Advance Auto Parts, Inc. The Tide or the Turnaround

Research evidence excerpt

Advance Auto Parts, Inc. The Tide or the Turnaround

J P M O R G A N North America Equity Research

22 May 2026

Advance Auto Parts, Inc. Neutral

AAP, AAP US

The Tide or the Turnaround Price (21 May 26):$58.62

▲Price Target (Dec-26):$65.00

Prior (Dec-26):$59.00

PM’s take: progress continues while we attempt to separate the tide from the

turnaround. AAP posted a 3.5% SSS led by +MSD DIFM trends (DIY +LSD) and Retailing – Broadlines & Hardlines /

Leisureup-and-down the Street pro accounts outperforming DIFM comps by 200 bps. The

75% EPS upside was led by 50 bps of gross margin upside (all LIFO vs. our model Christopher Horvers, CFA AC

and prior mgmt comments, but still up ~200 bps ex-LIFO, capitalized costs, and (1-212) 622-1316

christopher.horvers@jpmorgan.com

clearance laps and 90 bps sequentially) along with clearance sales laps that

confused consensus. SG&A dollars were in-line. Cadence wise, like most retailers, Christian Carlino, CFA

(1-212) 622-9145

March was the strongest period on the back of stimulus, weather, and the Easter christian.carlino@jpmorgan.com

shift with the current QTD shoulder period (qtr ended 4/25) comping at the low end

Jolie Wasserman

of the 1-2% annual guide with some weekend weather headwinds in its core (1-212) 622-1961

Northeast/Mid-Atlantic markets (as noted by HD, LOW). While the degree of EPS jolie.wasserman@jpmchase.com

upside is exaggerated by a low share count and margins, estimates remain biased J.P. Morgan Securities LLC

higher as (1) AAP didn’t update its guidance but “would on 2Q should trends come

in relatively in-line or better” and (2) we see conservatism in the expectation for

Key Changes (FYE Dec)a 45.0-45.4% gross margin on self-help (promo effectiveness, vendor support) and

LIFO. Prev Cur Δ

Adj. EPS - 26E ($) 3.40 3.59 5.7%