Autozone 2025 Q3 Earnings Mixed Results as Net Income Falls 6.6%

Autozone (AZO) reported its fiscal 2025 Q3 earnings on May 26th, 2025. The company posted mixed results, with revenue rising 5.4% to $4.46 billion, surpassing the analyst estimate of $4.42 billion. However, net income fell by 6.6% to $608.44 million, missing expectations as FactSet analysts anticipated earnings of $37.11 per share. Despite this, Autozone remains optimistic about its growth strategies and market expansion plans. The company is committed to opening new stores and enhancing delivery speed and efficiency in both domestic and international markets.

Revenue

The total revenue of Autozone increased by 5.4% to $4.46 billion in 2025 Q3, up from $4.24 billion in 2024 Q3.

Earnings/Net Income

Autozone's EPS declined 3.7% to $36.33 in 2025 Q3 from $37.73 in 2024 Q3. Meanwhile, the company's net income declined to $608.44 million in 2025 Q3, down 6.6% from $651.73 million reported in 2024 Q3. The EPS decline indicates challenges in maintaining earnings momentum.

Price Action

The stock price of Autozone has edged down 0.74% during the latest trading day, has edged up 1.06% during the most recent full trading week, and has climbed 4.77% month-to-date.

Post-Earnings Price Action Review

The strategy of purchasing Autozone (AZO) shares following its revenue increase on the earnings report release date and holding for 30 days yielded a 26.51% return, which slightly underperformed the benchmark's 37.40% return. The strategy's Sharpe ratio was 0.28, indicating a moderate risk-adjusted return, with a maximum drawdown of -34.70% and a volatility of 29.83%. Although the return was positive, it was less favorable compared to the benchmark, reflecting the strategy's moderate risk and fluctuating performance.

CEO Commentary

Philip Daniele, CEO of AutoZone, expressed confidence in the company's performance, highlighting the robust growth in domestic same-store sales, which rose by 5%. He acknowledged challenges impacting gross profit margins but emphasized the strength of their Duralast brand and improvements in inventory availability across their satellite and mega-hub stores. Daniele noted that their strategic focus on expanding both domestic and international markets is vital for long-term growth, reinforcing the company's commitment to enhancing delivery speed and service cost efficiency. His tone was optimistic as he articulated confidence in AutoZone's initiatives to navigate competitive pressures and economic uncertainties.

Guidance

AutoZone anticipates revenue to reach approximately $4.46 billion for the upcoming quarter, with a projected earnings per share (EPS) of $36.33. The company expects continued same-store sales growth driven by strong performance in both DIY and commercial segments. Furthermore, management is committed to ongoing store expansion, with plans to open additional locations both domestically and internationally, supporting their strategic goal of enhancing market penetration.

Additional News

In recent developments, AutoZone has been active in corporate strategy with significant store expansions across various regions. During the quarter, the company opened 54 new stores in the U.S., 25 in Mexico, and five in Brazil, totaling 84 net new stores. This expansion aligns with AutoZone's commitment to increasing its market presence and service capabilities. Additionally, JPMorgan raised its price target for AutoZone from $3,830 to $4,350 prior to the earnings release, reflecting a positive outlook on the company's potential market share gains and operational improvements. AutoZone has also continued its share repurchase program, investing $250.3 million to buy back 70 thousand shares, emphasizing its focus on shareholder value.