The auto-parts retailer guided to 3% to 4% comparable sales growth next year. Nearly all of it is expected to come from commercial customers, with do-it-yourself demand projected roughly flat.
When AutoZone reported its fiscal fourth quarter this week, it said sales had strengthened late in the period but stopped short of a formal outlook. On its earnings call, management filled in the number, and the shape of that guidance says a lot about who is still spending on cars.
AutoZone guided fiscal 2027 comparable sales growth to a range of 3% to 4%. The breakdown behind it is lopsided. The company expects roughly flat growth from do-it-yourself customers, who buy parts to fix their own vehicles, and growth of 6% or more from commercial customers, the independent repair shops and garages that buy on behalf of drivers.
Management was direct about the weaker half. Executives acknowledged soft DIY demand and attributed a 0.6% decline in DIY comparable sales to financially pressured customers and weather. That fits a broader pattern in consumer spending this year, where lower-income households have pulled back on discretionary purchases and deferred projects they can put off, including their own car repairs.
The commercial business is where AutoZone has been investing to capture that shift. When drivers stop doing the work themselves, the repair still has to get done, and it often moves to a shop that buys parts from AutoZone's commercial program. The company's own guidance effectively bets that this handoff continues next year.
The company is spending to support it. Capital expenditure is expected to rise to about $1.65 billion in fiscal 2027 from roughly $1.5 billion. On the other side of the ledger, AutoZone expects its LIFO inventory charge to fall sharply to $85 million to $90 million from $192 million this year, a meaningful tailwind to reported margins.
Tariff refunds, which helped lift fourth-quarter gross margin, will contribute less going forward. Chief Financial Officer Jamere Jackson said most of the refund, about $96 million, landed in the fourth quarter, with the remainder expected in fiscal 2027. Investors modeling next year's margins will need to account for a smaller refund benefit alongside the lower LIFO charge.
Taken together, the call reads as cautiously optimistic rather than uniformly confident: specific targets, reaffirmed spending, and an open acknowledgment that the retail customer is struggling. For investors, the guidance turns AutoZone's 2027 story into a single question. If commercial growth delivers 6% or better, the range is achievable even with a flat DIY business. If commercial slows, there is little in the DIY outlook to make up the difference.