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AutoZone Q4 Earnings Beat Estimates on Tariff Refunds, Sales Miss
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Key Takeaways
AutoZone's Q4 EPS rose 15.1% as gross margin expanded 182 basis points to 53.3%.
Commercial sales grew 8.6%, with 6,443 programs supporting continued professional customer growth.
AutoZone opened 175 stores, taking its global footprint to 8,031 locations at quarter-end.
AutoZone, Inc. (AZO - Free Report) reported fourth-quarter fiscal 2026 earnings per share of $56.05, which increased 15.1% year over year and beat the Zacks Consensus Estimate of $54.54 by 2.8%. Gross margin expansion supported the profit increase.
Net sales rose 5.6% to $6.60 billion but missed the consensus mark of $6.69 billion by 1.4%. Total company same-store sales increased 1.5% on a constant-currency basis.
Domestic same-store sales increased 1.6% in the 16-week quarter. International same-store sales advanced 10.7% on a reported basis, while constant-currency growth was 1.3%, reflecting the impact of currency movements.
Total company same-store sales rose 2.7% on a reported basis. Sales per average store increased to $830,000 from $823,000, while sales per average square foot remained at $122. Management said the selling environment was difficult during the first eight weeks, but sales strengthened over the final eight weeks.
Gross margin expanded 182 basis points year over year to 53.3%. The improvement included a 145-basis-point benefit from tariff refunds and a 105-basis-point favorable net non-cash LIFO impact, partly offset by a higher commercial sales mix. The quarter included a $15 million LIFO charge versus an $80 million charge a year earlier.
Operating expenses increased to 33.4% of sales from 32.4%, with deleverage primarily tied to growth initiatives. Operating profit rose 10.1% to $1.32 billion, while net income increased 11.3% to $931.59 million. Operating margin improved 81 basis points to 20%.
AZO’s Commercial Business Maintains Solid Momentum
Domestic commercial sales reached $1.91 billion, up 8.6% from the year-ago quarter. Average weekly sales per commercial program increased 2.7% to $18,700, showing continued growth in the professional customer channel.
The company ended the quarter with 6,443 domestic commercial programs, up 5.7% year over year. Commercial programs were available in 94% of domestic stores, supporting AutoZone’s push to expand service to repair shops and other professional customers.
AutoZone’s Store Openings Expand Its Global Footprint
AutoZone opened 175 stores during the quarter, including 97 in the United States, 68 in Mexico and 10 in Brazil. The global store count reached 8,031 at quarter-end compared with 7,657 a year earlier.
The domestic network ended with 6,863 stores, while Mexico and Brazil had 1,001 and 167 stores, respectively. Total company square footage reached 54.66 million square feet versus 51.82 million a year earlier. The company also opened 16 new Mega Hub stores in the United States.
AZO’s Balance Sheet Reflects Growth Investment
Merchandise inventories increased 10.1% year over year to $7.74 billion, primarily due to growth initiatives. Inventory per store rose 5% to $963,000, while net inventory per store was negative $107,000 compared with negative $131,000 a year earlier. Inventory turns eased to 1.3 times from 1.4 times.
Cash and cash equivalents stood at $326.12 million at fiscal year-end, while total debt was $9.08 billion. Fourth-quarter cash flow from operations totaled $1.18 billion, and capital spending was $498.77 million. Adjusted debt to EBITDAR remained at 2.5 times, while working capital was negative $1 billion.
AutoZone’s Capital Returns Stay Substantial
AutoZone repurchased 223,000 shares during the quarter for $697.50 million at an average price of $3,125 per share. Diluted weighted average shares outstanding declined 3.3% year over year to 16.6 million. The company had $1.61 billion remaining under its share repurchase authorization at fiscal year-end.
Management expects sales in the United States, Mexico and Brazil to accelerate in fiscal 2027. The company plans to keep improving its inventory offering, delivery speed and customer service while pursuing domestic commercial, do-it-yourself and international growth.
General Motors Company (GM - Free Report) reported second-quarter 2026 adjusted earnings of $3.57 per share, up 41.3% year over year. The figure beat the Zacks Consensus Estimate of $3.13 by 14.06%. Revenues increased 1.9% to $48.03 billion and surpassed the consensus estimate of $46.56 billion by 3.15%. Strong pricing, lower costs and disciplined incentives supported results. General Motors raised its full-year adjusted EBIT guidance to $14-$16 billion from $13.5-$15.5 billion. Adjusted earnings are now projected at $12-$14 per share, up from the prior range of $11.50-$13.50.
Tesla, Inc. (TSLA - Free Report) reported second-quarter 2026 adjusted earnings of 33 cents per share, which declined 17.5% year over year. The figure missed the Zacks Consensus Estimate of 50 cents by 34%. Revenues advanced 25.5% to $28.24 billion and surpassed the consensus estimate of $25.81 billion by 9.41%. Tesla expects 2026 capital expenditures to exceed $25 billion and rise further over the next two to three years.
Genuine Parts Company (GPC - Free Report) reported second-quarter 2026 adjusted earnings of $2.15 per share, beating the Zacks Consensus Estimate of $2.10 by 2.38%. The bottom line increased 2.4% from $2.10 in the year-ago quarter. Revenues rose 6% year over year to $6.54 billion and surpassed the consensus estimate of $6.39 billion by 2.36%. Genuine Parts reaffirmed its 2026 adjusted earnings guidance of $7.50-$8 per share and total sales growth outlook of 3-5.5%. Genuine Parts ended June with $2.3 billion of liquidity, including $559 million in cash.
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AutoZone Q4 Earnings Beat Estimates on Tariff Refunds, Sales Miss
Key Takeaways
AutoZone, Inc. (AZO - Free Report) reported fourth-quarter fiscal 2026 earnings per share of $56.05, which increased 15.1% year over year and beat the Zacks Consensus Estimate of $54.54 by 2.8%. Gross margin expansion supported the profit increase.
Net sales rose 5.6% to $6.60 billion but missed the consensus mark of $6.69 billion by 1.4%. Total company same-store sales increased 1.5% on a constant-currency basis.
AutoZone, Inc. Price, Consensus and EPS Surprise
AutoZone, Inc. price-consensus-eps-surprise-chart | AutoZone, Inc. Quote
AZO’s Same-Store Sales Show Mixed Regional Trends
Domestic same-store sales increased 1.6% in the 16-week quarter. International same-store sales advanced 10.7% on a reported basis, while constant-currency growth was 1.3%, reflecting the impact of currency movements.
Total company same-store sales rose 2.7% on a reported basis. Sales per average store increased to $830,000 from $823,000, while sales per average square foot remained at $122. Management said the selling environment was difficult during the first eight weeks, but sales strengthened over the final eight weeks.
AutoZone’s Margin Gains Lift Quarterly Profitability
Gross margin expanded 182 basis points year over year to 53.3%. The improvement included a 145-basis-point benefit from tariff refunds and a 105-basis-point favorable net non-cash LIFO impact, partly offset by a higher commercial sales mix. The quarter included a $15 million LIFO charge versus an $80 million charge a year earlier.
Operating expenses increased to 33.4% of sales from 32.4%, with deleverage primarily tied to growth initiatives. Operating profit rose 10.1% to $1.32 billion, while net income increased 11.3% to $931.59 million. Operating margin improved 81 basis points to 20%.
AZO’s Commercial Business Maintains Solid Momentum
Domestic commercial sales reached $1.91 billion, up 8.6% from the year-ago quarter. Average weekly sales per commercial program increased 2.7% to $18,700, showing continued growth in the professional customer channel.
The company ended the quarter with 6,443 domestic commercial programs, up 5.7% year over year. Commercial programs were available in 94% of domestic stores, supporting AutoZone’s push to expand service to repair shops and other professional customers.
AutoZone’s Store Openings Expand Its Global Footprint
AutoZone opened 175 stores during the quarter, including 97 in the United States, 68 in Mexico and 10 in Brazil. The global store count reached 8,031 at quarter-end compared with 7,657 a year earlier.
The domestic network ended with 6,863 stores, while Mexico and Brazil had 1,001 and 167 stores, respectively. Total company square footage reached 54.66 million square feet versus 51.82 million a year earlier. The company also opened 16 new Mega Hub stores in the United States.
AZO’s Balance Sheet Reflects Growth Investment
Merchandise inventories increased 10.1% year over year to $7.74 billion, primarily due to growth initiatives. Inventory per store rose 5% to $963,000, while net inventory per store was negative $107,000 compared with negative $131,000 a year earlier. Inventory turns eased to 1.3 times from 1.4 times.
Cash and cash equivalents stood at $326.12 million at fiscal year-end, while total debt was $9.08 billion. Fourth-quarter cash flow from operations totaled $1.18 billion, and capital spending was $498.77 million. Adjusted debt to EBITDAR remained at 2.5 times, while working capital was negative $1 billion.
AutoZone’s Capital Returns Stay Substantial
AutoZone repurchased 223,000 shares during the quarter for $697.50 million at an average price of $3,125 per share. Diluted weighted average shares outstanding declined 3.3% year over year to 16.6 million. The company had $1.61 billion remaining under its share repurchase authorization at fiscal year-end.
Management expects sales in the United States, Mexico and Brazil to accelerate in fiscal 2027. The company plans to keep improving its inventory offering, delivery speed and customer service while pursuing domestic commercial, do-it-yourself and international growth.
AZO currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Key Releases From Auto Space
General Motors Company (GM - Free Report) reported second-quarter 2026 adjusted earnings of $3.57 per share, up 41.3% year over year. The figure beat the Zacks Consensus Estimate of $3.13 by 14.06%. Revenues increased 1.9% to $48.03 billion and surpassed the consensus estimate of $46.56 billion by 3.15%. Strong pricing, lower costs and disciplined incentives supported results. General Motors raised its full-year adjusted EBIT guidance to $14-$16 billion from $13.5-$15.5 billion. Adjusted earnings are now projected at $12-$14 per share, up from the prior range of $11.50-$13.50.
Tesla, Inc. (TSLA - Free Report) reported second-quarter 2026 adjusted earnings of 33 cents per share, which declined 17.5% year over year. The figure missed the Zacks Consensus Estimate of 50 cents by 34%. Revenues advanced 25.5% to $28.24 billion and surpassed the consensus estimate of $25.81 billion by 9.41%. Tesla expects 2026 capital expenditures to exceed $25 billion and rise further over the next two to three years.
Genuine Parts Company (GPC - Free Report) reported second-quarter 2026 adjusted earnings of $2.15 per share, beating the Zacks Consensus Estimate of $2.10 by 2.38%. The bottom line increased 2.4% from $2.10 in the year-ago quarter. Revenues rose 6% year over year to $6.54 billion and surpassed the consensus estimate of $6.39 billion by 2.36%. Genuine Parts reaffirmed its 2026 adjusted earnings guidance of $7.50-$8 per share and total sales growth outlook of 3-5.5%. Genuine Parts ended June with $2.3 billion of liquidity, including $559 million in cash.