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AutoZone (AZO) Up 11% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for AutoZone (AZO - Free Report) . Shares have added about 11% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is AutoZone due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
AutoZone Q4 Earnings Beat Estimates
AutoZone 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.
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.
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%.
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.
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.
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.
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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
Currently, AutoZone has a average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock has a score of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, AutoZone has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
View the Zacks #1 Rank List
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AutoZone (AZO) Up 11% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for AutoZone (AZO - Free Report) . Shares have added about 11% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is AutoZone due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
AutoZone Q4 Earnings Beat Estimates
AutoZone 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.
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.
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%.
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.
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.
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.
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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
Currently, AutoZone has a average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock has a score of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, AutoZone has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.