0001104659-26-032757
SEC filingAutoZone, Inc. delivered robust revenue growth in its fiscal Q2 2026 10-Q filing for the twelve weeks ended February 14, 2026. Net sales increased 8% year-over-year to $4.27 billion from $3.95 billion, driven by higher sales volume in its single Auto Parts segment. Gross profit rose 5% to $2.24 billion, supported by sales expansion despite cost of sales at $2.03 billion. Operating profit dipped 1% to $698.5 million amid elevated operating, selling, general, and administrative expenses of $1.54 billion, up from $1.42 billion prior year. Income before taxes was $591.3 million, with net income at $468.9 million, down 4% YoY, yielding diluted EPS of $27.63 versus $28.29. For the twenty-four weeks, net sales grew 8% to $8.90 billion, net income $999.7 million. Balance sheet shows total assets $20.44 billion, up from $19.36 billion at fiscal year-end, with cash $285.5 million, inventories $7.48 billion, and long-term debt $8.91 billion. Operating cash flow for the half totaled $1.32 billion, funding $652 million capex and $742 million treasury stock purchases. Stockholders' deficit improved to -$2.91 billion. Investors note ongoing share repurchases with $1.4 billion remaining authorization and tariff uncertainties.
AutoZone, Inc.'s Q2 fiscal 2026 results showed strong revenue growth but softer profitability. For the twelve weeks ended February 14, 2026, net sales were $4,274,098 thousand, up 8% from $3,952,012 thousand prior year. Gross profit increased 5% to $2,243,358 thousand from $2,128,401 thousand. Operating profit was $698,456 thousand, down 1% from $706,767 thousand, reflecting higher operating, selling, general and administrative expenses of $1,544,902 thousand versus $1,421,634 thousand. Net income totaled $468,860 thousand, a 4% decline from $487,923 thousand, with diluted EPS at $27.63 compared to $28.29. Over twenty-four weeks, net sales reached $8,902,727 thousand (+8% YoY), net income $999,683 thousand (down 5% from $1,052,856 thousand). Balance sheet as of February 14, 2026: total assets $20,438,595 thousand, up from $19,355,324 thousand at August 30, 2025.
The Company operates a single reportable segment, Auto Parts, encompassing 7,774 stores in the Americas with sales through stores and online. Q2 net sales for the segment were $4,274,098 thousand, up 8% YoY from $3,952,012 thousand. Half-year segment sales $8,902,727 thousand, +8% from $8,231,652 thousand. No geographic or product breakdowns disclosed beyond consolidated figures. CODM reviews consolidated net income and key expenses like compensation $937M (Q2), rent $118M, depreciation $137M.
Gross profit margin trended lower implicitly with 5% growth versus 8% sales increase. Operating profit margin contracted slightly due to SG&A leverage challenges. Interest expense, net $107.2 million (down from $108.8 million YoY). Effective tax rate reflected income tax expense $122.4 million on $591.3 million pre-tax income. Share-based compensation $36.7 million in Q2. Aggressive repurchases continued, with $741.7 million treasury stock purchases in half-year, retiring shares and impacting retained deficit to -$4.39 billion.
Half-year net cash from operating activities $1,317.6 million, driven by net income $999.7 million, depreciation $303.8 million, inventory build -$552.4 million offset by payables $235.8 million. Investing cash outflow -$667.5 million, mainly capex $652.0 million. Financing outflow -$642.9 million, including treasury purchases $741.7 million, partially offset by commercial paper $102.4 million. Net cash increase $13.7 million; ending cash $285.5 million. Total current assets $8.83 billion, inventories $7.48 billion, accounts payable $8.30 billion. Long-term debt $8.91 billion; revolver availability $2.2 billion. Total liabilities and stockholders' deficit $20.44 billion, with deficit -$2.91 billion.
No quantitative guidance issued. Board authorized additional $1.5 billion repurchases in October 2025, with $1.4 billion remaining as of February 14, 2026. Subsequent to quarter-end, repurchased additional $169.9 million shares. ERP system implementation underway, enhancing controls but with inherent risks. Upcoming ASUs on income taxes (fiscal 2026), expense disaggregation (2028), internal-use software (2029) under evaluation, no material impact expected. Tariff policy evolving post-Supreme Court ruling, with new tariffs implemented; monitoring potential business impacts. Litigation not expected material.