What Is AutoZone No Longer Telling You?
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AutoZone (AZO) stock trades at 20.0 times earnings, compared with 22.6 for the S&P 500. Investors paying that multiple need a clear picture of the underlying business, and executives have shifted how they describe consumer behavior. On the fiscal Q3 2025 call in May 2025, management said tariff uncertainty had made customers cautious. By the latest call, executives dropped that characterization of tariffs. It has not come up on any of the five calls since May 2025. So what does management say is holding customers back now?
AutoZone Now Points To High Inflation
During the fiscal Q4 2026 call on September 22, 2026, management said transactions are soft as customers face high inflation in AutoZone’s industry and elsewhere. Executives also said they see deferrals and trade-downs among do-it-yourself (DIY) shoppers, pointing particularly to the most financially challenged customers.
Tariffs still came up on that call. The quarter included a benefit from tariff refunds, and management listed those tariffs, followed by the refunds, as items making its profit and loss noisy. TThe worry named by management has moved from a policy that might make buyers cautious to the prices customers are already paying. Management tied part of those prices to tariffs, saying consumers had to deal with tariffs on top of normal inflation.
How Big Are The Refund And The DIY Slowdown?
The tariff refund accounted for nearly 8% of AutoZone’s profit per share in fiscal Q4 2026. These refunds added $4.43 a share to the quarter’s earnings per share of $56.05.
Domestic commercial sales to professionals represented 29% of total company sales during the quarter, so most of AutoZone’s business goes to other buyers, including DIY customers. Domestic DIY same-store sales fell 0.6% from a year earlier, while total domestic commercial sales, which is not a same-store figure, expanded 8.6%. A quarter earlier, on the fiscal Q3 2026 call, management reported DIY sales up 2.2% and commercial sales up 10.4%.
Within the DIY segment, shoppers paid more per visit but arrived less frequently. Management said the average DIY ticket climbed roughly 5%, aided by mid-single-digit inflation on like-for-like items, but traffic declines offset that increase. Revenue for the entire company grew 5.6% from a year earlier in fiscal Q4 2026, down from 8.4% in fiscal Q3.
What Inflation Means For AutoZone Holders
For a shareholder, the new worry presents a larger concern than the old one. The tariff issue centered on policy uncertainty, and the refund that followed added to AutoZone’s own earnings. The inflation worry arrives alongside DIY sales that are already falling and transactions that are shrinking.
Management expects same-store sales to be relatively flat in fiscal Q1 2027, with average ticket growth staying around 5%. Executives also expect the transaction decline, which they put at more than 5% and particularly in DIY, to ease back toward a long-run trend of 1% to 3% declines. For fiscal 2027 as a whole, the company guided domestic same-store sales from flat to up low single digits, on ticket growth of about 4%. Management sees commercial as the segment where growth will hold up, forecasting total domestic commercial sales to expand in the high single to low double digits in fiscal 2027.
AutoZone is expected to report its fiscal Q1 2027 results in December 2026, and its DIY same-store sales are the number to watch in that report. It will be the first report since Chief Financial Officer Jamere Jackson leaves on November 25, 2026, to join FedEx; AutoZone is searching for a successor.
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