Скачать или смотреть Advance Auto Parts: Q2 2025 Earnings Breakdown! EPS Beat, Stock Dip & Turnaround Strategy!

*Advance Auto Parts: Q2 2025 Earnings Breakdown! EPS Beat, Stock Dip & Turnaround Strategy!*

Hey everyone, let's dive into Advance Auto Parts' (NYSE: AAP) Q2 2025 results! The company just announced its financials for the quarter ending July 12, 2025, and there's a lot to unpack.

*The Big Picture – Mixed Signals!*
Advance Auto Parts *returned to profitability* in Q2 2025, which is a significant milestone. They reported an *adjusted diluted EPS of $0.69**, blowing past the forecast of $0.53 – that's a **30.19% surprise beat!**. However, despite this strong earnings performance, the **stock dipped 7.77%* in pre-market trading, reaching $57.01. Revenue came in at $2 billion, slightly above forecasts, but marked an **8% year-over-year decline**.

*CEO Shane O'Kelly* thanked the team for delivering "solid second-quarter results" and expressed encouragement from "early signs of stabilization in our DIY business". He also highlighted confidence that their "long-term advantages of a stable supply chain financing program and enhanced financial flexibility will serve as catalysts for driving EPS growth and value creation over time".

*Q2 Financial Highlights at a Glance:*
*Net Sales:* $2.0 billion, down from $2.2 billion last year, mainly due to store optimization.
*Comparable Store Sales:* A **slight increase of 0.1%**. This included a 25 basis point headwind from the shift in Easter timing.
*Pro Business:* Continued to show **positive low single-digit growth**.
*DIY Business:* Experienced a low single-digit sales decline, but showed **signs of stabilization**, performing consistently with Q1.
*Adjusted Gross Profit:* $0.9 billion, or **43.8% of net sales**, showing a 16 basis points margin expansion year-over-year.
*Adjusted Operating Income:* $61 million, or **3.0% of net sales**, a 20 basis points margin expansion year-over-year.
*Free Cash Flow:* Still a *negative outflow of $201 million* through Q2 2025.

*Strategic Moves: Reorganizing Debt & Investing in the Future!*
Advance Auto Parts completed a significant *debt offering of $1.95 billion in senior notes* and entered a **new $1.0 billion asset-backed revolving credit facility**. This proactive step aims to ensure financial flexibility, support their supply chain financing program, and serve as a "bridge structure to return to an investment grade credit rating in the future".

The company's turnaround plan is built on three key pillars:
1. *Merchandising Excellence:*
Focusing on **product cost reductions**, aiming for ~50 basis points of annualized cost reductions in 2025.
*Accelerating SKU growth**, adding over **60,000 new SKUs* year-to-date, nearly 300% more than last year.
Improving **store availability KPI to the mid-90% range**.
Rolling out a *new assortment framework* to the *top 50 DMAs (70% of sales) by the end of Q3**, which is ahead of schedule and showing an average **50 basis points comp sales uplift* in initial DMAs.
2. *Supply Chain Optimization:*
**Consolidating U.S. distribution centers**, on track for 12 closures this year, bringing the total to 16 DCs by year-end.
Driving **productivity in DCs**, with a low single-digit increase in product lines per hour.
*Expanding market hub locations**, on track to open **10 new market hubs* this year. These hubs are delivering an average estimated **100 basis points comparable sales uplift**.
3. *Store Operations:*
Improving *"Time to Serve" for Pro customers* into the target range of 30-40 minutes (down from over 50 minutes average in FY 2024).
For DIY, they're *prioritizing robust training plans* and reinforcing services like battery testing and wiper installation.
*Investing significantly in store upgrades**, allocating three times more maintenance CapEx year-to-date than in 2024, leading to major upgrades at **over 1,000 stores* (compared to ~400 in all of 2024).

*Outlook and Challenges:*
Advance Auto Parts *reaffirmed its full-year 2025 guidance* for sales, operating margin, and free cash flow:
*Net sales:* $8.4 billion - $8.6 billion.
*Comparable store sales:* 0.5% - 1.5%.
*Adjusted operating income margin:* 2.00% - 3.00%.
*Adjusted diluted EPS:* Revised to $1.20 - $2.20 (from $1.50 - $2.50) due to higher net interest expense.
*Free cash flow:* $(85) million - $(25) million.

*Long-term (FY27) Objectives:*
*Net sales:* ~$9 billion.
*Adjusted operating income margin:* ~7%.
*Net Leverage Ratio:* ~2.0 to 2.5 times.

*Key Risks and Challenges* include continued revenue decline, tariffs impacting ~40% of COGS at a blended rate of ~30%, persistent low to mid-single-digit inflation, and the DIY segment's response to price increases. Execution of operational improvements and store upgrades remains critical.