Many car owners and investors have been asking the same question lately: Is Advance Auto Parts going out of business? This question has surfaced due to widespread store closures, restructuring announcements, and declining sales. However, the real story is more complex than just a simple “yes” or “no.” In this article, we’ll explore the company’s background, financial situation, restructuring plans, and the reality behind these concerns.
A Brief Look at Advance Auto Parts
Advance Auto Parts, Inc. (NYSE: AAP) is one of the largest automotive aftermarket parts retailers in the United States, serving both professional repair shops and individual car owners. Founded in 1932, the company operates thousands of stores across North America and is known for selling a wide range of auto parts, accessories, and maintenance products.
Despite its long history and strong brand presence, the company has faced financial challenges in recent years. As a result, the question of whether Advance Auto Parts is going out of business has become a frequent topic among customers and investors.
Why the Rumors Started: Store Closures and Restructuring
The main reason people are asking is Advance Auto Parts going out of business is because of the company’s large-scale store closures. In 2024, Advance Auto Parts announced it would close 523 corporate-owned stores, exit 204 independently owned locations, and shut down four distribution centers by mid-2025. That’s more than 700 locations affected as part of a major restructuring plan.
This move followed the sale of the company’s WorldPac subsidiary to Carlyle for approximately $1.5 billion, a step aimed at simplifying operations and generating cash. Although these closures have raised concerns, they are part of a larger strategy to streamline operations and improve profitability rather than an outright shutdown.
The Current Financial Situation
To determine whether is Advance Auto Parts going out of business is a valid concern, it’s essential to examine the company’s financials.
As of early 2025, Advance Auto Parts reported about $1.79 billion in total debt, offset by $1.67 billion in cash, leaving a net debt of roughly $118 million. However, it also has $4.79 billion in current liabilities and $3.63 billion in long-term liabilities.
In the first quarter of 2025, the company reported $2.6 billion in net sales, down from $2.8 billion the previous year. Comparable store sales fell by 0.6%, partly due to store closures. The company’s operating income was $22 million, or 1.1% of net sales, and its adjusted operating income was $61 million (about 3% of net sales).
One red flag is the negative free cash flow of $201 million reported during the same period, indicating cash flow challenges that need urgent attention.
While these numbers show a company under financial strain, they do not necessarily prove that Advance Auto Parts is going out of business.
A Closer Look at the Restructuring Plan
Advance Auto Parts’ leadership has made it clear that the current wave of closures and restructuring is part of a strategic plan to improve efficiency rather than a sign of collapse. The company intends to focus on profitable markets and optimize its physical footprint.
Interestingly, while hundreds of stores are closing, the company also plans to open 30 new stores in 2025 and 100 more by 2027. These new locations will follow a “market hub” model designed to improve logistics and service delivery.
By selling non-core assets and cutting costs, Advance Auto Parts hopes to strengthen its balance sheet and position itself for future growth. These actions suggest that the company is fighting to remain competitive rather than shutting down.
What Industry Experts Say
Industry analysts believe that the question is Advance Auto Parts going out of business is understandable but premature. The company is still listed on the New York Stock Exchange (NYSE: AAP), continues to issue financial reports, and has not filed for bankruptcy.
Advance Auto Parts has also reaffirmed its 2025 full-year sales and free cash flow guidance, signaling confidence in its turnaround strategy. Analysts are watching key areas such as margin improvement, debt levels, and cash flow management closely, but there is no indication of an imminent shutdown.
Key Risks That Could Change the Outlook
While Advance Auto Parts is not currently going out of business, the company faces several risks that could affect its future if not managed properly:
-
Cash Flow Problems – Sustained negative free cash flow could drain resources and limit the company’s ability to operate efficiently.
-
Debt Burden – High levels of debt and interest payments could put financial pressure on the company if revenue continues to fall.
-
Declining Margins – Profit margins have narrowed, and further declines could make profitability harder to achieve.
-
Market Competition – Competitors like AutoZone and O’Reilly Auto Parts continue to capture market share.
-
Execution Risks – The success of the restructuring plan depends on effective execution and improved financial discipline.
Monitoring these factors will provide a clearer answer to the question is Advance Auto Parts going out of business in the future.
So, Is Advance Auto Parts Going Out of Business?
After analyzing the facts, the answer is no, Advance Auto Parts is not going out of business as of 2025. The company is undergoing significant restructuring, including closing hundreds of stores, selling off non-core divisions, and focusing on profitability. However, these actions are designed to stabilize and strengthen the company, not to wind it down.
The challenges are real — shrinking sales, cash flow issues, and heavy competition. Yet, the company continues to operate thousands of stores, invest in new locations, issue earnings reports, and trade publicly on the stock market. All of this indicates that Advance Auto Parts is still very much in business.
Conclusion
The question is Advance Auto Parts going out of business arises from understandable concerns about store closures and financial struggles. However, the evidence suggests that Advance Auto Parts is not shutting down but is instead restructuring its business to adapt to market challenges. Its efforts to optimize operations, reduce costs, and focus on core markets show that the company is determined to remain a major player in the automotive retail industry.
While the future depends on the success of its turnaround strategy, customers and investors can be assured that Advance Auto Parts is not going out of business right now. Instead, it is evolving — and its ultimate success will depend on how well it navigates the road ahead.
FAQs:
1. Is Advance Auto Parts going out of business in 2025?
No, Advance Auto Parts is not going out of business in 2025. The company is restructuring, closing some stores, and focusing on improving profitability, but it continues to operate nationwide.
2. Why is Advance Auto Parts closing so many stores?
The company is closing over 700 stores as part of a cost-cutting and optimization plan. This move is designed to focus on profitable locations and streamline operations, not to shut down entirely.
3. Is Advance Auto Parts still financially stable?
Advance Auto Parts faces financial challenges such as lower sales and negative cash flow, but it remains active, trades publicly, and is working to strengthen its financial position.
4. Will Advance Auto Parts open new stores in the future?
Yes. Despite closing underperforming stores, the company plans to open 30 new locations in 2025 and about 100 more by 2027 under a new market hub model.
5. Should customers worry about Advance Auto Parts shutting down?
At present, customers don’t need to worry. Advance Auto Parts is restructuring its business and remains committed to serving customers rather than shutting down.