Key Highlights
- Q3 diluted earnings per share hit $38.07, surpassing Wall Street’s $36.18 projection
- Revenue climbed 8.4% annually to $4.84 billion but came up short of the $4.86 billion target
- U.S. comparable store sales increased 4.1%; company-wide comps up 3.9% when adjusted for currency
- International comparable sales gained only 1.6% in constant currency due to weakness in Mexico and Brazil
- The retailer expanded its global presence by 82 net locations during the period, reaching 7,856 total stores
AutoZone delivered strong bottom-line results in its third fiscal quarter, but shares plunged 9.10% following the announcement as revenue figures narrowly trailed analyst projections.
The automotive aftermarket parts specialist announced diluted earnings of $38.07 per share for the 12-week period concluding May 9, 2026. This performance exceeded the analyst consensus of $36.18 compiled from 11 experts surveyed by Zacks.
Revenue reached $4.84 billion, representing an 8.4% increase compared to the same period last year. Nevertheless, Wall Street had anticipated $4.86 billion, meaning AutoZone fell slightly short on its revenue target.
Quarterly net income totaled $641.5 million. Operating profit expanded 6.6% to $923.8 million, driving the operating margin beyond the 19% threshold.
Gross margin came in at 52.2% of sales, representing a 57 basis point contraction year-over-year. Management pointed to a 77 basis point non-cash LIFO charge as the primary driver, though this was partially counterbalanced by other favorable factors.
Operating expenses relative to sales showed modest improvement, declining to 33.1% from 33.3% in the comparable quarter. The company attributed this efficiency gain to revenue expansion and disciplined cost controls.
U.S. Operations Maintain Momentum
Both retail and professional customer channels delivered growth in the domestic market throughout the quarter. U.S. comparable store sales advanced 4.1%, while consolidated comparable sales grew 3.9% when currency fluctuations are neutralized.
Chief Executive Phil Daniele commented that performance remained balanced across all customer categories. The company did not provide granular data separating DIY and professional sales channels.
Overseas Performance Falls Short
International comparable store sales jumped 16.6% on a nominal basis, but this figure contracts dramatically to merely 1.6% in constant currency after eliminating foreign exchange impacts.
Business units in Mexico and Brazil performed below management’s expectations. Daniele recognized these shortcomings while expressing confidence that AutoZone continues to capture additional market share in both territories.
The company established 82 net new locations globally throughout the quarter. Domestic expansion accounted for 57 units, Mexico contributed 20, and Brazil added five. AutoZone’s worldwide footprint now encompasses 7,856 stores.
For the complete fiscal year, management projects opening between 355 and 365 new locations.
Inventory levels increased 10.8% year-over-year to $7.56 billion, reflecting strategic growth investments and inflationary pressures.
During the quarter, AutoZone deployed $586.3 million toward share repurchases, retiring 164,000 shares at an average cost of $3,582 per share. The company retained $804.2 million in remaining authorization under its current buyback program as the quarter concluded.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
