Advance Auto Parts vs. Monro: Two Auto Service Stocks at a Crossroads

• Both companies are stabilizing operations aft store closures, but AAP has wide borderline enlargement guidance and beardown currency reserves portion Monro lacks ceremonial FY2026 guidance and relies connected one-time existent property gains to enactment results.

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Advance Auto Parts (NYSE: AAP) and Monro (NASDAQ: MNRO) conscionable reported net telling a akin communicative from precise antithetic positions. Both are car aftermarket companies clawing backmost from years of antagonistic comps, some closed hundreds of underperforming stores, and some are betting leaner operations volition construe into existent net power.

AAP sells car parts to DIY customers and nonrecreational installers crossed 4,305 firm locations positive 809 autarkic Carquest stores. Monro fixes cars astatine 1,116 locations, focusing connected tires, brakes, and underbody work. Related but chiseled businesses.

AAP's Q4 FY2025 showed existent progress. Comparable store income came successful astatine +1.1%, with affirmative momentum successful the last 8 weeks. CEO Shane O'Kelly framed it directly:

We returned to afloat twelvemonth affirmative comparable income maturation pursuing 3 years of antagonistic results and expanded adjusted operating income borderline by implicit 200-basis points.

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O'Kelly, AAP Q4 FY2025 earnings

Monro's Q3 FY2026 was messier. Revenue fell 4% year-over-year to $293.39 million, missing estimates slightly. But operating income surged 86% year-over-year to $18.57 million, and this was the 4th consecutive 4th of affirmative comparable store sales. Tires were the standout, up 5% connected a comp basis, portion beforehand extremity and shocks jumped 7%.

AAP's restructuring is deeper and amended funded. The institution closed 522 stores successful FY2025 and inactive carries astir $3.1 cardinal successful cash, giving absorption country to execute a multiyear fix. FY2026 guidance calls for adjusted operating borderline of 3.8% to 4.5% and adjusted EPS of $2.40 to $3.10. That's a credible roadmap.

Monro's equilibrium expanse is acold tighter. With lone $4.9 cardinal successful cash, determination is astir nary borderline for error. The institution leaned connected $13.53 cardinal successful existent property gains from closed stores to boost Q3 results -- a one-time lever that won't repeat. CEO Peter Fitzsimmons is banking connected taxation refund play and incremental selling to support comps positive, but issued nary ceremonial FY2026 guidance.