Companies / Advance Auto Parts
Advance Auto Parts AAP
Moody's Ba1 (stable)S&P BB+ (negative)
Capital Structure
| Cap Structure | Amt Out. | Mkt Price | Yield | Lev. Through | View |
|---|---|---|---|---|---|
| Unrestricted Cash | $3,085.0 | ||||
| ABL Revolving Credit Facility | 0.0 | 100.0% | N/a | NA | Neutral |
| 1.750% Senior Unsecured Notes due 2027 | 349.9 | 96.3%* | 5.62% | NA | Neutral |
| 5.950% Senior Unsecured Notes due 2028 | 271.0 | 100.6%* | 5.50% | NA | Bearish |
| 7.000% Senior Notes due 2030 | 975.0 | 102.2%* | 6.37% | NA | Neutral |
| 3.900% Senior Unsecured Notes due 2030 | 500.0 | 94.1%* | 5.79% | NA | Neutral |
| 3.500% Senior Unsecured Notes due 2032 | 350.0 | 87.6%* | 6.20% | NA | Neutral |
| 7.375% Senior Notes due 2033 | 975.0 | 102.6%* | 6.91% | NA | Neutral |
| Total Debt | $3,388.0 | NA | |||
| Net Debt | $303.0 | NA |
Last Twelve Months
| Revenue | -- |
| Implied Costs | -- |
| Adj. EBITDA | -- |
| (-) Interest Expense | (101) |
| (-) Capex | (239) |
| Memo: FCF | $163 |
| Total Liquidity | $3,979.0 |
Advance Auto Parts
| 10/10/26 | Face Value / Adj. EBITDA | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cap Structure | Coupon | Maturity | Amt Out. | Mkt Price | YTM | Next Call | Yield to Call | View | 2021A | 2022A | 2023A | 2024A | 2025A | LTM |
| Unrestricted Cash | $3,085.0 | |||||||||||||
| Undrawn Revolver ($1,000mm facility) | 894.0 | |||||||||||||
| Total Liquidity | $3,979.0 | |||||||||||||
| ABL Revolving Credit Facility | SOFR + 125 to 175 | 8/12/2030 | 0.0 | 100.0% | N/a | N/a | N/a | Neutral | ||||||
| Total Secured Debt | $0.0 | 0.0x | 0.0x | 0.0x | 0.0x | 0.0x | NA | |||||||
| Net Secured Debt | ($3,085.0) | -2.7x | -3.8x | -8.5x | -30.4x | -6.2x | NA | |||||||
| 1.750% Senior Unsecured Notes due 2027 | 1.75% | 10/1/2027 | 349.9 | 96.3%* | 5.62% | 8/1/2027 @ 100 | 5.62% | Neutral | ||||||
| 5.950% Senior Unsecured Notes due 2028 | 5.95% | 3/9/2028 | 271.0 | 100.6%* | 5.50% | 2/9/2028 @ 100 | 5.50% | Bearish | ||||||
| 7.000% Senior Notes due 2030 | 7.00% | 8/1/2030 | 975.0 | 102.2%* | 6.37% | 8/1/2027 @ 103.5 | 8.09% | Neutral | ||||||
| 3.900% Senior Unsecured Notes due 2030 | 3.90% | 4/15/2030 | 500.0 | 94.1%* | 5.79% | 1/15/2030 @ 100 | 5.79% | Neutral | ||||||
| 3.500% Senior Unsecured Notes due 2032 | 3.50% | 3/15/2032 | 350.0 | 87.6%* | 6.20% | 12/15/2031 @ 100 | 6.45% | Neutral | ||||||
| 7.375% Senior Notes due 2033 | 7.375% | 8/1/2033 | 975.0 | 102.6%* | 6.91% | 8/1/2028 @ 103.688 | 7.71% | Neutral | ||||||
| Other debt, discounts and issuance costs | N/a | N/a | (32.9) | |||||||||||
| Total Debt | $3,388.0 | 3.0x | 4.1x | 9.3x | 33.4x | 6.8x | NA | |||||||
| Net Debt | $303.0 | 0.3x | 0.4x | 0.8x | 3.0x | 0.6x | NA | |||||||
| Adj. EBITDA | $1,147 | $819 | $365 | $101 | $501 | -- | ||||||||
Key Financials
| 2021A | 2022A | 2023A | 2024A | 2025A | LTM | |
|---|---|---|---|---|---|---|
| Revenue | $10,998 | $9,149 | $9,209 | $9,094 | $8,601 | -- |
| Y/Y Growth | (16.8%) | 0.7% | (1.2%) | (5.4%) | ||
| (-) Cost of Revenue | (6,074) | (4,916) | (5,349) | (5,685) | (4,868) | (3,296) |
| Gross Profit | $4,924 | $4,233 | $3,860 | $3,409 | $3,733 | -- |
| Gross Margin | 44.8% | 46.3% | 41.9% | 37.5% | 43.4% | |
| (-) SG&A | (4,102) | (3,708) | (3,805) | (3,813) | (3,572) | (2,421) |
| (+/-) Other Operating Costs, net of D&A | 260 | 248 | 253 | (17) | 68 | -- |
| EBITDA | $1,082 | $773 | $308 | ($421) | $229 | -- |
| (+) Add-backs: stock comp, restructuring, impairments | 65 | 47 | 57 | 522 | 272 | -- |
| Adj. EBITDA | $1,147 | $819 | $365 | $101 | $501 | -- |
| Margin | 10.4% | 9.0% | 4.0% | 1.1% | 5.8% | |
| (-) Restructuring and other cash add-backs | -- | -- | (16) | (309) | (204) | (76) |
| Cash EBITDA | $1,147 | $819 | $349 | ($208) | $297 | -- |
| (-) Interest Expense (Cash Only) | (36) | (46) | (74) | (76) | (76) | (101) |
| (-) Cash Taxes | (177) | (95) | (99) | (37) | (13) | (20) |
| (-) Capex | (290) | (399) | (226) | (181) | (252) | (239) |
| (+/-) Working Capital and Other | 174 | 58 | 111 | 406 | (254) | -- |
| Memo: FCF | $817 | $338 | $61 | ($96) | ($298) | $163 |
| % of Debt | 24.1% | 10.0% | 1.8% | (2.8%) | (8.8%) | 4.8% |
Liquidity
| Unrestricted Cash | $3,085.0 |
| Undrawn Revolver | 894.0 |
| Total Liquidity | $3,979.0 |
| (-) Debt due through 2028 | (620.9) |
| (+/-) Free cash flow, last twelve months | 163.0 |
| Liquidity after maturities and a year of cash flow | $3,521.1 |
The basket review for this company has not finished yet. When it does, this tab shows the dollar capacity to move value or prime lenders, the playbook moves that fit, and what they would do to each tranche. Meanwhile, see the liability management playbook.
Key Financials
| 2021A | 2022A | 2023A | 2024A | 2025A | LTM | |
|---|---|---|---|---|---|---|
| Revenue | $10,998 | $9,149 | $9,209 | $9,094 | $8,601 | -- |
| Y/Y Growth | (16.8%) | 0.7% | (1.2%) | (5.4%) | ||
| (-) Cost of Revenue | (6,074) | (4,916) | (5,349) | (5,685) | (4,868) | (3,296) |
| Gross Profit | $4,924 | $4,233 | $3,860 | $3,409 | $3,733 | -- |
| Gross Margin | 44.8% | 46.3% | 41.9% | 37.5% | 43.4% | |
| (-) SG&A | (4,102) | (3,708) | (3,805) | (3,813) | (3,572) | (2,421) |
| (+/-) Other Operating Costs, net of D&A | 260 | 248 | 253 | (17) | 68 | -- |
| EBITDA | $1,082 | $773 | $308 | ($421) | $229 | -- |
| (+) Add-backs: stock comp, restructuring, impairments | 65 | 47 | 57 | 522 | 272 | -- |
| Adj. EBITDA | $1,147 | $819 | $365 | $101 | $501 | -- |
| Margin | 10.4% | 9.0% | 4.0% | 1.1% | 5.8% | |
| (-) Restructuring and other cash add-backs | -- | -- | (16) | (309) | (204) | (76) |
| Cash EBITDA | $1,147 | $819 | $349 | ($208) | $297 | -- |
| (-) Interest Expense (Cash Only) | (36) | (46) | (74) | (76) | (76) | (101) |
| (-) Cash Taxes | (177) | (95) | (99) | (37) | (13) | (20) |
| (-) Capex | (290) | (399) | (226) | (181) | (252) | (239) |
| (+/-) Working Capital and Other | 174 | 58 | 111 | 406 | (254) | -- |
| Memo: FCF | $817 | $338 | $61 | ($96) | ($298) | $163 |
| % of Debt | 24.1% | 10.0% | 1.8% | (2.8%) | (8.8%) | 4.8% |
Earnings call: Q3 2026 (twelve weeks ended October 10, 2026) · Nov 5, 2026
Sales dipped 1.2% but turned positive late in the quarter; adjusted margin held at 4.5% and full-year free cash flow guidance rose to about $150 million.
Takeaways
- Net sales fell 1.2% to $2.01 billion and comparable sales fell 1.2%. Sales were down in the first eight weeks and turned positive in the last four. Pro grew low single digits while DIY declined low single digits.
- Adjusted operating margin was 4.5%, up 10 basis points. Adjusted gross margin slipped to 44.7% on mix and supply chain deleverage, offset by lower SG&A. GAAP operating income roughly doubled to $47 million as restructuring and impairment charges eased.
- Free cash flow was $109 million year to date versus a $277 million outflow a year ago. Operating cash flow was $311 million. Better payables and much lower restructuring cash costs drove the swing.
- Net leverage on the company's lease-adjusted basis was 2.2x. Total debt was $3.39 billion against $3.09 billion of cash, so funded net debt is small. The company restated its aim to regain an investment grade rating.
- About $349 million of debt has moved into current liabilities, so a maturity falls inside the next twelve months. Interest expense rose to $46 million in the quarter from $40 million.
- Restructuring continues. The quarter carried $38 million of impairments and write-downs tied to location closures, and $42 million of restructuring and related expense in GAAP SG&A.
Debt and capital
- Total debt $3,388 million at October 10, 2026: $349 million current and $3,039 million long term, versus $3,412 million at fiscal year end.
- Cash and equivalents $3,085 million, down slightly from $3,123 million at fiscal year end.
- Adjusted net debt including operating leases $2,492 million; adjusted EBITDAR $1,157 million for the trailing four quarters; net leverage 2.2x.
- The company says its goal is to re-establish an investment grade rating.
- Quarterly dividend of $0.25 per share declared. No share buyback was announced.
Guidance
- Free cash flow raised to about $150 million from about $100 million.
- Adjusted operating margin narrowed to 4.0% to 4.3% from 3.8% to 4.5%; the midpoint is roughly held.
- Adjusted diluted EPS narrowed to $2.75 to $3.10 from $2.60 to $3.30.
- Net sales trimmed to about $8.5 billion from $8.485 to $8.575 billion, and comparable sales cut to about 1% from 1% to 2%.
- Capex held at about $300 million. New store openings held at 30 to 35 and market hub openings at 15 to 20.
- Guidance assumes about $210 million of interest expense and about $105 million of interest income for the year.
Tone: Cautiously upbeat: management points to improving sales momentum and better cash generation while trimming top line expectations.
Last quarter: Third quarter 2026
Sales slipped 1% but adjusted operating margin held at 4.5%, and full year free cash flow guidance rose to about $150mm.
Results
- Net sales were $2,012mm in the 12 weeks to October 10, 2026, down from $2,036mm a year earlier; comparable store sales fell 1.2%.
- Adjusted operating income was $91mm, a 4.5% margin, against $90mm and 4.4% a year earlier; GAAP operating income was $47mm.
- Net income was $15mm against a $1mm loss a year earlier; adjusted diluted EPS was $0.79 against $0.92.
- Free cash flow for the first 40 weeks was $109mm against negative $277mm a year earlier; the quarter alone was about negative $11mm by our subtraction of year-to-date figures.
- The company does not report quarterly Adjusted EBITDA; trailing four quarter Adjusted EBITDAR was $1,157mm.
Why
- Sales fell at a low single digit rate in the first eight weeks and turned positive in the last four, helped by more transactions.
- The Pro channel grew at a low single digit rate, led by Main Street Pro, while DIY sales fell at a low single digit rate.
- Adjusted gross margin dipped to 44.7% from 44.8% on product and channel mix and supply chain cost deleverage.
- Adjusted SG&A fell to $808mm from $823mm on lower spending; $38mm of impairments and write-downs plus $6mm of restructuring costs were excluded from adjusted results.
Balance sheet and guidance
- Cash was $3,085mm and total debt was $3,388mm at October 10, 2026, with $349mm of debt now classed as current.
- Company-reported net leverage (adjusted net debt including $2,189mm of lease liabilities, over Adjusted EBITDAR) was 2.2x, against 2.1x a quarter earlier.
- Interest expense rose to $46mm in the quarter from $40mm a year earlier.
- Fiscal 2026 net sales guidance moved to about $8,500mm from $8,485mm to $8,575mm, and comparable sales to about 1% from 1% to 2%, so both were set at the low end of the old range.
- Adjusted operating margin guidance narrowed to 4.0% to 4.3% from 3.8% to 4.5%; adjusted diluted EPS narrowed to $2.75 to $3.10 from $2.60 to $3.30.
- Free cash flow guidance was raised to about $150mm from about $100mm; capex was held at about $300mm.
- The guidance assumes about $210mm of interest expense and about $105mm of interest income for the year.
What to watch
- Whether the positive sales trend in the last four weeks of the quarter holds, since full year sales guidance now sits at the low end of the old range.
- Fourth quarter cash generation: hitting about $150mm of full year free cash flow needs roughly $40mm more after $109mm year to date and a slightly negative third quarter.
- How the company handles the $349mm of debt now due within a year, and whether net leverage keeps drifting up from 2.1x.
Filings
Earnings releases 8
- Nov 5, 20268-K for Nov 5, 2026: Results · Press release
- Aug 20, 20268-K for Aug 20, 2026: Results · Press release
- May 21, 20268-K for May 21, 2026: Results · Press release
- Feb 13, 20268-K for Feb 13, 2026: Results · Press release
- Oct 30, 20258-K for Oct 30, 2025: Results · Press release
- Aug 14, 20258-K for Aug 12, 2025: Material agreement; Results · Press release
- Jul 24, 20258-K for Jul 24, 2025: Results · Press release
- Nov 14, 20248-K for Nov 13, 2024: Results · Press release
Annual reports (10-K) 5
- Feb 13, 202610-K for Jan 3, 2026
- Feb 26, 202510-K for Dec 28, 2024
- Mar 12, 202410-K for Dec 30, 2023
- Feb 28, 202310-K for Dec 31, 2022
- Feb 15, 202210-K for Jan 1, 2022
Quarterly reports (10-Q) 12
- Nov 5, 202610-Q for Oct 10, 2026
- Aug 20, 202610-Q for Jul 18, 2026
- May 21, 202610-Q for Apr 25, 2026
- Oct 30, 202510-Q for Oct 4, 2025
- Aug 14, 202510-Q for Jul 12, 2025
- May 22, 202510-Q for Apr 19, 2025
- Nov 14, 202410-Q for Oct 5, 2024
- Aug 22, 202410-Q for Jul 13, 2024
- May 30, 202410-Q for Apr 20, 2024
- Nov 21, 202310-Q for Oct 7, 2023
- Aug 23, 202310-Q for Jul 15, 2023
- Jun 6, 202310-Q for Apr 22, 2023
Current reports (8-K) 20
- Jun 26, 20268-K for Jun 24, 2026: Director or officer change
- May 22, 20268-K for May 20, 2026: Shareholder vote
- Mar 10, 20268-K for Mar 9, 2026: Director or officer change; Regulation FD
- Jan 13, 20268-K for Jan 12, 2026: Director or officer change; Regulation FD
- Oct 30, 20258-K for Oct 27, 2025: Director or officer change
- Aug 5, 20258-K for Aug 4, 2025: Material agreement
- Jul 24, 20258-K for Jul 24, 2025: Material agreement; Regulation FD; Other event
- May 22, 20258-K for May 22, 2025: Current report
- May 19, 20258-K for May 15, 2025: Shareholder vote
- Mar 20, 20258-K for Mar 20, 2025: Director or officer change
- Feb 26, 20258-K for Feb 25, 2025: Current report
- Feb 26, 20258-K for Feb 26, 2025: Current report
- Feb 19, 20258-K for Feb 12, 2025: Director or officer change
- Feb 6, 20258-K for Feb 3, 2025: Director or officer change
- Dec 20, 20248-K for Dec 19, 2024: Director or officer change
- Nov 14, 20248-K for Nov 13, 2024: Material agreement
- Nov 7, 20248-K for Nov 1, 2024: Acquisition or disposal completed; Regulation FD
- Oct 4, 20248-K for Sep 30, 2024: Director or officer change
- Sep 17, 20248-K for Sep 13, 2024: Director or officer change
- Aug 22, 20248-K for Aug 22, 2024: Material agreement; Regulation FD
Proxy statements 3
- Apr 1, 2026DEF 14A for Apr 1, 2026
- Mar 21, 2025DEF 14A for Mar 21, 2025
- Apr 8, 2024DEF 14A for May 22, 2024
Rating actions
- Invalid DateMoody's: Downgraded to Ba1 from Baa3, outlook changed to stable from negative. Filings show Baa3 with a negative outlook at October 5, 2024 and Ba1 stable by February 26, 2025, a move below investment grade as margins and cash flow weakened during the turnaround. · source
- Invalid DateS&P: BB+ affirmed in effect, outlook revised to negative from stable. Filings show BB+ stable at October 5, 2024 and BB+ negative by February 26, 2025, signalling risk of a further downgrade if the turnaround lagged. · source
Coming up
- Oct 1, 2027Maturity. 1.750% Senior Unsecured Notes due 2027: $350mm outstanding comes due.
- Mar 9, 2028Maturity. 5.950% Senior Unsecured Notes due 2028: $271mm outstanding comes due.
Recent 8-K filings
- Nov 5, 2026Reported results
- Aug 20, 2026Reported results
- Jun 26, 2026Director or officer change