Key Takeaways
- Refund-Boosted Print: Q4 sales rose 5.6% YoY to $6.6B and EPS jumped 15.1% to $56.05, with a $96M IEEPA tariff refund adding $4.43 per share.
- Commercial Momentum: Domestic commercial sales grew 8.6% YoY as DIY comps slipped 0.6%.
- Modest FY27 Guide: Management expects domestic comps flat to up low single digits on ~4% ticket growth, while 400 planned store openings push SG&A up ~8%.
- Traffic Recovery Bet: CEO Philip Daniele called the 5%+ DIY transaction decline “not typical in this industry,” and August domestic comps already climbed to 2.1%.
AutoZone’s Q4 EPS Jumped 15% on a Tariff Refund While DIY Traffic Sank
AutoZone (AZO) reported fiscal fourth-quarter 2026 earnings per share of $56.05 on September 22, up 15.1% year over year, though a $96 million refund of IEEPA tariffs (duties imposed under the International Emergency Economic Powers Act) contributed $4.43 of that total. Excluding noncash LIFO (last-in, first-out inventory accounting) charges in both periods, EPS grew 8.5%, and that figure still carries the refund.
For AutoZone stock, the harder number sits beneath the headline. Domestic same-store sales rose just 1.6%, as an 8.6% gain in commercial, the unit that supplies professional repair shops, absorbed a 0.6% decline in DIY (do-it-yourself) retail. DIY tickets climbed 5% on mid-single-digit same-SKU inflation, but transactions fell more than 5% as higher fuel prices and a mild early summer squeezed lower-income drivers.
CEO Philip Daniele treated that traffic drop as an outlier on the Q4 earnings call: “The 5% decline or north of that in transactions is not typical in this industry, and we would expect those to moderate back into a more normal traffic rate.” August gave him early support, with domestic comps accelerating to 2.1% after averaging 1.4% across the quarter’s first three months.
Still, the fiscal 2027 guide prices in only a partial recovery. Management expects domestic comps flat to up low single digits on 4% ticket growth, with first-quarter comps running flat. Commercial should grow high single to low double digits, fed by 172 Mega Hubs (large stores stocking over 100,000 SKUs) that the company plans to expand to 300 over three years.
The Mega Hub buildout runs alongside the heaviest store rollout in company history, 374 openings in fiscal 2026 with 400 planned for 2027, and that pace pushes SG&A up 8% while holding return on invested capital in the mid-30s as new stores ramp toward 15% ROIC by year four. LIFO relief offsets part of the drag, with charges falling to $85 million to $90 million from $192 million and gross margin excluding LIFO guided flat to up 25 basis points.
Buybacks did the rest of the work. AutoZone repurchased $2 billion of stock in fiscal 2026 against $1.8 billion of free cash flow, cutting the diluted share count 3.3% and lifting Q4 EPS growth well above the 11.3% rise in net income. The company also trimmed its fiscal 2028 store target to 430 from 500, slowing Brazil to concentrate on the U.S. and Mexico.
TIKR Values AutoZone Stock at $4,609 as Commercial Growth Carries the Business
TIKR’s mid-case model values AutoZone stock at $4,609 by August 2031, a 59% total return from the current price of $2,895, or 10% annualized over 4.9 years.
As of September 2026, that 10% annual pace puts AutoZone stock ahead of the high-single-digit compounding investors typically expect from a mature, buyback-heavy specialty retailer.
The target doesn’t need a sharp DIY snapback to stay within reach, because commercial growth of high single to low double digits and a share count shrinking 3.3% year over year already drive the EPS math. A normalizing DIY transaction rate, which August’s 2.1% domestic comp hints at, would only add to it.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
