AutoZone Shares Drop 6% as Investments Pressure Profit Despite Sales Growth

Core Insights - AutoZone Inc. reported first-quarter earnings that fell short of analyst expectations, leading to a 6% decline in share price intra-day [1] Financial Performance - The company posted earnings of $31.04 per share for the quarter ended November 22, 2025, which was below the consensus estimate of $32.87 [2] - Revenue increased by 8.2% year-over-year to $4.63 billion, slightly missing expectations of $4.64 billion [2] - Same-store sales rose by 5.5%, with U.S. same-store sales up by 4.8% [2] Profitability and Expenses - Gross margin decreased by 203 basis points to 51.0%, primarily due to a 212-basis-point non-cash LIFO adjustment [3] - Operating expenses accounted for 34.0% of sales, an increase from 33.3% a year earlier, as the company continued to invest in strategic expansion [3] Expansion Activities - AutoZone opened 53 new stores during the quarter, including 39 in the U.S., 12 in Mexico, and 2 in Brazil, bringing the total number of locations to 7,710 [3]