Advance Auto Parts is undergoing a major transformation in 2025, starting with plans to open 30 new stores this year and an additional 100 by 2027. These store openings are targeted for strategic markets with strong demand for DIY and commercial automotive repair, signaling a focused—but cautious—growth strategy. In parallel, the company announced it will close 700 underperforming locations by mid-year as part of a broader restructuring effort aimed at improving operational efficiency and profitability. This shift follows several quarters of declining margins and competitive pressure. In Q1 2025, the company reported $1.1 billion in gross profit, down from $1.2 billion a year prior, driven by inflationary costs, labor challenges, and tightening consumer budgets.
For NNN investors, these changes highlight both risk and opportunity. The closure of a large number of stores may raise concerns about asset-level viability, particularly for older leases or locations in rural or oversaturated markets. However, the company’s focused expansion and cost-cutting measures suggest long-term viability in core markets. Investors should prioritize newer stores with long-term, corporate-guaranteed leases and avoid locations lacking strong automotive demand or demographic support. Sites near high-traffic corridors or commercial vehicle hubs may offer more stability. While near-term performance pressures remain, Advance Auto Parts’ restructuring and strategic store placement indicate a forward-looking approach that could strengthen the brand’s position over time in the net lease space.