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Edge20 Dec 2024
Under the Hood: AutoZone's Blueprint for Retail Excellence
An in-depth look at the largest aftermarket auto parts retailer in the U.S., its philosophy, and masterful capital allocation.
AutoZone (AZO) investor relations material
AutoZone Q4 2025 earnings summary
Complete event summary combining all related documents: earnings call transcript, report, and slide presentation.Q4 2025 earnings summary23 Sep, 2025
Executive summary
Q4 adjusted net sales were $6.24 billion, up 6.9% year-over-year, with same store sales up 5.1% and strong international growth of 7.2% in constant currency.
Domestic same-store sales grew 4.8% in Q4, and international same-store sales rose 9.3% for the year (constant currency).
Commercial sales accelerated, up 12.5% year-over-year on a 16-week basis, with domestic commercial sales up 6.0% in Q4 and 6.7% for the year.
Diluted EPS for Q4 was $48.71, up 1.3% year-over-year on an adjusted basis; annual EPS was $144.87, down 3.1%.
304 net new stores were opened in FY25, including 90 in Q4 and 109 internationally, the highest since 1996.
Financial highlights
Q4 adjusted EBIT was $1.2 billion (down 1.1%); full-year adjusted EBIT was $3.61 billion (down 2.5%).
Q4 net income was $837 million; annual net income was $2.5 billion, down 6.2% year-over-year.
Q4 adjusted gross margin was 51.5%, down 103 bps, mainly due to an $80 million LIFO charge.
Free cash flow for Q4 was $511 million; annual cash flow from operations was $3.16 billion.
Foreign exchange rates reduced Q4 net sales by $36 million and full-year by $273 million.
Outlook and guidance
Expect to open 325 to 350 stores in the Americas in FY26, with most CapEx of ~$1.5 billion allocated to store growth.
LIFO charges expected to be $120 million in Q1 FY26, with $80–85 million per quarter for the rest of the year.
SG&A growth to remain in the mid-single-digit range, with some acceleration in the back half of FY26 due to store openings.
Inflation expected at least 3%, likely higher, with pricing discipline to cover costs and maintain competitiveness.
Focus on domestic commercial and DIY growth, international expansion, and disciplined capital allocation.
Quantify LIFO impact on Q4 EPS?
What caused the ROIC drop to 41.3%?
Inventory efficiency with new stores?
Future LIFO charge impact and reversal?
SG&A leverage point with accelerated store growth?
Mexico Mega-Hub rollout strategy?
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Next AutoZone earnings date
Q1 20269 Dec, 2025
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Frequently asked questions
Automotive Replacement Parts
AutoZone, established in 1979 and headquartered in Memphis, Tennessee, has grown into a household name in the automotive aftermarket and is a leading distributor of automotive replacement parts and accessories in the United States. With over 6,000 stores spread across the U.S., Puerto Rico, Mexico, and Brazil, AutoZone caters to both the do-it-yourself (DIY) sector and the commercial (Do-It-For-Me) market. For someone facing car trouble or looking to do maintenance on their vehicle, AutoZone offers a variety of products and services to help with whatever issues a customer might have.
The Genesis of AutoZone
AutoZone's history began when Malone & Hyde, a wholesale grocery company, decided to venture into the automotive market. The first store was established in Forrest City, Arkansas, under the name "Auto Shack." The business model proved successful, and the company quickly expanded its footprint. By the 1980s, the name had been changed to AutoZone, and the company had stores far outside of Arkansas state linesThe journey from a single store to the sprawling chain it is today parallels the growth trajectory of many other American enterprises, with some examples being Dollar General and Walmart.
Products and Services
AutoZone's primary offerings include automotive replacement parts—everything from body parts to engine components. The stores also offer a myriad of accessories, such as interior and exterior enhancements, car care products, and tools specifically designed for automotive repair. One of their distinguishing features is the "Loan-A-Tool" program, where customers can borrow a specific tool for a job, depositing a certain amount that is refunded upon return. For professional mechanics and garages, AutoZone's commercial program delivers parts directly to local repair garages, ensuring mechanics can get their hands on needed components as quickly as possible.
Looking ahead
As the automotive industry changes, with electric vehicles becoming more prevalent and technology becoming an integral part of vehicles, AutoZone is positioning itself to adapt to these shifts. They've gradually introduced parts and accessories relevant to hybrid and electric vehicles, ensuring they remain a resource for all car owners, regardless of the type of vehicle they drive.
Its website isn't both an online store and an automotive resource. Alongside their product listings, they offer repair help, including video tutorials, vehicle-specific repair guides, and a platform for customers to ask automotive-related questions.AutoZone also launched an app that makes vehicle maintenance and repair more accessible for users. The app allows users to shop for parts, access repair guides, manage their AutoZone Rewards account, and even locate their vehicle in a parking lot.
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