AutoZone (AZO) has clearly been hampered by the U.S. trade war.
The 25% tariffs on auto parts has eaten into the company’s bottom-line profits, forcing the company to increase prices.
AutoZone at a glance:
- Founded: 1979
- Formerly known as: Auto Shack (1979-1987)
- CEO: Philip B. Daniele
- U.S. locations: 6,628 as of September 2025
- Employees: 130,000+
Recently, AutoZone Chief Financial Officer Jamere Jackson told investors to expect prices to increase by 3%, despite the company’s negotiations with vendors to absorb some of the tariff costs.
But that could be just the tip of the iceberg.
“What we anticipate going forward is that you could see another couple of mid-single-digit increments of inflation as we work our way through tariffs and build our inventory accordingly,” said Jackson.
Auto parts customers may face higher prices due to the impact of tariffs.
Image source: Bloomberg/Getty Images
AutoZone rides tariffs to strong Q4
Last month, AutoZone reported fourth-quarter earnings of $48.71 per share, missing analyst estimates of $50.52.
Net sales rose to $6.24 billion, topping analyst estimates of $6.22 billion.
CEO Phillip Daniele has said the tariffs will lead to further price hikes. Still, auto parts customers probably aren’t going anywhere, since fixing a vehicle is a non-negotiable for most people.
Related: Rivian reveals concerning shift in consumer behavior
Wall Street analysts expect the company to report sales of $20.5 billion in fiscal 2026.
AutoZone revenue by fiscal year:
- 2026: $20.5 billion (projected)
- 2025: $18.9 billion
- 2024: $18.5 billion
- 2023: $17.4 billion
- 2022: $16.3 billion
- 2021: $14.6 billion
AutoZone VP sells millions in stock following earnings release
Last week, AutoZone Vice President and Controller Scott Murphy exercised options to acquire 2,860 company shares in two separate transactions dated September 24, according to a filing with the Securities and Exchange Commission.
Murphy purchased 1,660 shares at $587.13 each and a second batch of 1,200 shares for $744.85 apiece, for a total purchase price of about $1.9 million.
Murphy then sold 2,860 shares in a series of 18 transactions for about $12 million.
Related: Waymo shows the secret to avoiding traffic tickets in funny video
Murphy still directly owns about 1,244 shares valued at $5.28 million’ based on a closing price of $4,247.96.
AutoZone shares were down 1.66% to $4,144.17 at last check in Oct. 6 morning trading.
Murphy’s move is not out of the ordinary for him; he also sold a few thousand shares a year ago on September 25.
Murphy sold a total of 1,580 shares, generating over $4.9 million in proceeds.
AutoZone has a captive audience when it comes to auto parts
Due to the necessary nature of their inventory, auto parts retailers are partially shielded from consumer pullback after tariff-fueled price increases.
Unlike discretionary purchases such as apparel, auto parts are non-negotiable. If a car requires repairs, it needs to be fixed, and that means consumers have no option but to pay higher prices.
“Customers can defer that maintenance for some period of time, but ultimately they realize that they’ve got to fix it or it creates more damage,” Chief Executive Philip B. Daniele said on the earnings call this week. “There’s just not a lot of elasticity variability in the categories that we play in.”
So far, higher prices haven’t dented foot traffic at AutoZone stores. According to Placer.ai, store visits in July and August were “essentially flat.“