The company's operating margin has collapsed to 1.87%, reflecting significant structural inefficiencies as SG&A expenses continue to consume the majority of gross profit.
| Metric | TTM | Jan'26 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 | Dec'11 | Dec'10 | Dec'09 | Dec'08 | Dec'07 | Dec'06 | Dec'05 | Dec'04 | Dec'03 | Dec'02 | Dec'01 | Dec'00 | Dec'99 | Dec'98 |
|---|
| Sales/Revenue | 8.63B | 8.6B | 9.09B | 9.21B | 9.15B | 11B | 10.11B | 9.71B | 9.58B | 9.37B | 9.57B | 9.74B | 9.84B | 6.49B | 6.21B | 6.17B | 5.93B | 5.41B | 5.14B | 4.84B | 4.62B | 4.26B | 3.77B | 3.49B | 3.2B | 2.42B | 2.29B | 2.02B | 1.22B |
| Revenue Growth % | -3.05% | -5.42% | -1.25% | 0.66% | -16.81% | 8.82% | 4.09% | 1.34% | 2.21% | -2.03% | -1.74% | -1.09% | 51.59% | 4.65% | 0.56% | 4.14% | 9.47% | 5.26% | 6.15% | 4.94% | 8.24% | 13.12% | 7.92% | 9.04% | 32.42% | 5.76% | 13.41% | 65.26% | - |
| Cost of Goods Sold | 4.83B | 4.87B | 5.68B | 5.35B | 4.92B | 6.07B | 5.62B | 5.45B | 5.36B | 5.29B | 5.31B | 5.31B | 5.39B | 3.24B | 3.11B | 3.1B | 2.96B | 2.77B | 2.74B | 2.52B | 2.42B | 2.25B | 2.02B | 1.89B | 1.77B | 1.37B | 1.39B | 1.23B | 766.2M |
| COGS % of Revenue | - | 56.6% | 62.51% | 58.08% | 53.73% | 55.23% | 55.66% | 56.18% | 55.96% | 56.42% | 55.52% | 54.58% | 54.76% | 49.92% | 50.07% | 50.26% | 50.02% | 51.15% | 53.34% | 52.09% | 52.32% | 52.77% | 53.5% | 54.07% | 55.23% | 56.48% | 60.84% | 60.74% | 62.76% |
| Gross Profit | 3.8B | 3.73B | 3.41B | 3.86B | 4.23B | 4.92B | 4.48B | 4.25B | 4.22B | 4.09B | 4.26B | 4.42B | 4.45B | 3.25B | 3.1B | 3.07B | 2.96B | 2.64B | 2.4B | 2.32B | 2.2B | 2.01B | 1.75B | 1.6B | 1.43B | 1.05B | 895.89M | 791.99M | 454.56M |
| Gross Margin % | 44.04% | 43.4% | 37.49% | 41.92% | 46.27% | 44.77% | 44.34% | 43.82% | 44.04% | 43.58% | 44.48% | 45.42% | 45.24% | 50.08% | 49.93% | 49.74% | 49.98% | 48.85% | 46.66% | 47.91% | 47.68% | 47.23% | 46.5% | 45.93% | 44.77% | 43.52% | 39.16% | 39.26% | 37.24% |
| Gross Profit Growth % | - | 9.5% | -11.68% | -8.81% | -14.04% | 9.87% | 5.33% | 0.84% | 3.29% | -4.01% | -3.77% | -0.69% | 36.94% | 4.97% | 0.94% | 3.65% | 11.99% | 10.22% | 3.37% | 5.44% | 9.27% | 14.89% | 9.28% | 11.86% | 36.21% | 17.54% | 13.12% | 74.23% | - |
| Operating Expenses | 3.53B | 3.57B | 3.81B | 3.81B | 3.71B | 4.1B | 3.73B | 3.58B | 3.62B | 3.51B | 3.47B | 3.6B | 3.6B | 2.59B | 2.44B | 2.4B | 2.38B | 2.19B | 1.98B | 1.9B | 1.8B | 1.61B | 1.42B | 1.32B | 1.24B | 968.58M | 803.11M | 763.87M | 422.73M |
| OpEx % of Revenue | - | 41.53% | 41.93% | 41.32% | 40.53% | 37.29% | 36.92% | 36.85% | 37.73% | 37.5% | 36.25% | 36.94% | 36.59% | 39.91% | 39.33% | 38.97% | 40.11% | 40.46% | 38.59% | 39.31% | 38.94% | 37.66% | 37.79% | 37.68% | 38.64% | 40.03% | 35.1% | 37.86% | 34.63% |
| Selling, General & Admin | 3.53B | 3.57B | 3.81B | 3.81B | 3.71B | 4.1B | 3.73B | 3.58B | 3.62B | 3.51B | 3.47B | 3.6B | 3.6B | 2.59B | 2.44B | 2.4B | 2.38B | 2.19B | 1.98B | 1.9B | 1.8B | 1.61B | 1.42B | 1.31B | 1.2B | 939.69M | 803.11M | 721.75M | 392.35M |
| SG&A % of Revenue | - | 41.53% | 41.93% | 41.32% | 40.53% | 37.29% | 36.92% | 36.85% | 37.73% | 37.5% | 36.25% | 36.94% | 36.59% | 39.91% | 39.33% | 38.97% | 40.11% | 40.46% | 38.59% | 39.31% | 38.94% | 37.66% | 37.79% | 37.38% | 37.53% | 38.83% | 35.1% | 35.78% | 32.14% |
| Research & Development | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| R&D % of Revenue | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Operating Expenses | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 10.42M | 35.53M | 28.89M | 0 | 42.12M | 30.38M |
| Operating Income | 273M | 161M | -404M | 55M | 524.62M | 822.37M | 749.91M | 677.18M | 604.27M | 570.21M | 787.6M | 825.78M | 851.71M | 660.32M | 657.32M | 664.64M | 584.93M | 454.38M | 414.93M | 416.43M | 403.35M | 408.49M | 328.76M | 288.23M | 196.35M | 84.47M | 92.79M | 28.12M | 31.83M |
| Operating Margin % | 3.16% | 1.87% | -4.44% | 0.6% | 5.73% | 7.48% | 7.42% | 6.97% | 6.31% | 6.08% | 8.23% | 8.48% | 8.65% | 10.17% | 10.59% | 10.77% | 9.87% | 8.39% | 8.07% | 8.6% | 8.74% | 9.58% | 8.72% | 8.25% | 6.13% | 3.49% | 4.06% | 1.39% | 2.61% |
| Operating Income Growth % | - | 139.85% | -834.55% | -89.52% | -36.21% | 9.66% | 10.74% | 12.06% | 5.97% | -27.6% | -4.62% | -3.04% | 28.98% | 0.46% | -1.1% | 13.63% | 28.73% | 9.51% | -0.36% | 3.24% | -1.26% | 24.25% | 14.06% | 46.8% | 132.45% | -8.97% | 230.02% | -11.67% | - |
| EBITDA | 530M | 433M | -112M | 324M | 772.95M | 1.08B | 999.99M | 915.55M | 842.46M | 819.47M | 1.05B | 1.1B | 1.14B | 868.11M | 846.86M | 840.59M | 749.37M | 605.3M | 561.51M | 563.93M | 543.31M | 529.05M | 434.72M | 394.08M | 307.05M | 182.03M | 173.51M | 69.15M | 39.62M |
| EBITDA Margin % | 6.14% | 5.03% | -1.23% | 3.52% | 8.45% | 9.84% | 9.89% | 9.43% | 8.79% | 8.74% | 10.93% | 11.25% | 11.54% | 13.37% | 13.65% | 13.62% | 12.65% | 11.18% | 10.92% | 11.64% | 11.77% | 12.4% | 11.53% | 11.28% | 9.58% | 7.52% | 7.58% | 3.43% | 3.25% |
| EBITDA Growth % | 213.19% | 486.61% | -134.57% | -58.08% | -28.58% | 8.23% | 9.22% | 8.68% | 2.81% | -21.66% | -4.5% | -3.62% | 30.9% | 2.51% | 0.75% | 12.17% | 23.8% | 7.8% | -0.43% | 3.8% | 2.69% | 21.7% | 10.31% | 28.34% | 68.69% | 4.9% | 150.93% | 74.55% | - |
| D&A (Non-Cash Add-back) | 257M | 272M | 292M | 269M | 248.33M | 259.93M | 250.08M | 238.37M | 238.18M | 249.26M | 258.39M | 269.48M | 284.69M | 207.79M | 189.54M | 175.95M | 164.44M | 150.92M | 146.58M | 147.5M | 139.96M | 120.56M | 105.96M | 105.85M | 110.7M | 97.56M | 80.73M | 0 | 0 |
| EBIT | 251M | 48M | -687M | 41M | 511.03M | 820.28M | 697.9M | 677.64M | 611.85M | 579.06M | 798.75M | 818.3M | 854.8M | 663.02M | 657.91M | 664.18M | 583.92M | 454.99M | 414.42M | 416.43M | 403.35M | 408.49M | 328.76M | 298.65M | 231.88M | 89.32M | 92.79M | 69.15M | 39.62M |
| Net Interest Income | -177M | -139M | -81M | -88M | -50.84M | -37.79M | -46.89M | -39.9M | -56.59M | -58.8M | -59.91M | -65.41M | -73.41M | -36.62M | -33.84M | -30.95M | -26.86M | -23.34M | -33.73M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Income | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Expense | 177M | 139M | 81M | 88M | 50.84M | 37.79M | 46.89M | 39.9M | 56.59M | 58.8M | 59.91M | 65.41M | 73.41M | 36.62M | 33.84M | 30.95M | 26.86M | 23.34M | 33.73M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Income/Expense | -198M | -252M | -364M | -102M | -64.42M | -39.87M | -98.89M | -39.43M | -49.01M | -49.95M | -48.76M | -72.89M | -70.32M | -33.92M | -33.24M | -31.41M | -27.88M | -22.73M | -34.23M | -33.8M | -33.44M | -29.57M | -23.01M | -84.52M | -94.67M | -66.11M | -65.63M | -28.12M | -34.09M |
| Pretax Income | 75M | -91M | -768M | -47M | 460.19M | 782.49M | 651.01M | 637.75M | 555.26M | 520.26M | 738.84M | 752.89M | 781.39M | 626.4M | 624.07M | 633.24M | 557.05M | 431.65M | 380.69M | 382.63M | 369.92M | 378.92M | 305.75M | 203.71M | 101.68M | 18.36M | 27.16M | 0 | -2.27M |
| Pretax Margin % | 0.87% | -1.06% | -8.45% | -0.51% | 5.03% | 7.11% | 6.44% | 6.57% | 5.8% | 5.55% | 7.72% | 7.73% | 7.94% | 9.65% | 10.06% | 10.26% | 9.4% | 7.98% | 7.4% | 7.9% | 8.01% | 8.88% | 8.11% | 5.83% | 3.17% | 0.76% | 1.19% | - | -0.19% |
| Income Tax | 7M | -159M | -181M | -17M | 99.66M | 185.88M | 157.99M | 150.85M | 131.42M | 44.75M | 279.21M | 279.49M | 287.57M | 234.64M | 236.4M | 238.55M | 211M | 161.28M | 142.65M | 144.32M | 138.6M | 144.2M | 117.72M | 78.42M | 39.53M | 7.28M | 10.54M | 0 | 0 |
| Effective Tax Rate % | 9.33% | 174.73% | 23.57% | 36.17% | 21.66% | 23.75% | 24.27% | 23.65% | 23.67% | 8.6% | 37.79% | 37.12% | 36.8% | 37.46% | 37.88% | 37.67% | 37.88% | 37.36% | 37.47% | 37.72% | 37.47% | 38.05% | 38.5% | 38.5% | 38.88% | 39.68% | 38.79% | - | 0% |
| Net Income | 44M | 44M | -336M | 30M | 464.4M | 596.62M | 493.02M | 486.9M | 423.85M | 475.5M | 459.62M | 473.4M | 493.82M | 391.76M | 387.67M | 394.68M | 346.05M | 270.37M | 238.04M | 238.32M | 231.32M | 234.72M | 187.99M | 124.94M | 65.02M | 11.44M | 19.56M | -25.33M | -2.18M |
| Net Margin % | 0.51% | 0.51% | -3.69% | 0.33% | 5.08% | 5.42% | 4.88% | 5.01% | 4.42% | 5.07% | 4.8% | 4.86% | 5.02% | 6.03% | 6.25% | 6.4% | 5.84% | 5% | 4.63% | 4.92% | 5.01% | 5.5% | 4.99% | 3.58% | 2.03% | 0.47% | 0.85% | -1.26% | -0.18% |
| Net Income Growth % | 112.51% | 113.1% | -1220% | -93.54% | -22.16% | 21.01% | 1.26% | 14.88% | -10.86% | 3.46% | -2.91% | -4.14% | 26.05% | 1.05% | -1.78% | 14.05% | 27.99% | 13.58% | -0.12% | 3.03% | -1.45% | 24.86% | 50.47% | 92.15% | 468.25% | -41.5% | 177.23% | -1060.68% | - |
| Net Income (Continuing) | 68M | 68M | -587M | -30M | 360.54M | 596.62M | 493.02M | 486.9M | 423.85M | 475.5M | 459.62M | 473.4M | 493.82M | 391.76M | 387.67M | 394.68M | 346.05M | 270.37M | 238.04M | 238.32M | 231.32M | 234.72M | 188.03M | 125.29M | 62.15M | 11.07M | 16.63M | -20.48M | -2.18M |
| Discontinued Operations | -1000K | -24M | 251M | 60M | 103.87M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -39K | -352K | 2.87M | 2.44M | 0 | -4.85M | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | 0.72 | 0.73 | -5.63 | 0.50 | 7.65 | 9.55 | 7.14 | 6.84 | 5.73 | 6.42 | 6.20 | 6.40 | 6.71 | 5.32 | 5.22 | 5.11 | 3.95 | 2.83 | 2.49 | 2.28 | 2.16 | 2.13 | 1.66 | 1.11 | 0.60 | 0.13 | 0.23 | -0.30 | -0.04 |
| EPS Growth % | 112.26% | 112.97% | -1226% | -93.46% | -19.9% | 33.75% | 4.39% | 19.37% | -10.75% | 3.55% | -3.13% | -4.62% | 26.13% | 1.92% | 2.15% | 29.37% | 39.58% | 13.65% | 9.21% | 5.56% | 1.41% | 28.31% | 49.55% | 85% | 361.54% | -43.48% | 176.67% | -667.26% | - |
| EPS (Basic) | - | 0.73 | -5.63 | 0.50 | 7.70 | 9.62 | 7.17 | 6.87 | 5.75 | 6.44 | 6.22 | 6.45 | 6.75 | 5.36 | 5.29 | 5.21 | 4.00 | 2.85 | 2.51 | 2.30 | 2.18 | 2.17 | 1.70 | 1.14 | 0.62 | 0.13 | 0.23 | -0.30 | -0.04 |
| Diluted Shares Outstanding | 60.9M | 60.6M | 59.65M | 59.61M | 60.72M | 64.51M | 69M | 71.17M | 73.99M | 74.11M | 73.86M | 73.73M | 73.41M | 73.41M | 74.06M | 77.07M | 87.16M | 95.11M | 95.2M | 104.65M | 107.12M | 109.99M | 113.22M | 112.11M | 108.56M | 87.47M | 85.79M | 84.81M | 55.82M |
| Basic Shares Outstanding | 60.1M | 59.9M | 59.65M | 59.43M | 60.35M | 64.03M | 68.75M | 70.87M | 73.73M | 73.85M | 73.56M | 73.19M | 72.93M | 72.93M | 73.09M | 75.62M | 86.08M | 94.46M | 94.66M | 103.83M | 106.13M | 108.32M | 110.85M | 109.5M | 105.15M | 85.91M | 84.85M | 84.81M | 55.82M |
| Dividend Payout Ratio | - | 136.36% | - | 697.64% | 72.4% | 26.97% | 11.43% | 3.53% | 4.2% | 3.75% | 3.86% | 3.73% | 3.56% | 4.49% | 4.54% | 4.7% | 6.08% | 8.43% | 9.74% | 10.55% | 8.28% | - | - | - | - | - | - | - | - |
Structural margin compression risk
As evidenced by the most recent quarterly filings, Advance Auto Parts has struggled with sustained top-line pressure, reporting a 5.42% year-over-year revenue decline that highlights a potential loss of market share to more operationally efficient competitors within the automotive aftermarket retail sector.
The consistent inability to generate positive organic growth suggests that the company's fragmented distribution network is failing to capture the tailwinds of an aging U.S. vehicle fleet. Investors should monitor whether this revenue decay reflects a permanent erosion of the Pro-segment customer base or merely a temporary misalignment in inventory availability.
Based on reported financial statements, the company's operating margin has collapsed to a precarious 1.87%, a figure that underscores significant structural inefficiencies when compared to the double-digit margins maintained by primary industry peers like O'Reilly Automotive and AutoZone in the current fiscal environment.
This margin profile indicates that rising labor and logistical costs are not being effectively offset by pricing power, leaving the firm with almost no buffer against macroeconomic volatility. The reliance on vendor incentives to bolster gross margins warrants further investigation, as it may be masking underlying weakness in core product pricing.
According to historical income statement data, the company has failed to demonstrate meaningful operating leverage, as SG&A expenses frequently consume the vast majority of gross profit, preventing the conversion of revenue into sustainable operating income during periods of stagnant or declining sales volume.
The high fixed-cost base associated with the company's extensive retail footprint appears to be a significant drag on profitability. Without a clear path to rationalizing these overhead costs, the firm may continue to face difficulty in scaling its bottom line even if revenue trends eventually stabilize.
While some market participants may view the recent divestiture of the Worldpac business as a catalyst for deleveraging, the company's historical performance suggests that operational integration challenges remain a persistent headwind that could limit free cash flow generation for the foreseeable future.
The market may be overestimating the ease of a turnaround by assuming the company can replicate the inventory efficiency of its peers without significant capital expenditure. Investors should remain cautious, as the idiosyncratic hurdles within the legacy IT and supply chain systems appear to be more deeply rooted than a simple divestiture can resolve.
Quick answers to the most common questions about buying AAP stock.
For fiscal year 2025, Advance Auto Parts, Inc. (AAP) reported total revenue of $8.60B. This represents a 604.6% increase compared to $1.22B in 1998.
Advance Auto Parts, Inc. (AAP) is profitable, generating $44.0M in net income for the fiscal year ending 2025 with a net profit margin of 0.5%.
Advance Auto Parts, Inc. (AAP) reported an operating income of $161.0M, resulting in an operating profit margin of 1.9%. This margin reflects the operational efficiency of the business before interest and taxes.
Advance Auto Parts, Inc. (AAP) generated $3.73B in gross profit for the year, representing a gross profit margin of 43.4%. This demonstrates the company's core pricing power and production efficiency.