AutoZone (AZO) 10 Dec 242025 Q1 Earnings call transcript

Good day, everyone. Welcome to AutoZone's 2025 Q1 Earnings Release Conference Call. [Operator Instructions] Before we begin, the client would like to read the forward-looking statement. Please go ahead.

Before we begin, please note that today's call includes forward-looking statements that are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

guarantees performance. not are statements of future Forward-looking for Please company's Form most this that morning's could Exchange XX-K and results important and from the press release expectations. Commission and recent Securities differ other cause with refer discussion uncertainties filings of risks to and the a to annual materially actual report on

of call Forward-looking GAAP our measures. obligation to no the company statements speak undertakes measures non-GAAP financial only non-GAAP press certain as such to of will statements. Today's can the A in include reconciliation date made, and found also update be release.

to the floor like now would Daniele. Phil over The I yours. turn floor to is

Chief Thank Treasurer, for Tax. Quarter Financial joining Brian you. Campbell, XXXX Investor you me First thank Conference AutoZone's morning, Good us Call. Relations today Jackson, today and Officer; Vice and and President, for With Jamere are

with the click opportunity the press about quarter's you quarterly Investor results. first If and Please www.autozone.com, them. Relations today, under our to earnings the website, the read along complementing hope quarter, the learn Regarding to press release are see available call our slides link. had not, conference on on our comments I our release,

our I for of states, XXX,XXX more thank to across the performance. Put Customers first AutoZoners Always AutoZoners continue globe As our drive our contributions begin, their we to the want to which commitment than line pledge Their First.

expectations for difficult be sales first would would FX last same-store quarter as be domestic this comparison. knew our muted to rate We a international and similar were against up sales our quarter

impact the our our call, macro positively to not on did conference expect mentioned we previous As results. environment we

on The of as will winter improve and we improved us. are initiatives We uncertainty are, execution customer environment and service however, election behind the track. weather, now experience are the our that optimistic

gain to both commercial. customers led DIY domestic has will to and continue we that their environment spending, cautious be over macro the time share remain confident with we While in

Customer same-store sales total sales basis. up with focus Service, sales grew continued on basis. International per call, of on X.X%. sales currency constant X.X% and on while our X.X%, and earnings stack a decreased X.X% our same-store what WOW! share company sales domestic X-year commercial X.X%, we positive same-store with a X% quarter, the growth For up domestic total delivered our XX.X% We grew

operating we currency more While comp our which continued international sales, points in negative of approximately business Jamere to headwind, U.S. basis QX had impact regarding a local up results foreign our remainder and impressively, year. we stronger for business the reported on resulted the XX% X% our our profit unadjusted color provide EPS. and almost financial concerning in will X,XXX and impact currencies, an on on comp. The currency dollar the the what And are international of thinking faced impact

any results, While sustainable there will driving headwinds and always in has what be results. long-term been our quarter's consistent is tailwinds on focus

to invest in consumer supply product chain, believe assortment continue in are initiatives, We we positioned demand. upswings service, well and for future improved customer our

sales into Now results. let dive our me

to improvement results QX's First slightly were X.X%. quarter last improved DIY down slight our -- domestic DIY sales a a comp off, showed as

merchandise categories discretionary quarters. DIY Our last the on our several a sales, similar be domestic to continue to drag

categories discretionary continue and of sales mix, approximately quarter, expectations. our category first were our For underperform XX% these to our

year's results, discretionary mid-single-digit categories. are declines on we in While quarter's the now against better percentage comping than last basis a last

QX. the sales, we the continue consumer pressured inflation expect saw goods quarter, the to our that will gets uptick sales and until ticket to SKU X.X% growth with inflation's ticket economic impact into difference like-for-like We customer average The the was on driven be ticket in that while mix up is of the DIY the continue relief DIY encouraged between improves. With average was sold. belief and average and approximately by regard Our confidence X.X%. were some trend up for to inflation

X% historic we over further be from expect as our to ticket growth time the over we will in of and to industry return hyperinflation continue anticipate away inflation rates will last the average We years. move to approximately couple remain ticket -- growth

also down This, the we We too, than last down was count better saw X% DIY transaction experienced quarter. X.X%.

this While a the favorable confidence recent we gives we the were their when best-in-class customers return that for offering, not be have to of product believe historic we by shopping do segment and final We beneficiaries. we have the share last data trends. service quarter, encouraged and habits, will us

of saw the underperformance Rust X.X% and Northeast, to what performance. These Belt. rest rest us years. the speak regional markets. DIY noticeable as usual Secondly, the have to Mid-Atlantic underperformed these and markets of surprise of lower in versus doesn't the markets domestic negative the the than levels in X.X% temperatures milder-than-normal This the our last were negative precipitation due We call I'll we couple down

business. and was DIY weather address our the impact believe we Third, what on I will

This having quarter by impacted was markets hurricanes. several

DIY storms business. much to our in did pattern across country, Although QX. was impact previous year. believe the are We customers weather performance the on role our a DIY Also and on of meaningful these our they for meaningful similar played a have AutoZoners, do difficult weather not not the our

on Next, business. our U.S. commercial touch I will

X.X% last growth. up were quarter's sales quarter for to the X.X% compared; total commercial commercial Our

with we Mid-Atlantic because spread points. the markets were these the with country continuing Northeast, noticed saw and are the we X.X%, share. the only the the Rust rest quarter XXX the DIY exited believe basis our between weeks to The similar markets. of approximately sales what of weakest broadly gain and and and as U.S. stronger Belt We was X primarily we in underperformance sales customers, More grew hurricanes. to first across The

more initiatives. to remain have continued variations in we While our we markets, see performance across these wide steadfast with sensitive weather

improve customer move gives through our and confidence year. of with encouraged the coverage, which execution improved to speed continued as Hub are and satellite of brand in we initiatives significant availability, improved the inventory Duralast improvements good We us our our and strength delivery store Mega-Hub on service,

on inflation sales. of ticket. continued This which business X.X% basis, down, pressure quarter, like-for-like a negative to our The SKU to a lack was commercial contributed average

Our sales ability will an 'XX. inflation continued growth share expectation by gain SKU of to will that driven and the market FY by accelerate like-for-like end our retail be

of of are and be Mega-Hubs continued domestic Hubs a the deploy quarter, results to the that skewed For growing better towards remain these aggressively of we year. stores. important to stores. opened back continually balance faster the half Hubs the our aggressively and And are lead stores, 'XX, the XX going committed assets. chain comp to than of Mega-Hub We total regular remainder and net we will to openings for more the opening be FY

the momentum to we as initiatives. easier and our our modestly For comparisons commercial we gain expect second DIY quarter, slightly growth sales and from both sales become trends improve

We transparent as be outlook as and trends we will, what are about seeing always, markets emerge. our provide and on color

a of and to like to take XX international stores. and the In total a stores Jamere, call in Brazil, the our turning now I'd have business. XXX quarter, Before and international moment Mexico opened discuss total we

openings. expect to XX%. just As base number can under constant total you accelerate and of basis just see our materially XX% last were release, as our store from press accelerated currency same grow XX% our the we and we this quarter's have Today, under from outside of international U.S. a store on the stores

fiscal XXX international expect around stores. to For year, we the open

into international our U.S. take to store our learnings continue introduce we and expect, operations. you'd As them

order very in in summary, billion continued traffic $X are sales in We we to, strategic to have priorities. than growth. we the to more about excited driving CapEx in year, our growth future stores. In invest expect and invest This international again, drive

technology Hubs Mega-Hubs, demand centers our ability exactly improve when believe store are We the in in be customers. leveraging our placing that time efficiency ready that and serve supply customers, invested to to costs our specifically IT to right chain -- invest investing our is AutoZoners' and and in closer inventory ramps up. growth, accelerated reduce We drive order and these that systems to industry initiatives this distribution

Now call Jamere the to I will turn Jackson. over

morning, everyone. Phil. Good Thanks,

total up were billion, the X.X%. $X.X sales For quarter,

Our sales X.X%. domestic same-store grew

and Total X.X%. EPS was was on constant our comp international down basis. was XX.X% Our currency EBIT down up company X.X% a

Phil discussed had from this we earlier, As exchange headwind foreign rates a quarter.

Mexico, a the headwind in $XX dollar a on For to and drag EBIT versus XX% a for the rates sales, share prior headwind million U.S. year. versus EPS million FX the a weakened to $XX $X.XX quarter, resulting

continue as the We earlier stores and solid us to of to efforts our discussed deliver results challenging economic AutoZoners despite Phil that backdrop continue grow our business. our have centers in enabled to the distribution

P&L our growth Let the in for initiatives, QX. sales business. on to elaborate me domestic commercial specifics more and starting a with our color with I'll start little our giving few take a moments on

billion. our DIFM sales For X.X% domestic the quarter, to first $X.X increased

company total XX% represented part our of For auto of sales. our XX% our the sales sales domestic quarter, and domestic commercial

lap sales Our that $XX,XXX, average as flat several were programs last at weekly not we that year opened are program new maturity. to per we

continuing grow customers. results winning new of with to good wallet business our existing Our share increasing as commercial deliver acceleration initiatives we share are and by

our infrastructure, and building regional We DIY and with local leverages have business we're in approximately program stores, continue of which our to XX% domestic our national, commercial our accounts.

we programs. new This XX finishing net opened total quarter, programs, X,XXX with

new expand Importantly, opportunity program our customers, locations. have and support we which domestic across commercial growth sales of plan sales to opportunities have Mega-Hub growth, we represents per ones. for to our lots pursue a open aggressively company. To tremendous continue our to commercial now XXX We

per sales Mega-Hubs average a balance growing While $XX,XXX faster ago in XXX program the the than significantly per our the weekly much was sales commercial commercial business averaged QX. I moment higher program, and are mentioned that of

DIY over XXX,XXX for deliver AutoZone of and well business. as the customers parts network. box fulfillment entire both and as the access expansion capability to is our As assets to coverage inside Mega-Hubs assortment and store additional a our of for the sales stores performing thousands expanded typically lift stores. The commercial a to sales drive and as meaningful the continues surrounding other lift tremendous lifting availability are individually, reminder, parts carry serve SKUs and giving source well These an our

XXX full to have have now a buildout. new We set Mega-Hubs at just under objective

by customer to while our more we commercial levels. markets as offering improving excited local are customers in deploy Our service closer our parts the

side the business, X.X% On the quarter. DIY of down retail comp our for domestic our was

maintained share in we positioned Importantly, well reaccelerates. we're when the DIY, and industry

down growth. ticket As a we with mentioned, positive along X.X% traffic X.X%, saw Phil

line for by ticket in changes As technology with in we would see the parts. forward, to transaction business low the offset of historical to mid-single-digit growth by long-term the durability driven we move and trends new counts, slightly expect declining

has our share initiatives. DIY remained growth Our behind strong

which initiatives and we growth, and believe new 'XX. is These to macro aging will ticket growing dynamics, customers, the for environment in Importantly, market challenging for a a business car our DIY sales business. continues continue provide car tailwinds, a resilient growth to our park used experiencing for market park tailwind car a and drive FY

business. international our regarding words few a say I'll Now

be making continue we're with markets. We pleased the our to progress international in

we XXX the stores X Mexico new During new finish in stores in to Brazil, with quarter, opened with X and stores, XXX. ending

XX.X% basis markets, grew committed on success and the remain currency pace a sales forward. in on accelerate will basis. We same-store X% and reported given constant Our going opening these to store our a international we

international bullish meaningful an sales We and being growth. and on are profit AutoZone's to attractive operating contributor future

me few Now margins. gross a the let spend P&L the and on rest of minutes

points. For basis our XX the quarter, gross up XX%, margin was

This quarter, book have LIFO $X year. did than did any a while we comparison LIFO million adjustments, not last unfavorable we

from merchandising gross margin by point improvement a XX in LIFO years, Excluding both in continued improvement had we basis margins. driven

increases to this As QX the and million of the I've $XX in $XX as goods. have At we end, cost back And take year, previously, P&L. yet LIFO through expect any not through we P&L, had reversed offsetting a credits, begin of rebuild as be $XX said million cumulative QX and an credits LIFO the cost have once reserve. credit, a to we do will we for charges deflation to quarter in still freight not we remainder our will last any we unrecorded million are credit our more reminder,

Moving expenses. to operating

XX versus points. last were Our percentage SG&A as expenses year of up basis deleveraged X.X% as sales a

and enablers accelerated initiatives. believe an in a important continue growth experience, and will these slower environment We disciplined gain managing in pay will spend way, to IT a we we our us customer are underpin share. CapEx to SG&A speed invest While investments future in dividends pace for to and are market at productivity, growth our and

line growth and in growth move disciplined committed will will on SG&A we We we expenses to over SG&A as being manage forward time. with sales remain

million, $XXX Moving the to for EBIT the down was rest of the quarter P&L. prior versus X.X% the year.

from ago. quarter rates said, QX up of currency a billion a reduced As was I X%. Interest was approximately EBIT previously our year have the million, XX% billion $XXX.X $X.X $XX a $X for outstanding as been EBIT quarter the million. basis, versus our by FX expense constant the up year our debt approximately would On end at ago

We debt second versus across the the borrowing in curve last 'XX are million range levels increases. of for planning $XXX $XXX.X drive rates and to are FY continuing an interest quarter million the interest year. Higher expense

rate quarter first XX% quarter, was up of XX.X%. last and our tax the For year's from

This basis benefited from points. while basis options XXX last rate benefited XX stock year, it quarter's points exercised,

For model us 'XX, suggest assumption we investors at credits option exercises. the XX.X% second quarter due FY to any of before stock approximately on

are assuming exercises of year, credits. last We than are million QX less had option QX $XX which

Moving year. income versus was $XXX Net for million, EPS. to X.X% last income net quarter and the down

$XX.XX, earnings drove quarter. to share XX.X combination X.X% share X.XX% of diluted The income quarter. the lower the million count of for Our lower year's last quarter down than count first net and for was per share lower

reminder, a our comparison share. drove FX a down the EPS unfavorable $X.XX As approximately

talk free our flow. cash let Now about me

quarter, For QX, first free net and generated in cash $XXX we higher year flow million income by driven last the million lower $XXX CapEx. versus in

We of to cash an expect to our continue shareholders. remain strong going incredibly forward, we and flow meaningful committed generator returning to cash amounts being

ratio very Regarding our balance our liquidity position finished our at X.Xx strong EBITDAR. leverage sheet, and remains

basis, last store growth increased $XXX,XXX defined to Net year last quarter. a year, versus growth the up inventory inventories year, by store Our merchandise less payable support and negative new per negative placement last over accounts and QX per new inventory $XXX,XXX was $XXX,XXX total period negative a versus X.X% on as last same while opportunities. driven X.X% inventory, was store inventory

percent As versus of the at a inventory a as of accounts XXX.X% gross result, quarter year's XXX.X%. QX payable finished last

repurchase our $XXX remaining authorization. $X.X we million a at Lastly, end, the We buyback I'll share our stock allocation spend moment under AutoZone repurchased in quarter, had on of program. capital quarter and share and billion

program. balance continues earnings, sheet us our and shareholders allow strong a return to cash our significant through free of ongoing buyback to Our amount powerful to cash

the have cash remain growing remain assets disciplined existing to of return amounts cash the while in growth to wrap our since We stock bought capital us XXX% that to committed shareholders. returning and long-term investing and driving enable invest cash allocation XXXX, and our shareholder in to our driving of shareholders. To approach back of outstanding earnings in committed business We meaningful excess by in we shares our to buyback value inception then initiatives, over up, business. will investing robust this and our

a Our to growing strategy work. way. share improving continues We're our market and our competitive disciplined positioning in

behind fiscal our we balance resilient tremendous continue As business our we're a behind continuing drive to a for bullish a ability prospects of the team to significant look grow I to business, forward have share. and exceptional ongoing shareholders industry, international and our in business on domestic growth that of fast-growing winning commercial confidence to a is value year, and DIY strong an strategy a AutoZoners. our

to performance. want revenue generally reporting on the you basis currency We so purposes. comps primarily to operating to results constant transactional our a take reflect back I that Before risks, on reflect impact call Phil, translation our for handing remind report don't the we

$X.XX and in it rates year revenue, fiscal to a current As approximately a in million I share back XXXX, a now I'll year the mentioned rates impact on impact to $XXX would expect on then to revenue million if $XXX If spot approximately full drag full on the million we EPS. And quarter, remained rates turn a Phil. of to headwind EBIT revenues, $X.XX impact currency spot held and EPS. million at for a foreign earlier, a And on the EBIT a drag expect drag yesterday's for and we EPS. QX, $XX $XX resulted share

Jamere. you, Thank

We and focus are our the execution quarter. to our AutoZoners proud of this and improving globe delivered Service. results We WOW! driving past across promise the Customer our continue team on to

are our well our While and our sales reflect we with initiatives international retail domestic yet, grow sales don't our store and bases increases progress we've on meaningful made commercial our quite customers. and it positioned across both to believe

for margins solid expense growth. operating and gross appropriate are is future our Our

put experience where domestic growing We growth on focus are our know in commercial WOW! and and share will have for gains have and where our to our in business momentum build needs. The believe areas year. say to able our remain a at availability the stores, in parts continuing in to capital a impact the technology leveraging fiscal international. to solid centers top we will our market plan customers' We of fiscal share. lead to for sales we Customer continue and yes our balance the distribution customer on Service culture sales, our biggest work place We we'll focus XXXX superior

excited leadership Meeting. The to fantastic. calendar can energy our hosted start for teams National excitement about are we and XXXX and We we our here in XXXX. In September, plans was AutoZone's Sales field Memphis what accomplish

theme Service, not Our Great effort could of never the year, operating People, on like AutoZoners X this being will be was proud for organization. This on our exhibited new more full those our I display days. before. focus over Great year, across we

determined to cannot upon macro we on improve an already laurels. this difficult are of service. environment, outstanding We culture In rest our customer

right sure hour make store to the every have is day. of We staffed every

processes execution Simply and opening execution on have top store to been. Fiscal goals timelines. priorities machine meet have must function always in our put, correctly, improving Customer We based and Our the need that to WOW! we are XXXX always. we Service. remain

invest Hub strategic the and Mega-Hub to projects. following in new openings. our will We Reaccelerating continue

opening up and growth. our import efficiently stores direct Effectively our Hubs recently, facility. Mega-Hubs. we excited than performance. international we and our new centers Ramping store domestic about incredibly domestic are These their take but now more As optimizing we and time, said have continued and XXX distribution plan do to

base continuing strong sales XX%, nearly a constant same-store sales years posted our on currency reaccelerate teams international most importantly, several commercial our comps growth. of And growth. discussed, As of domestic

focused the of change, advantage leveraging and environment to and take look we aftermarket is focus our gaining outstanding culture remained has and As macro change customer improving AutoZoners have always that been share. to execution challenging, automotive going additional The of through go on service. on market

are excited We AutoZone's to what our AutoZoners can days are of delivering results accomplish, ahead we best in us. about better XXXX. and We committed are believe

open to like questions. the we'd call Now for up

first coming Instructions] Your with Bret is question Jordan [Operator from Jefferies.

how the of the on term, in maybe guess one disruption? you in how see a you're share you out? bit as there will and peers liquidation you and Coast little some gain inventory region? short longer potential. talk exiting stores is term, Could that I filtering seeing think price what market share any I about see West the Obviously, shutting that your be

tell this they're They out will that Yes, be a gain prices will in closing be discounted term, It's for I'd wait see they've term ramped share they there. those their could to out what that those in what's at and very the point. as say there see slight share what discounting, that long nature. be there's markets. great are they're inelastic Obviously, short potentially market opportunities think as in exit we'll things is But and a us some as looks it's business, I and hard imagine, headwind that as of could for a up gains doing. benefit to kind this early pretty think I time, discounting and it's of innings like. Over stores, their early you us

first the could to of show the seen I called about up? about commercial. were out cadence Okay. we've X could the think begun second that has quarter, as weeks what you you I in into And the talk then But winter weakest guess, the first talk you quarter?

correct. that's Yes,

in about is shops That's has first pretty a DIY half kind to lot that disrupted. of what those the the the quarter business, The of the the of think get in talked Rust And it on And where we've impact of of markets. there in on first I markets. the X but a that's as DIY you back the those normal commercial initially continued, X business. The side of first, a material mean underperformance lot kind weeks consistent. quarter the commercial business Southeast then a if in the the business. more Belt across of weeks of business, wasn't on and side those weather the volumes came impact kind of lot commercial saw the quarter the we returned of the hurricanes side more those whole about

quarter Okay. you part in enough Or Do beginning improved see second of not meaningful really yet? the and weather? quarter cold the is it the later of with the

markets, Again, winter that initial we've but it's part our the quarter they like over quarter. the winter, I the to materialize. a most ended. the matters Belt so the -- in years. do hasn't of the Rust precipitation to in couple really got again, weather early We're over throughout and just what those and and which think time cold happened long see is last And the get way We go markets cold winter, snow of

coming question Morgan from Gutman next Your is Simeon with Stanley.

can Or it and EBIT period is if in question invest sluggish the the take ex strengthen this FX, have backdrop that and up lower? or about more My doesn't up of don't range? keeping little in way but for slightly. it you bit would income think is, mentioned slightly comps question time you more you EBIT? with are stay I this change a know of is debating question to a less growth. operating to guide, is, on area, this some good And you comps been macro My

of year. of Yes, inventory the infrastructure I opportunities. One through some of the we're is improve comps out ourselves, both those terms of we couple positioning a expect to to take we think And as to stand us. and advantage dynamics in do move

a then the and manage of we're dynamic the actions good strong a disciplined taking doing way. merchandising in are business, the to to executing our think the move job is remain third through. very we gross able teams we as expect fantastic side SG&A margin that on there. And second the margins of is We're I

the believe we going take of and for impact and advantage do competitive can invest negative to it we to operating in but are we the sort of us environment to opportunities income. without a grow infrastructure having that share, on opportunities Now that

a going in opportunities. P&L, take to middle to in of the disciplined we you expect invest be of environment, advantage comp would but a growth So way those lower to in us the are disciplined

Okay. second That's Jamere. on follow-up, then My tariffs. CPI a pricing question, helpful, it's and the and

Curious year-over-year. the year, them? did price? CPI is in up. some is how there's X% world take they're bearing could the prices And into getting curious range just with when tariffs, tariffs to take Biden example the working? XXX So future suppliers for any you then price? X% earlier picking if that Like into real went they that it, up. But play put back potential the meaning how Section Are Did the taking

this are question, saying I'll start know off going an don't interesting point, we what's Tariffs at Yes. and really by to happen.

happen, if have back vast origin. teams better think was of look you and decade. part those historically go countries the And the merchant of majority for early of I been supply dedicated the on now tariffs chain pretty to Our certain dealing tariffs with when our

time of done sure of origins lot we've been to a Since our that that make diversified. country have frame, work

in our vast than the nimble We category one pretty And in more we've majority we category become more -- than than one back had provider supply chain. the then. have in

to But pricing this to very to we'll strategies, in that, and I has I think that exercise long in this term, cycle playbook. early the see been what will with against And continue. disciplined it's So happen tariffs. suspect continue ultimately going is that very industry

on spike see bit inflation home, And we've while I movement in some a the we start closer up. to CPI, seen are little freight starting to I think to front, mean,

into ultimately, cost labor and pricing the tickets We fought expect And bit. over its in goods little the think have I that time. and to way make of markets a

there. to seeing extent industry we we're mentioned in the see inside his hyperinflation when the that we some is comments, we prepared inflation, So the saw very what impact inflation. expect we a on And have there on inflation return, of and we as what Phil that in normal that an pricing But to not has positive industry we know, disciplined taking see SKU should kind inflation as that when this about been like-for-like see you basis. saw

So through slow will but I think a of potentially to over we period net-net, a going tailwind, relatively its way believe. be work it's it time,

Agreed.

is Your Kate next Goldman coming McShane from with question Sachs.

Jordan on for This Mark McShane. Kate is

little the still allocation in thinking were think notes feel are for bit in How current capital levels? expecting should quarter. planning due repurchases, over that about than year? Just April going share about lower debt are here? we about coming on forward How it the a we rolling And you came do you this

Yes.

capital So no change in our allocation policy.

due. and to to to X.Xx we're on that that's As play time. significant That manage X.Xx to I mentioned, debt to of our amount do you to a leverage and to and financial what generator. a that going And continue expect to amount our us as the give to debt target to We're going a can over tremendous grow we're we our in flow stack any a going to gives hold to relates back assets, be shareholders, significant cash impact free continue firepower cash in will us target, of run business area. it invest our existing leverage

Okay. Perfect. come of across? purchases And some option? as the kind do ahead have were might that you Do piggybacking just accelerating comments the a follow-up, made maybe earlier. any of on plan on tariff tariffs And you that

in pretty categories at mind, the operate turning. that I of our are vast Yes. mean, we are merchants in the low majority Keep today. that looking

and, we'll So environment, customer. accordingly makes for thoughts and that. opportunities merchants act do what's are adept where obviously, that And this in us we'll type sense take the to of pretty in for best our the studious and

question with UBS. next Lasser is Michael Your coming from

you your quarter? the week extra last you to measure quarters? this in comp shift your over the And did expect Given in how that would had out how same-store your impact how few calendar, sales the play you year next

quarter. pick That's about leader months. X our our a in comps negatively extra next good comps. worth was or it potentially And our spring in get we that given about it particularly up question, specifically, the talk the as the shifts could about Michael. so, quarters over point that will we bump did expect, we the play but the and about it X calendar, the comps couple the quarter, it X in impacted in out just would point, We into impact didn't an spring But impact point of

So the and will third be quarter, reverse of in then the Jamere, fourth year, the will a to -- continue drag quarter right? it and be is it in next that

about way right the think it. to That's

if being thumb us in programs question you in a several next those accelerate over less the these currently think rule quarters, commercial average commercial the market not per my productive the as programs serviced these the Hubs, closures? being Hub? Okay. stores follow-up rollout the week by for are stores the good by sales more And reach it locations versus look especially productive is at could to happening given the is are that commercial of serviced consolidation all And that is, the what about you the that's a of Hubs store with

also both when all you the probably may of a miles may Mega-Hub to that put many a serviced have imagine, numbers out deeper overperform Michael, gets stores side can was, question. on a -- have will. closer and would that not into is, business. And we're as been inventory market, And all those customer, -- But they away, you lifts great sides frankly, to Yes. or a market, commercial publicly. we share stores by lift closer store, inventory. it it been on you market, they suffice break Mega-Hub say put delineating can that those of them don't you satellite in the imagine, and serviced boats the you a or the XXX if say, those in XXX Hubs have as -- But cases, those if DIY Hub

closer The X% better today, Mega-Hubs, we and to Hopefully, you question. these you Over and and those if inventories customer, both commercial you for have up our closer our get us. Again, having the store stores time, pretty both answers advantage them. in deeper those about deeper to it's bigger have sales these in inventory -- under your we'll assortments that take So the the will we're where placement Hubs of markets. have. lift Mega-Hubs we think just DIY that significantly,

Your next from question Christopher coming with Horvers is JPMorgan.

question So the on margin. gross my first is

headwind. was headwind. the some about You mix LIFO there talked DIY Presumably,

If product you of looks back from you're points generating it like lower expansion basis XX that, costs.

So can going you've with past on quarters. That where couple consistent in level the pretty what's that about you of seems talk there? seems -- been

do are can those how improvement? that much how that to benefit you level So initiative? far think into And continue longer you we -- of

we a as few the saw have couple we're margin mix but in we have were a of are inflation products in in marketplace that we of that We're one, when doing Yes. of like-for-like I pieces Number the raising how well, we a the are work and dynamics gross say of prices a where base, extremely supply our terms feel line, pretty from with moving we with the margin both couple There I inflation. merchandising, that the sort in fast doing I'll things. we more are of good mean standpoint, as we're marketplace, more merchandising are. not happening.

that from offsetting margin that we're extent with of a tremendous wasn't standpoint. LIFO merchandising So a deal. we big had actions that to some

quarter. quarter, we this next is of had and quarter. This credits any dynamic And LIFO didn't actually talked of just say freight likely fact, maturity, impacts where little we've some the in given a at got and dollars a is that that's are clearly million And couple quarter, third bit inflationary it's new have where we could not not book depending are of that that booking DCs about, couple see credits we've in those we're and only last we DCs of just line. we the coming of a the online, a I'll margin drag we are. And some on that headwinds anything then gross

you pleased basis. ex put XX all So LIFO net-net, it points I'm together, basis we're very up when on that an

the we of like And do back always margins I intensity. should be year. the be margin running half through with to we gross think move managing we're positive play as we gross the

and of it like year, And a to more draw do that guide, move would in ability know extent based I In Got but the just we've make. the see you amount around staying about on up it of X.Xx, To based the you assuming I could investment-grade the take it. level on in seem share really balance relates seen the in flexibility you it know could on it improvement you past, over the maintaining question, maybe then your higher rating? up of don't as to range. a X.Xx -- than debt, X.Xx current of sheet, talked down you repurchases previous gradual the keep balance comps little bit the what into X.Xx,

about have there. a we I the Yes. you talk hear amount me mean often of X.Xx And it as clearly tremendous area. flexibility

But X.Xx you've do ability to little different that in gives points the seen time at a or past. so X.Xx area. us of the we that like bit think dip being us down as it in about bit a And area little

to amount the gives flexibility it our tremendous As growth over back we're initiatives continue run and to I play shareholders, lot us grow going to and to of of time. business, said, in a give that to to cash a with invest

Next question Forbes Steven from Guggenheim Securities. is with coming

the on the a I strategy. target end just maybe Phil, follow-up you raised Hub believe state and XXX-plus. maybe XXX Mega-Hubs from for to the

years so change And the decision? maybe over So that that of curious any what drove are planned been there's the learnings cadence that, next to come? opening if driving in

Yes.

Mega-Hubs. all these you if in XX the change have ultimately, and the we between go we'd XX thought strategy, somewhere back, way So of

long ago. time A

to time, thought day, as from long continue The we stores outsized end they benefit interesting and performance specifically stores height it's the look we time able And is ago. several the will a Mega-Hub. be we've reached guidance you kind then to continue these grow It's produce kind the we what of back to see And times. of And of these the over we've of at -- the the updated updated Hubs, for us. of stores, assortment. on as both specifically They commercial of for sides incremental our on those business. and and stores, inventory we our they surrounding they to business, of the -- in help of side the but we and help DIY kind power And help productive more optimize continue the talk commercial add the become both more they and continue and do epicenters drive incremental about to brands both leverage sales become brands, results. of the

So we these assets. like

open does of As could go. ready essentially stores stores average. to They us that But I've said XX Jamere has about we on wish open time. to take before, X get years them of got almost a are we now take it these pipeline full faster. do these

So and it Hubs takes with Again, have assortments. have deeper as That's Mega-Hubs. And have time. under and But SKUs. roughly as our XX,XXX them. go somewhere of them. like fast again, including the we're XXX,XXX Mega-Hubs X% reminder, assets can to the we going between a them keep today excited SKUs stores just as about we these XX,XXX And stores in and Hubs opening to and we're

Yes.

of those things that we've heard up I can think jam markets. very And as were little one that tests, of that mention years testing we in together, seeing we is of several learned in of the the things is wrapped last density me closer you've over terms cannibalization. Mega-Hubs couple Mega-Hub we've the one

lift those DIY point, both to we're to boxes a we when So the business. Phil's in the seeing marketplace, the commercial put and

wrapped put up where forward. we a we've of we in said, them, put that test, building about can we the density Mega-Hub the given moving we're rapidly should marketplace, that's us as that lot the confidence as and So pipeline number

with Maybe ramping estate, sticking up focus store growth. real as top area, follow-up, a

You rethinking for we of stores gave the Any be curve the openings? the year. store of or past in out-year international sort reframing per targets domestic how updates should or on new the slope and

loaded. KPIs of we significantly my up pace that more company, about we roughly stores did the good as this comments, at half back to about the year we're XXX year. of smiling is talked ramping mean, me. will They Phil So Phil here. but We're very than domestically When I stores inside feel going prepared last be we big in then And this opened internationally one open stores. his happens,

decade. We've as open. the fast of the end will good, growth of them doing can got XXX as the our our the opportunities XXX store we international, path So to and domestic right of significant a this we towards some move be on rebuilt as piece a strategy forward. to get that here. attractive do go to to development We've target pipelines glide we're And

mentioned. those timelines frame markets, all that international being and I open year by Jamere in more think time stores much XXX this XXX would and towards our in that for I say, we're get confident hit 'XX to XXX roughly ability that roughly domestically

time. it that headed So we're pretty first time day It meet these feel be and from long to trails up Again, of takes confident on its time. open able actually ] we're long the where sale. stores you quite we The headed. rings a we're [ about to these a about to goals. good where our excited the pretty bit are a up But stores decide feel store we'll take

from Zaccone Steven coming Citi. Your next is question with

I wanted weaker. a gone to focus has little it on the comp DIFM bit business. the like looks Sequentially,

But in the there performed. Is first transactions weeks? largely step little attribute for down called you've those you X how in backdrop anything those seen the the first could overall you through to weakness a you Now DIFM Do weaker? just suggest bit X weeks. would some that talk industry has out industry sequential gotten

decelerate from Yes. a QX bit We total our comp. did little comp

where those weeks The the in mostly markets were first impacted, X and definitely hurricanes. from saw impacts those we

But about X commercial don't If improving share are we what some weeks. we happy those hurricanes. And also and the about. over some it exited although down of commercial you business has segments over we high. the think pretty There rates highs of that about interest have detail. of that used on pandemic sales car car business I'm last transaction about quarters. of seeing comps growth, new think you the of -- related, not we're you of The those new first sold are you million as quickly effects inside over versus business, if the car sales, say responds of to in a with average our of more be customers have and transactions this look lingering so if been are the muted, the talked sure quarter and we've are We about business with the segment all been you ticket if used -- the any cars average. couple which kind pretty used to ticket think continue call poor our year, side I'll XX

what are do like So our a trend and the not I'm UDS of resoundingly for think business. recover. pretty customers that's We we us positive segments those in other see sure The forward. going particular area, parts in positive we

out do growth And was helpful. the there some -- Is lowest time. anything wage SG&A, to of quite the some that moderating of you and about maybe dollar rate of shift. there the balance the how growth then call That's in just SG&A in rate inflation in business, a of fixed one Okay. the cost think over year? the or pressure terms

initiatives point, on clip that are and focused healthy improving and as speed we're that grow focus continue at customer to service really going we we're is SG&A. very continuing on Yes. I mean levels. business in our invest we've our forward, a this productivity growing to what at our to said move And we as growth

wages We off have seen some. cool

saw when that more sort we elevated SG&A that SG&A And the given growth rate so of and in us opportunity an see was more to elevated. was has rates not the significantly same significantly growth

say We're the opportunities. is grow take of infrastructure share, we've that that for to the with inventory advantage play way. intensity extent overall time. this over those there we've opportunities I'll place to investing are and run what disciplined market to us in So a the got in And

Your next Truist. Scott Ciccarelli with from is question coming

fully on also comparisons? improvement clarification we stat you commercial and DIY are comp trends? easier Based So macro, domestic improvement just the due in are with better on where about your expecting the is performance. to expecting comments you Or referenced looking for

growth a closer putting Clearly, you the got think what customers. the top easier you thinking think of making on have on diet, I'm half initiatives. But about couple been a on year, that a focusing of commercial in things And side I our comps we're both in things I with those the We've to the got seen seen the lot steady commercial the we we more give business. not levels inventory some speed in of on we've as progress confidence of over couple that share last Well, markets, forward. things, us focused move service. we the the we of going. we've a and really specifically back has some that kinds move the the side market going opportunities we've the local layer of that on been on year. of And be are to of us, then available for that driving commercial through DIY and even there think are And the years, same growth those and as

to outlook the us things that on the year. a finish are those up going we're where bullish give So

both at the the to and the store, We've of the towards side spent the true. effort We've all on has moderate. commercial months about store training are extensively money things Jamere AutoZoners and so improving turnover level or said execution, our DIY on the business. we've last think pretty over -- XX side of that we've spent talked also I those started our --

will in come. more we've depressed. are a we normal into Rust got seasonal pattern, I kind We going a that weather next this, we've markets those help about more little hopefully the to going have like talked So believe opportunities we'll feel think of which been that Belt running specifically start get a

And execution in we have well that pretty we've our our point, delivery, DIY we're future. strategies side the prepared believe speed on we we specifically among and to we opportunities commercial on where to we we're delivering -- we're customer, deployed focus and the customer, and the we take towards side, to headed. are, the better have put where improved. Jamere's our inventory, place. And in the share effort both are where about we'll strategies And be service all like commercial excited the in have well with we positioned like on the So feel

a price competitive including change parts consistent I even categories, large And you that. just of very appreciate in outside that's a your I the typically which environment Have There pricing there strategies? competitive auto and seen increasingly batteries. retailer a product become any is quick follow-up, peers, lot in are can. their out if very direct special across of

of always If in mass, changes. you majority point arena. the they're going competed the play we've to don't think for this decades And automotive players doing have against They vast -- about our they at hard parts. mass are those in

this batteries front of do other If the about some We're point. of place you the the DIY we any specifically, strategy They several store. don't generally years strategies. and on like in and of are sales see maintain business. in change it And those those and to play ago those we that at think We force to categories that part oil put continuing reason way. our

Bellinger Your from Mizuho is David coming with next question Securities.

XXX. access already one to believe Another Mega-Hub to I XX% on stores the target have Mega-Hub up moving you domestic closer more inventory. than with of

are Mega-Hubs strategy? kind multiple normal talk point maybe of are where now a location, getting to associated that So you a store X with And servicing X? that it's have you more returns can the to about or

Yes.

a that So that is is given market. it forward about you if really again, about within inventory, inventory think how place

the the all Miami, way of the closer to have the believe city one time. may this of one, side we of If a benefit. period customer, you think to other these on We and driving the been large some of markets, pick take Chicago, inventory New about get will the metro just we York, L.A., Mega-Hub long side can city, takes the

density well cannibalization. benefit they Ultimately, earlier, can of commercial, proved DIY and side of the have business. surrounding talked close the a lift business own. stores customer, incredibly it's both the we their ultimately, then not of that or on And given parts the the we've hard-to-find the on stores the of perform on begin amount us. to lot some they DIY of And about and side to market, commercial done either markets, those and those proximity the of size in Mega-Hubs they've a As tests and in Jamere and Mega-Hub depending multiple ultimately, vehicles these add

And quick follow-up. one it. then just Got

is? of that something the these what Mega-Hubs stores assortment think the like well? closer look having makeup commercial? Do you before, X% about in to that sped mentioned to of inventory them. have lean those more as And times did like? delivery talk get Could I just up by deeper market, a you Does what

are XXX,XXX and have XX,XXX those Hubs and is, -- including Mega-Hubs delivery the over have Again, So side assortment on them. in generally Mega-Hubs. the both stores either hard time SKUs, the of Hubs roughly X% of that's parts categories. SKUs speaking, depth --

of things instead deployed to pumps, the hours or get of customer, get to fuel may X get commercial that nature. take there. to alternators, that starters, minutes taking customer, hour it to commercial X, as closer it those X, And XX parts X So

it assets get us like market we as that them. lifts closer you and on parts the the helps customer They're also So those DIY. and for great to

question next Greg Your coming is with from Evercore. Melich

questions. Two

I you guess the in think on have deeper or we little bps XX a in inflation But deflationary? DIY. inflation, dig do-it-for-me commercial, deflation. to the I wanted on why said quarter? XX was SKU Just the same

business. we've You've continued seen of the side pressure just seen commercial the -- on

the not commercial that going than a the on it's competitors little the we small on going bit it's it's But more business seen the snapback, to start DIY. do to -- time. numbers a numbers. those And will again, take be relative our over to On we all there But try to more the watch get quarters. of pretty time less the historic multiple believe We number, to X%. deflation ticket a back average to side have

seen side the commercial think I of is irrational no. we the on business, and the But answer your behavior question, premise have of the

deflationary the inflation inflation become commercial SKU or on it's ultimately, that's X. return like We the time. seen We quarter that several more last moderated, historical some over But on to trends normal have think pretty over back years. will over the of side business significant the last slightly and

be number. clear, that do-it-for-me an that to number, ticket average was Just

that's driving deflation mix really that than SKU on same So commercial? rather that's

a a correct. little but little correct. That's It's both. bit bit of It's of you're That's correct. both,

Got it.

So next are question COGS indirect on us you where this then set was, direct how What What year? we your plays on out just out second my -- What come now the from? figure imported? from could as come China? are into percentage and level

from in tell the assortment shared never all and year, we've externally. we over the product from and an those We given very tons world. frankly, XXX,XXX buy international mean perspective. good it our from SKUs, ways Lots all and domestically I come comes at that costs I domestic of comes to overseas, finding sell, come it you, a sourcing from roughly world. of is arena can Yes. global team And that products from in as individual reduce the over well.

origin things have significant reduce each it's well spend sourcing. suppliers any those and to number, So back what of I'll of the both last other nimble global all with diversifying and and and that allows but country risk as of lot time our us the a is a more over in inflation sort having as done decade of multiple it go merchants category, tariffs be to come

Okay.

last our is that think call. I

more? got one I'm have we one sorry, more. We

more. you Yes, have one

with Scott ROTH MKM. is Stember question last coming Your from

driving about play the I the you performance by of region just or Mexico that what's focusing particular, I of rest dig side you domestic sales But the out international growth could out in maybe equation. on parameter in there? of into break that the is to Brazil? can the want talk What Mexico, maybe And the expect how to piece. seen growth that? for know if versus you've the And year? you do everybody

Mexico markets, in the international Brazil or them don't the Our we market. break out between

of them have store for Brazil us. been about weighted the Mexico talk Obviously, great our very international growing They're it's total. because we But count. So quickly. more towards than much markets in

over in have point Jamere's XXX stores XXX earlier, just And have Mexico. over We Brazil. we in to

exported we we're said seeing to those is us and also same in the and markets there domestic in for opportunity great accelerate, we they're international markets. strategies store into markets to is and like commercial, is a both the and those grow such we it lot productivity. in of But great the And that the count think they'll we've the We've on performance have domestically continue as well. reason strategies biggest place,

disclosed ever follow-up. what the then in Have you And versus do-it-yourself mix is DIFM a Mexico?

right. not. All have we No,

to our position is industry Before take is we in want conclude moment I a a reiterate. believe our the call, to strong We solid. business and model

granted prospects customers nothing understand alternatives. we are for the about as will our have but we our for year, We take excited growth

succeed But this should to a us We have exciting help the a that future. I marathon that and plans for want sprint. is stress not

As optimize the to WOW! successful. be continue shareholder execution, are for flawless and strive focus future, we Customer on confident will AutoZone Service, to value we

happy And Finally, AutoZoners today's to everywhere holiday want a thank season. wish healthy you on call. and participating for everyone

conference conclude everyone. does This call. Thank today's you,

for your may participation. lines and disconnect your this at time, a have You phone you day. wonderful Thank