AutoZone — Fourth Quarter 2026 Earnings Summary

Financial Performance

• Fourth quarter net sales reached $6.6 billion, a 5.6% increase year-over-year from the prior year quarter.
• Fiscal year 2026 net sales totaled $20.3 billion, representing a 7.4% increase from the prior year.
• Fourth quarter gross profit margin was 53.3%, an increase of 182 basis points year-over-year, driven by 145 basis points from tariff refunds and a 105 basis point net non-cash LIFO impact, partially offset by higher commercial mix.
• Fiscal year 2026 gross profit margin was 52.3%, a decrease from 52.6% the prior year, impacted by a 61 basis point net non-cash LIFO impact, partially offset by a 48 basis point benefit from tariff refunds.
• Fourth quarter operating expenses were 33.4% of sales versus 32.4% the prior year, with deleverage driven by growth initiatives.
• Fiscal year 2026 operating expenses were 34.0% of sales versus 33.6% the prior year.
• Fourth quarter operating profit increased 10.1% to $1.3 billion; net income was $931.6 million compared to $837.0 million the prior year.
• Fourth quarter diluted earnings per share (EPS) were $56.05, up from $48.71 the prior year.
• Fiscal year 2026 operating profit increased 3.1% to $3.7 billion; net income increased 3.0% to $2.6 billion.
• Fiscal year 2026 diluted EPS increased 5.3% to $152.55 from $144.87.
• Cash flow from operations for the fourth quarter was $1.18 billion compared to $990.8 million the prior year; for the fiscal year, it was $3.30 billion compared to $3.16 billion.
• Capital spending for the fourth quarter was $498.8 million; for the fiscal year, it was $1.50 billion.
• Inventory increased 10.1% year-over-year, driven primarily by growth initiatives.
• Net inventory per store was negative $107 thousand, compared to negative $131 thousand the prior year.
• Total debt was $9.08 billion at year-end, up from $8.80 billion the prior year.
• Adjusted debt to EBITDAR ratio remained flat at 2.5x for the fiscal year.
• Adjusted Return on Invested Capital (ROIC) was 35.8% for the fiscal year, down from 41.3% the prior year.

Guidance and Future Outlook

• Management expects sales in each of the three countries in which it operates to accelerate in fiscal 2027.
• The company feels well-positioned for sales growth in fiscal 2027 following strengthened sales results in the last eight weeks of the fourth quarter.

Business Segments and Product Lines

• Domestic same store sales increased 1.6% in the fourth quarter and 3.3% for the fiscal year.
• International same store sales increased 10.7% in the fourth quarter and 13.5% for the fiscal year.
• Total company same store sales increased 2.7% in the fourth quarter and 4.5% for the fiscal year.
• International same store sales on a constant currency basis increased 1.3% in the fourth quarter and 2.2% for the fiscal year.
• Total company same store sales on a constant currency basis increased 1.5% in the fourth quarter and 3.2% for the fiscal year.
• Domestic commercial sales increased 8.6% in the fourth quarter and 10.6% for the fiscal year.
• The company opened 175 new stores in the fourth quarter, including 97 in the U.S., 68 in Mexico, and 10 in Brazil.
• The company opened 374 new stores for the full fiscal year.
• Store count as of August 29, 2026, totaled 8,031: 6,863 in the U.S., 1,001 in Mexico, and 167 in Brazil.
• The company continues to improve its inventory offering for do-it-yourself and professional customers and is focusing on speed of delivery and customer service.

Market and Competitive Landscape

• Management stated that based on available data, the company continued to gain market share.
• The company operates in the U.S., Mexico, and Brazil.

Risks and Challenges

• The press release lists forward-looking risks including product demand fluctuations due to fuel prices or miles driven, energy prices, weather, competition, credit market conditions, inflation, exchange rates, supply chain disruptions, tariffs, trade policies, geopolitical factors, and the ability to hire and retain qualified employees.

Management Commentary and Tone

• Phil Daniele, President and CEO, thanked the organization for delivering another quarter of sales and earnings growth despite a difficult selling environment in the first eight weeks of the quarter.
• Management emphasized a commitment to executing strategies to grow domestic and international businesses and maintaining a disciplined approach to driving shareholder value.

Other Key Points

• Under its share repurchase program, the company repurchased 223,000 shares in the fourth quarter for $697.5 million and 579,000 shares for the fiscal year for $2.0 billion.
• At year-end, $1.6 billion remained under the current share repurchase authorization.
• Cumulative share repurchases since fiscal 1998 totaled $40.5 billion.
• The company does not derive revenue from automotive repair or installation services.
• The company offers products through www.autozone.com, commercial purchases through www.autozonepro.com, and sells the ALLDATA brand software through www.alldata.com.