AutoZone Inc. (NYSE:AZO) traded 2.4% lower in premarket action Tuesday after the company reported first-quarter results that missed Wall Street’s profit forecasts, as continued spending on expansion initiatives pressured margins even as revenue grew solidly.
For the quarter ending November 22, 2025, AutoZone posted earnings per share of $31.04—well below analyst expectations of $32.87. Revenue increased 8.2% year over year to $4.63 billion, narrowly missing the $4.64 billion consensus estimate. Same-store sales rose 5.5%, supported by a 4.8% gain in the company’s U.S. operations.
The earnings shortfall largely stemmed from margin pressure. Gross profit margin declined by 203 basis points to 51.0%, driven primarily by a 212-basis-point non-cash LIFO charge. Operating expenses also grew faster than sales, rising to 34.0% of revenue from 33.3% a year earlier as the retailer continued to invest heavily in growth initiatives.
Expressing confidence in the company’s progress, President and CEO Phil Daniele said,
“I would like to thank our AutoZoners for delivering another quarter of strong sales growth. Our Domestic and International businesses performed well throughout the quarter as we continue to execute on our growth initiatives.”
AutoZone continued its aggressive store expansion, opening 53 new locations during the period—39 in the U.S., 12 in Mexico, and two in Brazil—bringing the total to 7,710. Inventory levels rose 13.9% from a year earlier, reflecting both inflation and the company’s strategic expansion efforts.
Commercial sales remained a major driver of growth, jumping 14.5% to $1.29 billion, with average weekly sales per program improving by 10.1%.