AutoZone Reports $56.05 Quarterly EPS and 1.6% Domestic Same-Store Sales; KB Home Reports After Tuesday's Close

Two Earnings Reports, One Question About the American Wallet

AutoZone's numbers landed before the opening bell on Tuesday, September 22, 2026. Net sales for the 16 weeks ended August 29 came in at $6.59 billion, up 5.6% from a year earlier^[1][2]. Diluted earnings per share hit $56.05, comfortably above the roughly $54 analysts had expected, and well past last year's $48.71^[2][5][7].

That should read as an easy win. But one number inside the same release tells a different story: sales at existing U.S. stores, the figure that best shows whether shoppers are actually buying more, rose just 1.6%^[2]. Total sales grew mostly because AutoZone opened 175 new stores during the quarter, not because each store sold much more than before^[2].

KB Home, a homebuilder, was set to report after the market closed the same day, so its real numbers were not yet public^[9]. Its own guidance pointed toward a rough quarter: housing revenue of $1.2 billion to $1.35 billion, down from $1.61 billion a year ago, and deliveries falling from 3,393 homes to somewhere between 2,600 and 2,800^[11]. Investors were treating both companies as barometers for the same thing: whether ordinary households still have room to spend.

A Profit Beat With an Asterisk

AutoZone's press release credits a 182-basis-point jump in gross margin, and a basis point is just one-hundredth of a percentage point, so that's 1.82 percentage points of extra profit on every dollar of sales^[2]. Of that, 145 basis points came from tariff refunds and 105 came from a shift in inventory accounting called LIFO, short for "last in, first out"^[2]. Those two items alone explain almost all the margin gain, with a bit given back to a shift toward lower-margin commercial sales^[2].

The tariff refund traces back to a Supreme Court ruling in February 2026. The Court found, 6-3, that the President did not have the authority to impose certain tariffs using emergency powers law, in a case called Learning Resources, Inc. v. Trump^[18][19]. A trade court then ordered the government to pay some of that money back to the companies that had been charged^[17][19]. The National Retail Federation, a retail trade group, says businesses paid more than $160 billion in these tariffs, and a Customs and Border Protection court filing in early August 2026 showed more than $100 billion, or roughly 60% of that, had already been refunded^[17][26].

The government defended the tariffs by arguing that the law's language covering "importation" was broad enough to include setting tariff rates, and that the tariffs were self-limiting because they were capped at one year and could be overridden by Congress^[27]. In dissent, Justice Thomas pointed to historical precedent for presidents setting tariffs on their own, while Justices Kavanaugh and Alito argued other laws might support most or all of the same tariffs anyway^[27]. Retailers and importers, who brought the challenge, argued that taxing imports is a power the Constitution gives to Congress, not the president, no matter what emergency is declared^[18][19].

LIFO cuts the other way and explains itself with a simple mechanic. Under LIFO, a company books the cost of its newest, priciest inventory against what it's selling right now. When costs are climbing, as they were when tariffs were in effect, that inflates expenses and shrinks profit on paper, even though no extra cash left the building^[2][23]. AutoZone had been bracing for about $277 million in LIFO charges this year, up from just $64 million the year before, because of tariff-driven cost increases^[23]. Once tariffs eased, that same math flipped into a gain, which is the 105-basis-point benefit sitting inside this quarter's number^[2].

Strip out both the refund and the LIFO swing, and what's left is a chain still growing, still buying back stock, but not growing dramatically faster than it did last year^[2][7]. Whether that matters depends on what you think the tariff refund proves.

What AutoZone's Own Numbers Argue For and Against It

AutoZone's case for itself is straightforward: sales grew 5.6% this quarter and 7.4% for the full year, and operating profit rose 10.1% to $1.3 billion^[1][2]. The company opened 175 stores in just 16 weeks, a bet that it can keep taking market share while smaller rivals pull back^[2]. Management's strongest argument is about who its customers are: when money gets tight, people tend to fix an old car rather than buy a new one, and AutoZone's commercial business, which sells parts to repair shops instead of walk-in customers, keeps climbing even when foot traffic doesn't^[2][7].

International stores backed that story up, with same-store sales there up 10.7%, more than six times the domestic rate^[2]. But there's a crack in the do-it-yourself argument that AutoZone doesn't emphasize. Customer traffic in its DIY segment, meaning people fixing their own cars rather than paying a shop, fell 3.6% in the prior quarter^[7]. If people are deferring even a cheap repair, the usual logic of hard times helping the parts business starts to weaken.

Wall Street's read split along similar lines before the report even came out. UBS warned that AutoZone's same-store sales could miss estimates given soft demand for aftermarket parts^[8]. Oppenheimer cut its price target on the stock to $3,500 from $4,300, citing higher oil prices as a drag on do-it-yourself demand, while still rating the stock Outperform^[7]. The stock had drifted toward a 12-month low heading into the report, and options traders were pricing in a swing of roughly 9.72% in either direction once the numbers landed^[6][7][22].

There's also a gap between how fast profit grew and how fast the underlying business grew, and it comes down to a buyback. Net income rose 11.3%, from $837.0 million to $931.6 million. But earnings per share rose 15.1%, from $48.71 to $56.05^[2][4]. The difference is AutoZone repurchasing its own stock, which shrinks the number of shares that profit gets divided among. That's real money returned to shareholders, but it's a separate thing from selling more parts.

The Other Side of the Same Squeeze: Homes Nobody Can Afford to Sell

If AutoZone's story is about people holding onto old cars, KB Home's is about people who can't afford new mortgages. Freddie Mac's weekly survey put the average 30-year fixed mortgage rate at 6.76% on September 10, 2026, with some daily measures climbing above 7%^[16]. The National Association of Home Builders, an industry group that surveys its own members monthly, reported that its builder confidence index fell three points in September to 32, the lowest reading since September 2025^[14][15]. Readings below 50 mean more builders see conditions as poor than good.

Builders argue the demand is there, just priced out by borrowing costs they don't control^[16]. Their strongest point is structural: millions of existing homeowners are sitting on mortgages locked in at much lower rates, so selling and buying again near 7% means giving that up^[16][24]. That keeps existing homes off the market and leaves builders like KB Home as the market's main source of new supply, which is why analysts treat their order books as the clearest live read on housing demand^[20][24].

To move units anyway, builders have been cutting prices and subsidizing buyers' interest rates directly. Surveys tied to the September sentiment index found 38% of builders had cut prices and 66% were offering sales incentives^[16]. KB Home's own guidance shows the cost of that squeeze: housing revenue expected to fall from $1.61 billion to as low as $1.2 billion, and deliveries dropping from 3,393 homes to as few as 2,600^[11]. In the prior quarter, revenue had already fallen 27% and earnings per share had dropped from $1.50 to $0.43^[12][13].

How the Story Got Told Before the Facts Were In

The coverage leading up to both reports split less on facts than on what got emphasized. AutoZone's own release led with dollar figures that all looked strong, store openings and annual revenue, while the slower same-store number and the sources of the margin gain sat further down the page^[2]. That's a legal disclosure, not a distortion, but it's also a choice about what a reader sees first.

Trading-focused outlets went further in the other direction. TipRanks ran a piece framing the report through a prediction market's betting odds on whether AutoZone would beat estimates, alongside the 9.72% implied stock swing^[6]. A Seeking Alpha piece carried an explicit buy-side rating from a contributor, useful for understanding the bullish case but written as advocacy for a position rather than as reporting^[21]. One filing summary from TradingView mislabeled which fiscal quarter KB Home's prior results belonged to, a reminder that even routine numbers get scrambled in aggregation^[13].

The National Association of Home Builders' own press release is worth reading with its source in mind, too. Its headline, "Builder Sentiment Falls on Higher Interest Rates and Costs," names the causes in the same breath as the data, and the survey behind it draws entirely from the group's own members^[14]. That's legitimate data from the people closest to the market, but it's also an industry group whose job includes making the case for lower rates and lighter regulation.

What Wasn't Knowable Yet

Two things were still missing when AutoZone's numbers went public Tuesday morning. One was KB Home's actual results, due after the closing bell the same day, which would either confirm or complicate its own guidance^[9][11]. The other was how AutoZone's stock would actually react to a report that beat on profit but missed on the metric, same-store sales, that most closely tracks whether individual shoppers are spending more. Both answers were due before the trading day was out.