AutoZone walked into this earnings day with a stock that had cooled in recent months and it walked out with the price down another 1.8% to about US$2,843. That reaction jars with the headline result. Quarterly earnings per share reached about US$57 and quarterly revenue came in around US$6.6b, while company same store sales grew 1.5%.
The real flashpoint sits in profitability quality. A US$96m tariff refund and lighter last in first out inventory charges did a lot of work for this quarter, which leaves investors questioning how much of that EPS power is repeatable.
Is AutoZone cheap on a 17.9x trailing P/E and a DCF value near the current price, or is that small discount just noise in the numbers? Compare the assumptions that matter in the full valuation analysis for AutoZone
Q4 2026 Earnings Summary
- Revenue (Q4 2026 vs. Q4 2025): US$6,594.9m vs. US$6,242.7m (up about 5.6%)
- Net Income (Excl. Extra Items, Q4 2026 vs. Q4 2025): US$931.6m vs. US$837.0m (up about 11.3%)
- Basic EPS (Q4 2026 vs. Q4 2025): US$57.17 vs. US$50.02 (up about 14.3%)
- Same Store Sales Growth (Company, Q4 2026 vs. FY 2025 TTM): 1.5% vs. 3.9% (growth rate slower)
Prefer clean visuals over another dense block of earnings tables and footnotes? See AutoZone's full financial picture in charts that spotlight valuation at a glance in the company report for AutoZone.
AutoZone bull story: scale, comps and cash tested
Bulls argue AutoZone is entering an earnings inflection, where scale, store growth and commercial momentum can carry results even if DIY is choppy. Q4 revenue grew 5.6% and pushed full year sales just over US$20b, which fits the long term scale narrative and the recent 8,000th store milestone. Company comps of 1.5% and domestic same store sales of 1.6% show growth, but they fall short of the stronger reacceleration many investors looked for. The commercial business did the heavy lifting with an 8.6% Q4 comp and nearly 11% for the year, helped by Mega Hubs that management says run about 16% higher commercial sales. Free cash flow of about US$1.8b and continued buybacks support the capital return angle, yet the US$96m tariff refund and lighter LIFO charge mean a meaningful slice of EPS strength did not come from underlying demand.
Bear worries: DIY softness, costs and earnings quality
Bears worry that AutoZone is leaning on accounting benefits while underlying demand and cost control weaken. DIY comps declined 0.6% in Q4 and traffic worsened versus the prior quarter, which matches concerns about domestic demand softness, even though tickets rose about 5%. SG&A expanded 8.9% and deleveraged roughly 101 bps after earlier commentary that expenses would not re accelerate, so the miss on cost discipline is clear. International growth looks more mixed than promised. Brazil store plans were cut, and management is prioritizing the U.S. and Mexico while international same store sales only grew low single digits in constant currency. EPS optics also validate quality worries. About US$4.43 per share came from a tariff refund while a smaller LIFO charge further padded gross margin. Those items helped the quarter, but they make it harder to read pure operating momentum.
Compare that mix of tariff refunds, lighter LIFO and patchy comps with how Wall Street is recalibrating its expectations right now. Track whether analysts view AutoZone’s latest quarter as a durable step up or a one off bump, and see how their targets stack up in the consensus price target analysis for AutoZone
Stay Ahead Of Your Next Move With AutoZone
AutoZone's mix of tariff refunds, lighter LIFO and softer DIY trends creates real timing questions, so register for free with Simply Wall St and add it to your Watchlist to keep the share price and fair value side by side before deciding on an entry point. Once you have taken a position, use the Portfolio Command Center to cut through market noise and focus on the key developments that matter to your holdings. For longer term decisions, tap into the collective view of thousands of investors through the Community and see how others are interpreting the same data. Spot potential catalysts and risks early so you can act with confidence rather than reacting late to the market.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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