AutoZone Inc. (NYSE: AZO) reported fiscal second‑quarter 2026 results on March 3 2026, posting net sales of $4.27 billion, an 8.1 % year‑over‑year increase that fell short of the consensus estimate range of $4.30 billion to $4.35 billion. The company’s diluted earnings per share were $27.63, beating the consensus range of $27.10 to $27.59 and exceeding the prior‑year EPS of $28.29.
Same‑store sales grew 3.3 % overall and 3.4 % domestically, while international comparable sales surged 17.1 %. Gross profit margin contracted to 52.5 % of sales, a decline of 137 basis points from the prior year, largely driven by a $59 million non‑cash LIFO charge that reflected inflationary pressure on inventory costs. Operating expenses rose to 36.1 % of sales, up 0.1 percentage point, and operating profit fell 1.2 % to $698.5 million.
Net income declined to $468.9 million from $487.9 million a year earlier, a drop that was offset by a share‑repurchase program that bought 85,000 shares at an average price of $3,666, totaling $310.8 million. Inventory increased 13.1 % year‑over‑year, with net inventory per store at negative $105,000 versus negative $161,000 a year ago. AutoZone opened 64 net new stores globally—43 in the U.S., 18 in Mexico and 3 in Brazil—bringing its total store count to 7,774.
The earnings beat was largely attributable to disciplined cost management and the impact of the share‑repurchase program, which amplified earnings per share. However, the revenue miss and margin compression reflected the ongoing impact of inflation and the LIFO charge, which eroded gross margin and pressured operating profitability. Management noted that the company remains focused on expanding its commercial and DIY channels while managing the cost impacts of the LIFO charge and currency headwinds.
Investors reacted negatively to the results, citing the revenue miss and margin compression as key concerns, despite the EPS beat. The company’s guidance for the remainder of the fiscal year was not disclosed in the release, leaving analysts to weigh the implications of the current quarter’s performance on future outlooks.
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