AutoZone Q4 Profit Beats Estimates Despite Sales Miss
AutoZone posted Q4 EPS of $56.05, beating expectations, while net sales missed consensus due to weak early-quarter demand.
Key points
- AutoZone Q4 EPS was $56.05, beating estimates by 2.8%, while net sales of $6.60 billion missed consensus by 1.4%.
- Gross margin expanded to 53.3% due to tariff refunds and favorable inventory impacts, driving a 10.1% rise in operating profit.
- The company opened 175 new stores globally and repurchased $697.50 million in shares during the quarter.
AutoZone reported fourth-quarter fiscal 2026 earnings of $56.05 per share. This figure beat analyst estimates by 2.8%. Net sales rose 5.6% to $6.60 billion, however. This amount missed the consensus mark by 1.4%.
The profit increase was driven by gross margin expansion. The company benefited from tariff refunds and lower inventory charges. These factors helped offset weaker sales in the first eight weeks of the quarter.
Margin Expansion Drives Quarterly Profit
Gross margin expanded 182 basis points to 53.3%. This gain included a 145-basis-point benefit from tariff refunds. A favorable non-cash inventory impact added another 105 basis points.
Operating profit rose 10.1% to $1.32 billion. Net income increased 11.3% to $931.59 million. Operating margin improved by 81 basis points to reach 20%.
Operating expenses increased to 33.4% of sales from 32.4%. Management cited growth initiatives as the primary driver for this rise. Despite higher costs, overall profitability strengthened significantly.
Commercial Sales and Store Growth
Domestic commercial sales reached $1.91 billion, up 8.6% year over year. Average weekly sales per commercial program increased 2.7% to $18,700. This shows steady growth in the professional customer channel.
AutoZone opened 175 new stores during the quarter. This included 97 locations in the United States. The global store count reached 8,031 at the end of the period.
The company also opened 16 new Mega Hub stores in the US. These facilities support the expansion of services for repair shops. Commercial programs are now available in 94% of domestic stores.
Balance Sheet and Capital Returns
Merchandise inventories increased 10.1% year over year to $7.74 billion. Inventory turns eased to 1.3 times from 1.4 times. This reflects the company's ongoing growth investments.
