2 Auto Retail Parts Stocks Still Worth Tracking as the Market Slows

The auto retail and aftermarket space is moving through a more difficult phase, but it has not lost its long-term appeal. Slower vehicle demand, cost pressure, uneven consumer spending, and ongoing competition are making life harder for many companies tied to automotive maintenance and repair. Even so, some businesses still have qualities that can help them perform better than the broader group. In this market, Advance Auto Parts (AAP) and Driven Brands (DRVN) continue to attract attention because of their scale, strategic changes, operational improvements, and exposure to repair-and-maintenance demand that tends to hold up better than new-car demand.

Why the Auto Retail Parts Industry Is Under Pressure

The broad industry backdrop is no longer as easy as it was during stronger recovery periods. A slowing vehicle sales market can affect related spending patterns, while inflation, labor expenses, freight, tariffs, and supply chain costs can squeeze margins. Consumers are also watching their budgets more closely, which may delay some discretionary automotive services. Still, the aftermarket often keeps an important defensive feature: drivers usually need to maintain aging vehicles even when they postpone buying new ones. That creates a split environment where weaker operators may struggle, but stronger and better-positioned businesses can still find room to grow.

That is the key reason some investors continue to scan the sector instead of avoiding it completely. The best opportunities are often found in companies that are improving margins, tightening operations, growing store or service networks, and gaining share in categories tied to essential vehicle upkeep. A weak market does not help anyone, of course, but it can make the strongest turnaround stories and best-run platforms stand out even more clearly.

Why Advance Auto Parts Stands Out

Advance Auto Parts has spent the past year trying to prove that it can move from repair mode into recovery mode. The company’s latest official results suggest that the turnaround is gaining traction. For the fourth quarter ended January 3, 2026, Advance reported net sales of about $2.0 billion, with comparable store sales up 1.1%. For full-year 2025, comparable store sales increased 0.8%, marking a return to positive comparable sales growth after several years of negative trends. Management also said adjusted operating income margin for the year reached 2.5%, up more than 200 basis points year over year.

Those numbers matter because they suggest the company’s restructuring efforts are beginning to show through in the income statement. Advance has been working through store optimization, cost control, sourcing improvements, and a broader effort to strengthen execution. In its fourth-quarter commentary, management said the business delivered positive sales performance in the last eight weeks of the year and laid a foundation for more progress in 2026. That may not sound dramatic, but in a challenged retail environment, steady improvement is often more valuable than flashy promises.

Margin Improvement Is a Big Part of the Story

One of the most encouraging signs from Advance Auto Parts is the change in profitability. The company’s fourth-quarter adjusted gross profit margin rose to 44.2% from 39.0% a year earlier, while adjusted SG&A as a percentage of sales improved to 40.5% from 43.9%. Adjusted operating income turned positive at $73 million, compared with an adjusted operating loss in the prior-year quarter. For a company that had been under heavy pressure, this kind of margin repair is an important signal that restructuring actions are not just theoretical—they are flowing into actual results.

Management linked these gains to several factors, including savings from footprint optimization, better product margins through strategic sourcing, and easier comparisons after the company cycled through unusual charges tied to its earlier restructuring plan. In other words, Advance is not simply hoping demand saves it; it is trying to rebuild the business from the inside out. That makes the stock worth following, especially for investors who look for turnarounds before they become obvious to everyone else.

Advance Is Still Investing for Growth

Even while restructuring, Advance is not standing still. The company’s 2026 guidance calls for net sales between $8.485 billion and $8.575 billion, comparable store sales growth of 1.0% to 2.0%, adjusted operating income margin of 3.8% to 4.5%, and adjusted diluted EPS of $2.40 to $3.10. It also plans approximately 40 to 45 store openings and 10 to 15 market hub openings, alongside about $300 million in capital expenditures.

That outlook matters because it shows management expects improvement to continue rather than flatten out. A company guiding to better sales trends and better operating margins in a slowing market is telling investors that it believes execution can offset at least part of the macro pressure. That does not guarantee success, but it gives the stock a clearer path than many struggling retail names.

Scale and Network Still Matter

Advance also benefits from a large footprint. As of January 3, 2026, the company operated 4,305 stores, mainly in the United States, along with additional locations in Canada, Puerto Rico, and the U.S. Virgin Islands. It also served 809 independently owned Carquest branded stores. That scale gives it purchasing power, broad customer reach, and a chance to compete across both professional installer and do-it-yourself channels. In a slower market, companies with established networks often have a better chance to defend their position than smaller operators with weaker systems.

There is another reason scale matters in auto parts: availability and speed. Repair shops and everyday drivers often need parts quickly, not someday. A company with a wide distribution and store network can use that advantage to protect relationships and capture repeat business. If Advance keeps improving availability, pricing, and service while cleaning up its cost base, the turnaround case becomes more believable.

Why Driven Brands Remains a Stock to Watch

Driven Brands is a different kind of automotive play. Rather than focusing mainly on parts retailing, the company runs a broad automotive services platform that includes oil changes, repair, glass, collision, paint, maintenance, and franchise-based operations. Its brands include Take 5 Oil Change, Meineke, Maaco, 1-800-Radiator & A/C, Auto Glass Now, and CARSTAR. The company says it has about 4,200 locations across North America and services tens of millions of vehicles each year.

That service mix can be attractive in a slowing market because many of these offerings are tied to necessary maintenance rather than optional purchases. Oil changes, glass repairs, and basic upkeep are not the kind of expenses most drivers can ignore for long. If consumers hold onto older vehicles for longer, service demand can remain more stable than demand for new vehicle purchases. That helps explain why a company like Driven Brands can stay on watchlists even when the broader market becomes cautious.

Its Latest Operating Trends Were Solid

Driven Brands’ most recently reported quarterly operating update, for the third quarter of 2025, showed respectable growth. Revenue increased 6.6% year over year to $535.7 million, while system-wide sales rose 4.7% to $1.6 billion. Same-store sales increased 2.8%, and the company posted its 19th consecutive quarter of same-store sales growth. Net income from continuing operations improved to $60.9 million, compared with a loss in the prior-year period, while adjusted EBITDA rose to $136.3 million.

The strongest contribution came from the Take 5 business, where segment revenue rose 14% and same-store sales increased 6.8%. That kind of performance suggests the company still has momentum in fast-turn automotive service categories. Driven also said its net leverage ratio improved to 3.8x adjusted EBITDA by the end of the third quarter, showing some progress on the balance-sheet side as well.

Its Franchise-and-Service Model Has Strategic Appeal

Driven Brands is interesting because it combines corporate operations with franchise economics. A platform like that can generate fee streams, recurring service demand, and network effects through multiple brands and service channels. In tougher economic periods, diversity across maintenance, repair, collision, glass, and quick-lube services may help smooth out weakness in any one category. That is not a magic shield, but it can make the company more resilient than a narrowly focused operator.

Investors also tend to pay attention when a company operates in everyday, non-luxury categories. Drivers may delay cosmetic upgrades, but they still need inspections, fluid changes, replacement glass, and repair work. This “needs-based” quality is often a helpful trait in a slowing economy. Driven itself described its model as resilient and needs-based in its third-quarter commentary.

The Risk Investors Cannot Ignore With DRVN

Still, any detailed rewrite of this story needs to include an important caution. On February 25, 2026, Driven Brands disclosed in an SEC filing that it had identified material errors in previously issued financial statements and that certain historical financial statements for fiscal 2023, fiscal 2024, and several interim periods in 2025 would need to be restated. The company also said management identified material weaknesses in internal control over financial reporting, and it delayed its 2025 annual report filing.

That disclosure creates a serious overhang. It does not erase the company’s underlying operating footprint or the strengths of its service network, but it does mean investors should separate the business model from the reporting risk. In practical terms, DRVN may remain worth tracking because of its scale and service positioning, yet it also carries elevated uncertainty until the restatement process is resolved and the company provides updated, reliable financial reporting.

What Makes These Two Stocks Different From the Rest

What links Advance Auto Parts and Driven Brands is not that they are identical businesses. They are not. Instead, both stand out because they have identifiable catalysts in a weak environment. Advance is a classic restructuring-and-margin-recovery story. Driven is a broad automotive services platform with strong exposure to recurring vehicle care demand. In both cases, the investment case centers on execution rather than hoping the industry suddenly turns easy again.

That distinction matters. When the market slows, investors often stop rewarding vague potential. They look for measurable improvements: better margins, positive comparable sales, healthy liquidity, disciplined expansion, leverage improvement, or clearly defensible demand. Advance has shown signs of this through improving margins and a return to positive comparable sales growth. Driven has shown it through network scale, service diversity, and a long streak of same-store sales growth—though that must now be weighed against reporting problems.

What Investors Should Watch Next

For Advance Auto Parts

Investors should watch whether Advance can sustain positive comparable store sales, keep lifting adjusted operating margin, and show that its strategic sourcing and store optimization efforts are durable rather than one-time benefits. Its 2026 guidance sets a clear benchmark, so future quarters will likely be judged against that framework. If the company meets or beats its margin and sales targets, confidence in the turnaround could build further.

For Driven Brands

For Driven, the biggest near-term issue is not just sales momentum. It is credibility and transparency. Investors will want to see completed restatements, updated filings, clarity on the scope of prior errors, and evidence that internal control weaknesses are being fixed. Only after that will the market be able to focus fully again on the company’s service platform, growth opportunities, and cash generation profile. Until then, the stock may remain volatile even if the underlying business continues to serve a large and active customer base.

Bigger Industry Themes Supporting the Aftermarket

Even in a cooling market, the auto aftermarket keeps several supportive themes. Vehicles on the road still require maintenance. Aging car fleets can increase demand for replacement parts and basic service. Repair activity also tends to continue through economic slowdowns because maintenance cannot be deferred forever without larger problems later. That is why the space often attracts investors looking for businesses with some defensive qualities, even when sentiment around the broader auto sector weakens.

But stock selection matters more than ever. Investors are no longer buying “the industry” as a simple theme. They are buying execution, balance-sheet discipline, operational efficiency, and management credibility. In that setting, names like AAP and DRVN remain watchworthy not because the road ahead is easy, but because each has a reason to stand apart from weaker peers.

Final Take

In a slowing auto retail parts market, it makes sense to be selective. Advance Auto Parts looks like a recovery story that is beginning to show real financial progress, with better margins, positive comparable sales, and a clearer roadmap for 2026. Driven Brands still offers exposure to resilient automotive service categories and a large, diversified network, but its accounting and reporting issues make it a more complicated idea. Put simply, both stocks may still be worth tracking, but for different reasons: AAP for improving fundamentals and DRVN for operating strength tempered by elevated risk.

Source note: This rewritten English article is based on public reporting from Zacks’ commentary headline and updated company disclosures from Advance Auto Parts, Driven Brands, and the SEC, rather than copied text from the original article.

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