Advance Auto Parts AAP Q1 2026 Earnings Transcript

Motley Fool Transcribing, The Motley Fool

Thu, May 21, 2026 astatine 10:20 AM CDT 48 min read

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DATE

Thursday, May 21, 2026 astatine 8 a.m. ET

CALL PARTICIPANTS

• Chief Executive Officer — Shane O'Kelly

• Executive Vice President and Chief Financial Officer — Ryan Grimsland

Full Conference Call Transcript

Shane O?Kelly: Thank you, Lavesh, and bully morning, everyone. I privation to statesman by thanking our frontline squad for their hard work, which delivered a coagulated commencement to 2026. Comparable income grew by 3.5% successful the archetypal quarter, marking our strongest 4th of maturation successful 5 years. Based connected marketplace indicators, we judge our results were intimately aligned to broader marketplace trends, reflecting meaningful advancement implicit the past 2 years. The Pro transmission was the superior operator of income with accordant monthly maturation successful the mid-single-digit range. Performance successful the Pro transmission was driven by our strategical absorption connected the Main Street Pro, wherever the income maturation remains stronger.

The DIY transmission besides delivered affirmative debased single-digit growth, reversing the softness experienced past quarter. Our Q1 show reflects continued betterment successful parts availability and comer service, which is helping america respond to favorable manufacture dynamics. We proceed to execute initiatives firmly rooted successful the fundamentals of selling car parts arsenic we purpose to stabilize marketplace stock successful the adjacent word portion positioning ourselves for stock summation successful the future. The squad besides delivered steadfast profitability successful the archetypal quarter. Adjusted operating borderline expanded by implicit 400 ground points to 3.8%. This advancement was partially fueled by effectual merchandising execution and merchandise borderline expansion.

We expect Merchandising to stay the superior catalyst for borderline betterment passim the year, and I'm encouraged by the advancement our squad has made. We besides proceed to thrust accountability crossed the enactment to amended productivity, which contributed to steadfast disbursal leverage successful Q1. We are pleased with the beardown commencement to the year, and we proceed to marque advancement connected our strategical initiatives, which gives america assurance to reaffirm our afloat twelvemonth guidance.

We are intimately monitoring user spending patterns arsenic we modulation beyond the caller taxation refund tailwinds that person shaped trends successful caller months, portion higher state prices whitethorn present impermanent fluctuations successful request we stay assured successful our semipermanent maturation prospects, supported by robust underlying fundamentals, including an aging conveyance population, increasing car parkland and expanding miles driven. Next, let's crook to an update connected our strategical priorities for 2026. Our strategy remains unchanged and is built connected 3 pillars, supported by targeted initiatives to thrust sustainable, profitable maturation implicit the agelong term. We stay committed to executing actions nether our 2026 strategical priorities arsenic we marque advancement connected our travel towards a medium-term 7% adjusted operating borderline target.