You’ve probably seen the headlines or maybe just noticed it yourself when you drive by, the question that’s been floating around online forums and even in some financial news circles is advance auto parts going out of business. It’s a real worry for a lot of people.
Maybe you’re a loyal customer. Or maybe you just own a car that always seems to need one more thing. For many, Advance is the go-to spot for a new battery or some brake pads on a Saturday morning.
The chatter isn’t coming from nowhere. Their stock took a nosedive, and when Wall Street gets spooked, everyone else starts to wonder what’s up. So let’s get into it, what’s actually happening with the company in the red and yellow sign.
It’s not really a simple yes or no answer. The situation is messy, with some bad signs and, believe it or not, some good ones too. We’re going to look at the whole picture for 2025.
What’s Really Going On with Advance Auto Parts?
The biggest and most obvious sign of trouble has been the stock price. It is the company’s report card, that everyone can see. And lately, it’s been getting some pretty bad grades from the market.
For a long time, investors liked Advance because it paid a dividend. This is basically a little cash payout they give to people who own their stock. But they cut that dividend, a lot.
This was a huge red flag. A move like that typically signals that the company needs to hold onto every penny it can. It tells you money is tight and they are worried about the future.
Their financial reports have also shown some concerning things. Sales have been kind of flat, and the amount of money they make from each sale has been shrinking. That’s a bad combination.
It means they’re working just as hard, or harder, but ending up with less money in the bank. You can only do that for so long before you get into real trouble.
The Big Headaches: Competition and Internal Issues
A company doesn’t just start having problems for no reason. For Advance Auto Parts, the issues are coming from both outside the company and from within. It’s a two-front battle.
They are squeezed between some very tough competitors. On one side you have AutoZone and O’Reilly Automotive, who are, to be blunt, running their businesses better right now. Then there is the internet.
And on the other side, they seem to have made some decisions over the years that just haven’t worked out the way they were supposed to. It’s a pile of small problems that became one big one.
The DIY vs. Pro Customer Juggle
You generally have two kinds of people buying auto parts. You have the do-it-yourself person (DIY) who fixes their own car on the weekend. Then you have the professional mechanic (Pro) who runs a repair shop.
These two groups want different things. The DIYer wants good advice and the part to be in stock. The pro mechanic needs parts delivered fast, like within the hour, and needs them to be the right parts every time.
AutoZone has normally been considered the king of the DIY crowd. O’Reilly is known for being really good with the pro mechanics. Advance has tried to be great for both, and that is a hard thing to do.
It seems like in trying to please everyone, they didn’t really dominate either category. They ended up being just okay for both, which isn’t good enough when your competition is so focused.
Supply Chain Messes
Getting the right part to the right store at the right time sounds simple. But when you have thousands of stores and millions of different parts, it’s a huge, complicated dance. This is what people call the supply chain.
Advance has had a lot of trouble with this. They’ve spent a ton of money trying to update their systems, but the results haven’t been amazing. The reason why this is a problem is because it creates chaos.
If a customer comes in for an alternator and you don’t have it, they’ll just go to the O’Reilly down the street. If you can’t get a water pump to a mechanic’s shop quickly, they will stop calling you.
These are the kinds of basic things in the auto parts business that you have to get right. It is this failure to execute that has really hurt them badly.
The Online Threat is Real
Then there’s the internet. Websites like RockAuto have changed the game completely. They don’t have fancy stores, so they can sell parts for a lot cheaper.
If you know what you need and you can wait a few days for shipping, you can save a lot of money online. This puts a ton of pressure on physical stores like Advance to lower their prices.
When they lower their prices to compete, they make less money on each sale. This goes back to that problem of shrinking profit. It’s a cycle that’s hard to break.
Are There Any Good Signs for Advance Auto Parts?
With all that bad news, you might think they’re doomed. But that’s not the whole story. The company isn’t just sitting there waiting to fail. There are some things that could point to a turnaround.
For one, they have a new CEO. Shane O’Kelly came in during the fall of 2023. A new leader can sometimes bring fresh energy and a new plan, which is something they desperately need.
He has a background in supply chain management which is good, since that’s one of their biggest messes. People are watching to see what changes he makes in 2025. It’s a big wild card.
Also, they have a massive number of stores. While the internet is a threat, there are still millions of times when you need a part right now. You can’t wait two days for shipping when your car is stranded.
Store Locations: They are in almost every town. This physical presence is something online retailers can’t match.
Owned Brands: They own some famous names like DieHard batteries and Carquest. People know and trust these brands, which is a big plus.
Professional Focus: They are really trying to get better at serving professional mechanics, which is where the most consistent money is.
So there are pieces there to build on. It’s not a lost cause, but it is a project. A very big, very difficult project.
So, Is Advance Auto Parts Actually Closing Stores in 2025?
This is the real bottom-line question. Is the company going to disappear? The answer is almost certainly no. Going “out of business” like a complete shutdown is very unlikely for a company this size.
What is much more likely is that we will see a lot of changes. A “right-sizing” of the company. That’s business-speak for closing the stores that aren’t making enough money.
We will probably see Advance close hundreds of underperforming locations in 2025 and beyond. They will focus on the stores that are profitable and are in the best locations. It will look like they are shrinking.
But shrinking isn’t the same as dying. Sometimes, you have to get smaller to get healthier. By cutting the dead weight, they can focus their money and attention on making the remaining stores better.
So, you might see your local Advance Auto Parts close down. But the company as a whole will likely still be around, just looking a bit different and, they hope, a lot stronger.
Frequently Asked Questions (FAQ)
So for real, is Advance Auto Parts going out of business?
No, it’s extremely unlikely that the entire company will go out of business in 2025. They are in a tough financial spot, but they are more likely to restructure and close a lot of stores than to shut down completely.
Why is everyone so worried if they ask is Advance Auto Parts going out of business?
The main reasons are a massive drop in their stock price, a big cut to their dividend payment to investors, and sluggish sales compared to their main competitors like AutoZone and O’Reilly. These are all signs of a company with problems.
Are competitors like AutoZone hoping Advance Auto Parts is going out of business?
Competitors are probably watching very closely. If Advance closes stores, AutoZone and O’Reilly will be right there trying to scoop up their customers and their best employees. It’s a big opportunity for them to gain more of the market.
What would happen to my DieHard battery warranty if Advance Auto Parts is going out of business?
Since it’s highly unlikely they will go completely out of business, your warranty should be fine. In a scenario where they just close some stores, you would just go to another open Advance location. The warranty is with the corporation, not a specific store building.
Key Takeaways
Advance Auto Parts is not likely going out of business entirely, but it is facing some very real challenges.
The company’s struggles are due to fierce competition, internal supply chain problems, and a tough balance between DIY and professional customers.
The dramatic stock drop and dividend cut are the main reasons people are so concerned about the company’s health.
Expect to see a lot of store closures in 2025 as the new leadership tries to make the company leaner and more profitable.
The future of Advance depends on whether its new turnaround plan can actually fix its long-standing problems.
