Advance Auto Parts Inc. · NYSE:AAP
Advance Auto Parts — Q4 2025 Earnings Presentation
23 slides from Advance Auto Parts's earnings presentation, Feb 13, 2026
Slide 1: Q4 & FY 2025 Results
Q4 & FY 2025 RESULTS FEBRUARY 13 | 2026
Slide 2: Forward Looking Statements and Non-GAAP
Forward Looking Statements and Non-GAAP Certain statements herein are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are usually identifiable by words such as “anticipate,” “believe,” “could,” “estimate,” “expect,”
Slide 3: Agenda
Business Update Shane O’Kelly President and Chief Executive Officer Financial Update AGENDA Ryan Grimsland Executive Vice President and Chief Financial Officer Q&A 3
Slide 4: Business Update
BUSINESS UPDATE Shane O’Kelly 4 4
Slide 5: Summary
SUMMARY FY 2026 FY25 Results In Line Entered New Phase of “Our Journey with Expectations Strategic Execution Advances” 5
Slide 6: One Year Into Our Journey
Rationalized asset footprint Sourcing, inventory management Progress Customer service improvements Achieved Distribution center consolidation Market hubs, new stores and asset upgrades ONE YEAR Tariffs Changes Since Consumer spending environment Announcing INTO OUR Debt re-financing
Slide 7: Strategic Plan Is Delivering Adjusted Operating Margin Expansion
STRATEGIC PLAN IS DELIVERING ADJUSTED OPERATING MARGIN EXPANSION Approx. 500-basis points of margin expansion since Approx. 7% new leadership joined Advance 3.8% - 4.5% 2.5% 0.4% // -2.5% 2H FY23 FY24 FY25 FY26E Medium-term Guidance Target Stabilize Operations Execute Strategic Plan Review Ass
Slide 8: Strategic Pillars and Key Initiatives
STRATEGIC PILLARS AND KEY INITIATIVES Right Right Right Part. Place. Service. Merchandising Supply Store Excellence Chain Operations Distribution center Store Strategic sourcing productivity operating model Assortment Hub network Service-level management expansion improvements Promotions & margin Tr
Slide 9: Key 2026 Priorities
KEY 2026 Merchandising Store PRIORITIES Excellence Operations Strategic sourcing Elevate team- and vendor Supply member experience partnerships Chain Improve DIY/ PRO New pricing service standards Completion of framework distribution center Strengthen in-store consolidation Assortment
Slide 10: Financial Update
FINANCIAL UPDATE Ryan Grimsland UPDATE IMAGE 10 10
Slide 11: Q4 2025 Results
Q4 2025 RESULTS Advance Auto Parts Continuing Operations Comparable Store Adjusted Diluted Net Net Sales Sales Growth Earnings Per Share Leverage Ratio $2.0B 1.1% YoY $0.86 2.4x (-1.2% YoY) TTM Adj. Net Debt/ Adj. EBITDAR Adjusted Adjusted Adjusted Operating Gross Margin SG&A Margin Income Margin 44
Slide 12: FY 2025 Results
FY 2025 RESULTS Advance Auto Parts Continuing Operations Comparable Store Adjusted Diluted Net Net Sales Sales Growth Earnings Per Share Leverage Ratio $8.6B 0.8% YoY $2.26 2.4x (-5.4% YoY) TTM Adj. Net Debt/ Adj. EBITDAR Adjusted Adjusted Adjusted Operating Gross Margin SG&A Margin Income Margin 43
Slide 13: FY 2026 Net Sales Guidance
FY 2026 NET SALES GUIDANCE (1.3%) - (0.3%) YoY $8,601 1.0% - 2.0% $8,485 - $8,575 ($51) (0.2%) – (0.1%) $8,418 ($132) FY25 Less: Q1 FY25 Less: Q4 FY25 FY25 Add: FY26E Less: FY26E FY26E Liquidation Extra week Normalized Comparable Other Guidance sales sales Sales Base sales growth The Company is not
Slide 14: FY 2026 Adj. Operating Margin Guidance
FY 2026 ADJ. OPERATING MARGIN GUIDANCE Key Drivers 0.0% – 0.3% 3.8% - 4.5% Gross Margin 0.2% – Tailwinds – Product costs. Pricing 0.9% - 1.3% & promotions. – Headwinds – Supply chain 0.2% - 0.5% investments and labor inflation. 0.2% 2.5% FY26E SG&A Margin SG&A Leverage – Lower expenses YoY. Incl
Slide 15: FY 2026 Guidance Summary
FY 2026 GUIDANCE SUMMARY ($ in million, except margins and per share data) Current - As of February 13, 2026 Net sales $8,485 - $8,575 Comparable store sales growth 1.0% - 2.0% Adjusted operating income margin 3.8% - 4.5% Adjusted diluted EPS (1) $2.40 - $3.10 Capital expenditures Approx. $300 Free
Slide 16: Q&A
QsA “:7ADVANCE 1c
Slide 17: Appendix – Q4 & FY 2025 Reconciliation of Non-GAAP Financial Measures
APPENDIX – Q4 & FY 2025 RECONCILIATION OF NON-GAAP FINANCIAL MEASURES 17
Slide 18: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES The Company uses certain non-GAAP financial measures described below to supplement the Company's unaudited condensed consolidated financial statements prepared and presented in accordance with GAAP and to understand and evaluate the Company's core operat
Slide 19: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Transformation Expenses Expenses incurred in connection with the Company's turnaround plan and specific transformative activities related to asset optimization that the Company does not view to be normal cash operating expenses. These expenses primarily
Slide 20: Reconciliation of Diluted EPS (GAAP) and Adjusted Diluted EPS (Non-GAAP)
RECONCILIATION OF DILUTED EARNINGS (LOSS) PER SHARE (GAAP) AND ADJUSTED DILUTED EARNINGS (LOSS) PER SHARE (NON-GAAP) (1) Reflects a charge for expected future credit losses related to vendor receivables due from a vendor that filed petitions for Chapter 11 bankruptcy protection on September 28, 2025
Slide 21: Reconciliation of Adjusted Gross Profit and Adjusted SG&A
RECONCILIATION OF ADJUSTED GROSS PROFIT RECONCILIATION OF ADJUSTED SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 21
Slide 22: Reconciliation of Adjusted Operating Income and Free Cash Flow
RECONCILIATION OF ADJUSTED OPERATING INCOME (1) These GAAP and Non-GAAP measures are calculated as a percentage of Net sales. RECONCILIATION OF FREE CASH FLOW 22
Slide 23: Reconciliation of Adjusted Net Debt to Adjusted EBITDAR
RECONCILIATION OF ADJUSTED NET DEBT TO ADJUSTED EBITDAR (1) Management believes its Adjusted Net Debt to Adjusted EBITDAR ratio (“net leverage ratio”) is a key financial metric for debt securities, as reviewed by rating agencies, and believes its debt levels are best analyzed using this measure. The