01—Abstract
Summary
Summary of the 8-K filed September 22, 2026. Cited figures are marked; the original filing is the authoritative source.
AutoZone (AZO) reported fourth-quarter fiscal 2026 results (16 weeks ended August 29, 2026) with net sales of $6.6 billiona, up 5.6% year over year, and diluted EPS of $56.05 versus $48.71 a year ago.
Total company same store sales rose 1.5% on a constant currency basis (2.7% as reported), with domestic same store sales up 1.6%. Operating profit rose 10.1% to $1.3 billionb. Much of the margin improvement was non-recurring or non-operational: gross margin expanded 182 basis points to 53.3%, helped by a 145 basis point benefit from tariff refunds and a 105 basis point net non-cash LIFO impact.
Operating expenses deleveraged to 33.4% of sales from 32.4%, driven mainly by growth initiatives. For the full fiscal year, net sales reached $20.3 billionc (up 7.4%), operating profit rose 3.1% to $3.7 billion, and diluted EPS increased 5.3% to $152.55. Full-year gross margin declined to 52.3% from 52.6%, as a 61 basis point non-cash LIFO headwind outweighed a 48 basis point tariff refund benefit.
Domestic same store sales grew 3.3% for the year, while international same store sales grew 2.2% in constant currency. The company opened 374 net new stores, ending with 8,031 locations, and repurchased $2.0 billiond of stock during the year, leaving $1.6 billion under its authorization. Management noted a difficult selling environment in the first eight weeks of the quarter, with sales strengthening over the final eight weeks, and said it expects sales growth to accelerate in each of its three countries in fiscal 2027.
Investors should weigh the quarter's EPS strength against the fact that tariff refunds and LIFO effects flattered gross margin, which may not recur. Inventory grew 10.1% year over year, and total debt rose to $9.1 billion, though adjusted debt to EBITDAR was stable at 2.5x.
02—Key points
Key Highlights
- Q4 net sales of $6.6 billion, up 5.6% year over year; total company same store sales up 2.7% as reported and 1.5% in constant currency
- Q4 diluted EPS of $56.05, up from $48.71, with operating profit up 10.1% to $1.3 billion
- Q4 gross margin rose 182 bps to 53.3%, but included a 145 bp one-time tariff refund benefit and a 105 bp non-cash LIFO impact
- Full-year net sales of $20.3 billion (+7.4%) and diluted EPS of $152.55 (+5.3%); full-year gross margin contracted to 52.3% from 52.6%
- Opened 175 stores in Q4 (including 16 Mega Hubs in the U.S.) and 374 for the fiscal year, ending at 8,031 total stores
- Repurchased $2.0 billion of shares in fiscal 2026 with $1.6 billion remaining under authorization; total debt rose to $9.1 billion while adjusted debt/EBITDAR held at 2.5x
- Management expects sales to accelerate in all three operating countries in fiscal 2027 after a soft first eight weeks of Q4
03—Questions
Frequently Asked Questions
How much of the Q4 earnings improvement came from one-time or non-operating items?
The gross margin expansion of 182 basis points was substantially driven by a 145 basis point benefit from tariff refunds and a 105 basis point net non-cash LIFO impact. Together these items account for more than the total gross margin improvement, meaning underlying merchandise margin pressures were partly offset by these benefits. Investors should treat these as potentially non-recurring when assessing run-rate earnings.
Is AutoZone's domestic business still growing comparable sales?
Yes. Domestic same store sales rose 1.6% in Q4 and 3.3% for the full fiscal year. Domestic commercial sales grew 8.6% in Q4 and 10.6% for the year, with average sales per commercial program up 2.7% in the quarter. The commercial program is an important growth driver as the company continues to expand its professional customer base.
Why did operating expenses rise as a percentage of sales?
Operating expenses increased to 33.4% of sales in Q4 from 32.4% a year earlier, and to 34.0% for the full year from 33.6%. Management attributed the deleverage primarily to growth initiatives, including new store openings, 16 new Mega Hub locations, and speed-of-delivery investments. These costs are expected to continue to weigh on expense ratios until sales growth catches up.
What is the company's capital allocation and balance sheet picture?
AutoZone repurchased $697.5 million of stock in Q4 and $2.0 billion for the fiscal year, at average prices of about $3,125 and $3,496 per share. Total debt rose to $9.1 billion from $8.8 billion, and adjusted debt to EBITDAR remained at 2.5x, consistent with management's goal of maintaining investment-grade credit ratings. Shares outstanding fell to 16.2 million from 16.7 million, and the company retains $1.6 billion under its current repurchase authorization.
What is management's outlook for fiscal 2027?
Management said sales strengthened over the final eight weeks of the quarter and that the company is well positioned for sales growth in fiscal 2027. It expects sales in the U.S., Mexico, and Brazil to accelerate in the new fiscal year, and it reiterated a disciplined approach to driving shareholder value. The release did not include formal numerical guidance for fiscal 2027.
04—Continue