AutoZone said IEEPA tariff refunds added 145 basis points to its fiscal fourth-quarter gross margin. The company received a $96 million refund during the quarter, most of it tied to tariffs on inventory it had already sold. CFO Jamere Jackson said the remaining refunds will “trickle out over FY ‘27” rather than arrive in one lump sum.
Gross margin rose to 53.3% in the quarter, up 182 basis points. The tariff refund accounted for most of the increase, while a 105-basis-point LIFO benefit provided another boost. For the full year, tariff refunds added 48 basis points to gross margin, while LIFO was a 61-basis-point headwind. That makes the fourth-quarter margin gain look larger than the full-year effect.
AutoZone’s sales rose 5.6% to $6.6 billion in the quarter and 7.4% to $20.3 billion for the full year, the company reported. Its store count reached 8,031 across the US, Mexico and Brazil. Domestic same-store sales rose 1.6%. CEO Phil Daniele said milder weather weighed on sales early in the quarter, particularly in hot-weather categories, before demand improved in August.
The results also show how much the tariff refund influenced AutoZone’s quarterly profitability. Without the refund and LIFO benefit, the gross-margin increase would have been considerably smaller. Same-store sales also came in below some analyst expectations as the quarter got off to a slower start.
