Advance Auto Parts Plunges 21% After Revenue Miss and Negative Comp Sales Despite Earnings Beat

Advance Auto Parts reported second-quarter 2026 results before the bell on August 20, delivering a sharp earnings beat alongside a revenue miss that sent shares down roughly 21% to $44.33, with pre-market declines reaching as deep as 22.4%. Adjusted earnings per share came in at $1.03, crushing the Wall Street consensus of $0.81 by 27% and rising 49% year over year from $0.69. Net sales of $2.000 billion fell short of analyst projections of $2.039 billion by about $40 million and edged down 0.5% from the prior-year period.

Comparable sales declined in the quarter, with cash-strapped do-it-yourself customers pulling back more sharply than expected, partially offset by growth in the company's professional customer segment. Gross margin expanded between 240 and 320 basis points depending on the measure cited, and operating margin nearly doubled to 5.6%, while free cash flow turned positive at $120 million year to date and net leverage fell to 2.1 times. For the full year, management raised its adjusted EPS guidance to a range of $2.60 to $3.30, up from $2.40 to $3.10 previously, while reaffirming its full-year net sales outlook of $8.485 billion to $8.575 billion and comparable sales growth of 1% to 2%.

The stock's drop dragged peers lower, with AutoZone falling roughly 4% and O'Reilly Automotive also slipping. At least one analyst firm upgraded shares to Buy following the selloff, citing the market's underappreciation of the margin recovery and characterizing the decline as an overreaction to the top-line miss.