Core Viewpoint - AutoZone reported fourth-quarter earnings per share of $48.71, missing the analyst consensus estimate of $50.91, with quarterly sales of $6.242 billion, a 0.6% year-over-year increase, also falling short of expectations [1][5]. Financial Performance - The company's gross margin decreased by 98 basis points to 51.5%, primarily due to a 128 basis point LIFO impact linked to an $80 million non-cash charge, partially offset by improved merchandise margins [2]. - The analyst expects LIFO headwinds to continue, projecting $120 million in the first quarter and $80–$85 million per quarter for the remainder of 2026, despite management's efforts to maintain margin rates [3]. Strategic Insights - The analyst believes that increased investments will help the company enhance its Pro-segment market share, currently at 5% [4]. - First quarter SG&A is expected to deleverage to 33.5%, with SG&A per store rising by 4.8%, noting that new locations typically take 4 to 5 years to mature, which could impact SG&A in early 2026 [4]. Market Position and Outlook - The analyst remains optimistic about AutoZone's resilience during economic downturns, potential share gains in DIY and Pro segments, and favorable pricing dynamics due to inflation and a better used-versus-new vehicle mix [5]. - Following the fiscal fourth-quarter results, EPS estimates for fiscal 2026 were revised down to $152.93 from $166.90 [5].