AutoZone Q2 EPS $27.63 and 8.2% Sales Growth, Plans 30 More Mega Hubs
AutoZone delivered Q2 fiscal 2026 EPS of $27.63 and net sales of $4.27 billion, marking 36 consecutive years of sales growth driven by 8.2% year-over-year revenue gains. Rising capex to $1.6 billion, SG&A costs, a 1.6 debt-to-capital ratio and upcoming $60 million quarterly LIFO charges could pressure margins.
1. Strong Q2 Fiscal 2026 Performance
AutoZone reported Q2 fiscal 2026 EPS of $27.63 and net sales of $4.27 billion, representing an 8.2% year-over-year increase and extending its record sales growth to 36 consecutive years. Revenue gains were driven by strong DIY and commercial demand that improved parts availability and market share.
2. Expansion of Mega Hubs and Store Openings
The company operated 142 mega-hubs at the end of Q2 and plans to add at least 30 more this year as part of its distribution network expansion. AutoZone opened 64 net new stores globally in the quarter and expects to open roughly 350–360 stores in fiscal 2026, including 90–95 in Q3.
3. Currency Tailwind and Share Repurchases
Favorable currency movements in Mexico boosted Q2 results by $74 million in sales, $23 million in EBIT and approximately $0.95 in EPS, with similar third-quarter benefits expected. The company repurchased $310.8 million of shares in the quarter, leaving over $1.4 billion under its authorization.
4. Rising Capex, SG&A and LIFO Charges
Capital expenditures rose to $1.4 billion in fiscal 2025 and are forecast to increase to $1.6 billion in fiscal 2026 amid technology and network investments, while SG&A expenses increased by 18 basis points of sales. AutoZone’s debt-to-capital ratio stands at 1.6 versus the industry average of 0.91, and upcoming $60 million quarterly LIFO charges are expected to compress margins and reduce EPS by about $2.75 in Q3.