On September 22, AutoZone, Inc. (NYSE:AZO) reported results for its fourth quarter, which covered 16 weeks and ended August 29, 2026. The company delivered stronger-than-expected profits and the stock ended the session 3.26% higher.
The company’s net sales increased 5.6% year-over-year to $6.6 billion, while operating profit rose 10.1% to $1.3 billion. Net income reached $931.6 million, up from $837 million a year earlier. Diluted earnings per share also increased to $56.05 from $48.71, beating Wall Street expectations.
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Gross margin also experienced significant improvement. Gross profit as a percentage of sales reached 53.3%, up 182 basis points from the prior year. AutoZone, Inc. said the improvement was helped by a 145-basis-point benefit from tariff refunds and a 105-basis-point net non-cash LIFO benefit, partially offset by a higher commercial mix.
Store Expansion Supports the Growth Story
AutoZone, Inc. continued to expand its store network during the quarter as it opened 175 new locations, including 16 new Mega Hub stores in the US. For the full fiscal year, the company opened 374 new stores.
As of August 29, the company had a total of 8,031 stores, including 6,863 in the US, 1,001 in Mexico, and 167 in Brazil.
Despite higher gas prices and a challenging economic environment, management struck a positive tone on the outlook. AutoZone, Inc.’s leadership said sales momentum strengthened during the final eight weeks of the quarter and that it believes the company is well positioned for sales growth in fiscal 2027.
The latest earnings report provides a positive near-term signal, but the stock’s performance over the past 12 months remains a concern. Shares were still down nearly 30% over the year as of September 22.
What the Numbers Say
Hedge fund interest in the stock also slightly declined during the second quarter. According to Insider Monkey‘s database, 62 hedge funds held AutoZone, Inc. at the end of the second quarter, down from 63 in the first quarter.
Short interest also remains relatively limited. As of August 31, short interest stood at 2.99% of AutoZone, Inc.’s float, indicating a relatively low level of bearish positioning in the stock.
Analyst sentiment remains largely positive. Of the 31 analysts covering AutoZone, Inc., 84% rate the stock a Buy. The median 12-month price target of $3,914.50 also implies an upside of more than 35% from the stock’s current price as of September 22.
The latest results support the bullish case through a combination of earnings growth, better-than-expected EPS, improving margins, continued store expansion, and management’s expectation for sales growth in fiscal 2027. At the same time, investors should note that part of the gross-margin improvement was boosted by both a 145-basis-point benefit from tariff refunds and a 105-basis-point net non-cash LIFO benefit.
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