Autozone Inc.

Strong Q3 growth & market share gains (core “good”): - Total sales +8.4% YoY to $4.8B (largest increase in 3+ years). - Domestic same-store sales +4.1%; DIY +2.2% and Domestic commercial +10.4% (double-digit strength). - International same-store +1.6% (constant currency), +16.6% unadjusted driven by FX (tailwind noted). - Management attribution: customer-first execution, commercial share gains, and store/supply chain improvements.

EPS/margins pressured by LIFO but underlying improvement (mix of “good + bad”): - Reported EPS +7.7%; but results were hurt by a non-cash $20M LIFO charge vs last year’s $16M LIFO credit. - Excluding LIFO impacts, EPS would have been up about +12.5% YoY. - Gross margin 52.2%, down 57 bps YoY, with LIFO a key headwind; excluding LIFO comparison, gross margin up ~20 bps. - Q4 outlook on LIFO: management expects ~$30M LIFO charge, with ~45 bps gross margin drag and ~$1.40 EPS headwind.

Weather softness explainable; Q4 expectation = more “normal summer” (surprising/important): - Domestic comp decelerated in the last two 4-week segments of Q3 due to unseasonably cool weather affecting heat-related categories (air conditioning, starting, charging). - Q3 cadence: ~5%, then 4.5%, then 2.9% across successive 4-week windows; last two weeks comps ~1.3%. - For Q4, management guided to similar domestic operating environment and expects normal to hotter-than-normal summer, implying demand should improve as weather shifts.