Quick Summary
- The company delivered diluted EPS of $38.07 in its third quarter, surpassing analyst projections of $36.18
- Revenue climbed 8.4% annually to reach $4.84 billion, falling slightly below the $4.86 billion Wall Street target
- U.S. comparable store sales expanded 4.1%; company-wide comps increased 3.9% when adjusted for currency fluctuations
- Global same-store sales growth in constant currency reached only 1.6%, hampered by weak performance in Brazilian and Mexican markets
- The retailer expanded its presence by 82 net locations during the period, pushing total stores to 7,856 globally
The automotive aftermarket retailer delivered strong bottom-line results for its fiscal third quarter, yet shares tumbled 9.10% as the company’s top-line performance came in slightly below analyst projections.
For the 12-week fiscal period concluding May 9, 2026, the retailer announced diluted earnings of $38.07 per share. This figure exceeded the consensus forecast of $36.18 compiled from 11 Wall Street analysts surveyed by Zacks.
Revenue reached $4.84 billion, representing an 8.4% increase from the same period last year. Nevertheless, market watchers had anticipated $4.86 billion, resulting in AutoZone narrowly missing revenue expectations.
The quarter produced net income of $641.5 million. Operating profit expanded 6.6% to $923.8 million, elevating the operating margin beyond the 19% threshold.
The gross profit margin registered at 52.2% of sales, representing a 57 basis point contraction compared to the year-ago period. Management pointed to a 77 basis point headwind from non-cash LIFO charges as the primary driver, though this was partially mitigated by other favorable factors.
Operating expenses showed improvement relative to sales, declining to 33.1% from 33.3% in the prior-year quarter. Leadership attributed this enhancement to revenue expansion and disciplined cost control.
U.S. Operations Show Resilience
Both retail and professional customer segments demonstrated positive momentum throughout the quarter domestically. Comparable sales at U.S. locations increased 4.1%, while the overall company reported a 3.9% comp increase when currency effects are normalized.
In prepared remarks, CEO Phil Daniele noted that the company experienced balanced expansion across both customer categories. The company did not provide granular details separating retail DIY performance from commercial sales.
Foreign Markets Present Challenges
Overseas comparable sales showed a 16.6% jump on a nominal basis, though this figure contracts dramatically to merely 1.6% growth when currency fluctuations are accounted for.
Performance in the company’s Mexican and Brazilian divisions fell short of management’s internal projections. While Daniele acknowledged these disappointing results, he expressed confidence that AutoZone is still capturing additional market share in these regions.
The retailer’s expansion efforts yielded 82 net new locations during the three-month period. The domestic market received 57 additions, Mexico gained 20 stores, and Brazil added five units. This brings the company’s global retail network to 7,856 locations.
Management guidance calls for total store openings between 355 and 365 for the complete fiscal year.
Merchandise inventory expanded 10.8% year-over-year to $7.56 billion, reflecting both strategic growth investments and ongoing inflationary pressures.
During the quarter, the company deployed $586.3 million toward share repurchases, retiring 164,000 shares at a weighted average cost of $3,582 per share. The remaining authorization for the buyback program stood at $804.2 million at quarter’s conclusion.
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