AutoZone, Inc.

AutoZone reported Q3 total sales of $4.8 billion, up 8.4% year over year, with domestic same-store sales up 4.1% and international same-store sales up 1.6% on a constant-currency basis. EPS was $38.07, up 7.7%, and net income was $641 million, up 5.4%. Gross margin was 52.2%, down 57 basis points, impacted by a $20 million noncash LIFO charge; excluding LIFO, gross margin was up 20 basis points and EPS would have been up 12.5%. For Q4, management expects about a $62 million FX benefit to revenue, a $19 million benefit to EBIT, and a $0.78 benefit to EPS if current rates hold, while LIFO is expected to reduce EBIT by about $30 million and EPS by about $1.40. They also expect average ticket growth in the mid-4% range in DIY, same-store sales in international to be similar to Q3, and SG&A growth to remain in a similar range to Q3.

Philip Daniele framed the quarter as evidence that AutoZone is gaining share and executing well, highlighting 8.4% sales growth, stronger store productivity, and progress in domestic commercial and international expansion. He emphasized that the company is still early in its hub and mega hub rollout, sees long-term opportunity in both DIY and commercial, and believes recent store investments are outperforming original expectations. His tone was confident but cautious, especially on the fourth quarter and on international consumer conditions.

Jamere Jackson said Q3 total sales were $4.8 billion, EBIT was $924 million, net income was $641 million, and EPS was $38.07. He noted gross margin of 52.2%, a $20 million LIFO charge in the quarter, and a year-to-date LIFO total of $177 million; for FY26 he expects about $207 million of LIFO charges, including roughly $30 million in Q4. He also cited $455 million of free cash flow in Q3 and $1.1 billion year to date, leverage of 2.5x EBITDAR, $586 million of share repurchases in the quarter, and $800 million remaining on the buyback authorization.

Analysts pressed management on whether Q4 comp growth could slow as inflation moderates, and whether weather, supply-chain/lubricants, or tax-refund benefit roll-off were masking underlying trends. Management said the softer late-quarter trend was mainly weather-driven, expects a normal or hotter summer, and does not see a simple one-for-one read-through from lower inflation to lower comps because share gains, new stores, and improving execution should offset some of that. Questions also focused on mega hub returns and whether competitors are copying the strategy; management said the mega hub pipeline is strong, performance is outperforming expectations, and the strategy has not been materially affected by rivals.