AutoZone (AZO) Q1 2026 earnings summary

Executive summary

• Net sales grew 8.2% year-over-year to $4.63 billion, with domestic same-store sales up 4.8% and international comps up 3.7% constant currency; 53 net new stores were opened globally, bringing the total to 7,710.

• Commercial sales in the U.S. rose 14.5% year-over-year, with commercial programs now in 93% of domestic stores.

• Net income declined 6% to $530.8 million, and diluted EPS fell 4.6% to $31.04, impacted by a $98 million non-cash LIFO charge.

• Same store sales increased 4.7% overall, with international up 11.2% unadjusted.

Financial highlights

• EBIT was $784 million, down 6.8% year-over-year, with gross margin at 51.0%, down 203 basis points mainly due to LIFO impacts.

• Free cash flow was $630 million, and cash flow from operations rose to $944.2 million.

• Capital expenditures increased to $314.2 million, reflecting investment in new stores and expansion projects.

• Inventory increased 13.9% to $7.14 billion, with inventory per store up 9.1%.

• Debt stood at $8.62 billion, down from $9.01 billion year-over-year.

Outlook and guidance

• Plans to open 350–360 new stores in FY26 and up to 500 annually by FY28, with aggressive store expansion to gain market share.

• SG&A growth will remain elevated due to store openings and commercial investments, expected to normalize as stores mature.

• LIFO charges projected at ~$60 million per quarter for the next three quarters.

• Inflation expected to persist through Q3, moderating in Q4 as tariff impacts are lapped.

• Liquidity remains strong with $287.6 million in cash and $2.2 billion in undrawn credit capacity.