Starnes, and other key leaders in pivotal roles,” offered CEO O’Kelly. “They have been focused on reestablishing Advance as a premier destination for high quality auto parts and rebuilding trust as a long term growth partner for vendors. The team is engaged in line reviews and several rounds of negotiations with vendors to secure products at a more competitive cost.

“The groundwork laid by this team over the last year is also supporting productive negotiations with vendors on sharing the tariff burden. As we have indicated previously, approximately 40% of our reported cost of goods is exposed to tariffs at a blended rate of approximately 30%. The dynamic tariff environment has certainly presented challenges across the industry. However, we have been able to navigate through this complex landscape, thanks to our much improved price management capabilities.

“Our pricing team has been successful in identifying dutiable components across product lines, which is enabling more effective discussions with vendors around cost increases. Simultaneously, the team has been proactive in exploring alternative sources of supply and diversifying countries of origin to mitigate costs. In addition, to handle external tariff discussions, the team is internally optimizing product promotion strategies to minimize reliance on ineffective promotions.

“This work involves close collaboration with store teams to refine the use of unproductive discounting mechanisms. We view promotion management as an important lever to balance the impact of higher costs and to maximize profit dollars.”

O’Kelly added that Advance had added 60,000 new SKUs to its network year to date, which is up nearly 300% compared to last year. 

Ryan Grimsland, Executive Vice President and Chief Financial Officer, detailed that revenue growth was led by undercar components, engine management and the brake category.

“For the quarter, transactions declined in the low single digit range, while ticket was positive and improved compared to Q1. We estimate that inflation was about 2% during the quarter and included tariff related price adjustments that began midway through Q2. This rate of inflation was also influenced by the comparison to last year’s price investments, which had pressured ticket growth last year. Looking at channel performance more broadly for the full quarter, Pro grew in the low single digit range and accelerated compared to Q1.” DIY, he added, underperformed in the quarter.

“Our tariff related price actions are expected to contribute to low to mid single digit same SKU inflation in the second half. “

Second Quarter 2025 Results 

Second quarter 2025 net sales totaled $2.0 billion, compared with $2.2 billion in the second quarter of the prior year. Comparable store sales for the second quarter 2025 increased 0.1%.

All figures in USD.

The Company’s second quarter 2025 gross profit was $0.9 billion, or 43.5% of net sales compared with $1.0 billion, or 43.6% in the second quarter of the prior year. Adjusted gross profit was $0.9 billion, or 43.8% of net sales compared with $1.0 billion, or 43.6% in the second quarter of the prior year. The margin expansion was driven by savings associated with the footprint optimization activity completed in March. These savings were partially offset by the reversal of previously capitalized inventory costs.

The Company’s second quarter 2025 selling, general and administrative (SG&A) expenses were $0.9 billion, or 42.4% of net sales compared with $0.9 billion, or 41.1% in the second quarter of the prior year. Adjusted SG&A expenses were $0.8 billion, or 40.7% of net sales in the second quarter of 2025 compared with $0.9 billion, or 40.8% in the second quarter of 2024. The reduction in SG&A expenses was primarily related to operation of fewer stores compared to last year.

The Company’s second quarter 2025 operating income was $22 million, or 1.1% of net sales, compared with operating income of $54 million, or 2.5% in the second quarter of the prior year. Adjusted operating income was $61 million, or 3.0% of net sales, compared with adjusted operating income of $62 million, or 2.8% in the second quarter of 2024.

The Company’s second quarter 2025 effective tax rate was 28.6%, compared with an effective tax rate of 29.5% in the second quarter of 2024. The Company’s diluted earnings per share for the quarter was $0.25, compared with $0.51 in the second quarter of 2024. The Company’s adjusted diluted earnings per share was $0.69 compared with adjusted diluted earnings per share of $0.62 in the second quarter of 2024.

Net cash used in operating activities was $106 million through the second quarter of 2025 versus $39 million of cash provided by operating activities in the same period of the prior year. Free cash flow through the second quarter of 2025 was an outflow of $201 million compared with an outflow of $48 million in the same period of the prior year.

Capital Allocation

On August 5, 2025, the Company declared a regular cash dividend of $0.25 per share to be paid on October 24, 2025, to all common stockholders of record as of October 10, 2025.

Full Year 2025 Guidance (53 weeks)

The Company has revised adjusted diluted EPS guidance to account for higher net interest expense related to its recent senior notes offering. Other guidance items remain unchanged, as shown in the table below. Full year 2025 guidance assumes current tariffs remain in place for the remainder of 2025.

		As of August 14, 2025
($ in millions, except per share data)		Low		High
Net sales from continuing operations (1)		$8,400		$8,600
Comparable store sales (52 weeks) (2)		0.5%		1.5%
Adjusted operating income margin from continuing operations (4)		2.00%		3.00%
Adjusted diluted EPS from continuing operations (3,4)		$1.20		$2.20
Capital expenditures		Approx. $300
Free cash flow (4)		$(85)		$(25)
New store growth
Store openings		30 new stores
Market hub openings		10 new market hubs

(1)		Includes approximately $100 to $120 million of net sales in the 53rd week.
(2)		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.
(3)		Reduction in guidance driven by approximately $0.30 of incremental net interest expense related to the recent debt offering.
(4)		Adjusted operating income margin from continuing operations, Adjusted diluted EPS from continuing operations 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 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.

Investor Conference Call

The Company detailed its results for the second quarter ended July 12, 2025, via a webcast scheduled to begin at 8 a.m. Eastern Time on Thursday, August 14, 2025. 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 day in advance or at 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 installers and do-it-yourself customers. As of July 12, 2025, Advance operated 4,292 stores primarily within the United States, with additional locations in Canada, Puerto Rico and the U.S. Virgin Islands. The Company also served 842 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.