AutoZone Reports $6.59 Billion in Fiscal Q4 Sales as Earnings Rise

AutoZone reported $6.59 billion in net sales for its fiscal fourth quarter, up 5.6% from a year earlier, as higher sales and a sharply improved gross margin lifted quarterly profit. Net income rose to $931.6 million from $837.0 million, while diluted earnings per share increased to $56.05 from $48.71.

The Memphis-based auto-parts retailer said the 16-week quarter ended August 29 produced $6.5949 billion in sales, compared with $6.2427 billion in the same period of fiscal 2025. Operating profit increased 10.1% to $1.32 billion. The results closed a fiscal year in which AutoZone generated $20.34 billion in sales, 7.4% more than the prior year.

AutoZone’s fiscal fourth-quarter results also showed a mixed same-store sales picture. Total company same-store sales increased 2.7% on a reported basis and 1.5% on a constant-currency basis. Domestic same-store sales rose 1.6%. International same-store sales increased 10.7% as reported, but only 1.3% when the effect of foreign-exchange movements was removed.

Margin gains played a large role in the earnings increase

The biggest change in the quarterly profit profile came from gross margin. Gross profit was $3.52 billion, equal to 53.3% of sales, an increase of 182 basis points from a year earlier. AutoZone said tariff refunds contributed 145 basis points to the improvement, while a net non-cash LIFO benefit added another 105 basis points. A higher mix of commercial sales partly offset those gains.

That composition matters when reading the quarter. Sales were higher, but the profit increase was helped materially by items that do not simply reflect stronger underlying merchandise demand. The tariff refunds and LIFO accounting effect together were larger than the total year-over-year increase in gross-margin percentage because other factors worked in the opposite direction.

Operating expenses also moved higher. Selling, general and administrative expenses were $2.20 billion, or 33.4% of sales, compared with 32.4% in the prior-year quarter. AutoZone attributed the deleverage mainly to spending on growth initiatives. Even with that higher expense burden, the gross-margin improvement was enough to lift operating profit to $1.317 billion from $1.196 billion.

At the bottom line, quarterly net income increased 11.3% to $931.6 million. Diluted earnings per share rose faster, by about 15%, helped in part by a lower diluted share count. AutoZone reported 16.62 million weighted-average diluted shares for the quarter, down from 17.18 million a year earlier.

The full-year margin picture was less favorable than the fourth-quarter result alone suggests. For fiscal 2026, gross profit was 52.3% of sales, down from 52.6% in fiscal 2025. AutoZone said the annual margin was reduced by a 61-basis-point net non-cash LIFO impact, partly offset by a 48-basis-point benefit from tariff refunds. Full-year net income nevertheless increased to $2.57 billion from $2.50 billion.

Sales improved late in the quarter as AutoZone kept expanding

Chief Executive Phil Daniele said the selling environment was difficult during the first eight weeks of the quarter, but that results strengthened during the final eight weeks. Management said it believes the company continued to gain market share and expects sales in the United States, Mexico and Brazil to accelerate in fiscal 2027.

Store expansion remained a major part of AutoZone’s growth strategy. The company opened 175 stores during the quarter, including 97 in the United States, 68 in Mexico and 10 in Brazil. Sixteen of the U.S. openings were Mega Hub locations, which carry broader inventories and are intended to improve parts availability and delivery speed for both do-it-yourself and professional customers.

AutoZone ended the fiscal year with 8,031 stores across its three markets: 6,863 in the United States, 1,001 in Mexico and 167 in Brazil. The company had crossed the 8,000-store threshold earlier in September with the opening of a location in Murfreesboro, Tennessee. A year earlier, its global footprint was smaller, so new units contributed alongside same-store growth to the increase in total sales.

The retailer’s international numbers also show why reported sales growth and constant-currency growth can tell different stories. International same-store sales increased 10.7% in the quarter as reported, but the constant-currency increase was 1.3%. For the full year, international same-store sales rose 13.5% as reported and 2.2% in constant currency. Foreign-exchange movements therefore provided a meaningful boost to the reported growth rates.

Domestic same-store sales were steadier. They rose 1.6% in the quarter and 3.3% for the full year. Because AutoZone’s U.S. store base remains much larger than its international footprint, domestic trends continue to carry substantial weight in the company’s overall operating performance even as Mexico and Brazil expand.

Cash generation supported investment and continued buybacks

AutoZone generated $3.30 billion in cash from operations during fiscal 2026, up from $3.16 billion in the prior year. Capital spending increased to $1.50 billion from $1.37 billion as the company continued opening stores, building out its distribution and inventory capabilities, and investing in other growth projects.

The company also continued its long-running share repurchase program. Cumulative repurchases since fiscal 1998 reached $40.54 billion by the end of August, up from $38.52 billion a year earlier. AutoZone had about $1.61 billion remaining under its repurchase authorization at fiscal year-end. The number of shares outstanding at the end of the quarter fell to 16.17 million from 16.67 million a year earlier.

That shrinking share count helps explain why per-share earnings can grow faster than net income. In the fourth quarter, net income rose by about 11%, while diluted EPS increased by about 15%. The company’s buyback program reduced the number of shares over which its earnings were spread, amplifying the per-share increase.

AutoZone enters fiscal 2027 with management pointing to stronger sales momentum late in the quarter, continued store expansion and further work on inventory availability and delivery speed. The comparison investors will need to watch is whether those operating gains can carry forward without the same level of help from tariff refunds and favorable LIFO effects that boosted fourth-quarter gross margin.