AutoZone Credit Rating & NNN Cap Rate (2026)

Bond vs NNN Comparison: See how AutoZone corporate bond yields compare to AutoZone NNN cap rates, with after tax math, depreciation impact, and 1031 exchange treatment. AutoZone Bonds vs NNN →

Business Overview

AutoZone, Inc. describes itself as a leading retailer and distributor of automotive replacement parts and accessories in the Americas. It had 6,863 US stores at August 29, 2026, plus 1,001 in Mexico and 167 in Brazil, according to its fiscal 2026 results. It sells to do-it-yourself customers and, through commercial programs at 6,443 of its US stores, to repair shops, dealers, and fleets. Fiscal 2026 net sales were $20.3 billion, up 7.4%, and domestic commercial sales grew 10.6% to $5.8 billion. With a BBB/Baa1 credit rating, AutoZone is a core investment grade tenant.

AutoZone does not pay a dividend. It returns cash to shareholders through share repurchases ($2.0 billion in fiscal 2026) while keeping adjusted debt to EBITDAR at about 2.5x, the level it reported at both fiscal 2025 and fiscal 2026 year-end. Diluted earnings per share rose 5.3% to $152.55 in fiscal 2026 after a 3.1% decline in fiscal 2025. NNN lease structures with AutoZone tie an investor’s income to a rated tenant when AutoZone, Inc. is the tenant or guarantor; confirm both in the lease.

Growth comes from new stores, larger mega hub stores that carry expanded inventory for surrounding stores, commercial sales, and expansion in Mexico and Brazil. AutoZone also sells the ALLDATA brand of automotive diagnostic, repair, collision and shop management software.

Credit Rating Analysis

AutoZone, Inc. is rated BBB by S&P, and Moody’s rates its senior unsecured notes Baa1, both above the BBB-/Baa3 investment grade threshold. AutoZone says it targets its capital structure to maintain its investment grade credit ratings while managing debt levels and share repurchases. Total debt was about $9.1 billion at August 29, 2026, the end of fiscal 2026, with adjusted debt to EBITDAR of 2.5x, according to its fiscal 2026 results release.

AutoZone is also an active bond issuer, which gives its credit a public market price. In July 2026 it sold $850 million of 4.950% senior notes due 2031, priced to yield 4.971%, or 72 basis points over Treasuries, according to its SEC filings. See our investment-grade credit tenant ratings for how AutoZone compares with other rated tenants.

For a landlord, the corporate rating matters to the extent AutoZone, Inc. is bound by the lease. AutoZone leases may be signed by AutoZone, Inc. or by a subsidiary, so confirm the tenant entity and any parent guaranty in the lease before relying on the corporate rating.

Lease Structure & Terms

AutoZone leased 4,307 of its 7,657 stores and owned 3,350 at August 30, 2025, according to its fiscal 2025 Form 10-K. Investor-owned AutoZone properties come in two main forms: leases where the investor owns both the land and the building, and ground leases, where the investor owns the land and the tenant owns the building. Many building leases are NNN, with the tenant paying taxes, insurance, and maintenance, but some are NN, leaving roof and structure with the landlord. Under a ground lease, confirm in the lease who maintains the improvements during the term, the landlord’s obligations, and what happens to the building at lease end.

Primary terms, renewal options and rent increases vary by lease. In the AutoZone listings we track, some leases show fixed increases of 10% every five years and others show increases only in the renewal options. Confirm the remaining term, the options and the full rent schedule in the lease rather than assuming a standard AutoZone structure.

The median building size among the AutoZone listings we track is 7,370 square feet. Lot size and rent vary by property, so compare both with local comparables.

Cap Rate & Pricing Analysis

Live asking cap rates for AutoZone and comparable tenants:

Active listings InvestmentGrade.com tracks with an asking cap rate (stated in the listing, or computed from its stated income and price when no rate is stated), listings last observed October 16, 2026. Asking cap rates are not closed-sale cap rates. The middle half is the range from the 25th to the 75th percentile of listings. The 10-year Treasury yield is 5.24% as of October 1, 2026 (FRED series DGS10). Ratings are the agency ratings in our ratings database for the entity shown, which may be a parent company; the rating type (for example issuer, senior unsecured debt, long-term debt or revenue bond ratings) varies by company and is shown on each tenant page. A rating applies to a lease only if the rated entity signs or guarantees it, so confirm the tenant and any guarantor in the lease. n/a means no verified rating is on file.

Ground leases, where the investor owns the land under a tenant-owned building, and leases that include the building can carry different asking cap rates, so compare a listing with others of the same structure. Asking prices cluster between about $1.35M and $2.35M, with a median near $1.97M.

Pricing is driven by (1) remaining primary term; (2) ground lease versus a lease that includes the building; (3) the rent schedule; (4) rent relative to local market rent; and (5) location quality, along with the BBB/Baa1 corporate credit when AutoZone, Inc. is the tenant or guarantor. Asking cap rates are not closing cap rates, and the listings we track change as properties sell or are withdrawn.

Our investment grade guide explains how credit, term, and structure combine in NNN pricing. Home improvement tenants Home Depot (A/A2) and Lowe’s (BBB+/Baa1) are a different category and store format, so compare their ratings, lease terms and rent with AutoZone’s property by property rather than treating them as substitutes.

Real Estate Footprint & Market Coverage

At August 30, 2025, AutoZone had stores in all 50 states, Washington, DC, Puerto Rico, and Saint Thomas in the US Virgin Islands; Texas (736 stores) and California (681) were its largest states, according to its fiscal 2025 Form 10-K. The domestic store base grew from 6,627 to 6,863 during fiscal 2026, with no domestic closures, according to its fiscal 2026 results release.

AutoZone’s fiscal 2025 Form 10-K says substantially all of its stores are based on standard store formats, and its stores averaged about 6,800 square feet at August 29, 2026, according to its fiscal 2026 results release. If a store goes dark, re-leasing or redevelopment depends on the site, local demand, zoning and conversion cost. AutoZone also operates hub and mega hub stores; the same 10-K says mega hub stores carry about 80,000 to 110,000 unique SKUs and work with nearby stores to improve local parts availability.

Growth Outlook & Strategic Initiatives

AutoZone opened 374 stores in fiscal 2026: 236 in the US, 118 in Mexico, and 20 in Brazil. Domestic commercial sales rose 10.6% in fiscal 2026 to $5.8 billion, about 28% of total company sales, well ahead of the 3.3% gain in domestic same store sales. AutoZone’s commercial program provides prompt delivery of parts and commercial credit to repair garages, dealers, service stations and fleet owners, according to its fiscal 2026 results release.

For NNN investors, new store openings can add new-construction leases to the market, though AutoZone owns many of its stores. Older stores with shorter remaining terms need more attention to renewal likelihood; compare their asking cap rates with longer-term listings rather than assuming a premium.

Investment Strengths & Advantages

1. BBB/Baa1 Investment Grade Credit: AutoZone, Inc. is rated BBB by S&P, and Moody’s rates its senior unsecured notes Baa1, above the BBB-/Baa3 minimum; its public bond issues, such as the July 2026 senior notes, give the credit a market price.

2. Market Position: AutoZone had 6,863 US stores at August 29, 2026 (fiscal 2026 results release) and describes itself as a leading retailer and distributor of automotive replacement parts and accessories in the Americas. Its store network and hub stores support local parts availability and commercial delivery.

3. Lease Duration: A new-construction lease can provide long-duration income from a rated tenant; confirm the primary term, the renewal options and the tenant or guarantor in the lease.

4. Aftermarket Demand: AutoZone’s fiscal 2025 Form 10-K, citing S&P Global Mobility, reports that the average age of light vehicles on the road increased slightly to 12.8 years, and AutoZone expects demand for its products to rise as more older vehicles stay on the road.

5. Smaller Format: AutoZone stores averaged about 6,800 square feet at August 29, 2026 (fiscal 2026 results release), a smaller building to re-lease or redevelop than a large-format store, though the outcome depends on the site.

Investment Risks & Considerations

1. Leverage by Design: AutoZone funds large share repurchases partly with debt. Adjusted debt to EBITDAR of about 2.5x is consistent with its ratings but leaves less cushion than a less levered retailer would have.

2. Electric Vehicle Transition: EV adoption reduces some maintenance categories, such as oil changes and certain engine parts. The effect builds slowly because the existing fleet turns over across many years.

3. E-Commerce Competition: Online sellers compete on price for parts that are not needed the same day. AutoZone’s store network and same-day availability are its main defense.

4. Flat or Infrequent Rent Increases: Some AutoZone leases in the listings we track increase rent only every five years or only in the renewal options, so real income can erode during periods of high inflation.

5. Lease Obligor: A lease signed by a subsidiary without a parent guaranty does not carry the same credit as AutoZone, Inc. Confirm the tenant entity and guaranty before pricing the lease off the corporate rating.

Comparable Tenants & Market Positioning

O’Reilly Auto Parts (BBB/Baa1): A direct auto parts competitor. In the active listings we track, O’Reilly’s median asking cap rate is 6.00% versus 5.35% for AutoZone. A gap between medians can reflect lease structure (ground lease or building), remaining term and location as well as credit, so compare individual leases. See our AutoZone vs O’Reilly comparison.

Advance Auto Parts (BB): An auto parts competitor shown as not investment grade in our ratings database. Under a restructuring plan approved in November 2024, it closed about 500 stores and about 200 independent locations, completing the closures in the first quarter of 2025, according to its fiscal 2025 Form 10-K. Its listings we track show a median asking cap rate of 7.25%.

Lowe’s (BBB+/Baa1): A home improvement tenant in a different category and a much larger store format; compare its ratings, lease structure and asking price with AutoZone’s directly rather than treating the two as substitutes.

Dollar General (BBB/Baa3): A discount retailer whose listings we track show a median asking cap rate of 7.00%; compare rent, location and remaining term as well as credit.

Frequently Asked Questions