AutoZone Posts Record $20.3B Sales, Commercial Segment Drives Growth
AutoZone's fiscal 2026 revenue hit a record high, driven by an 11% surge in commercial sales despite soft DIY demand.
Key points
- AutoZone's fiscal 2026 sales reached a record $20.3 billion, up 7.4%, with 374 new stores opened.
- Domestic commercial sales grew nearly 11% to just under $5.8 billion, driving overall revenue.
- Fiscal 2027 guidance projects flat to low-single-digit same-store sales growth and $1.65 billion in capex.
AutoZone (NYSE:AZO) reported fiscal 2026 fourth-quarter revenue of $6.6 billion, a 5.6% year-over-year increase, with diluted earnings per share rising 15.1% to $56.05. The results included a $96 million benefit from tariff refunds and a $15 million non-cash LIFO charge. For the full year, sales climbed 7.4% to a record $20.3 billion, while EPS increased 5.3% to $152.55.
The company opened 374 new stores during the fiscal year, its highest annual total, with 175 locations added in the final quarter alone. Management attributed the performance to improved supply-chain capabilities and market share gains in a challenging macro environment, as reported by Yahoo Finance.
Commercial Segment Drives Revenue Growth
Domestic commercial sales, or DIFM, totaled $1.9 billion in the fourth quarter, representing 34% of domestic auto-parts revenue. For the full year, this segment generated nearly $5.8 billion, marking an 11% increase. Growth was supported by expanded Mega Hub coverage, improved inventory availability at satellite locations, and faster delivery speeds for professional customers.
Commercial programs expanded by 87 net new locations in the quarter, bringing the total to 6,443. AutoZone plans to open more than 40 Mega Hubs in fiscal 2027 to further strengthen its distribution network and support continued commercial expansion.
DIY Sales Face Inflation Pressure
While overall same-store sales rose 1.5% on a constant-currency basis, the DIY segment declined 0.6% domestically. CFO Jamere Jackson noted that financially challenged consumers are deferring purchases and trading down due to inflation. However, average ticket size increased by approximately 5%, offsetting the drop in customer traffic.
Management observed that domestic comparable sales accelerated to 2.1% in August after averaging 1.4% growth in the prior three months. Hot-weather product categories performed better late in the quarter as temperatures rose, partially countering earlier weakness caused by milder weather and lower traffic in Southeast and South Central markets.
Fiscal 2027 Outlook and Capital Plans
For the first quarter of fiscal 2027, AutoZone expects same-store sales to remain relatively flat, with average ticket growth holding near the 5% level seen in the previous quarter. For the full year, the company projects domestic same-store sales growth ranging from flat to low single digits.
The company plans to open approximately 400 global stores in fiscal 2027 and allocates $1.65 billion for capital expenditures. These investments aim to sustain store expansion and supply-chain improvements, supporting long-term growth despite a modest comparable-sales forecast.
