Advance Auto Parts Q2 2026: Gross Margin Jumps 267 bps, Operating Income Up 359%
AAP is trading near its 52-week low of $37.89 (12% above the low) on elevated volume (7.9× avg).
Summary
Advance Auto Parts reported Q2 2026 net income of $55M, up from $15M a year ago, on flat sales of $2.0B. Gross margin expanded 267 basis points to 46.2%, and operating cash flow swung to a $252M inflow.
Key Events · Earnings and Guidance · AAP
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Q2 Net Income Up 267%
Net income rose to $55M from $15M a year ago, with diluted EPS of $0.90 versus $0.25.
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Gross Margin Expands 267 bps
Gross margin reached 46.2% of net sales, up from 43.5%, driven by product margin expansion and $26M in IEEPA tariff refunds.
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Operating Cash Flow Turns Positive
Operating cash flow was $252M for the 28 weeks, compared to a $106M outflow last year, reflecting lower restructuring charges and working capital improvements.
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Debt Repurchase Under 10b5-1 Plan
The company repurchased $29.1M principal of senior notes during the quarter, reducing long-term debt to $3.4B.
Analysis · AAP · Trade & Services
The 10-Q confirms the strong Q2 results previewed in the 8-K, with gross margin expanding to 46.2% from 43.5% a year ago and operating income rising to $101M from $22M. The improvement was driven by product margin expansion, $26M in tariff refunds, and lower restructuring costs. Cash flow turned positive at $252M versus a $106M outflow last year, and the company repurchased $29.1M of senior notes. The balance sheet remains solid with $3.1B in cash and $894M in ABL availability.
At the time of this filing, AAP was trading at $42.28 on NYSE in the Trade & Services sector, with a market capitalization of approximately $2.6B. The 52-week trading range was $37.89 to $65.21. This filing was assessed with positive market sentiment and an importance score of 7 out of 10.