📈 AZO — Earnings Recap

EX-99.1 2 exh_991.htm PRESS RELEASE EdgarFiling EXHIBIT 99.1 AutoZone 2nd Quarter Total Company Same Store Sales Increase 3.3%; Domestic Same Store Sales Increase 3.4%; EPS of $27.63 MEMPHIS, Tenn., March 03, 2026 (GLOBE NEWSWIRE) -- AutoZone, Inc. (NYSE: AZO) today reported net sales of $4.3 billion for its second quarter (12 weeks) ended February 14, 2026, an increase of 8.1% from the second quarter of fiscal 2025 (12 weeks). Same store sales, or sales for our domestic and international stores open at least one year, are as follows: Constant Currency Constant Currency 12 Weeks 12 Weeks* 24 Weeks 24 Weeks* Domestic 3.4 % 3.4 % 4.2 % 4.2 % International 17.1 % 2.5 % 14.2 % 3.1 % Total Company 5.2 % 3.3 % 5.4 % 4.0 % * Excludes impacts from fluctuations of foreign exchange rates. For the quarter, gross profit, as a percentage of sales, was 52.5%, a decrease of 137 basis points versus the prior year. The decrease in gross margin was driven by a 138 basis point non-cash LIFO charge. Operating expenses, as a percentage of sales, were 36.1% versus last year at 36.0%. Deleverage was driven by investments to support our growth initiatives. Operating profit decreased 1.2% to $698.5 million. Net income for the quarter was $468.9 million compared to $487.9 million in the same period last year, while diluted earnings per share were $27.63 compared to last year at $28.29. Under its share repurchase program, AutoZone repurchased 85 thousand shares of its common stock at an average price per share of $3,666, for a total investment of $310.8 million. At the end of the second quarter, the Company had $1.4 billion remaining under its current share repurchase authorization. The Company s inventory increased 13.1% over the same period last year, driven primarily by growth initiatives and inflation. Net inventory, defined as merchandise inventories less accounts payable, on a per store basis, was negative $105 thousand versus negative $161 thousand last year and negative $145 thousand last quarter. I want to thank our AutoZoners across the company for delivering solid financial results this past quarter. We continue to be pleased with our strategies to grow sales. Domestically, both DIY and Commercial sales continued to perform well this past quarter in spite of winter storms causing disruptions the last week of January and the first week of February. While our international sales, in constant currency, were slightly below our expectations, we believe our market share continues to grow as we outpace our competition in both Mexico and Brazil. We were also pleased to have opened 64 net new stores globally in the quarter, in line with our expectations to open approximately 350-360 stores for the full fiscal year. As we remain focused on gaining market share across our highly fragmented industry, we remain committed to a disciplined approach of increasing earnings and cash flows to drive shareholder value, said Phil Daniele, President and Chief Executive Officer. During the quarter ended February 14, 2026, AutoZone opened 43 new stores in the U.S., 18 in Mexico and three in Brazil for a total of 64 net new stores. As of February 14, 2026, the Company had 6,709 stores in the U.S., 913 in Mexico and 152 in Brazil for a total store count of 7,774. AutoZone is a leading retailer and distributor of automotive replacement parts and accessories in the Americas. Each store carries an extensive product line for cars, sport utility vehicles, vans and light duty trucks, including new and remanufactured automotive hard parts, maintenance items, accessories, and non-automotive products. The majority of stores have a commercial sales program that provides prompt delivery of parts and other products and commercial credit to local, regional and national repair garages, dealers, service stations, fleet owners and other accounts. AutoZone also sells automotive hard parts, maintenance items, accessories and non-automotive products through www.autozone.com, and our commercial customers can make purchases through www.autozonepro.com. Additionally, we sell the ALLDATA brand of automotive diagnostic, repair, collision and shop management software through www.alldata.com. We also provide product information on our Duralast branded products through www.duralastparts.com. AutoZone does not derive revenue from automotive repair or installation services. AutoZone will host a conference call this morning, Tuesday, March 3, 2026, beginning at 10:00 a.m. (ET) to discuss its second quarter results. This call is being webcast and can be accessed, along with supporting slides, at AutoZone s website at www.autozone.com by clicking on Investor Relations. Investors may also listen to the call by dialing (888) 506-0062, passcode AUTOZONE. In addition, a telephone replay will be available by dialing (877) 481-4010, replay passcode 53591 through March 31, 2026. This release includes certain financial information not derived in accordance with generally accepted accounting principles ( GAAP ). These non-GAAP measures include adjustments to reflect return on invested capital, adjusted debt and adjusted debt to earnings before interest, taxes, depreciation, amortization, rent and share-based expense ( EBITDAR ). The Company believes that the presentation of these non-GAAP measures provides information that is useful to investors as it indicates more clearly the Company s comparative year-to-year operating results, but this information should not be considered a substitute for any measures derived in accordance with GAAP. Management targets the Company s capital structure in order to maintain its investment grade credit ratings. The Company believes this is important information for the management of its debt levels and share repurchases. We have included a reconciliation of this additional information to the most comparable GAAP measures in the accompanying reconciliation tables. Certain statements herein constitute forward-looking statements that are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements typically use words such as believe, anticipate, should, intend, plan, will, expect, estimate, project, positioned, strategy, seek, may, could and similar expressions. These statements are based on assumptions and assessments made by our management in light of experience, historical trends, current conditions, expected future developments and other factors that we believe appropriate. These forward-looking statements are subject to a number of risks and uncertainties, including without limitation: product demand, due to changes in fuel prices, miles driven or otherwise; energy prices; weather, including extreme temperatures and natural disasters; competition; credit market conditions; cash flows; access to financing on favorable terms; future stock repurchases; the impact of recessionary conditions; consumer debt levels; changes in laws or regulations; risks associated with self-insurance; war and the prospect of war, including terrorist activity; public health issues; inflation, including wage inflation; exchange rates; the ability to hire, train and retain qualified employees, including members of management; construction delays; failure or interruption of our information technology systems; issues relating to the confidentiality, integrity or availability of information, including due to cyber-attacks; historic growth rate sustainability; downgrade of our credit ratings; damage to our reputation; challenges associated with doing business in and expanding into international markets; origin and raw material costs of suppliers; inventory availability; disruption in our supply chain; tariffs, trade policies and other geopolitical factors; new accounting standards; our ability to execute our growth initiatives; and other business interruptions. These and other risks and uncertainties are discussed in more detail in the Risk Factors section contained in Item 1A under Part 1 of our Annual Report on Form 10-K for the year ended August 30, 2025. Forward-looking statements are not guarantees of future performance and actual results may differ materially from those contemplated by such forward-looking statements. Events described above and in the Risk Factors section could materially and adversely affect our business. However, it is not possible to identify or predict all such risks and other factors that could affect these forward-looking statements. Forward-looking statements speak only as of the date made. Except as required by applicable law, we undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Contact Information: Financial: Brian Campbell at (901) 495-7005, brian.campbell@autozone.com Media: Jennifer Hughes at (901) 495-6022, jennifer.hughes@autozone.com AutoZone's 2nd Quarter Highlights - Fiscal 2026 Condensed Consolidated Statements of Operations 2nd Quarter, FY2026 (in thousands, except per share data) GAAP Results 12 Weeks Ended 12 Weeks Ended February 14, 2026 February 15, 2025 Net sales $ 4,274,098 $ 3,952,012 Cost of sales 2,030,740 1,823,611 Gross profit 2,243,358 2,128,401 Operating, SG&A expenses 1,544,902 1,421,634 Operating profit (EBIT) 698,456 706,767 Interest expense, net 107,205 108,822 Income before taxes 591,251 597,945 Income tax expense 122,391 110,022 Net income $ 468,860 $ 487,923 Net income per share: Basic $ 28.29 $ 29.06 Diluted $ 27.63 $ 28.29 Weighted average shares outstanding: Basic 16,573 16,788 Diluted 16,969 17,245 Year-To-Date 2nd Quarter, FY2026 (in thousands, except per share data) GAAP Results 24 Weeks Ended 24 Weeks Ended February 14, 2026 February 15, 2025 Net sales $ 8,902,727 $ 8,231,652 Cost of sales 4,300,055 3,835,194 Gross profit 4,602,672 4,396,458 Operating, SG&A expenses 3,120,011 2,848,542 Operating profit (EBIT) 1,482,661 1,547,916 Interest expense, net 213,475 216,451 Income before taxes 1,269,186 1,331,465 Income tax expense 269,503 278,609 Net income $ 999,683 $ 1,052,856 Net income per share: Basic $ 60.18 $ 62.48 Diluted $ 58.68 $ 60.83 Weighted average shares outstanding: Basic 16,612 16,850 Diluted 17,036 17,307 Selected Balance Sheet Information (in thousands) February 14, 2026 February 15, 2025 August 30, 2025 Cash and cash equivalents $ 285,492 $ 300,905 $ 271,803 Merchandise inventories 7,449,330 6,588,586 7,025,688 Current assets 8,797,362 7,802,598 8,341,379 Property and equipment, net 7,554,520 6,449,129 7,062,509 Operating lease right-of-use assets 3,300,213 3,120,826 3,194,666 Total assets 20,403,883 18,116,279 19,355,324 Accounts payable 8,262,824 7,784,717 8,025,590 Current liabilities 9,886,491 9,267,357 9,519,397 Operating lease liabilities, less current portion 3,175,110 3,007,455 3,093,936 Total Debt 8,907,052 9,052,099 8,799,775 Stockholders' deficit (2,908,769 ) (4,457,773 ) (3,414,313 ) Working capital (1,089,129 ) (1,464,759 ) (1,178,018 ) AutoZone's 2nd Quarter Highlights - Fiscal 2026 Condensed Consolidated Statements of Operations Adjusted Debt / EBITDAR (in thousands, except adjusted debt to EBITDAR ratio) Trailing 4 Quarters February 14, 2026 February 15, 2025 Net income $ 2,445,074 $ 2,606,790 Add: Interest expense 472,848 474,025 Income tax expense 626,979 663,963 EBIT 3,544,901 3,744,778 Add: Depreciation and amortization 645,942 575,654 Rent expense (1) 478,652 459,840 Share-based expense 135,623 116,848 EBITDAR $ 4,805,118 $ 4,897,120 Debt $ 8,907,052 $ 9,052,099 Financing lease liabilities 432,330 385,899 Add: Rent x 6 (1) 2,871,912 2,759,040 Adjusted debt $ 12,211,294 $ 12,197,038 Adjusted debt to EBITDAR 2.5 2.5 Adjusted Return on Invested Capital (ROIC) (in thousands, except ROIC) Trailing 4 Quarters February 14, 2026 February 15, 2025 Net income $ 2,445,074 $ 2,606,790 Adjustments: Interest expense 472,848 474,025 Rent expense (1) 478,652 459,840 Tax effect (2) (194,105 ) (189,575 ) Adjusted after-tax return $ 3,202,469 $ 3,351,080 Average debt (3) $ 8,847,030 $ 8,943,172 Average stockholders' deficit (3) (3,596,773 ) (4,711,173 ) Add: Rent x 6 (1) 2,871,912 2,759,040 Average financing lease liabilities (3) 399,840 369,622 Invested capital $ 8,522,009 $ 7,360,661 Adjusted After-Tax ROIC 37.6 % 45.5 % (1) The table below outlines the calculation of rent expense and reconciles rent expense to total lease cost, per ASC 842, the most directly comparable GAAP financial measure, for the trailing four quarters ended February 14, 2026, and February 15, 2025 . Trailing 4 Quarters (in thousands) February 14, 2026 February 15, 2025 Total lease cost, per ASC 842 $ 630,737 $ 614,312 Less: Financing lease interest and amortization (106,221 ) (113,698 ) Less: Variable operating lease components, related to insurance and common area maintenance (45,864 ) (40,774 ) Rent expense $ 478,652 $ 459,840 (2) Effective tax rate over the trailing four quarters ended February 14, 2026, and February 15, 2025, was 20.4 % and 20.3%, respectively. (3) All averages are computed based on trailing five quarter balances. Other Selected Financial Information (in thousands) February 14, 2026 February 15, 2025 Cumulative share repurchases ($ since fiscal 1998) $ 39,259,531 $ 37,820,600 Remaining share repurchase authorization ($) 1,390,469 1,329,400 Cumulative share repurchases (shares since fiscal 1998) 155,821 155,442 Shares outstanding, end of quarter 16,519 16,747 12 Weeks Ended 12 Weeks Ended 24 Weeks Ended 24 Weeks Ended February 14, 2026 February 15, 2025 February 14, 2026 February 15, 2025 Depreciation and amortization $ 155,640 $ 137,918 $ 303,834 $ 271,091 Cash flow from operations 342,462 583,749 1,286,633 1,395,552 Capital spending 327,530 292,702 641,703 539,737 AutoZone's 2nd Quarter Highlights - Fiscal 2026 Condensed Consolidated Statements of Operations Selected Operating Highlights Store Count & Square Footage 12 Weeks Ended 12 Weeks Ended 24 Weeks Ended 24 Weeks Ended February 14, 2026 February 15, 2025 February 14, 2026 February 15, 2025 Domestic: Beginning stores 6,666 6,455 6,627 6,432 Stores opened 43 28 82 51 Stores closed - - - - Ending domestic stores 6,709 6,483 6,709 6,483 Relocated stores 4 1 7 3 Stores with commercial programs 6,310 5,962 6,310 5,962 Square footage (in thousands) 44,750 43,049 44,750 43,049 Mexico: Beginning stores 895 800 883 794 Stores opened 18 13 30 19 Ending Mexico stores 913 813 913 813 Brazil: Beginning stores 149 132 147 127 Stores opened 3 4 5 9 Ending Brazil stores 152 136 152 136 Total 7,774 7,432 7,774 7,432 Total Company stores opened, net 64 45 117 79 Square footage (in thousands) 52,697 50,118 52,697 50,118 Square footage per store 6,779 6,744 6,779 6,744 Sales Statistics ($ in thousands, except sales per average square foot) 12 Weeks Ended 12 Weeks Ended Trailing 4 Quarters Trailing 4 Quarters Total AutoZone Stores (Domestic, Mexico and Brazil) February 14, 2026 February 15, 2025 February 14, 2026 February 15, 2025 (1) Sales per average store $ 552 $ 523 $ 2,579 $ 2,506 Sales per average square foot $ 81 $ 78 $ 381 $ 373 Domestic Commercial Total domestic commercial sales $ 1,154,800 $ 1,051,765 $ 5,478,984 $ 4,989,711 % Increase vs. LY 9.8 % 7.3 % 9.8 % 6.6 % Average sales per program per week $ 15.4 $ 14.7 $ 17.2 $ 16.0 % Increase vs. LY 4.8 % 4.3 % 7.5 % 0.6 % (1) Trailing 4 Quarters ending February 15, 2025 include an additional week of sales of approximately $359.1 million for Total AutoZone Stores with $95.7 million for Domestic Commercial. Sales per average store and sales per square foot benefited from the additional week by $49K, and $7K, respectively. 12 Weeks Ended 12 Weeks Ended 24 Weeks Ended 24 Weeks Ended Same store sales (2) February 14, 2026 February 15, 2025 February 14, 2026 February 15, 2025 Domestic 3.4 % 1.9 % 4.2 % 1.0 % International 17.1 % (8.2 %) 14.2 % (3.9 %) Total Company 5.2 % 0.5 % 5.4 % 0.4 % International - Constant Currency 2.5 % 9.5 % 3.1 % 11.5 % Total Company - Constant Currency 3.3 % 2.9 % 4.0 % 2.4 % (2) Same store sales are based on sales for all stores open at least one year. Constant Currency same store sales exclude the impact of fluctuations of foreign currency exchange rates by converting both the current year and prior year international results at the prior year foreign currency exchange rate. Inventory Statistics (Total Stores) as of as of February 14, 2026 February 15, 2025 Accounts payable/inventory 110.9 % 118.2 % ($ in thousands) Inventory $ 7,449,330 $ 6,588,586 Inventory per store 958 887 Net inventory (net of payables) (813,494 ) (1,196,131 ) Net inventory/per store (105 ) (161 ) Trailing 5 Quarters February 14, 2026 February 15, 2025 Inventory turns 1.3 x 1.4 x