Advance Auto Parts (NYSE:AAP) Surpasses Earnings and Revenue Estimates

• Advance Auto Parts reported an EPS of -$0.22, significantly outperforming the estimated EPS of -$0.82.
• The company's revenue reached approximately $2.58 billion, exceeding expectations and demonstrating its ability to outperform market predictions.
• Despite a challenging year, AAP's shares surged by approximately 46% following the announcement of its earnings results.

Advance Auto Parts (NYSE:AAP) is a leading automotive aftermarket parts provider in North America, offering a wide range of products, including replacement parts, accessories, batteries, and maintenance items for cars and trucks. AAP competes with other major players in the industry, such as AutoZone and O'Reilly Automotive.

On May 22, 2025, AAP reported an earnings per share (EPS) of -$0.22, which was significantly better than the estimated EPS of -$0.82. The company achieved an earnings surprise of 72.84%, as highlighted by Zacks. Despite a negative price-to-earnings (P/E) ratio of -8.19, AAP's performance exceeded expectations.

AAP also reported revenue of approximately $2.58 billion, surpassing the estimated revenue of about $2.51 billion. This revenue figure, although down 7% year over year, exceeded the Zacks Consensus Estimate by 3.34%. The company has exceeded consensus revenue estimates three times in the last four quarters, demonstrating its ability to outperform market expectations.

The positive market reaction to AAP's results is evident, with shares surging by approximately 46% as of 10:45 a.m. ET. This comes after a challenging year where the company's stock had lost more than half its value due to poor performance and broader economic concerns. Investors' low expectations were pleasantly surprised by the company's results and strategic initiatives.

AAP has been actively pursuing a transformation plan, which includes closing hundreds of stores and opening new ones in more strategic locations. Despite the challenges, the company has reiterated its guidance, affirming that its restructuring plan is progressing well. The debt-to-equity ratio of 1.70 suggests that AAP has a significant amount of debt compared to its equity, but the current ratio of 1.32 indicates a reasonable level of liquidity to cover short-term liabilities.