Revenue continues to contract year-over-year, falling 5.4% in Q2 2026, while operating margins remain severely compressed at 5.1% versus a TTM average of just 1.87%.
Advance Auto Parts, Inc. (AAP) annual income statement — 28-year revenue, gross profit & net income history
| 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 | 8.62B | 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 % | -1.31% | -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 | 4.77B | 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 | 3.85B | 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 % | 44.66% | 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 | 3.52B | 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 | 1000K | 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 | 323M | 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 % | 3.75% | 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 | 545M | 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 % | 6.32% | 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 % | 213.02% | 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) | 200M | 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 | 334M | 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 | -206M | -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 | 206M | 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 | -194M | -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 | 129M | -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 % | 1.5% | -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 | 21M | -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 % | 16.28% | 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 | 84M | 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 % | 0.97% | 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 % | 122% | 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) | 108M | 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) | 1.38 | 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 % | 121.47% | 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 | 61M | 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 | 60.3M | 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% | - | - | - | - | - | - | - | - |
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.
Key Metrics
Top Statement Risk
Thin margins amid negative revenue growth
Metrics are mathematically derived from official filings.
Persistent Top-Line Contraction
Advance Auto Parts continues to experience negative revenue growth, with a -5.4% year-over-year decline reported in Q2 2026, extending a trend of persistent top-line contraction that began in early 2024 and appears to be driven by competitive pressures and execution challenges.
The company's revenue trajectory shows consistent negative growth across most recent periods, with only isolated quarters of slight positive movement. This pattern suggests structural demand loss rather than temporary cyclical softness, particularly when compared to peers like O'Reilly and AutoZone which continue to post positive growth. The inability to grow the top line while managing costs indicates a potentially losing market position.
Structural Margin Compression vs Peers
With a trailing twelve-month operating margin of 1.87%, Advance Auto Parts operates at a severe disadvantage to industry leaders like AutoZone (19.1%) and O'Reilly (19.5%), indicating fundamental cost structure inefficiencies that appear resistant to recent optimization efforts.
The gross margin recovery from the catastrophic 17.4% in Q4 2024 to the mid-40% range in recent quarters is notable, but the conversion to operating margin remains poor. For every dollar of gross profit, Advance retains only about 10 cents as operating income compared to peers who retain nearly 40 cents, suggesting overhead costs are consuming profitability gains. This structural gap indicates deep-seated inefficiencies in SG&A and store-level execution.
SG&A Overhead Dominates P&L
Selling, general, and administrative expenses consistently consume 81-83% of gross profit, creating a structural profitability ceiling that prevents meaningful operating leverage even as gross margins improve from their 2024 lows.
The SG&A-to-gross-profit ratio reveals that Advance's cost structure is heavily weighted toward fixed overhead rather than variable costs tied to sales volume. This explains why revenue declines translate directly into margin pressure—the company cannot scale its cost base down proportionally with its top line. The ratio has improved slightly from over 100% in Q4 2024 but remains fundamentally out of balance with industry norms.
Negative Operating Leverage Amplifies Weakness
Operating income has failed to scale with gross profit improvements, with the operating margin expanding only modestly to 5.1% in Q2 2026 despite gross margins improving 29 percentage points from their 2024 nadir, indicating severe negative operating leverage.
The relationship between gross profit and operating income demonstrates that each incremental dollar of gross profit generates minimal additional operating profit. When gross profit increased by over $570 million from Q4 2024 to Q2 2026, operating income improved by only $901 million in total over several quarters, with significant volatility. This suggests the company's cost structure is rigid and cannot be scaled efficiently.
Turnaround Thesis Faces Execution Doubts
The recent earnings beat masks persistent fundamental weakness, as the company sacrifices margin to buy down inventory and the dividend cut suggests management lacks confidence in sustainable cash generation to service its 2.38x debt-to-equity leverage.
Short sellers would focus on the disconnect between EPS beats and deteriorating competitive position. The company's ability to generate positive EPS appears dependent on one-time cost actions rather than sustainable operational improvement. The high debt level combined with negative revenue growth creates a dangerous combination where financial flexibility is constrained just when significant investment is needed to remain competitive. Without revenue growth, the current profitability improvement may prove unsustainable.