Autozone 2026 Q1 Earnings Net Income Drops 6.0% Amid Revenue Growth

AutoZone reported fiscal 2026 Q1 earnings on Dec 9, 2025, with revenue rising 8.2% to $4.63 billion but EPS declining 4.6% to $31.88. The company provided guidance for 350–360 global store openings and $1.6B in CAPEX, aligning with expansion plans.

Revenue

Driven by an 8.2% revenue increase to $4.63 billion, AutoZone's performance in Q1 2026 was supported by strong domestic and international same-store sales growth of 4.8% and 3.7%, respectively. The commercial business segment also contributed significantly, experiencing a 14.5% acceleration in sales.

Earnings/Net Income

AutoZone’s net income fell to $530.82 million in Q1 2026, a 6.0% decline from $564.93 million in the prior year. Despite the EPS and net income declines, AutoZone's sustained profitability over two decades highlights its operational resilience.

Price Action

The stock price of AutoZone has dropped 5.36% during the latest trading day, has tumbled 8.62% during the most recent full trading week, and has dropped 4.82% month-to-date.

Post-Earnings Price Action Review

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CEO Commentary

Philip Daniele, CEO of AutoZone, highlighted Q1 2026 results with 8.2% sales growth driven by domestic and international same-store sales (4.8% and 3.7%, respectively) and commercial business acceleration (14.5% growth). He emphasized challenges, including a noncash $98M LIFO charge impacting EPS by 4.6%, but noted adjusted EPS growth of 8.9% excluding this. Strategic priorities include expanding Hubs, Mega-Hubs, and international store openings (53 globally in Q1), alongside supply chain investments. Daniele expressed cautious optimism, citing resilience in DIY and commercial sales, improved execution, and confidence in FY 2026 growth despite weather-related headwinds and inflation.

Guidance

AutoZone expects 350–360 global store openings in FY 2026, $1.6B in CAPEX for accelerated growth, and $60M LIFO charges per quarter for the next three quarters. FX is projected to provide a $0.77/share benefit in Q2, while gross margin pressures from commercial mix shifts will be offset by merch margin actions. The company anticipates disciplined SG&A growth aligned with store expansion, with operating margins stabilizing post-2028. FY 2026 guidance includes resilient DIY and commercial sales, international market share gains, and free cash flow generation to support shareholder returns.

Additional News

Analysts revised AutoZone’s price targets downward in December 2025 due to margin pressures from accelerated store growth and elevated SG&A costs. DA Davidson cut its target to $4,500 from $4,850, citing near-term margin compression but remaining bullish on long-term benefits from new stores and distribution capabilities. Guggenheim and Wells Fargo also reduced targets to $4,400 and $4,500, respectively, while Evercore ISI and Wolfe Research set targets at $4,100 and $4,487. The company’s 53 Q1 international store openings underscore its expansion focus, with analysts emphasizing that disciplined execution could offset current margin headwinds.