Advance Auto Parts, Inc.
Advance Auto Parts, Inc. provides automotive aftermarket parts. The company offers batteries and battery accessories; belts and hoses; brakes and brake pads; chassis parts; climate control parts; clutches and drive shafts; engines and engine parts; exhaust systems and parts; hub assemblies; ignition components and wires; radiators and cooling parts; starters and alternators; and steering and alignment parts. It also provides air conditioning chemicals and accessories; air fresheners; antifreeze and washer fluid; electrical wire and fuses; electronics; floor mats, seat covers, and interior accessories; hand and specialty tools; lighting products; performance parts; sealants, adhesives, and compounds; tire repair accessories; vent shades, mirrors, and exterior accessories; washes, waxes, and cleaning supplies; and wiper blades. In addition, the company offers air filters; fuel and oil additives; fuel filters; grease and lubricants; motor oil; oil filters; part cleaners and treatments; and transmission fluid. Further, it provides battery and wiper installation; engine light scanning; electrical system testing, including batteries, starters, and alternators; oil and battery recycling; and loaner tool program services. The company serves professional installers and do-it-yourself customers. It operates stores and independently owned branded stores in the United States, Canada, Puerto Rico, the U.S. Virgin Islands, Mexico, and various Caribbean islands primarily under the Advance Auto Parts and Carquest trade brands. The company also offers its products online. The company was founded in 1929 and is based in Raleigh, North Carolina.
What does it do?
Advance Auto Parts is one of America's largest auto parts retailers, with roughly 4,700 stores across the US, Canada, and Puerto Rico. Think of it as the place you go when your car's battery dies, your brakes are grinding, or your check engine light comes on — they sell everything from spark plugs to radiators. They serve two types of customers: everyday drivers who walk into a store for a quick fix, and professional mechanics who need parts delivered fast to their shop. Essentially, they keep older cars on the road.
The average age of a car on American roads is now over 12 years, which means more vehicles need replacement parts more often — that's a structural tailwind for companies like AAP. However, Advance has been losing ground to rivals like AutoZone and O'Reilly Auto Parts, and its revenue actually shrank from $9.1B to $8.6B last year, making it a turnaround story rather than a growth one. Investors are watching closely to see if new leadership can stop the bleeding and close the gap with competitors who are clearly executing better right now.
How does it make money?
Advance makes money in two main ways: selling parts directly to regular consumers in its retail stores (called the DIY segment — do-it-yourself), and supplying parts to professional repair shops and garages (called the DIFM segment — do-it-for-me). The professional side is actually more lucrative because shops order frequently and in bulk, but Advance has historically been weaker here than AutoZone and O'Reilly. With $8.6B in annual revenue spread across roughly 4,700 locations, each store is averaging around $1.8M in sales — a number its rivals comfortably beat.
Why do investors care?
The bull case for Advance is essentially a turnaround bet: the company is cheap relative to its own history and its peers, and if new management can fix operational problems — like poor inventory management and weak professional sales — the stock could re-rate sharply upward. The aging US car fleet means underlying demand for auto parts isn't going away, which gives the business a stable floor. What has to go right is execution: better stocking of the right parts, faster delivery to pro shops, and meaningful cost cuts to restore profitability. If Advance simply gets back to doing what AutoZone does, the upside could be significant.
Deep Dive
MemberA full investor briefing on Advance Auto Parts, Inc. — history, leadership, risks, and outlook.