Advance Auto Parts Inc. (NYSE:AAP) stock surged Thursday after the company delivered stronger-than-expected quarterly results, driven by improving demand trends across both professional and do-it-yourself customers.

Management also pointed to gains from merchandising initiatives, stronger parts availability and customer engagement efforts, while signaling caution around consumer spending pressure, elevated gas prices and geopolitical uncertainty.

Quarterly Details

The company reported first-quarter adjusted earnings per share of 77 cents, beating the analyst consensus estimate of 45 cents. Quarterly sales of $2.614 billion outpaced the Street view of $2.579 billion.

First-quarter 2025 net sales included approximately $51 million from stores closed during the first quarter of 2025 under the company's optimization program tied to its 2024 restructuring plan.

Comparable-store sales increased 3.5% in the first quarter of 2026.

Adjusted gross profit rose to $1.2 billion in the first quarter from $1.1 billion a year earlier, while adjusted gross margin expanded to 45.1% of net sales from 42.9%.

The margin expansion was primarily driven by higher product margins supported by merchandising initiatives.

Results also benefited from cycling approximately 90 basis points of atypical margin headwinds tied to the store optimization program under the company's 2024 restructuring plan.

Adjusted operating income for the first quarter of 2026 was $99 million, compared with a loss of $8 million in the prior-year quarter, while adjusted operating margin was 3.8% of net sales, versus a negative 0.3% in the first quarter of 2025.

Short Interest

Advance Auto Parts (NYSE:AAP) currently has a short interest of approximately 29.79% of its basic outstanding shares, according to Benzinga Pro data.

This represents roughly 11.55 million shares sold short, making it one of the most heavily shorted stocks in its sector as investors weigh its ongoing business turnaround.

Conference Call Takeaways

The company said merchandising initiatives, expanded assortment availability and stronger customer service helped drive higher transaction volumes across both Pro and DIY channels.

Management highlighted strong early traction from its ARGOS-owned-brand rollout and newly launched Advance Rewards loyalty program, which boosted customer engagement and transaction counts.

Advance Auto said it is closely monitoring consumer spending trends, elevated gas prices and broader geopolitical volatility that could pressure demand and supply-chain costs in the coming quarters.

The company added that recent tariff regulations have not changed its inflation expectations, while ongoing investments in supply chain operations, market hubs and store upgrades are expected to support long-term growth.

Dividend

On May 19, the company declared a regular cash dividend of 25 cents per share to be paid on July 24, 2026, to all common stockholders of record as of July 10, 2026.

Outlook

Advance Auto Parts affirmed fiscal 2026 adjusted EPS guidance of $2.40 to $3.10, compared with the analyst estimate of $2.76.

The company also maintained its fiscal 2026 sales outlook of $8.485 billion to $8.575 billion versus the Street estimate of $8.556 billion.

AAP Price Action: Advance Auto Parts shares were up 18.53% at $60.73 at the time of publication on Thursday, according to Benzinga Pro data.

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