Advance Auto Parts, Inc. (AAP) Stock Analysis

Advance Auto Parts’ competitive position is defined by scale, distribution reach, and brand recognition, but it faces significant headwinds relative to key rivals.

AAP operates 4,285 stores across the U.S., Canada, Puerto Rico, and the U.S. Virgin Islands, with 881 additional independently owned Carquest locations. This footprint is substantial, but smaller than AutoZone (7,200+ stores) and O’Reilly (6,200+), both of which have denser networks in core markets. AAP’s recent store closures—over 500 in early 2025—signal a retrenchment rather than expansion, potentially ceding local density advantages to competitors.

The company’s blended-box model (serving both professional installers and DIY customers) offers flexibility, but execution has lagged. Professional sales account for roughly 50% of revenue, similar to peers, yet AAP’s comp sales and margins have underperformed: 2024 operating margin was -7.8% versus O’Reilly’s 20%+ and AutoZone’s 20%+.

AAP’s supply chain is in transition, with ongoing consolidation of distribution centers and investment in market hubs. While this may improve efficiency, it currently trails the logistics sophistication of O’Reilly and AutoZone, both of which have more advanced inventory and delivery systems.

Brand equity remains strong, particularly in the eastern U.S., and the company’s customer service initiatives (e.g., free battery installation) are valued by DIY customers. However, persistent turnover in executive leadership and operational disruptions have undermined execution and morale.

In summary, AAP’s scale and brand are assets, but its competitive edge is eroding relative to better-executing, more profitable peers.