Download PDF

1. Company Snapshot

1.a. Company Description

AutoZone, Inc.retails and distributes automotive replacement parts and accessories.The company offers various products for cars, sport utility vehicles, vans, and light trucks, including new and remanufactured automotive hard parts, maintenance items, accessories, and non-automotive products.


Its products include A/C compressors, batteries and accessories, bearings, belts and hoses, calipers, chassis, clutches, CV axles, engines, fuel pumps, fuses, ignition and lighting products, mufflers, radiators, starters and alternators, thermostats, and water pumps, as well as tire repairs.In addition, the company offers maintenance products, such as antifreeze and windshield washer fluids; brake drums, rotors, shoes, and pads; brake and power steering fluids, and oil and fuel additives; oil and transmission fluids; oil, cabin, air, fuel, and transmission filters; oxygen sensors; paints and accessories; refrigerants and accessories; shock absorbers and struts; spark plugs and wires; and windshield wipers.Further, it provides air fresheners, cell phone accessories, drinks and snacks, floor mats and seat covers, interior and exterior accessories, mirrors, performance products, protectants and cleaners, sealants and adhesives, steering wheel covers, stereos and radios, tools, and wash and wax products, as well as towing services.


Additionally, the company provides a sales program that offers commercial credit and delivery of parts and other products; sells automotive diagnostic and repair software under the ALLDATA brand through alldata.com and alldatadiy.com; and automotive hard parts, maintenance items, accessories, and non-automotive products through autozone.com.As of November 20, 2021, it operated 6,066 stores in the United States; 666 stores in Mexico; and 53 stores in Brazil.The company was founded in 1979 and is based in Memphis, Tennessee.

Show Full description

1.b. Last Insights on AZO

Breaking News: AutoZone Inc reported Q2 2026 earnings, with total sales growing 8.1% to $4.3 billion. Earnings per share decreased 2.3% to $27.63, but beat estimates of $27.1. Excluding a $59 million LIFO charge, EPS would have increased. The company's strong sales growth was overshadowed by margin declines. Analysts had expected $27.29 EPS and $4.31B revenue. Some analysts recommend holding the stock, with recent forecasts changes from Wall Street's most accurate analysts indicating a positive outlook. A few analysts have a buy recommendation.

1.c. Company Highlights

2. AutoZone's Q2 2026 Earnings: A Mixed Bag

AutoZone, Inc.'s second quarter 2026 earnings release conference call highlighted the company's total sales growth of 8.1% to $4.3 billion, with domestic same-store sales up 3.4% and international same-store sales up 2.5% on a constant currency basis. Despite a non-cash $59 million LIFO charge, which negatively impacted gross margin, operating profit, and EPS, the company's EPS came out at $27.63, beating estimates of $27.15. Gross margin was 52.5%, down 137 basis points year-over-year, mainly due to the LIFO charge. Excluding this charge, gross margin was slightly positive year-over-year.

Publication Date: Mar -04

📋 Highlights
  • Sales Growth:: AutoZone reported 8.1% total sales growth to $4.3B, with domestic same-store sales up 3.4% and international up 2.5% (constant currency).
  • Store Expansion:: Opened 64 stores globally in Q2 (18 in Mexico, 3 in Brazil), with 342 new stores in the trailing four quarters and a target of 350–360 stores in FY26.
  • EPS Impact:: Non-cash $59M LIFO charge reduced EPS; adjusted EPS would have grown 7.1% YoY, with $277M in LIFO charges expected for FY26.
  • Margin Pressures:: Gross margin fell 137 bps to 52.5% due to LIFO, but excluding the charge, it remained slightly positive YoY, with recovery expected in Q3.
  • Capital Allocation:: $1.6B CapEx investment for growth, including store expansion, Mega Hubs, and supply chain, alongside $1.4B remaining in buyback authorization.

Store Expansion and International Growth

The company opened 64 stores globally, finishing with 6,709 U.S. stores, 913 Mexico stores, and 152 Brazil stores. AutoZone now has 342 new stores on a trailing four-quarter basis, and is on track to open approximately 350 to 360 stores for the full year. Internationally, the company saw a 17.1% unadjusted same-store sales growth, with a 2.5% growth on a constant currency basis, and opened 18 new stores in Mexico and 3 new stores in Brazil.

Segment Performance

Domestic DIY same-store sales grew 1.5%, while domestic commercial sales grew 9.8%. The commercial business was impacted by severe weather, with a 1-1.5% hit to comp in Q2. Management expects the business to recover as tax refunds and stimulus payments boost consumer spending. The DIY business had a low point in the middle four weeks of Q2 due to a tough comp from last year's cold weather event.

Margin Pressures and Operating Expenses

Margins can re-expand, but mix pressure from a faster-growing commercial business may impact margin rates. Management targets an 18-19% operating margin range and expects to grow EBIT dollars faster than sales. Operating expenses rose 8.7% versus Q2 last year, driven by investments in growth initiatives.

Valuation and Outlook

With a P/E Ratio of 42.05 and an EV/EBITDA of 30.05, the market is pricing in high expectations for AutoZone's future growth. Analysts estimate next year's revenue growth at 7.4%. The company's commitment to investing in international expansion and its bullish outlook on its contribution to future sales and operating profit growth are positives. However, the slowdown in discretionary business due to inflationary pressures and the impact of severe weather on the commercial business are concerns.

3. NewsRoom

Card image cap

Barclays PLC Has $588.41 Million Stock Holdings in AutoZone, Inc. $AZO

Mar -06

Source: defenseworld.net

Card image cap

AutoZone: Winter Weather Takes Results Out Of Zone

Mar -05

Source: seekingalpha.com

Card image cap

AutoZone Q2 Earnings Beat Expectations, Revenues Rise Y/Y

Mar -04

Source: zacks.com

Card image cap

AutoZone Inc (AZO) Q2 2026 Earnings Call Highlights: Strong Sales Growth Amid Margin Pressures

Mar -03

Source: gurufocus.com

Card image cap

AutoZone, Inc. (AZO) Q2 2026 Earnings Call Transcript

Mar -03

Source: seekingalpha.com

Card image cap

AutoZone Says Winter Storms Hurt Sales

Mar -03

Source: wsj.com

Card image cap

AutoZone's Q2 Results: EPS Beat Overshadowed by Margin Declines

Mar -03

Source: gurufocus.com

Card image cap

Why Is AutoZone Stock Falling Tuesday?

Mar -03

Source: feeds.benzinga.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.20%)

6. Segments

Auto Parts Stores

Expected Growth: 6.5%

As the demand for automotive parts and accessories continues to grow, AutoZone's extensive store network and strong supply chain will drive growth. The segment's expected growth rate is higher than the global growth hypothesis due to its dominant market position and loyal customer base.

All Other

Expected Growth: 5.8%

The growth of e-commerce and digital channels will contribute to the segment's growth. However, the expected growth rate is slightly lower than the global growth hypothesis due to the segment's relatively smaller size and higher competition in online sales.

7. Detailed Products

Auto Parts

AutoZone offers a wide range of auto parts, including batteries, brakes, belts, hoses, and more.

Oil and Fluids

AutoZone sells various types of motor oil, transmission fluid, brake fluid, and other automotive fluids.

Tools and Equipment

AutoZone offers a selection of tools and equipment, including air compressors, jump starters, and diagnostic tools.

Accessories and Appearance

AutoZone sells a variety of accessories, such as floor mats, seat covers, and car care products.

Chemicals and Supplies

AutoZone offers a range of chemicals and supplies, including cleaning products, adhesives, and lubricants.

Diagnostics and Testing

AutoZone provides diagnostic tools and testing equipment, including code readers and multimeters.

8. AutoZone, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

AutoZone, Inc. has a low threat of substitutes due to the lack of alternative products or services that can replace its auto parts and accessories. The company's wide range of products and strong brand recognition make it difficult for substitutes to emerge.

Bargaining Power Of Customers

AutoZone, Inc. faces moderate bargaining power from its customers. While customers have some power to negotiate prices, the company's strong brand and wide range of products limit their bargaining power.

Bargaining Power Of Suppliers

AutoZone, Inc. has a low bargaining power of suppliers due to its large scale of operations and strong relationships with suppliers. The company's ability to negotiate prices and terms with suppliers is high.

Threat Of New Entrants

AutoZone, Inc. has a low threat of new entrants due to the high barriers to entry in the auto parts and accessories market. The company's strong brand recognition, large scale of operations, and established distribution network make it difficult for new entrants to compete.

Intensity Of Rivalry

AutoZone, Inc. operates in a highly competitive market with several established players. The company faces intense rivalry from competitors such as O'Reilly Auto Parts, Advance Auto Parts, and others, which drives prices down and increases marketing expenses.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 166.11%
Debt Cost 3.95%
Equity Weight -66.11%
Equity Cost 7.54%
WACC 1.57%
Leverage -251.27%

11. Quality Control: AutoZone, Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Build-A-Bear Workshop

A-Score: 6.0/10

Value: 5.5

Growth: 6.7

Quality: 7.2

Yield: 5.0

Momentum: 8.5

Volatility: 3.0

1-Year Total Return ->

View Full Report
Stock-Card
AutoZone

A-Score: 5.9/10

Value: 4.4

Growth: 7.2

Quality: 5.9

Yield: 0.0

Momentum: 8.5

Volatility: 9.3

1-Year Total Return ->

View Full Report
Stock-Card
eBay

A-Score: 5.9/10

Value: 3.3

Growth: 6.1

Quality: 7.0

Yield: 4.0

Momentum: 8.5

Volatility: 6.3

1-Year Total Return ->

View Full Report
Stock-Card
O'Reilly Automotive

A-Score: 5.9/10

Value: 3.2

Growth: 7.4

Quality: 6.0

Yield: 0.0

Momentum: 8.5

Volatility: 10.0

1-Year Total Return ->

View Full Report
Stock-Card
Tractor Supply

A-Score: 5.2/10

Value: 2.6

Growth: 7.3

Quality: 5.4

Yield: 3.0

Momentum: 4.5

Volatility: 8.7

1-Year Total Return ->

View Full Report
Stock-Card
Amazon

A-Score: 5.2/10

Value: 1.9

Growth: 8.8

Quality: 6.8

Yield: 0.0

Momentum: 7.0

Volatility: 7.0

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

3641.29$

Current Price

3641.29$

Potential

0.00%

Expected Cash-Flows