AutoZone (AZO) Q3 2026: Revenue Growth and EPS Increase — Positive Outlook

AutoZone, Inc. (NYSE: AZO) reported a strong performance in its third quarter of fiscal 2026, with net sales reaching $4.8 billion, an increase of $0.4 billion or 8.4% compared to the same quarter last year. This growth is a positive indicator for shareholders, reflecting the company's ability to expand its market presence and manage operational efficiencies effectively.

Key Financial Metrics

• Net Sales: $4.8 billion, up $0.4 billion or +8.4% YoY
• Gross Profit Margin: 52.2%, down 57 basis points YoY
• Operating Profit: $923.8 million, up 6.6% YoY
• Net Income: $641.5 million, compared to $608.4 million last year
• Diluted EPS: $38.07, up from $35.36 YoY

Analyst View

This quarter can be considered a good one for shareholders. The increase in net sales and net income, alongside a rise in diluted EPS, demonstrates AutoZone's robust operational performance and effective cost management. The company has successfully leveraged its sales growth to improve profitability, as evidenced by the operating profit increase of 6.6%. Although the gross profit margin saw a slight decline, the overall financial health remains strong.

Operational Highlights

• Same Store Sales:
  • Domestic: 4.1% increase
  • International: 16.6% increase
  • Total: 5.5% increase
• Share Repurchase Program: AutoZone repurchased 164,000 shares at an average price of $3,582, totaling $586.3 million. The company has $0.8 billion remaining under its current share repurchase authorization.
• Inventory: Increased by 10.8% YoY, driven by growth initiatives and inflation, with net inventory per store improving to negative $107,000 from negative $142,000 last year.

Forward Guidance

Looking ahead, investors should keep an eye on AutoZone's expansion plans, as the company opened 82 new stores globally during the quarter, including 57 in the U.S., 20 in Mexico, and 5 in Brazil. The company aims to open approximately 355-365 stores for the full fiscal year, which could further enhance its market share and revenue growth.

In summary, AutoZone's third quarter results reflect a solid performance with significant revenue growth and improved earnings per share. The company's strategic focus on expanding its store footprint and managing expenses effectively positions it well for continued success in the upcoming quarters. Investors should monitor the execution of these growth strategies and the performance of international markets, which have shown variability in results.

Condensed Consolidated Statements of Income

(in thousands)

Note: The amounts in the following table are in thousands.

GAAP Results	12 Weeks Ended	12 Weeks Ended
May 9, 2026	May 10, 2025
Net sales	$ 4,840,950	$ 4,464,339
Cost of sales	$ 2,316,376	$ 2,110,816
Gross profit	$ 2,524,574	$ 2,353,523
SG&A expenses	$ 1,600,818	$ 1,487,349
Operating profit (EBIT)	$ 923,756	$ 866,174
Interest expense, net	$ 110,490	$ 111,285
Income before taxes	$ 813,266	$ 754,889
Income tax expense	$ 171,775	$ 146,449
Net income	$ 641,491	$ 608,440
Net income per share:	Basic	$ 38.95
Diluted	$ 38.07	$ 35.36
Weighted average shares outstanding:	Basic	16,468
Diluted	16,852	17,207

Condensed Consolidated Balance Sheets

(in thousands)

Note: The amounts in the following table are in thousands.

May 9, 2026	May 10, 2025	August 30, 2025
Cash and cash equivalents	$ 253,729	$ 268,625	$ 271,803
Merchandise inventories	$ 7,559,056	$ 6,822,881	$ 7,025,688
Current assets	$ 8,934,569	$ 7,985,711	$ 8,341,379
Property and equipment, net	$ 7,796,988	$ 6,727,218	$ 7,062,509
Operating lease right-of-use assets	$ 3,413,970	$ 3,145,590	$ 3,194,666
Total assets	$ 20,916,421	$ 18,621,983	$ 19,355,376
Accounts payable	$ 8,401,277	$ 7,887,417	$ 8,025,590
Current liabilities	$ 10,035,340	$ 9,465,535	$ 9,519,397
Operating lease liabilities	$ 3,278,354	$ 3,020,664	$ 3,093,936
Total liabilities	$ 9,016,477	$ 8,853,110	$ 8,799,775
Stockholders' deficit	$ (2,784,540)	$ (3,974,405)	$ (3,414,304)
Working capital	$ (1,100,709)	$ (1,479,824)	$ (1,178,042)

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