AutoZone (AZO) Q3 2026 earnings summary

Executive summary

• Net sales increased 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 rose 7.7% to $38.07.

• Domestic same store sales grew 4.1%, international same store sales rose 1.6% on a constant currency basis, and total company same store sales increased 3.9%.

• Commercial sales grew 10.4% year-over-year to $1.4 billion, outpacing DIY growth and now present in 94% of domestic stores.

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

• Failure and maintenance categories comprised 85% of sales, with no fundamental shift in sales mix year-over-year.

Financial highlights

• Gross margin was 52.2%, down 57 bps year-over-year due to a 77 bps non-cash LIFO impact; operating expenses as a percentage of sales improved to 33.1%.

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

• Net income was $641 million, up 5.4% year-over-year.

• Free cash flow for the quarter was $455 million, with $1.1 billion generated year-to-date; cash flow from operations for the quarter was $847.4 million.

• Year-to-date net sales were $13.74 billion, with net income at $1.64 billion.

Outlook and guidance

• Management expects Q4 same-store sales growth similar to Q3, with inflation and average ticket growth moderating to around 4%.

• Planning to open approximately 160 stores globally in Q4 and 355-365 for the full year.

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

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

• Management expects to increase investment in growth initiatives, including new stores and hub expansions, in fiscal 2026.