AutoZone posted a solid earnings beat in its fiscal third quarter, though the stock dropped 9.10% as revenue fell just short of Wall Street’s expectations.
The auto parts retailer reported diluted earnings per share of $38.07 for the 12-week period ended May 9, 2026. That cleared the consensus estimate of $36.18 from a Zacks survey of 11 analysts.
Net sales came in at $4.84 billion, up 8.4% year over year. However, analysts had expected $4.86 billion, leaving AutoZone with a narrow miss on the top line.
$AZO delivered another strong profit quarter despite a slight revenue miss. Domestic comps rose 4.1%, total company comps climbed 5.5%, and the auto parts retailer expanded aggressively with 82 new stores opened across the U.S., Mexico, and Brazil. https://t.co/Uf7UuLt96V
— Schaeffer's Investment Research (@schaeffers) May 26, 2026
Net income for the quarter was $641.5 million. Operating profit climbed 6.6% to $923.8 million, pushing the operating margin above 19%.
Gross profit as a percentage of sales came in at 52.2%, down 57 basis points versus the prior year. The company attributed the decline mainly to a 77 basis point non-cash LIFO impact, partly offset by other improvements.
Operating expenses as a percentage of sales improved slightly, falling to 33.1% from 33.3% a year earlier. The company credited sales growth and expense management for the gain.
Both do-it-yourself and commercial sales grew domestically during the quarter. Domestic same-store sales rose 4.1%, while total company same-store sales increased 3.9% on a constant-currency basis.
CEO Phil Daniele said in a statement that growth was consistent across customer segments. No specific breakdown between DIY and commercial was disclosed.
International same-store sales rose 16.6% on a reported basis, but that number shrinks to just 1.6% in constant currency once exchange rate effects are stripped out.
Operations in Mexico and Brazil came in below internal targets. Daniele acknowledged the shortfall but said AutoZone believes it continues to gain market share in both markets.
AutoZone opened 82 net new stores globally during the quarter. The U.S. added 57, Mexico added 20, and Brazil added five. The company’s total store count now stands at 7,856 worldwide.
For the full fiscal year, AutoZone expects to open between 355 and 365 stores.
Inventory rose 10.8% year over year to $7.56 billion, driven by growth initiatives and the effects of inflation.
AutoZone spent $586.3 million buying back stock during the quarter, acquiring 164,000 shares at an average price of $3,582 each. The company had $804.2 million remaining under its current repurchase authorization at quarter’s end.
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