AZO changes
Pick any two versions below to diff them.
- Price
- $3169.82 → $3237.73(+2.1%)
- Risks
- Domestic same-store sales are weak. They grew only 1.6% in the fourth quarter of fiscal 2026, and management expects about flat sales in the first quarter of fiscal 2027. If they stay weak, profit per share grows slowly. Buybacks of $2.03 billion in fiscal 2026 were larger than free cash flow of $1.81 billion. AutoZone keeps adjusted debt at about 2.5 times EBITDAR, so debt can grow only as fast as EBITDAR. If cash flow does not grow, the buyback must slow. AutoZone spends more on new stores and hubs. Capital spending was $1.50 billion in fiscal 2026. If the new stores do not add enough sales, this spending lowers free cash flow and the buyback. Banks fund a large part of AutoZone's payables through supplier finance programs removed: ($5.6 added: ($5.5 billion at removed: May 9, added: August 29, 2026). A change in these programs or a lower credit rating could require more debt.
- Balance sheet
- Cash: $326M Debt: $9.1B Net debt: $8.8B Interest cover: 7.9× Ratings: Moody's Baa1 (stable outlook), S&P BBB (stable outlook), Fitch BBB (stable outlook) AutoZone had a stockholders' deficit of $2.50 billion at August 29, 2026. The reason is that, over many years, it spent more on buybacks than it earned and kept. The business makes steady cash, and management keeps debt at a level that gives investment-grade ratings. All debt is unsecured at the parent: fixed-rate senior notes plus commercial paper. Commercial paper was removed: $1.36 billion added: $1,025 million at removed: May 9, added: August 29, 2026, at removed: 3.96%; the year-end figure comes with the 10-K. added: a weighted average interest rate of 3.82%. In July 2026, AutoZone added $850 million of 4.95% notes due 2031, and $450 million of 5.05% notes became due. The company's own measure is adjusted debt: debt, plus finance leases of $417 million, plus 6 times rent. Adjusted debt of $12.50 billion was 2.48 times EBITDAR of $5.04 billion for fiscal 2026 (2.49 times a year earlier). This is at the company's goal of about 2.5 times. Suppliers fund a large part of the inventory: accounts payable of $8.60 billion were 111% of inventory of $7.74 billion. At removed: May 9, added: August 29, 2026, removed: $5.6 added: $5.5 billion of payables were in supplier finance programs with banks. The $2.25 billion revolving credit facility runs to November removed: 2028 and was added: 15, 2028. At August 29, 2026, it had $2.2 billion of undrawn removed: at May 9, 2026. added: capacity, before commercial paper borrowings. In fiscal 2026, operating cash flow of $3.30 billion less capital spending of $1.50 billion gave free cash flow of $1.81 billion. Buybacks of $2.03 billion were larger, so new debt paid for part of them. As of Aug 29, 2026.
- Recent events
- Oct 26, 2026: AutoZone said that its CFO, Jamere Jackson, will leave the company on November 25, 2026. AutoZone started an external search for a new CFO. Oct 9, 2026: AutoZone said that director Claire McDonough will not stand for re-election at the 2026 annual meeting. The company said this was not because of a disagreement. Sep 25, 2026: Fitch affirmed AutoZone's BBB rating with a stable outlook. Fitch says it can lower the rating if leverage on its own measure goes above 3.5 times. Sep 22, 2026: AutoZone reported Q4 fiscal 2026 results (16 weeks to August 29, 2026). Net sales grew 5.6% to $6.59 removed: billion, a little below the about $6.7 billion analysts expected. added: billion. Domestic same-store sales grew 1.6%. Diluted EPS was removed: $56.05, above the consensus of about $54.5 (Zacks). added: $56.05. Gross margin rose 1.82 percentage points, but tariff refunds (1.45 points) and a LIFO gain (1.05 points) caused all of the rise. Jul 14, 2026: AutoZone sold $850 million of 4.95% senior notes due July 2031. Jun 16, 2026: AutoZone's board approved an additional $1.5 billion for share repurchases, bringing total authorized buybacks since 1998 to $42.2 billion. May 26, 2026: AutoZone reported its third quarter of fiscal 2026 (12 weeks to May 9, 2026). Sales grew 8.4% to $4.84 billion. Operating profit (EBIT) grew 6.6%, slower than sales, so the operating margin fell slightly.