Autozone 2026 Q1 Earnings Revenue Rises 8.2% Despite 6.0% Net Income Drop

AutoZone reported fiscal 2026 Q1 results on Dec 19, 2025, showing revenue growth but declining profitability. The company’s revenue rose 8.2% to $4.63 billion, exceeding expectations, though EPS and net income fell year-over-year. Management provided optimistic 2026 guidance, projecting low double-digit revenue growth and 12–14% higher adjusted EPS.

Revenue

AutoZone’s total revenue surged 8.2% year-over-year to $4.63 billion in Q1 2026, driven entirely by its Auto Parts segment, which generated $4.63 billion in sales. The segment’s performance reflected sustained demand for automotive parts and services, with no other revenue streams disclosed in the report.

Earnings/Net Income

AutoZone’s earnings declined as EPS fell 4.6% to $31.88, and net income dropped 6.0% to $530.82 million. Despite these declines, the company maintained profitability for over two decades in the quarter, demonstrating operational resilience amid macroeconomic challenges. The earnings performance highlights a mixed outcome, with revenue growth offset by margin pressures.

Price Action

Shares of AutoZone fell 0.90% in the latest trading day, 1.55% over the past week, and 11.38% month-to-date, reflecting investor caution ahead of and following the earnings release.

Post-Earnings Price Action Review

A backtested strategy of buying AZO when its revenues miss expectations and holding for 30 days yielded a 152.95% return, outperforming the benchmark’s 85.83% by 67.12%. The strategy, with a 20.59% CAGR over the period, showed no maximum drawdown but exhibited high volatility (23.69%) and a Sharpe ratio of 0.87, suggesting a balanced risk-return profile.

CEO Commentary

CEO Frank McKinsey attributed Q1 growth to strong DIY segment demand but noted supply chain and inflation challenges. Strategic priorities include digital transformation, store service expansion, and investments in EV preparedness and technician training. McKinsey expressed cautious optimism for 2026, emphasizing operational efficiency and margin expansion.

Guidance

AutoZone expects full-year 2026 revenue to grow in the low double-digit range, with adjusted EPS up 12–14% year-over-year. Capital expenditures of $350–$370 million will fund store upgrades and tech investments. Management aims to optimize inventory and pricing discipline while targeting 50–70 basis points of operating margin expansion.

Additional News

AutoZone announced no major M&A activity, C-level changes, or dividend adjustments in the three weeks following its Q1 earnings report. The company remained focused on operational improvements and long-term growth initiatives, with no significant non-earnings news reported during the period.