What Happened?
Shares of auto parts and accessories retailer Advance Auto Parts (NYSE: AAP) jumped 5.5% in the afternoon session after a key competitor reported positive sales figures, boosting sentiment for the auto parts retail sector ahead of the company's own earnings release.
Genuine Parts Company, a rival in the industry, announced that its third-quarter sales increased by 4.9% compared to the same period in the previous year, driven by a 2.3% rise in comparable sales. This news suggested healthy consumer demand across the market. Adding to the constructive outlook, UBS reiterated its Neutral rating on Advance Auto Parts. The bank's analysts also noted that they expected the company to have achieved low-single-digit same-store sales growth in its third quarter, with its professional 'do-it-for-me' segment likely seeing mid-single-digit gains.
After the initial pop the shares cooled down to $55.41, up 4.7% from previous close.
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What Is The Market Telling Us
Advance Auto Parts’s shares are extremely volatile and have had 37 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 5 months ago when the stock gained 53.2% on the news that the company reported impressive first-quarter 2025 results, which blew past analysts' sales and EPS expectations, despite shutting some of its stores to optimize operations. These optimization efforts resulted in roughly flat top-line sales as margins also came under pressure during the quarter. However, its full-year EPS guidance trumped Wall Street's estimates as the company reaffirmed fiscal year 2025 guidance. Overall, we think this was a very solid quarter with some key areas of upside, especially amid fears of economic weakness and tariff headwinds.
Advance Auto Parts is up 15.1% since the beginning of the year, but at $55.41 per share, it is still trading 16.7% below its 52-week high of $66.50 from July 2025. Investors who bought $1,000 worth of Advance Auto Parts’s shares 5 years ago would now be looking at an investment worth $358.89.
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