10-Q · June 12, 2026
AutoZone reported Q3 2026 earnings with total net sales rising to $4.8 billion, an 8.4% increase compared to the previous year. Despite slight declines in gross and operating margins to 52.2% and 19.4% respectively,…
Earnings analysis · 10-K
AZO earnings analysis
Filed October 26, 2026 · Our reading of the company's report
The latest report
AutoZone delivered solid fiscal 2026 growth, with revenue up 7.4%, domestic commercial sales up 10.6%, EPS up 5.3% and 374 net new stores. However, gross and operating margins contracted, ROIC fell to 35.8% from 41.3%,…
Read full summary
AutoZone delivered solid fiscal 2026 growth, with revenue up 7.4%, domestic commercial sales up 10.6%, EPS up 5.3% and 374 net new stores. However, gross and operating margins contracted, ROIC fell to 35.8% from 41.3%, and growth benefited from $96.0 million of IEEPA tariff refunds and favorable foreign exchange. The long-term positioning remains attractive due to the aging vehicle fleet, commercial expansion and store rollout, but tariff exposure, demand sensitivity, ERP execution and a worsening margin trajectory support a neutral overall assessment.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $152.55
What stood out
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Sales and EPS grew despite margin pressure
Fiscal 2026 net sales increased 7.4% to $20.34 billion from $18.94 billion, while diluted EPS rose 5.3% to $152.55 from $144.87. The company attributed growth primarily to 3.3% domestic same-store sales growth and $534.3 million of sales from new stores.
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Commercial business remains a growth engine
Domestic commercial sales increased 10.6%, or $550.1 million, and represented 33.1% of domestic sales. The commercial program expanded to 6,443 domestic stores from 6,098 in fiscal 2025.
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Accelerating store expansion
AutoZone expanded by 374 net stores in fiscal 2026 to 8,031 stores, versus 304 net additions in fiscal 2025 and 213 in fiscal 2024. The footprint comprised 6,863 U.S., 1,001 Mexico and 167 Brazil stores.
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Aging vehicle fleet supports aftermarket demand
Demand fundamentals remain supportive: the average U.S. light vehicle age reached 12.9 years, approximately 44% of U.S. vehicles were seven years old or older, and U.S. miles driven increased 0.8% for the twelve months ended July 2026.
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Strong operating cash generation funds growth
Operating cash flow increased to $3.25 billion from $3.12 billion in fiscal 2025 and $3.00 billion in fiscal 2024. AutoZone invested $1.43 billion in capital expenditures, primarily for new stores and hub and mega hub expansions.
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Aggressive buybacks continue
Capital returns remained substantial: the company repurchased $2.03 billion of stock in fiscal 2026, reduced diluted shares to 16.865 million from 17.245 million, and increased its authorization by $1.5 billion to $42.2 billion. No dividend is paid.
What to watch
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Tariffs and sourcing costs threaten margins
Trade-policy exposure increased materially: AutoZone directly imported approximately 12% of fiscal 2026 purchases, while tariff-driven inflation increased the LIFO credit reserve to $275.0 million from $83.0 million. Although the company received $127.6 million of IEEPA refunds, new tariffs could increase product costs and pressure pricing, margins and supply chains.
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Consumer and vehicle-mix demand risk
Demand could weaken if consumers defer maintenance amid inflation, consumer debt or high interest rates, while electric vehicles and improved vehicle technology may reduce parts failures. The filing identifies failure and maintenance categories as approximately 85% of sales, creating meaningful exposure to changes in repair frequency.
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ERP transition creates execution risk
AutoZone began using portions of a new ERP system during the quarter ended February 14, 2026, which will eventually replace existing core financial systems. The company warns of implementation delays, data loss, control failures and cost overruns; capitalized cloud ERP implementation costs totaled $52.1 million at August 29, 2026.
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AI and cybersecurity exposure is increasing
AI adoption introduces heightened competitive, cybersecurity and regulatory risks. The company states that competitors may adopt AI more effectively and that generative or agentic AI could enable more sophisticated attacks; unauthorized parties have previously gained access to and exfiltrated data, although no material breach has occurred to date.
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Profitability is lagging top-line growth
Gross margin declined to 52.3% from 52.6%, while operating margin declined to 18.3% from 19.1%. The filing attributes the gross-margin decline partly to a $192.0 million non-cash LIFO charge versus $64.0 million in the prior year and says SG&A investments increased expenses to 34.0% of sales from 33.6%.
Management's outlook
The 10-K provides no quantitative revenue or EPS guidance. Management expects fiscal 2027 investment to increase slightly versus fiscal 2026, primarily for new stores and expanded hub and mega hub stores; annual outlook was otherwise deferred to the earnings press release/call.
Earlier filings 4
10-Q · March 20, 2026
AutoZone reported twelve-week net sales of $4,274,098,000 (up $322,086,000 vs. prior year) and diluted EPS of $27.63 (down from $28.29 a year ago). Gross profit rose in dollars to $2,243,358,000 but gross margin…
10-Q · June 13, 2025
AutoZone reported twelve-week net sales of $4,464,339,000 (up $228,854,000 or ~5.4% vs. the twelve weeks ended May 4, 2024) and diluted EPS of $35.36 (down from $36.69). Gross margin compressed to 52.7% while operating…
10-Q · March 21, 2025
AutoZone reported modest revenue growth for the twelve weeks ended February 15, 2025, with net sales of $3,952,012 (thousands) versus $3,859,126 (thousands) a year earlier, while operating profit and diluted EPS…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.