In This Article:
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Net Sales: $2.6 billion, a 7% decrease compared to last year.
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Comparable Store Sales: Declined 60 basis points during Q1.
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Gross Profit: $1.11 billion or 42.9% of net sales, with a 50 basis points contraction in gross margin.
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Adjusted Operating Loss: $8 million or negative 30 basis points of net sales.
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Adjusted Diluted Loss Per Share: $0.22 compared to earnings per share of $0.33 in the prior year.
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Free Cash Flow: Negative $198 million compared to negative $49 million in the prior year.
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Store Footprint: More than 4,000 stores, with plans to open over 100 new stores in the next three years.
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Distribution Centers: On track to close 12 DCs this year, with 6 completed to date.
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Pro Business Growth: Grew in the low single-digit range, with eight consecutive weeks of positive comparable sales growth in the US.
Release Date: May 22, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Advance Auto Parts Inc (NYSE:AAP) reported better-than-expected first-quarter results, with a rebound in demand led by the Pro business.
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The company achieved eight consecutive weeks of positive comparable sales growth in the US Pro segment.
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AAP completed its store footprint optimization program, with 75% of its store footprint now in markets where it holds the number one or two position based on store density.
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The company plans to open more than 100 new stores over the next three years, aiming to capture a share of the $150 billion total addressable market.
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AAP is implementing a new assortment framework to improve parts coverage, which has already shown an estimated uplift of nearly 50 basis points in comparable sales growth in the initial rollout markets.
Negative Points
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Net sales from continuing operations decreased by 7% compared to last year, primarily due to store optimization activities.
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Comparable store sales declined by 60 basis points during the first quarter, excluding closed locations.
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The DIY segment remains challenged, with high weekly volatility and cautious consumer spending impacting sales.
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Gross margin contracted by 50 basis points year-over-year, largely due to liquidation sales related to store optimization.
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The company faces potential challenges from tariffs, with a blended tariff rate of about 30% affecting approximately 40% of sourced products.
Q & A Highlights
Q: Can you provide insights on the expected mix of DIY versus DIFM performance for the year, given the first quarter results? A: Ryan Grimsland, CFO, stated that the trends have played out as expected, with DIFM (Do It For Me) being the primary driver of performance, while DIY (Do It Yourself) remains pressured. The company has modeled different scenarios in their guidance, but currently, they expect DIFM to lead and DIY to remain slightly pressured.