aap-20251004

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549
__________________________________________

FORM 10-Q

________________________________________________________________

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended October 4, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________.

Commission file number 001-16797

_______________________________

ADVANCE AUTO PARTS, INC.

(Exact name of registrant as specified in its charter)

_________________________


Delaware			54-2049910
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

4200 Six Forks Road, Raleigh, North Carolina 27609

(Address of principal executive offices) (Zip Code)

(540) 362-4911

(Registrant’s telephone number, including area code)

Securities Registered Pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol

Name of each exchange on which registered

Common Stock, $0.0001 par value

AAP

New York Stock Exchange

Not Applicable

(Former name, former address and former fiscal year, if changed since last report).

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Registration S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of October 27, 2025, the number of shares of the registrant’s common stock outstanding was 60,022,245 shares.

Table of Contents


TABLE OF CONTENTS
			Page
NOTE REGARDING FORWARD LOOKING STATEMENTS			1
PART I.	FINANCIAL INFORMATION
	Item 1.	Condensed Consolidated Financial Statements of Advance Auto Parts, Inc. and Subsidiaries (unaudited)	2
		Condensed Consolidated Balance Sheets	2
		Condensed Consolidated Statements of Operations	3
		Condensed Consolidated Statements of Comprehensive Income	4
		Condensed Consolidated Statements of Changes in Stockholders’ Equity	5
		Condensed Consolidated Statements of Cash Flows	7
		Notes to the Condensed Consolidated Financial Statements	9
	Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	22
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34
	Item 4.	Controls and Procedures	34
PART II.	OTHER INFORMATION
	Item 1.	Legal Proceedings	34
	Item 1A.	Risk Factors	34
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35
	Item 5.	Other Information	36
	Item 6.	Exhibits	37
SIGNATURE			38

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FORWARD-LOOKING STATEMENTS

Certain statements herein are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are usually identifiable by words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast, “guidance,” “intend,” “likely,” “may,” “plan,” “position,” “possible,” “potential,” “probable,” “project,” “should,” “strategy,” “target,” “will,” or similar language. All statements other than statements of historical fact are forward-looking statements, including, but not limited to, statements about the Company’s strategic initiatives, restructuring and asset optimization plans, financial objectives, including with respect to the Company's reorganized debt capital structure, operational plans and objectives, statements about the benefits of the Company's Worldpac sale and use of proceeds therefrom, statements regarding expectations for economic conditions, future business and financial performance, including with respect to tariffs, as well as statements regarding underlying assumptions related thereto. Forward-looking statements reflect the Company’s views based on historical results, current information and assumptions related to future developments. Except as may be required by law, the Company undertakes no obligation to update any forward-looking statements made herein. Forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those projected or implied by the forward-looking statements. They include, among others, the Company’s ability to hire, train and retain qualified employees, the timing and implementation of strategic initiatives, risks associated with the Company’s restructuring and asset optimization plans, risks relating to incurrence of indebtedness and increased leverage, risks relating to the Company's credit ratings or perceived creditworthiness, deterioration of general macroeconomic conditions, geopolitical factors including increased tariffs and trade restrictions, the highly competitive nature of the industry, demand for the Company’s products and services, risks relating to the impairment of assets, including intangible assets such as goodwill, access to financing on favorable terms, complexities in the Company’s inventory and supply chain and challenges with transforming and growing its business. Please refer to “Item 1A. Risk Factors” of the Company’s most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”), as updated by the Company’s subsequent filings with the SEC, for a description of these and other risks and uncertainties that could cause actual results to differ materially from those projected or implied by the forward-looking statements.

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PART I. FINANCIAL INFORMATION

ITEM 1.CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Advance Auto Parts, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in millions, except par value amounts) (Unaudited)


Assets	October 4, 2025		December 28, 2024
Current assets:
Cash and cash equivalents	$	3,174	$	1,869
Receivables, net	483		544
Inventories, net	3,694		3,612
Other current assets	167		118
Total current assets	7,518		6,143
Property and equipment, net	1,269		1,334
Operating lease right-of-use assets	2,184		2,243
Goodwill	599		598
Other intangible assets, net	401		406
Other assets	88		74
Total assets	$	12,059	$	10,798
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	3,177		3,408
Accrued expenses	761		784

Other current liabilities	411		473
Total current liabilities	4,349		4,665
Long-term debt	3,411		1,789
Operating lease liabilities	1,850		1,897
Deferred income taxes	166		193
Other long-term liabilities	88		84
Total liabilities	9,864		8,628

Commitments and contingencies (Note 10)

Stockholders’ equity:
Preferred stock, nonvoting, $0.0001 par value, 10 million shares authorized; no shares issued or outstanding	—		—
Common stock, voting, and additional paid-in capital, $0.0001 par value, 200 million shares authorized; 78 million shares issued and 60 million outstanding at October 4, 2025 and 78 million shares issued and 60 million outstanding at December 28, 2024	1,026		994
Treasury stock, at cost	(2,944)		(2,940)
Accumulated other comprehensive loss	(42)		(47)
Retained earnings	4,155		4,163
Total stockholders’ equity	2,195		2,170
Total liabilities and stockholders’ equity	$	12,059	$	10,798

The accompanying notes to the condensed consolidated financial statements are an integral part of these statements.

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Advance Auto Parts, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(in millions, except per share data) (Unaudited)


	Twelve Weeks Ended				Forty Weeks Ended
	October 4, 2025		October 5, 2024		October 4, 2025		October 5, 2024
Net sales	$	2,036	$	2,148	$	6,628	$	7,098
Cost of sales	1,155		1,240		3,764		4,037
Gross profit	881		908		2,864		3,061
Selling, general and administrative expenses, exclusive of restructuring and related expenses	826		895		2,771		2,933
Restructuring and related expenses	33		13		180		21
Selling, general and administrative expenses	859		908		2,951		2,954
Operating (loss) income	22		—		(87)		107
Other, net:
Interest expense	(40)		(19)		(86)		(62)
Other income, net	16		2		61		12
Total other, net	(24)		(17)		(25)		(50)
(Loss) income before income taxes	(2)		(17)		(112)		57
Income tax (benefit) expense	(1)		8		(150)		34
Net income (loss) from continuing operations	(1)		(25)		38		23
Net income from discontinued operations	—		19		—		56
Net income (loss)	$	(1)	$	(6)	$	38	$	79

Basic earnings (loss) per common share from continuing operations	$	(0.02)	$	(0.42)	$	0.63	$	0.38
Basic earnings per common share from discontinued operations	—		0.32		—		0.95
Basic earnings (loss) per common share	$	(0.02)	$	(0.10)	$	0.63	$	1.33
Basic weighted-average common shares outstanding	60.0		59.7		59.9		59.6

Diluted earnings (loss) per common share from continuing operations	$	(0.02)	$	(0.42)	$	0.63	$	0.38
Diluted earnings per common share from discontinued operations	—		0.32		—		0.94
Diluted earnings (loss) per common share	$	(0.02)	$	(0.10)	$	0.63	$	1.32
Diluted weighted-average common shares outstanding	60.0		59.9		60.5		59.9

The accompanying notes to the condensed consolidated financial statements are an integral part of these statements.

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Condensed Consolidated Statements of Comprehensive Income
(in millions) (Unaudited)
	Twelve Weeks Ended				Forty Weeks Ended
	October 4, 2025		October 5, 2024		October 4, 2025		October 5, 2024
Net income (loss)	$	(1)	$	(6)	$	38	$	79
Other comprehensive income (loss):
Currency translation adjustments	(1)		1		5		9
Total other comprehensive income (loss)	(1)		1		5		9
Comprehensive income (loss)	$	(2)	$	(5)	$	43	$	88

The accompanying notes to the condensed consolidated financial statements are an integral part of these statements.

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Advance Auto Parts, Inc. and Subsidiaries Condensed Consolidated Statements of Changes in Stockholders’ Equity (in millions, except per share data) (Unaudited)

	Twelve Weeks Ended October 4, 2025
	Common Stock and Additional Paid-In-Capital			Treasury Stock, at Cost		Accumulated Other Comprehensive Loss		Retained Earnings		Total Stockholders’ Equity
	Shares	Amount
Balance at July 12, 2025	60	$	1,016	$	(2,943)	$	(41)	$	4,171	$	2,203
Net loss	—	—		—		—		(1)		(1)
Total other comprehensive loss	—	—		—		(1)		—		(1)

Share-based compensation	—	9		—		—		—		9
Common stock issued under employee benefit plans		1		—		—		—		1
Repurchases of common stock	—	—		(1)		—		—		(1)
Dividends declared ($0.25 per common share)	—	—		—		—		(15)		(15)
Balance at October 4, 2025	60	$	1,026	$	(2,944)	$	(42)	$	4,155	$	2,195

	Twelve Weeks Ended October 5, 2024
	Common Stock and Additional Paid-In-Capital			Treasury Stock, at Cost		Accumulated Other Comprehensive Loss		Retained Earnings		Total Stockholders’ Equity
	Shares	Amount
Balance at July 13, 2024	60	$	976	$	(2,938)	$	(44)	$	4,613	$	2,607
Net loss	—	—		—		—		(6)		(6)
Total other comprehensive income	—	—		—		1		—		1

Share-based compensation	—	11		—		—		—		11
Common stock issued under employee benefit plans	—	1		—		—		—		1
Repurchases of common stock	—	—		(1)		—		—		(1)
Dividends declared ($0.25 per common share)	—	—		—		—		(15)		(15)
Balance at October 5, 2024	60	$	988	$	(2,939)	$	(43)	$	4,592	$	2,598

The accompanying notes to the condensed consolidated financial statements are an integral part of these statements.

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Advance Auto Parts, Inc. and Subsidiaries Condensed Consolidated Statements of Changes in Stockholders’ Equity (in millions, except per share data) (Unaudited)

	Forty Weeks Ended October 4, 2025
	Common Stock and Additional Paid-In Capital			Treasury Stock, at Cost		Accumulated Other Comprehensive Loss		Retained Earnings		Total Stockholders’ Equity
	Shares	Amount
Balance at December 28, 2024	60	$	994	$	(2,940)	$	(47)	$	4,163	$	2,170
Net income	—	—		—		—		38		38
Total other comprehensive income	—	—		—		5		—		5