AutoZone Stock Drops From $4,388 High to $3,100 as Margins Tighten
GPC•AutoZone peaked near $4,388 eight months ago and has plunged to about $3,100 after its latest earnings despite reporting >8% revenue growth and positive same-store sales. Investors worry rising import tariffs, international weakness and heavy debt from buybacks are squeezing margins and elevating leverage risks.
1. Recent Selloff
AutoZone stock traded near an all-time high of $4,388 just eight months ago but has fallen sharply to approximately $3,100 following its latest earnings report. The speed of the decline has surprised many investors, shifting sentiment from confidence to caution.
2. Strong Quarterly Results
In the most recent quarter, AutoZone reported earnings above expectations and achieved more than 8% year-over-year revenue growth. Domestic same-store sales remained healthy, and the commercial division supplying professional repair shops continued expanding robustly.
3. Tariffs, International Weakness and Debt
The key headwinds include higher import tariffs that have increased merchandise costs, plus weaker performance in Mexico and Brazil. The company’s longstanding strategy of aggressive share buybacks has also left it with significant leverage, raising investor concerns as borrowing costs stay elevated.
4. Historical Crisis Resilience
Despite current fears, AutoZone has historically outperformed during market crises, falling less than the broader market in both the 2008 financial crisis and the 2020 COVID-19 crash, and recovering more quickly than many peers.
