For decades, AutoZone was the place car owners went to fix their own brakes.
That's no longer the engine.
Sales to pro mechanics and shops jumped 10.4% last quarter, while DIY sales rose just 2.2%. That gap is the story.
EPS beat and revenue missed by a hair. The real shift is that AutoZone is quietly becoming a wholesale parts firm with a retail shell.
The Numbers Behind The Quarter
Earnings came in at $38.07 a share, above the $36.65 estimate.
Total sales rose 8.4% to $4.84 billion. That's the biggest sales jump in over three years.
Still, the sales figure missed Wall Street's call by a small amount.
Same-store sales rose 5.5%. Same-store sales track growth at shops open at least a year.
Gross margin slipped a bit to 52.2% on a non-cash inventory charge. Strip that out and the margin was up 20 basis points.
A basis point is one one-hundredth of a percent.
Management also kept buying back stock. AutoZone bought $586 million of its own shares last quarter.
That kind of buyback says the firm sees value in its own stock.
The current price target from Wall Street sits at $4,300.
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Why Commercial Is The Quiet Win
DIY car repair is shrinking. Cars are more complex. Fewer drivers want to work on their own car.
A 2.2% sales lift in DIY barely beats inflation.
Commercial is a different beast.
AutoZone is winning shelf space in the bays of small repair shops, fleets, and oil-change chains.
Those are bigger orders, steadier demand, and harder for Amazon to take.
Bosses called the commercial push their top goal for fiscal 2026. The 10.4% jump says the plan is working.
For context, the US automotive aftermarket parts industry tops $200 billion a year. Pro shops account for a big slice of that.
The US car fleet is also getting older. The average car on the road is now 12.8 years old, per S&P Global.
Older cars need more parts. That's a long-term tailwind for AutoZone.
What To Watch
Two things from here.
First is whether commercial keeps beating DIY by this wide a margin.
If it does, AutoZone is changing what it sells and who it sells to.
Second is gross margin. Commercial buyers buy in bulk but at lower markups.
That means the firm has to find savings elsewhere to keep margins firm as the mix shifts.
A 12.5% adjusted EPS jump and $586 million in buybacks say bosses are leaning into the shift.
The next quarter will show if the trend holds. So far, the playbook is working.
For now, the shift to commercial is the real win. Investors should watch that mix more than the headline EPS beat.
A 12.5% adjusted EPS jump is good, but it's the type of growth that matters most.
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