AutoZone (AZO) Stock Forecast & Price Target

AutoZone has demonstrated strong sales performance, with net sales increasing by 4.8%, driven by a 6% overall sales growth rate that includes impressive growth in same-store sales (SSS) of approximately 3.7% or 5% in constant currency, aided by new distribution center throughput and hub store expansions. The domestic commercial segment, specifically the do-it-for-me market, has seen a notable sales increase of 7.3%, supported by moderate same-store SKU inflation and average ticket growth, indicating strong demand and efficient inventory management. Furthermore, improvements in in-stock levels and fill rates are contributing to robust comp sales growth, particularly within the commercial sector, suggesting a positive trajectory for AutoZone's financial performance moving forward.

AutoZone reported financial results for F2Q that fell short of consensus expectations on both revenue and earnings, adversely affected by foreign exchange (FX) headwinds and unusual snowy weather, which pressured sales. The company's domestic do-it-yourself comparable sales were nearly flat year-over-year at +0.1%, significantly below expectations, with an overall reported decline of -8.2%, largely due to the impact of the weakening Mexican Peso. Additionally, the firm experienced a decrease in operating margin to 19.7%, primarily driven by increased selling, general, and administrative (SG&A) costs, further prompting a downward revision of the fiscal year 2026 earnings per share forecast attributable to heightened operational expenses and continued FX challenges.