Advance Auto Parts, Inc.

Company profile

• Leading automotive aftermarket parts provider in North America serving professional installers and DIY customers.
• Operates under two main trade names: Advance Auto Parts (AAP) and Carquest.
• Offers brand-name automotive parts, OEM and owned-brand replacements, batteries, maintenance items, and accessories for domestic and imported vehicles.

Store footprint and channels

• Advance Auto Parts company-owned stores: 4,066 stores (including 255 hubs and 33 market hubs) across 44 U.S. states and two U.S. territories.
• Distribution footprint: 19 distribution centers (including 3 in Canada) and 33 market hubs; total distribution footprint of about 7.2 million square feet. One center is dedicated to reclamations.
• Carquest footprint: 239 Carquest stores (including 157 in Canada).
• Independently owned Carquest locations: 809 Carquest stores.
• Omnichannel: serves professional and DIY customers through brick-and-mortar stores, self-service e-commerce (AdvanceAutoParts.com), and the Advance Mobile App. Supports in-store services.

Product categories and brands

• Product categories: Parts and Batteries; Accessories and Chemicals; Engine Maintenance; Brakes; Electrical; Clutch/Transmission; Climate control; Lighting; Tools; and more.
• SKUs: approximately 23,200 SKUs at Advance Auto Parts stores and approximately 19,100 SKUs at Carquest stores.
• Owned brands: DieHard, Carquest, DriveWorks, Wearever, MOTLogic/MotoShop, ARGOS (oil and fluids brand launched January 2026).
• Also carries major brand-name products from suppliers such as Bosch, Castrol, Denso, NGK, Mobil 1, Meguiar’s, and others.

Customer base and services

• Professional customers (garage/service centers, auto dealers, etc.) represented about 50% of sales in 2023–2025.
• DIY customers are primarily served through stores, with online ordering available for in-store pickup or direct shipping.
• In-store value-added services provided at no charge include battery and wiper installation; check engine light scanning; electrical system testing (batteries, starters, alternators); oil and battery recycling; and loaner tool programs.

Supply chain and operations

• Multi-echelon supply chain with distribution centers, hubs, and market hubs to enable same-day/next-day availability.
• Ongoing supply chain modernization includes converting distribution centers and stores to market hubs to improve parts availability, reduce costs, and optimize transportation.
• Relies on a broad global supplier base; movement of goods is affected by tariffs, trade policies, and carrier dynamics.
• In 2025–2026, continued focus on merchandising, pricing, and store operations improvements within a broader strategic plan.

Financial highlights (continuing operations and 2025 events)

• Net sales (continuing operations) for 2025: $8.6 billion (fifty-three weeks); 2024: $9.094 billion (fifty-two weeks). The year included a 53rd week and was affected by store closures under the 2024 Restructuring Plan.
• Gross profit: $3.733 billion in 2025, equal to 43.4% of net sales (vs. 37.5% in 2024). Margin improvement was driven by inventory margins, pricing actions, and lower related costs after restructuring.
• Operating loss (continuing operations): $(43) million in 2025, an improvement from $(713) million in 2024.
• Net income (continuing operations): $68 million in 2025; diluted EPS from continuing operations: $1.13.
• Discontinued operations: 2025 loss of $24 million (after taxes) related to Worldpac adjustments.
• Cash flow and liquidity:
  • Cash and cash equivalents: $3.123 billion as of January 3, 2026.
  • Available liquidity: ABL Facility borrowing availability of $896 million; no outstanding borrowings under ABL as of January 3, 2026.
  • 2025 capital expenditures: $252 million (increase driven by store renovations); 2026 expected around $300 million (subject to conditions).
  • Net cash from operating activities (continuing operations) in 2025: $(46) million.
  • Net cash provided by financing activities in 2025: $1.538 billion (reflecting debt issuances and other financing actions).
• Long-term debt and financings:
  • Total long-term debt outstanding as of January 3, 2026: $3.45 billion.
  • 2025 debt activity: issued $1.95 billion aggregate principal of 7.000% notes due 2030 and 7.375% notes due 2033; redeemed $300 million of 5.90% notes due 2026.
  • Remaining maturities include various senior unsecured notes ranging from 2027 to 2033.
• Shareholder returns:
  • The company has paid quarterly dividends since 2006.
  • No share repurchases in 2025; about $0.9 billion remained under existing authorization as of January 3, 2026.
  • The ABL Facility restricts some types of share repurchases; capital return decisions are board-approved and subject to covenants.
• Worldpac divestiture:
  • Worldpac was sold in November 2024 for net proceeds of about $1.44 billion.
  • Final working capital adjustment settled in January 2026 resulted in a $31 million net excess adjustment over the preliminary estimate.

Strategic actions and risks

• 2024 Restructuring Plan completed in early 2025, including store and independent location closures and headcount reductions to streamline operations and improve profitability.
• Ongoing supply chain optimization and market hub conversion aimed at improving service levels and inventory availability.
• Management continues to prioritize omnichannel enhancements, pricing, and merchandising as core elements of long-term profitability and growth.
• Business risks include macroeconomic and geopolitical factors, tariff changes, supply-chain disruptions, competitive dynamics (large national chains and online retailers), and evolving automotive technologies, including effects of electric vehicles on maintenance patterns.

Notes

• Fiscal year 2025 included a 53rd week, which affected year-over-year comparisons with 2024 (52 weeks).
• The company reports both GAAP results and non-GAAP/adjusted metrics (Adjusted Net Income, Adjusted EPS, etc.) in the MD&A with detailed reconciliation; these adjusted metrics illustrate baseline operating performance excluding certain transformation and nonrecurring items.