Advance Auto Parts, Inc. (AAP) Stock Analysis

Advance Auto Parts’ primary competitive advantage is its scale and market reach. With 4,285 stores and 881 Carquest locations, AAP maintains one of the largest footprints in the U.S. automotive aftermarket, serving both professional installers and DIY customers. This scale enables broad parts availability and rapid delivery—critical in a sector where “need it now” is a key customer demand. Approximately 75% of AAP’s stores are in markets where it holds the #1 or #2 position by store density, supporting efficient logistics and strong local brand presence.

AAP’s purchasing power allows it to negotiate favorable terms with suppliers, which is essential in an industry with average inventory turns of just 1.5x per year. The company’s ongoing merchandising transformation, including joint business planning with vendors and SKU optimization, is expected to deliver 50 basis points of annualized cost reductions in the second half of 2025.

However, AAP’s competitive edge is less pronounced than that of AutoZone and O’Reilly, both of which have higher margins, faster inventory turns, and more consistent execution. AAP’s recent restructuring—closing 500 stores and four distribution centers—reflects past operational missteps and a need to catch up on efficiency.

In sum, AAP’s scale, purchasing leverage, and market density are its core advantages, but execution risk remains high relative to best-in-class peers.