AutoZone (AZO) Q3 2026 Earnings Call Transcript

Chief Executive Officer — Philip Daniele Chief Financial Officer — Jamere Jackson Vice President, Treasurer, Investor Relations, and Tax — Brian L. Campbell Philip Daniele: Good morning, and thank you for joining us today for AutoZone s 26 third quarter conference call. With me today are Jamere Jackson, Chief Financial Officer and Brian L. Campbell, Vice President, Treasurer, Investor Relations, and Tax. Regarding the third quarter, I hope you had an opportunity to read our press release and learn about the quarter s results. If not, the press release, along with slides complementing our comments today are available on our website at www.autozone.com under the Investor Relations link. Please click on quarterly earnings conference calls to see them. To start out this morning, I want to thank our more than 130 thousand incredible AutoZoners across the company for their commitment to delivering on the first line of our pledge, which is to always put customers first. Our results and performance begin with us asking, what does the customer need and how can we exceed those needs and do it more efficiently? And it is our AutoZoners across our stores and our supply chain who deliver on this commitment every day. This past quarter, their efforts allowed us to deliver sales growth of plus 8.4%. The largest we have reported since Q2 of FY 23. Simply put, we are growing. We are opening more stores than we have in many, many years, and we continue to gain market share. Congratulations AutoZoners. Let s keep delivering Wow customer service. To start this morning, we will address our sales results and provide an update on our growth initiatives. We will also discuss our domestic and international results and break down our domestic sales results between traffic and ticket growth to address what inflation has meant to both our ticket and sales growth. We will also share regional performance and give an outlook on how we expect the last quarter of the year to play out as we enter our summer selling season. For the third quarter, our total sales grew plus 8.4%. it is an acceleration from the first half of the year. While earnings per share increased plus 7.7%. Similar to our experience in the first half of the year, our gross margin, operating profit and EPS were negatively impacted by non-cash $20 million LIFO charge. As a reminder, during last year s Q3, we recognized a $16 million LIFO credit which favorably impacted operating profit and EPS. Excluding the LIFO charge of $20 million this quarter, and the $16 million credit last year, our EPS would have been up 12.5% versus last year s Q3. Now let me share a few key highlights from the quarter. Total company same store sales grew plus 4.9% or I am sorry, 3.9% on a constant currency basis with domestic same store sales growth of 4.1%. Our domestic DIY sales grew plus 2.2% while our domestic commercial sales grew plus 10.4% versus last year s Q3. We are pleased to report double digit commercial sales growth and believe the strong performance will continue as we move forward even as we cycle tougher comparisons to Q4 of last year. International same store sales were up plus 1.6% on a constant currency basis. And our unadjusted international comp was plus 16.6% as exchange rates positively impacted our comps by 1.49 thousand basis points. We opened 82 stores globally this past quarter to finish with 6.77 thousand US stores, 33 Mexico stores, and 157 Brazil stores. We are on track to open approximately 365 stores for the full year versus the 305 stores we opened globally last year. We continue to be very pleased with our sales productivity we are generating out of our new stores and their sales results are exceeding our pro forma expectations. Next, let me address our sales results in a little more detail. Coming into the quarter, we were optimistic that our domestic store execution would drive sales growth for both retail and commercial. Regarding our plus 4.1%, quarterly domestic same store sales, the cadence was 5% in our first 4 weeks, 4.5% in our second 4 weeks and 2.9% over the last 4-week period of the quarter. Now let me address the last 2 weeks a little more specifically. Those 2 weeks were softer than the rest of the quarter with comps of 1.3%. This slow down in sales was caused by unseasonably cool weather impacting our heat related categories which normally begin to ramp this time of year as summer heat begins to take hold. This affected both DIY and commercial. Our domestic comp was solid, up plus 2.2% versus last year, and an acceleration versus the plus 1.5% in Q2 as we continue to gain market share. I am very pleased with what we are seeing in terms of market share gains and we continue to exit well in this environment. Regarding our plus 2.2% DIY comp for the quarter, we experienced a positive 2.4% comp in the first 4-week segment a positive 3.4% comp in the second segment, and a 0.8% comp during the third segment. As noted, the last 4-week segment wa

AutoZone (AZO) Q3 2026 Earnings Call Transcript

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AutoZone (AZO) Q3 2026 Earnings Call Transcript

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