Advance Auto Parts shares plunge as tariff-aided EPS beat masks sales decline

Advance Auto Parts shares fell about 25% to $42.39 after the retailer reported second-quarter revenue of $2.00 billion, below estimates of about $2.04 billion, and comparable sales declined 0.5%. Adjusted EPS of $1.03 beat the 81-cent consensus, aided by $26 million of tariff refunds that contributed 130 basis points to the year-over-year gross-margin change; excluding International Emergency Economic Powers Act refunds, management said first-half 2026 gross margin was about 45%. Pro sales rose by a low-single-digit percentage while DIY sales fell by a low-single-digit percentage amid tighter household budgets. The company raised full-year adjusted EPS guidance to $2.60-$3.30, kept sales and comps guidance below cited estimates, reported $924 million of gross profit, $120 million of year-to-date free cash flow, and guided capex near $300 million while expanding SKUs, consolidating distribution centers, and scaling Market Hubs.

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