AutoZone (AZO) Q3 2026 earnings summary

Executive summary

• Net sales rose 8.4% year-over-year to $4.84 billion for the quarter, with operating profit up 6.6% to $923.8 million and net income up 5.4% to $641.5 million; diluted EPS increased 7.7% to $38.07.

• Domestic same store sales increased 4.1%, with commercial sales up 10.4% to $1.4 billion and DIY sales up 2.2%.

• 82 new stores opened globally in the quarter, bringing the total to 7,856 and on track for 355-365 new stores for the year.

• Year-to-date net sales reached $13.74 billion, with diluted EPS up 0.5% to $96.69.

• MegaHub stores and commercial programs continue to drive market share gains.

Financial highlights

• Gross margin was 52.2%, down 57 bps year-over-year, mainly due to a $20 million non-cash LIFO charge.

• EBIT increased 6.6% to $924 million, with EBIT margin at 19.1%.

• Operating expenses as a percentage of sales improved to 33.1% from 33.3% last year.

• Free cash flow for the quarter was $455 million, with $1.1 billion generated year-to-date.

• Net interest expense was $110.5 million for the quarter; average borrowings were $8.9 billion at a 4.52% rate.

Outlook and guidance

• Management expects to open approximately 355-365 stores for the full fiscal year, with Q4 same-store sales growth similar to Q3.

• LIFO charge for Q4 projected at $30 million, impacting gross margin by 45 bps and EPS by $1.40.

• SG&A growth expected to remain in line with historical trends.

• Focus remains on accelerating growth in domestic commercial and DIY segments, international expansion, and leveraging technology for customer experience.