Advance Auto Parts delivered a profit beat and raised its full-year earnings outlook on Thursday — and investors punished the stock anyway. Shares plunged as much as 25% before settling with a double-digit decline, wiping out a huge chunk of the retailer's market value in a single session.

The second-quarter results looked strong on the surface. Adjusted earnings came in at $1.03 per share, well ahead of the $0.81 Wall Street expected, and net income more than tripled year-over-year to $55 million. The company also lifted its full-year adjusted EPS guidance to a range of $2.60 to $3.30, up from $2.40 to $3.10 previously.

Revenue miss overshadows the beat

What spooked investors was the top line. Revenue came in at roughly $2.0 billion, just shy of the $2.04 billion analysts had forecast, and comparable-store sales fell 0.5% instead of growing as expected. Full-year revenue guidance of about $8.53 billion at the midpoint also landed slightly below consensus.

CEO Shane O'Kelly pointed to a pullback among do-it-yourself customers as the culprit. "Our second quarter comparable sales results reflected low-single-digit growth in the Pro channel," he said in the earnings release, but "total enterprise sales performance was impacted by the DIY channel as tighter household budgets constrained spending more than we anticipated, especially during the last four weeks of the quarter."

Tighter household budgets constrained spending more than we anticipated, especially during the last four weeks of the quarter.

The selloff wasn't contained to Advance Auto Parts. According to Yahoo Finance, larger rival AutoZone fell roughly 4% and O'Reilly Automotive also slipped as traders read Advance's numbers as a warning sign for consumer spending across the auto-parts sector more broadly, even though neither competitor had reported its own results that day.

The reaction underscores a pattern that has repeated across retail earnings this season: profitability gains driven by cost discipline and tariff-related refunds are being overshadowed by any sign that ordinary consumers are cutting back. StockStory noted the EPS beat was flattered in part by roughly $0.31 per share in tariff refunds, a one-time boost that doesn't reflect underlying demand trends.

Advance Auto Parts management maintained its comparable-sales guidance of 1% to 2% growth for the full year and said it remains focused on its multi-year turnaround plan, including margin expansion and store-network optimization. Whether Thursday's selloff proves an overreaction or the start of a re-rating will likely hinge on how the DIY channel performs heading into the back-to-school and holiday shopping stretch, with the company's next quarterly update expected in November.