AutoZone Gears Up to Report Q2 Earnings: What to Expect?

Core Insights - AutoZone, Inc. (AZO) is expected to report its second-quarter fiscal 2026 results on March 3, with an earnings per share (EPS) estimate of $27.58 and revenues of $4.30 billion, reflecting a 2.5% decline in EPS year-over-year [1][8] - The consensus estimate for quarterly revenues indicates an 8.8% year-over-year growth, although the company has missed earnings estimates in the last four quarters, averaging a negative surprise of 3.54% [2][5] Financial Performance - In the first quarter of fiscal 2026, AutoZone reported an adjusted EPS of $31.04, which was below the Zacks Consensus Estimate of $32.24 and down from $32.52 in the previous year [2] - The company's net sales for Q1 were $4.63 billion, slightly missing the consensus estimate of $4.64 billion but showing an 8.2% increase year-over-year [2][3] Growth Drivers - AutoZone anticipates continued growth in fiscal 2026, driven by strong performance in both DIY and commercial segments, along with improved parts availability and expanded market coverage [3] - The same-store sales growth is projected to be 4.5% for the fiscal second quarter, indicating robust demand from existing locations [3] Investment and Cost Structure - The company invested approximately $1.4 billion in capital expenditures (capex) in fiscal 2025 and plans to increase this to $1.6 billion in fiscal 2026, which may limit near-term cash inflows [4] - Rising selling, general and administrative (SG&A) expenses are expected to impact margins negatively, particularly due to new store openings affecting payroll and occupancy costs [4][5] Earnings Outlook - AutoZone's Earnings ESP is currently at -0.76%, indicating that the company may not meet earnings expectations for the upcoming quarter [6][7] - The company holds a Zacks Rank of 3, suggesting a neutral outlook in terms of stock performance [9]