Q1 2026 - AutoZone - Analysis

Reiterating what we've said over the past few months - imbalanced investor expectations

Today, before the bell, AutoZone reported its Q1 2026 results, with a continued sequential acceleration in same-store sales growth in Commercial/DIFM aided by market share gains and tariff pricing. Still, consistent with our commentary over the past few quarters, the incremental SG&A spend to grow the top-line isn’t showing any signs of a slowdown.

Investor expectations for a return toward double-digit EPS growth were too rosy. As we stated last September:

Moreover, except for the 2014 - 2016 period, there really hasn’t been a time when these two share cannibals were totally uninvestable. Sometimes they were fairly valued at best, but that’s not necessarily a reason to sell. The bottomline is that these two consumer staples (although they’re labeled as discretionary) remain rock-solid cash machines; it’s simply that the “just close your eyes” double-digit returns look difficult to reach over the next 5-10 years.

And here we are with AutoZone shares in a bear market. Let’s take a closer look at the quarter.