AutoZone(AZO) - 2026 Q2 - Quarterly Results

Financial Performance - AutoZone reported net sales of $4.3 billion for Q2 FY2026, an increase of 8.1% from the same quarter last year[1]. - Operating profit decreased by 1.2% to $698.5 million, and net income was $468.9 million, down from $487.9 million in the prior year[3]. - Net income for the trailing four quarters ended February 14, 2026, was $2,445,074, a decrease from $2,606,790 in the previous year[19]. - Adjusted After-Tax Return for the same period was $3,202,469, down from $3,351,080, reflecting a decline in profitability[19]. - Same store sales growth for the total company was 5.2% for the 12 weeks ended February 14, 2026, compared to 0.5% in the same period last year[27]. Sales and Store Expansion - Domestic same store sales increased by 3.4%, while international same store sales rose by 17.1%[1]. - The company opened 64 net new stores globally in the quarter, including 43 in the U.S., 18 in Mexico, and 3 in Brazil, bringing the total store count to 7,774[6][7]. - AutoZone aims to open approximately 350-360 new stores for the full fiscal year, focusing on gaining market share in a fragmented industry[6]. - Domestic commercial sales reached $1,154,800, representing a 9.8% increase compared to $1,051,765 in the prior year[26]. Inventory and Cost Management - Inventory increased by 13.1% year-over-year, with net inventory per store at negative $105, an improvement from negative $161 last year[5]. - Inventory as of February 14, 2026, was $7,449,330, up from $6,588,586 the previous year, indicating a growth in stock levels[28]. - Average sales per program per week in domestic commercial increased to $15.4, a 4.8% rise from $14.7 in the prior year[26]. - Total lease cost per ASC 842 increased to $630,737 from $614,312 year-over-year[20]. Financial Ratios and Debt - The adjusted debt to EBITDAR ratio remained stable at 2.5, with adjusted debt totaling $12.2 billion[17]. - Average debt decreased to $8,847,030 from $8,943,172, indicating a reduction in leverage[19]. Cash Flow - Cash and cash equivalents decreased to $285.5 million from $300.9 million year-over-year[16]. - The effective tax rate for the trailing four quarters was 20.4%, slightly up from 20.3% in the previous year[20]. Profitability Metrics - Gross profit margin was 52.5%, a decrease of 137 basis points year-over-year, primarily due to a non-cash LIFO charge[2].