AutoZone AZO Q3 2025 Earnings Call Transcript

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DATE

Tuesday, May 27, 2025 at 10 a.m. ET

CALL PARTICIPANTS

Chief Financial Officer — Jamere Jackson

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TAKEAWAYS

Inflation Rate: Chief Financial Officer Jackson reported inflation was "roughly flat" year-over-year, with about 1% this quarter.

Forward Inflation Guidance: Management expects inflation to normalize to a "low single digit growth rate" and move "into that three percent range over time."

LIFO Accounting Impact: Jackson stated, "it does play through our LIFO calculation, and we would be charged to the P&L," but confirmed, "there's no specific charges today."

Cost Pass-Through: Jackson said, "we believe our pricing capabilities and our competitive environment will allow us to pass those costs through," minimizing future P&L impact from rising inflation.

SUMMARY

AutoZone, Inc. (NYSE:AZO) management described current inflation as stable, with no LIFO-driven charges affecting financials this quarter. The company outlined expectations for inflation to trend toward 3% over time and emphasized confidence in its ability to offset future cost increases through pricing strategies.

Jackson explained that if inflation accelerates, it will impact the income statement via LIFO, but reiterated there are "no specific charges today."

INDUSTRY GLOSSARY

LIFO: Last-In, First-Out; an accounting inventory method where the most recently acquired items are expensed first, affecting reported cost of goods sold and earnings during periods of price changes.

Full Conference Call Transcript

Jamere Jackson: Yeah, sure. So, you know, on a year over year basis, as we said, inflation's been roughly flat. What we expect is more of a low single digit growth rate over time, which we think is more normalized. We saw about one percent this quarter, but again, we see that moving into that three percent range over time. And keep in mind that when inflation kicks in, you know, it does play through our LIFO calculation, and we would be charged to the P&L. Although there's no specific charges today, if we start to see that inflation ramp, we will see charges in the out quarters.

But, you know, what we've said before is we believe our pricing capabilities and our competitive environment will allow us to pass those costs through. So we're not particularly concerned about the impact on our P&L at the moment.

Zachary Fadem: Got it. Thank you very much.

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