AutoZone, Inc.
AZO · NYSE
Nov 2026
Next quarter
Reports Dec 8, 2026.
Consensus is $36.06 EPS for Nov 2026 across 9 estimates, ranging $34.25 to $39.37.
AZO Aug 2026
- 2.77%
- $54.54
- $56.05
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Highlights
- EPS beat: Diluted EPS was $56.05, 2.77% above the $54.54 consensus and 15.1% above $48.71 a year ago; net income rose 11.3% to $931.6 million.
- Sales and comps: Revenue increased 5.6% to $6.595 billion, while same-store sales rose 1.5% on a constant-currency basis; sales strengthened toward quarter-end after a difficult start.
- Commercial outperformed DIY: Domestic commercial sales grew 8.6%, while domestic DIY same-store sales fell 0.6%; domestic comps overall were up 1.6%.
- Margin benefited from one-offs: Gross margin expanded 182 basis points to 53.3%, helped by $96 million of tariff refunds and a smaller LIFO charge than a year ago; SG&A deleveraged 101 basis points.
- International growth: Constant-currency international comps increased 1.3%; reported comps rose 10.7%, including a foreign-exchange benefit of more than 900 basis points.
- Expansion continued: AutoZone opened 175 stores in the quarter and 374 for FY2026, ending the year with 8,031 stores; 16 quarterly openings were U.S. Mega Hubs.
- FY2027 outlook: Management expects domestic comps flat to up low single digits, international comps up low to mid-single digits, about 400 new stores and roughly $1.65 billion of capital spending.
- Cash returned to shareholders: The company repurchased $697.5 million of stock in the quarter and $2.0 billion for the year; $1.6 billion remained under authorization.
Analysis
AutoZone delivered $6.595 billion of fourth-quarter sales, up 5.6% year over year, and diluted EPS of $56.05, a 2.77% beat of the $54.54 consensus. EPS increased 15.1% from $48.71, while net income rose 11.3% to $931.6 million. The quarter’s 16 weeks make its $6.6 billion of revenue and $1.3 billion of operating income not directly comparable with the reported third-quarter figures of $4.84 billion and $923.8 million, respectively, which cover a shorter period. For the full year, sales reached $20.3 billion, up 7.4%, and EPS rose 5.3% to $152.55.
The central tension was resilient commercial and international growth against weak DIY demand and a challenging selling environment. Domestic commercial sales grew 8.6%, but DIY comps declined 0.6%; total-company comps were 1.5% on a constant-currency basis. Reported margin expansion also reflected substantial benefits from $96 million of tariff refunds and a much smaller LIFO charge than last year’s. Management said sales improved late in the quarter and expects FY2027 domestic comps to be flat to up low single digits, while continuing an ambitious store build-out: 374 openings in FY2026 and about 400 planned for FY2027.
Sales and earnings
- Revenue: Net sales rose 5.6% to $6.595 billion from $6.243 billion a year earlier. Total-company same-store sales grew 1.5% at constant currency, compared with 2.7% on a reported basis.
- Profit: Operating profit increased 10.1% to $1.317 billion; net income rose 11.3% to $931.6 million. Diluted EPS of $56.05 was up 15.1% year over year and exceeded the $54.54 consensus by 2.77%.
- Underlying comparison: The quarter included a $15 million LIFO charge versus $80 million in the prior-year quarter, as well as a $96 million tariff-refund benefit. Excluding the LIFO charges in both periods, management said EBIT growth was 4.4% and EPS growth was 8.5%.
Domestic sales mix
- DIY softness: Domestic DIY same-store sales declined 0.6%. Management attributed weakness to lower traffic amid high inflation and milder temperatures early in the quarter; DIY ticket was up about 5%, offset by transaction declines.
- Commercial strength: Domestic commercial sales reached $1.913 billion, up 8.6%; average weekly sales per program were $18,700, up 2.7%. Commercial represented 34% of domestic auto-parts sales, and 87 net new programs opened during the quarter.
- Improving cadence: Domestic comps averaged about 1.4% over the first three months and accelerated to 2.1% in August. Commercial growth also strengthened, from just over 8% in the first three months to well over 9% in the final month.
- FY2027 view: Management expects domestic comps to be flat to up low single digits, with ticket growth around 4%; it expects total domestic commercial sales growth in the high-single- to low-double-digit range.
Margin and expenses
- Gross margin: The rate increased 182 basis points to 53.3%. Management attributed 145 basis points to tariff refunds and 105 basis points to the net non-cash LIFO comparison, partly offset by higher commercial mix.
- Operating costs: SG&A rose 8.9%, and expenses increased to 33.4% of sales from 32.4%, a 101-basis-point deleverage primarily tied to growth initiatives.
- Next-year assumptions: Management expects FY2027 gross margin to be flat to up 25 basis points on a GAAP basis and models $85 million to $90 million of LIFO charges, versus $192 million in FY2026. It expects SG&A growth of about 8% overall, or roughly 3% per store.
Store and hub expansion
- Store openings: AutoZone opened 175 stores in the quarter—97 in the U.S., 68 in Mexico and 10 in Brazil—and 374 during FY2026, a company record. The year-end network totaled 8,031 stores.
- Mega Hubs: Sixteen opened in the quarter and 39 during the year, bringing the total to 172. Programs linked to a Mega Hub network generate 16% more annual sales than other commercial programs; the company targets about 300 Mega Hubs over the next three years.
- Investment and returns: FY2026 capital spending was about $1.5 billion; management plans roughly $1.65 billion and about 400 openings in FY2027. It expects average new-store sales to ramp from about $1.7 million in year one to $2.7 million by year six, with ROIC reaching about 15% by year four and more than 20% by year six.
- Longer-term pace: Management lowered its FY2028 opening target from roughly 500 to about 430, citing a slower Brazil build-out and greater near-term focus on the U.S. and Mexico. Adjusted ROIC was 35.8% for FY2026, down from 41.3%.
International business
- Comparable sales: International same-store sales grew 1.3% at constant currency, while reported comps were up 10.7%; favorable exchange rates added more than 900 basis points. Management cited continued macroeconomic softness, particularly in Mexico, but said sales improved in the final four weeks.
- Expansion plans: The company ended the year with 1,001 stores in Mexico and 167 in Brazil. For FY2027, it expects international comps to rise low to mid-single digits at constant currency and plans to emphasize U.S. and Mexico openings while slowing Brazil expansion.
Cash and buybacks
- Cash generation: Operating cash flow was $3.303 billion for FY2026, up from $3.155 billion. Management reported approximately $1.8 billion of full-year free cash flow, roughly flat year over year despite a $169 million increase in capital spending.
- Capital returns: AutoZone repurchased 223,000 shares for $697.5 million in the quarter and 579,000 shares for $2.0 billion in FY2026. The remaining authorization was $1.6 billion.
- Leverage and inventory: Adjusted debt to EBITDAR remained 2.5x. Inventory increased 10.1% year over year, primarily to support growth initiatives; net inventory per store was negative $107,000, unchanged from the prior quarter and compared with negative $131,000 a year earlier.
