AutoZone, Inc. (NYSE:AZO) stock slid on Tuesday after the auto parts retailer reported first-quarter earnings and sales that fell short of Wall Street expectations.
- AutoZone stock is under selling pressure. Why are AZO shares declining?
AutoZone generates most of its revenue by selling auto parts and accessories to Do-It-Yourself (DIY) customers and professional mechanics through its retail stores and online platforms.
The company reported quarterly earnings per share of $31.04, missing the analyst consensus estimate of $32.37.
Quarterly sales of $4.629 billion (up 8.2% year-over-year) missed the Street view of $4.637 billion.
Also Read: AutoZone Set For Solid Quarter As Consumer Demand Rebounds: Analyst
Company Metrics
AutoZone's quarterly total company same-store sales rose 5.5%. Its domestic same-store sales increased 4.8%, while the international same-store sales rose 11.2%.
AutoZone's constant-currency same-store sales for its international unit are up 3.7%.
Gross margin was 51.0%, down 203 basis points year over year. The decline reflects a 212 bps non-cash LIFO headwind partially offset by other net margin improvements.
The company's inventory increased 13.9% over the same period last year, driven primarily by growth initiatives.
Operating profit decreased 6.8% to $784.2 million. Net income for the quarter was $530.8 million compared to $564.9 million in the prior year.
AutoZone repurchased 108,000 shares in the quarter at an average price of $3,999. The total buyback outlay was $431.1 million.
At the end of the first quarter, the company had $1.7 billion remaining under its current share repurchase authorization.
In the quarter ended November 22, 2025, AutoZone opened 39 U.S. stores. It also opened 12 in Mexico and two in Brazil, totaling 53 net new stores.
AutoZone exited the quarter with cash and equivalents worth $287.64 million. It clocked an operating cash flow of $944.17 million, up 16% year-over-year.
Management Commentary
"We were especially pleased to open 53 net new stores globally in the quarter and we plan to aggressively open stores over the remainder of the fiscal year as we continue our focus on gaining market share," said CEO Phil Daniele.
He also stated that both Domestic and International businesses performed well as the company advanced its growth initiatives.
AutoZone stock has returned 17.64% year-to-date.
AZO Price Action: AutoZone shares were down 2.57% at $3670.00 during premarket trading on Monday, according to Benzinga Pro data.
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