AutoZone's Strategic Moves Fuel 10.7% Domestic Commercial Sales Growth in Q3 2025

Key Factors Driving Recent Acceleration in Domestic Commercial Sales Growth for AutoZone

1. Improved Execution and Customer Service Focus

   • The company emphasized a continued focus on "WOW! Customer Service," which has enhanced customer experience and contributed to sales growth.
   • Execution improvements include better assortment management and operational efficiencies.

2. Expansion and Optimization of Store Formats (Hubs and MegaHubs)

   • Aggressive opening and expansion of MegaHubs and Hub stores, which carry a significantly larger SKU assortment (over 100,000 SKUs in MegaHubs).
   • These stores serve as inventory hubs supporting surrounding satellite stores, improving parts availability and driving sales lift across the network.
   • MegaHubs are growing faster than the rest of the commercial business, indicating their strong contribution to sales acceleration.

3. Improved Parts Availability and Speed of Delivery

   • Initiatives to improve parts availability and reduce delivery times ("time to shop") for commercial customers have enhanced service levels.
   • Changes in fulfillment methodologies from Hubs and MegaHubs have accelerated delivery speed, improving customer satisfaction and driving repeat business.

4. Market Share Gains and Customer Growth

   • The company is gaining market share broadly across regions and customer segments, including national, regional, and local accounts.
   • Growth is driven by winning new business and increasing share of wallet with existing commercial customers.

5. Consistent Commercial Sales Growth Across the Quarter

   • Commercial sales growth was steady across all 4-week segments of the quarter, with a notable increase in the middle segment due to the Easter holiday shift.
   • This consistency is encouraging for sustained future growth.

6. Strategic Investments and Store Growth

   • Accelerated store growth with plans to reach approximately 300 MegaHubs domestically.
   • Investments in distribution centers and technology to support commercial growth and improve supply chain efficiency.

7. Stable Inflation Impact on Commercial Business

   • Year-over-year inflation on a like-for-like SKU basis for commercial business was basically flat, indicating that inflation did not significantly impact average ticket growth.
   • Average ticket growth was approximately 1%, driven more by volume and share gains than price increases.

8. Strong Brand and Product Offering

   • Strength of proprietary brands like Duralast supports commercial sales growth.
   • Improved assortments tailored to commercial customers enhance competitive positioning.

Summary

The acceleration in domestic commercial sales growth is primarily driven by AutoZone's strategic initiatives focused on improving execution, expanding and optimizing store formats (Hubs and MegaHubs), enhancing parts availability and delivery speed, and gaining market share across customer segments. These efforts, combined with disciplined investments in store growth and supply chain infrastructure, have resulted in consistent and accelerating commercial sales growth, with a 10.7% increase in the most recent quarter compared to 7.3% and 3.2% in prior quarters.