AutoZone Q3 EPS $38.07 Beats Estimates but Revenue Miss Sparks 3.95% Drop
AZO•Shares of AutoZone plunged 3.95% in pre-market trading, on pace for their worst session since March 2020, after Q3 EPS of $38.07 beat forecasts while revenue of $4.84 billion fell short of the $4.86 billion expected. Gross margin dipped 57 basis points to 52.2% due to a 77 bp inventory accounting impact, though net income rose to $641.5 million.
1. Q3 Financial Results
For the quarter ended May 9, AutoZone reported adjusted EPS of $38.07, surpassing the $36.22 consensus. Revenue rose 8.4% year-over-year to $4.84 billion but narrowly missed the $4.86 billion analysts expected, while net income increased to $641.5 million from $608.4 million a year earlier.
2. Margin and Expense Analysis
Gross margin declined by 57 basis points to 52.2%, driven by a 77 basis point non-cash LIFO inventory accounting impact. Operating expenses as a percentage of sales improved slightly to 33.1%, supporting a return to an operating margin above 19%.
3. Market Reaction
Shares fell 3.95% in pre-market trading, marking the worst single-day performance since March 2020 as investors focused on the revenue shortfall despite strong earnings. The drop underscores sensitivity to top-line misses in an otherwise robust quarter.
4. Store Expansion
AutoZone opened 82 new stores globally during the quarter, including 57 in the U.S., 20 in Mexico and five in Brazil. The company’s total store count now stands at 7,856 locations worldwide.
