Auto Parts - A Slick Setup As Oil Prices Remain Elevated; Latest Channel Thoughts…

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Auto Parts - A Slick Setup As Oil Prices Remain Elevated; Latest Channel Thoughts…

June 4, 2026

(+) Advance Feedback Continues to Be More Positive. Competitors and customers are more positive about AAP's

market positioning, and its inventory and pricing strategies are changing. One operator put it well when he said, "They

aren't giving it away anymore." Click here for our AAP 1Q Preview and Final Thoughts note.

(-) Operator Optimism / Tone Ticks Down Modestly. Operators are increasingly cautious after a choppier May, when

sales slowed vs. March and April. For companies that met their May targets, it was tougher than expected to meet their

goals, which caused the outlook for June to tick lower. There was also some recent callouts for parts margin compression,

suggesting some pressure from price increases.

(-) Oil Change Costs $100-120 Today… Going to $130-150 This Summer; We haven’t Seen Demand Impact from

this Yet Another Negative Catalyst. Our checks indicated that oil changes sit at $100-120 and are heading to $130-150

range. Oil changes moving up 20-30% will lead to lower volumes of these jobs and defer other maintenance projects.

Another way to think about it is the top of the funnel for demand is being tightened.

(-) FRAM Being Replaced By Purolator as First Brands Disintegration Is Almost Complete. Following their bankruptcy

last year, First Brands was bought by PGI in April for $25mm. Since then, we've seen FRAM in-stocks continue to

dwindle, and we think this purchase was likely a signal of the end for many FRAM & First Brands branded products.

Walmart is also removing the brand from many stores, and they were their most important customer here.

Exhibit 1 - Wolfe Research Motor Oil Price Gaps by Exhibit 2 - FRAM Out of Stock Being Replaced by