AutoZone Q4 2026 EPS Rises 15% as Sales Grow 5.6%

AutoZone Inc. (NYSE: AZO) reported higher fourth-quarter sales and earnings for fiscal 2026, as a wider gross margin helped offset increased operating expenses. Diluted earnings per share rose 15.1%, outpacing net income growth as the auto-parts retailer reduced its weighted average share count through continued stock repurchases.

For the 16 weeks ended Aug. 29, net sales increased 5.6% to $6.60 billion from $6.24 billion a year earlier. Total company same-store sales rose 1.5% on a constant-currency basis, comprising 1.6% growth in the domestic business and 1.3% constant-currency growth internationally.

Gross margin expanded 182 basis points to 53.3%. The quarter included a $15 million pre-tax, non-cash LIFO charge, compared with an $80 million charge in the prior-year period. AutoZone’s operating expense ratio increased 101 basis points to 33.4%, partially offsetting the gross-margin improvement.

Operating profit rose 10.1% to $1.32 billion, while operating margin increased 81 basis points to 20.0%. Net income advanced 11.3% to $932 million, and diluted EPS increased to $56.05 from $48.71. Diluted weighted average shares outstanding declined 3.3% to 16.6 million.

AutoZone repurchased $697 million of its shares during the quarter.

Commercial growth and store expansion

Domestic commercial sales remained a key source of growth, rising 8.6% to $1.91 billion in the fourth quarter. Average weekly sales per commercial program increased 2.7% to $18,700.

The company ended the period with 6,443 domestic commercial programs, up 5.7% from a year earlier. Those programs were available in 94% of domestic stores. AutoZone also opened 175 stores globally during the quarter, extending its domestic and international footprint.

For the full fiscal year, domestic commercial sales increased 10.6% to $5.76 billion. Average weekly sales per program for the trailing four quarters rose 6.0% to $17,700.

Full-year margin pressure

For the 52 weeks ended Aug. 29, AutoZone’s net sales increased 7.4% to $20.34 billion. Total company same-store sales grew 3.2% in constant currency, including domestic growth of 3.3% and international constant-currency growth of 2.2%.

Full-year profitability grew more slowly than revenue. Gross margin declined 29 basis points to 52.3%, while the operating expense ratio increased 47 basis points to 34.0%. Operating profit rose 3.1% to $3.72 billion, but operating margin contracted 76 basis points to 18.3%.

The fiscal year included a $192 million pre-tax, non-cash LIFO charge, up from $64 million in fiscal 2025. Net income increased 3.0% to $2.57 billion, and diluted EPS rose 5.3% to $152.55. Diluted weighted average shares declined 2.2% to 16.9 million, and full-year share repurchases totaled $2.0 billion.

Investment priorities and balance sheet

AutoZone identified U.S. retail, domestic commercial operations and international expansion as its principal growth priorities. Its operating plans include expanding hubs and mega-hubs, improving product assortment and coverage, using technology to improve the customer experience, and investing in existing assets while returning excess cash to shareholders.

Inventory stood at $7.74 billion at year-end, up 10.1%, while inventory per store increased 5.0% to $963,000. Inventory turnover declined to 1.3 times from 1.4 times. Net property and equipment rose 14.1% to $8.06 billion, reflecting the company’s continued investment and expansion, while debt increased 3.2% to $9.08 billion.

AutoZone cautioned that future results remain subject to changes in product demand, fuel prices, miles driven, inflation, weather and competition. Other identified uncertainties include consumer debt levels, hiring and retention, construction delays, tariffs and trade policies, exchange-rate movements, inventory availability, supply-chain disruptions, cybersecurity incidents and the company’s ability to execute its growth initiatives.