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AZO US S&P 500Russell 1000 Earnings call · transcribed from the recording

AutoZone (AZO) · Q3 2026 results and valuation

Share price: $3237.73 · 2026-11-11

AutoZone is a retailer and distributor of automotive replacement parts, accessories, and maintenance items. The company serves individual consumers and commercial customers, such as repair garages and fleet owners, across the United States, Mexico, and Brazil. Source: 10-K annual report (2025-10-27)

Results Q3 2026 vs Q1 2026 · previous quarter · fiscal Q4 2026 · published 22 Sep 2026 and 26 May 2026

Net income up 45.2% on the previous quarter. Management sounded upbeat, in its script and in answers to analysts.

1 · Numbers

+45.2%

Net income vs Q1 2026

Outlook given

Net income 931.5M vs 641.5M

Revenue +36.2%

Against the same quarter last year (Q3 2025) it is +11.3% — part of the move on last quarter is seasonal.

Why Against the same quarter last year (+11.3%), net income rose by 11.3% because, excluding the $15 million LIFO charge this year and the $80 million LIFO charge last year, EBIT grew 4.4% and EPS grew 8.5%.

2 · How management spoke

Upbeat

More upbeat than 68% of company calls

Answers to analysts: typical, in line with the script.

Last call it was different: the answers were more upbeat than the script.

3 · What stood out

AutoZone invested approximately $1.5 billion in CapEx for growth priorities this year and expects to invest a similar amount in FY 2027.

Valuation

Is AutoZone undervalued?

Reverse DCF. Free cash flow from the last full fiscal year (2025-08-30), grown for 10 years, discounted back, plus a terminal value. “Implied growth” is the rate the current price assumes.

At 5.2% growth a year (3-year revenue growth), the model's fair value is $1249.89 a share — the stock trades 159% above it. Today's price assumes 15.2% growth a year.

Current price

$3237.73

close of 2026-11-11

Market implies growth of iThe yearly free-cash-flow growth, for the next 10 years, that today’s share price already assumes. If you believe the company grows faster than this, the stock is cheap under this model; slower, and it is expensive.

+15.2% for 10 yrs

Fair value / share

$1249.89

Buy below

$937.42

Price vs fair value

Overvalued 159%

Price vs buy-below price

Overvalued >200%

Official channels

The company's own website and social media accounts.

Read between the lines

  1. Guidance

    Excluding LIFO, gross margins are expected to be flat to up 25 basis points on a GAAP basis in FY 2027 due to the lumpiness of margins this year.

  2. Figure

    Total sales grew by 5.6% in Q4 2026 compared to Q3 2026.

    Source quote
    “We delivered total sales growth of +5.6%.”
  3. Figure

    Domestic DIY same-store sales declined 0.6% while domestic commercial sales grew 8.6% compared to last year's Q4.

    Source quote
    “Our domestic DIY same-store sales declined 0.6%, while our domestic commercial sales grew +8.6% versus last year's Q4.”
  4. Guidance

    The company invested approximately $1.5 billion in CapEx for growth priorities this year and expects to invest a similar amount in FY 2027.

  5. Guidance

    For FY 2026, total sales reached $20.3 billion, up 7.4%, and EPS was $152.55, up 5.3%.

    Source quote
    “Our sales totaled $20.3 billion, an all-time high, and the first time we have exceeded the $20 billion mark.”
3 more
  1. Guidance

    The company expects to open approximately 400 stores for the full year, an increase from the 374 new stores opened in FY 2026.

  2. Guidance

    The company increased its Mega Hub targets from 75 to 300 because attaching a Mega Hub to a satellite network results in an acceleration.

  3. Guidance

    The company expects same-store sales to be slightly stronger on a constant currency basis due to a forecast of low double-digit growth in Q1.

Tone

How upbeat the language was, compared with other companiesiTone counts positive minus negative finance words, adjusted for length. Executives mostly speak positively, so the labels compare each call with every company's latest call: “typical” is the middle third, “very upbeat” the top tenth, “cautious” the bottom tenth.. Dot: Q3 2026. Ring: Q1 2026.

Prepared remarks Upbeat (was cautious)
Answers to analysts Typical (was very upbeat)

Script and answers carried a similar tone, so the script's message held up under questioning.

Sentences that drove the tone
“As mentioned earlier, these expanded assortments in these hubs are a key element needed to continue to accelerate growth and market share gains in both our DIY and more specifically...”
“While we grew slower than Q3's rate, we felt we gained momentum as the quarter moved along, and we liked our sales growth potential heading into the new year.”
“As a reminder, our stores are our highest and best returning assets, and we are happy with these accelerated openings.”

Full figures

USD · SEC EDGAR XBRL (10-Q, period end 2026-08-29)

Metric Q3 2026period end 2026-08-29 Q1 2026period end 2026-05-09 Change Q3 2025 YoY
Revenue 6.59B 4.84B +36.2% 6.24B +5.6%
Gross profit 3.52B 2.52B +39.3% 3.22B +9.4%
Operating income 1.32B 923.8M +42.6% 1.20B +10.1%
Net income 931.5M 641.5M +45.2% 836.9M +11.3%
EPS 55.86 38.07 +46.7% 48.70 +14.7%
P/E today 21.1 19.4 24.0 −4.6 29.0 −9.6

Topics

Most discussed now

  • AutoZone's average weekly sales per program were $18,700, up 2.7% versus last year.
  • AutoZone will discuss its international sales results and the progress it is making on its new store build-out.
  • This expanded Mexico supply chain will allow us to serve AutoZone's customers better, reduce supply chain costs, and better support...
  • AutoZone continues to see fairly significant share gains in that portion of the business.
  • AutoZone needed to expand its supply chain to make sure that it could accommodate what it believes is the right...

Faded since Q1 2026

  • Fading From a gross margin standpoint, what AutoZone has said is that the national account business is always very, very competitive.
  • Fading All those things point to better execution, and AutoZone thinks the opportunity to gain share specifically on the commercial side...
  • Fading The first thing that is driving that performance is, again, AutoZone has got a much stronger commercial business than it...
  • Fading Its customers are excited by its commercial offering as AutoZone has deployed more parts in local markets closer to the...

Latest announcements

Official filings, newest first. Summaries are generated from each filing and its attachment; every figure is checked against the source.

  • Director or officer change; Regulation FD disclosure · SEC 8-K

    AutoZone, Inc. announced that Chief Financial Officer Jamere Jackson resigned effective November 25, 2026, to join FedEx Corporation, with J. Scott Murphy appointed as the interim principal financial officer.

  • Director or officer change · SEC 8-K

    Claire R. McDonough announced on October 6, 2026, her decision not to stand for reelection to the AutoZone, Inc. Board of Directors due to a new executive role.

  • Results of operations · SEC 8-K

    AutoZone reported fourth-quarter net sales of $6.6 billion, up 5.6% from the prior year, and annual sales of $20.3 billion, an increase of 7.4% year over year.

  • Material agreement; New financial obligation · SEC 8-K

    AutoZone, Inc. completed the sale of $850,000,000 of its 4.950% Senior Notes due 2031 on July 14, 2026.

  • Material agreement · SEC 8-K

    AutoZone, Inc. entered into an underwriting agreement on July 7, 2026, to issue and sell $850,000,000 of its 4.950% Notes due 2031.

  • Other events · SEC 8-K

    AutoZone authorized an additional $1.5 billion for common stock repurchases, bringing the total authorized amount since 1998 to $42.2 billion.

  • Results of operations · SEC 8-K

    AutoZone reported net sales of $4.8 billion, up 8.4% from the prior year, with a net income of $641.5 million and diluted earnings per share of $38.07 compared to $35.36 last year.

  • Results of operations · SEC 8-K

    AutoZone reported net sales of $4.3 billion for the second quarter, an 8.1% increase from the same period last year, with a diluted earnings per share of $27.63 compared to $28.29.

Catalyst calendar

management-stated targets — from the latest earnings call; plans, not promises.

  1. late FY 2028

    new León, Mexico DC coming online

    Source quote
    “We also held our grand opening for our relocated Monterrey, Mexico distribution center, which is almost 2x the size of the previous distribution center, and we broke ground on our new León, Mexico DC, which will come online in late FY 2028 to support our international expansion.”
  2. first quarter of FY 2027

    expected same-store sales to be relatively flat with average ticket to remain around +5%

    Source quote
    “For the first quarter of FY 2027, we expect same-store sales to be relatively flat with average ticket to remain around +5% that we saw in Q4.”
  3. Q1

    expected trend of ticket average growth of around 5% to continue

    Source quote
    “We would expect this trend to continue into Q1.”
  4. Q1

    sales may inflect upward

    Source quote
    “Importantly, we saw an uptick in sales in the last four weeks of the quarter, which gives us confidence that sales may inflect upward in Q1.”
  5. Q1

    report low double-digit growth

    Source quote
    “We are expecting same-store sales to be slightly stronger on a constant currency basis as we expect to report low double-digit growth in Q1.”

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