Advance Auto Parts, Inc., 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 19, 2025.

“The Advance team delivered better than expected sales and profitability in the first quarter and I want to thank them for their hard work and commitment to serving our customers. During the quarter, we also successfully completed our store footprint optimization within an accelerated timeframe, while continuing to make progress on our other strategic initiatives. This progress was evident in our Pro performance during the quarter, with 8 consecutive weeks of US Pro comparable sales growth,” said Shane O’Kelly, president and chief executive officer.

“The recently implemented tariffs have created a highly dynamic economic environment. Despite this, the team is staying focused on the turnaround and our path ahead. We are reaffirming our annual guidance based on performance to date, expected progress on our strategic initiatives for the balance of the year and our planned mitigation actions for the tariffs currently in effect.”

As of April 19, 2025, Advance operated 4,285 stores primarily within the United States, with additional locations in Canada, Puerto Rico and the U.S. Virgin Islands. The company also served 881 independently owned Carquest branded stores across these locations in addition to Mexico and various Caribbean islands. 

Tariffs dominated much of the investor call.

“And think about tariffs as you got the 301s, the 232s, IEEPA and tariff creates variability by product, country of origin, tariff magnitude,” said O’Kelly. “By the way, changes to any of the above, the stackability of a tariff, whether it’s discrete or combined with others. And so, as we’ve looked at that in aggregate across the company, our blended tariff rate with what is currently in effect is about 30%.”

O’Kelly said too that about 40% of the company’s product are affected by tariffs, but that this may be only on a subcompnents of a product, cautioning against multiplying that 40% product by the 30% tariff impact he noted.

O’Kelly did emphasize that the company had employed a number of mitigration strategies, incuding but not limited to buying ahead on inventory, pushing back on cost increases, working with vendor partners, and looking at alternative sources of supply.

Any costs that can’t be mitigated with those strategies were passed along to price.

Ryan Grimsland, Executive Vice President & Chief Financial Officer, was asked to weigh in on more detail.

“Ultimately, we think the full value chain should bear some of that, whether that’s the vendor, the supplier, the retailer, and then, ultimately, the consumer are going to bear some of those impacts. But to give you an example of supply, when we think about our China exposure, about 10% from China’s direct import or 10% of our overall product is direct import from China. By the end of the year, more than 50% of that, that we’re direct importing from China, will be sourced from other countries.”

The tariff impact has, however, not really landed yet.

“We’ve got decent weeks of supply in some of these categories, and we’re working through those,” said Grimsland. “So that’s why we haven’t seen much of an impact early on. We also talked about we did a forward buy before the tariffs, and that helps with that weeks of supply that we can work through before we see a big impact.”

First Quarter 2025 Results 

First quarter 2025 net sales totaled $2.6 billion, compared with $2.8 billion in the first quarter of the prior year. Comparable store sales for the first quarter 2025 decreased 0.6% and does not include store closing sales at more than 500 corporate locations that were closed in the quarter as part of our store optimization program.

All figures in USD.

The Company’s first quarter 2025 gross profit was $1.1 billion, or 42.9% of net sales compared with $1.2 billion, or 43.4% in the first quarter of the prior year. The deleverage was primarily driven by approximately 90 basis points of margin headwind associated with liquidation sales at closing store locations.

The Company’s first quarter 2025 selling, general and administrative (SG&A) expenses were $1.2 billion, or 48.0% of net sales compared with $1.2 billion, or 41.5% in the first quarter of the prior year. Adjusted SG&A expenses were $1.1 billion, or 43.2% of net sales in the first quarter of 2025 compared with $1.1 billion, or 41.4% in the first quarter of 2024. The deleverage was primarily driven by higher labour-related expenses compared with the prior year.

The Company’s first quarter 2025 operating loss was $131 million, or 5.1% of net sales, compared with operating income of $53 million, or 1.9% in the first quarter of the prior year. Adjusted operating loss was $8 million, or 0.3% of net sales, compared with adjusted operating income of $56 million, or 2.0% in the first quarter of 2024.

Our first quarter 2025 adjusted operating margin was negatively impacted by approximately 90 basis points of margin headwind associated with liquidation sales at closing store locations, that is not included in non-GAAP adjustments.

The Company’s first quarter 2025 effective tax rate benefit was 118.3%, compared with an effective tax rate expense of 41.4% in the first quarter of 2024.

The Company’s effective tax rate was impacted by a discrete benefit of $126 million in the first quarter of 2025. The Company’s diluted earnings per share for the quarter was $0.40, compared with $0.29 in the first quarter of 2024. The Company’s adjusted diluted loss per share was $0.22 compared with earnings per share of $0.33 in the first quarter of 2024.

Net cash used in operating activities was $156 million through the first quarter of 2025 versus $3 million of cash used in operating activities in the same period of the prior year. Free cash flow through the first quarter of 2025 was an outflow of $198 million compared with an outflow of $49 million in the same period of the prior year.

Store Information

During the sixteen weeks ended April 19, 2025, 10 stores were opened and 513 were closed, resulting in a total of 4,285 stores as of April 19, 2025, compared with a total of 4,788 stores as of December 28, 2024.

Capital Allocation

On May 13, 2025, the Company declared a regular cash dividend of $0.25 per share to be paid on July 25, 2025, to all common stockholders of record as of July 11, 2025.

Full Year 2025 Guidance (53 weeks)

The company has reaffirmed its full year 2025 guidance as shown in the table below. Guidance assumes current tariffs remain in place for the remainder of 2025.

	As of May 22, 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)	$1.50		$2.50
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

Investor Conference Call

The Company detailed its results for the first quarter ended April 19, 2025, via a webcast scheduled to begin at 8 a.m. Eastern Time on Thursday, May 22, 2025. The webcast will be accessible via the Investor Relations page of the Company’s website (ir.AdvanceAutoParts.com).

A replay of the conference call will be available on the Company’s Investor Relations website for one year.