Abstract
AutoZone will release fiscal Q2 2026 results on March 03, 2026 Pre-Market; this preview distills consensus expectations for revenue, margins, and EPS, contrasts them with the prior quarter’s actuals, and highlights the demand outlook and store-level execution themes investors are watching.Market Forecast
For the current quarter, market forecasts indicate AutoZone’s revenue is estimated at $4.31 billion, up 8.25% year over year, with EBIT forecast at $696.71 million (down 7.04% year over year) and EPS estimated at $27.16 (down 6.69% year over year). Margin expectations imply pressure versus last year given the EBIT and EPS declines alongside higher revenue; consensus embeds cautious assumptions on gross margin and net profitability due to mix and operating investment, while adjusted EPS is expected to decline mid‑single digits year over year.AutoZone’s core parts retail business remains the main driver, supported by stable DIY demand and resilient commercial sales tied to an aging car parc and elevated used-vehicle prices. The most promising franchise is its commercial program within the auto parts stores network, which benefits from improved delivery density and parts availability; this segment anchors the revenue base near $4.31 billion this quarter with an 8.25% year-over-year increase.
Last Quarter Review
In the previous quarter, AutoZone delivered revenue of $4.63 billion, a gross profit margin of 50.97%, GAAP net income attributable to shareholders of $0.53 billion, a net profit margin of 11.47%, and adjusted EPS of $31.04, with revenue growing 8.16% year over year and EPS declining 4.55% year over year. Quarter on quarter, net income decreased, as indicated by a -36.58% sequential change in net profit, reflecting seasonality and normalization after peak periods.A notable operational highlight was the continued outperformance of its auto parts stores, which contributed $4.63 billion and underpinned overall growth, while disciplined expense control helped preserve double‑digit net margin despite higher shrink and wage investments. The main business highlight was stable momentum in the core auto parts retail and commercial operations, delivering an 8.16% year-over-year revenue increase from the auto parts stores footprint.
Current Quarter Outlook (with major analytical insights)
Auto parts stores: demand health, seasonal cadence, and price/mix
AutoZone’s auto parts stores remain the fulcrum of performance. Calendar factors and winter-related demand typically support DIY categories such as batteries, electrical, and ride control in the fiscal second quarter, but temperatures and precipitation patterns can shift category timing. The aging U.S. vehicle fleet above 12 years and constrained new-vehicle affordability continue to sustain replacement cycles; this dynamic supports unit stability, with pricing now cycling tougher compares after two years of industry-wide inflation. Mix will matter: higher battery and hard-parts volumes can lift gross profit dollars, while promotional normalization may pressure gross margin from unusually high levels during prior periods. Store-level execution—parts availability, speed of delivery to professional accounts, and labor efficiency—will influence conversion and average ticket, offsetting inflation in rent, utilities, and wages. With consensus calling for 8.25% revenue growth against declining EBIT and EPS, investors appear to anticipate some deleverage in operating expenses, while still expecting healthy comp trends within the core store base.Commercial program: densification, availability, and share capture
The commercial program continues to be the company’s highest-potential growth engine. Delivery density improvements and expanded hub/store inventory have helped AutoZone close availability gaps in late‑model applications, enabling better fill rates to professional garages. As the company adds mega-hubs and realigns regional distribution, it should reduce out‑of‑stocks and raise first-fill percentages, supporting mid‑ to high‑single-digit growth in commercial sales even as independents and national peers vie for share. The near-term margin tradeoff is that commercial carries a different mix and pricing profile than DIY; broader penetration can dilute gross margin percentage while expanding gross profit dollars. If consensus proves accurate, the projected 8.25% revenue growth will likely be anchored by continued gains in commercial ticket counts and customer penetration, while EBIT softness reflects higher operating costs to support delivery speed, inventory breadth, and technology tools for shops. Watch for commentary on new customer wins, wallet share with existing accounts, and any changes in daily delivery frequency; these are leading indicators for sustained commercial momentum across subsequent quarters.Key stock price drivers this quarter: margins, inventory, and capital returns
Three variables will likely drive the stock reaction. First, gross margin trajectory versus expectations: investors will focus on shrink normalization, mix impacts from commercial growth, and any hints of pricing discipline. Even modest variance can drive meaningful EPS deviation given the company’s high gross margin base. Second, inventory productivity and in‑stock levels: elevated inventory following strategic builds can support revenue but may raise carrying costs; improvements in inventory turns and obsolescence control would be viewed positively. Third, capital allocation and buybacks: AutoZone’s model historically relies on robust free cash flow and sizable repurchases to support EPS. With EBIT and EPS forecast to decline year over year this quarter, reaffirmation of disciplined buyback activity, while maintaining investment in supply chain and IT, would frame the path back to EPS growth. Guidance on store openings, mega-hub expansion, and distribution center investments will also shape perceptions of medium‑term margin and growth durability.Analyst Opinions
Across recent institutional commentary, the balance of views trends cautiously bullish: a majority of analysts maintain positive stances predicated on steady mid‑single to high‑single digit revenue growth in the core business and continued share gains in commercial, while acknowledging near‑term margin pressure. Well-followed coverage emphasizes that AutoZone’s pricing power and inventory breadth can sustain gross profit dollar growth even if the gross margin percentage moderates. Analysts also note that EPS compares remain sensitive to buyback cadence, which can cushion per‑share metrics if operating deleverage persists short term. On the cautious side, minority views highlight risks from wage inflation, shrink, and ongoing investment drag on EBIT.The prevailing perspective expects AutoZone to meet or modestly exceed revenue expectations near $4.31 billion, with an emphasis on same-store sales stability and commercial growth as the swing factors. Margin commentary will be scrutinized: if management signals shrink improvements and operating cost control, analysts anticipate sentiment could improve despite the forecast EPS decline. Several research desks frame the setup as skewed toward constructive outcomes provided inventory and service levels remain strong through late winter and early spring categories, balancing caution on operating expenses with confidence in AutoZone’s demand fundamentals.
Comments