Advance Auto Parts rebounds with profit after 2024 losses and store closures

Advance Auto Parts has reported a strong recovery in its latest financial results. The company turned a major loss in 2024 into a profit by the end of last year. At the same time, it has been reshaping its store network to cut costs and improve efficiency.

In 2025, the company shut down over 500 corporate stores and around 200 independent Carquest locations. These closures included outlets in Mexico and several Caribbean islands, reducing its footprint but saving about $70 million annually. Despite this, Advance still runs 4,305 stores across the U.S., Canada, Puerto Rico, and the U.S. Virgin Islands, along with supporting 809 independently owned Carquest shops.

The company's fourth-quarter earnings showed a clear turnaround. After a loss of $10.20 per share in the same period of 2024, it posted earnings of $0.50 per share last quarter. Total sales for the quarter reached $1.97 billion, with comparable-store sales rising by 1.1% compared to the previous year.

Looking ahead, Advance expects sales between $8.485 billion and $8.575 billion in 2026, marking growth of 1% to 2%. Its adjusted operating income margin is forecasted to land between 3.8% and 4.5%. The company also plans to open 40 to 45 new stores next year, including 10 to 15 hub locations.

Higher car prices—$50,326 for new vehicles and $26,043 for used ones—have pushed repair costs up. This trend has likely boosted demand for auto parts, benefiting Advance and its competitors. While rivals like O'Reilly Automotive, AutoZone, and Genuine Parts have seen share gains of 5% to 20% this year, Advance remains positioned as a more affordable investment. Its forward price-to-earnings (P/E) ratio sits below most competitors, and its price-to-sales (P/S) ratio is the lowest in the sector. The company also continues to offer a steady dividend, currently yielding around 1.7%.

Advance's cost-cutting measures and store optimisations have set the stage for modest growth in 2026. With a focus on expanding hub locations and a financial outlook pointing to higher margins, the company aims to capitalise on rising demand for auto repairs. Investors also benefit from a reliable dividend, reinforcing its appeal in a competitive market.