Advance Auto Parts, Inc.
Automotive Aftermarket Retail / Parts DistributionFounded 1932- Updated July 2025
Reviewed by Swet Parvadiya
Last reviewed: July 2025
CorpDigest
Advance Auto Parts, Inc.
Financial Performance
Last reviewed: July 2025 · By Swet Parvadiya
Revenue
$8.60B
Market Cap
$3.4B
Net Income
$68M
Employees
40,000
The $68 million net income that Advance Auto Parts reported for fiscal 2025 is almost entirely a distortion. The company recorded $431.5 million in inventory write-downs and $204.2 million in impairment charges against long-lived assets during the fiscal year, but also recognized a $349.5 million gain on the Worldpac divestiture. Strip those items out and the underlying operating performance of the continuing retail business was closer to breakeven — a brutal assessment for a company with $8.6 billion in revenue. Revenue has declined three consecutive years: $9.21 billion in fiscal 2023, $9.09 billion in fiscal 2024, $8.60 billion in fiscal 2025. The 2025 decline includes the impact of the Worldpac divestiture, which removed approximately $500 million in revenue but also removed a business that was consuming capital and management attention disproportionate to its contribution. The $3.4 billion market capitalization against $8.6 billion in revenue implies a 0.4 times price-to-sales ratio — extremely cheap by any consumer retail standard. AutoZone trades at over 3 times revenue. O'Reilly Automotive trades at approximately 4 times revenue. The gap reflects the market's view that Advance's operational model is not currently generating the margins that the category's economics should support, and that the path to closing that gap is unclear. CEO O'Kelly's 2024 performance incentive plan, with metrics tied to relative total shareholder return against the S&P 500, did not vest — the 2022-2024 performance period ranked below threshold. That outcome is a precise summary of where Advance Auto Parts stands relative to the broader market: a company with a viable category position and an operational execution problem that three successive management teams have promised to fix.
Revenue Trend Analysis
YoY Change
-5.4%
2-Year CAGR
-3.4%
Peak Year
2023
Trend
Declining Trend
Advance Auto Parts, Inc. has reported revenue across 3 fiscal years, compounding at -3.4% annually over 2 years. The most recent year saw a 5.4% decline versus the prior year. Revenue peaked in 2023 at $9.2B. Out of 2 reported periods, 0 showed growth and 2 showed a decline.
| Fiscal Year | Revenue | Net Income | YoY Change |
|---|---|---|---|
| FY2025 | $8.6B | $68M | -5.4% |
| FY2024 | $9.1B | — | -1.2% |
| FY2023 | $9.2B | — | — |
Source: SEC EDGAR filings, annual earnings releases, and verified financial disclosures.
Click any row to see year details.
Advance Auto Parts suspended its quarterly dividend ($1.50/share) in August 2023 — a significant move that shocked income investors who had held the stock for its yield. The suspension preserved approximately $250-300 million in annual cash that was redirected toward debt repayment and operational investment. Dividend suspension is typically a distress signal; in Advance's case, it reflected a combination of earnings collapse (from $12 EPS to near breakeven), high debt load from the Carquest acquisition, and the need to fund the turnaround under Shane O'Kelly.
Advance Auto Parts's approximately 0.8% net margin is dramatically below its peers: AutoZone typically reports 13-15% net margins and O'Reilly reports 13-14% net margins on similar or larger revenue bases. The gap reflects Advance's inefficient distribution network, higher SG&A from its Carquest dual-banner complexity, and debt service costs from the 2014 acquisition. Closing even half this margin gap would generate $500M+ in additional annual earnings — the core opportunity in the turnaround thesis.
Advance Auto Parts carried approximately $1.5-1.8 billion in long-term debt as of 2024, generating net debt-to-EBITDA ratios of approximately 3-4x during the earnings trough — elevated for a retailer. Proceeds from the Worldpac sale (~$1.5 billion, 2024) were used to substantially reduce this debt burden, improving the balance sheet and reducing annual interest expense. The deleveraging was a key element of Shane O'Kelly's 2023-2024 stabilization plan before attempting margin recovery.
The Worldpac sale generated approximately $1.5 billion in gross proceeds, reducing Advance's debt from ~$1.8 billion to under $500 million and lowering annual interest expense by approximately $80-100 million. The sale also removed a complex operating business (import-specialist wholesale distribution) that required different management capabilities than Advance's core retail operations. However, Worldpac contributed approximately $1.5-2 billion in annual revenue, so the sale also reduced Advance's top line, making revenue comparisons challenging in 2025.
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CorpDigest. "Advance Auto Parts, Inc. Revenue & Financials." CorpDigest, https://corpdigest.com/company/advance-auto-parts/financials.<div style="font-family:system-ui,sans-serif;font-size:14px;line-height:1.5;border:1px solid #e2e8f0;border-radius:8px;padding:12px 16px;max-width:520px"><strong>Advance Auto Parts, Inc. reported $9B in revenue (FY2025).</strong><br>Source: <a href="https://corpdigest.com/company/advance-auto-parts/financials" target="_blank" rel="noopener">CorpDigest — Advance Auto Parts, Inc. financials</a></div>