AutoZone, Inc. (NYSE: AZO) announced its financial results for the third quarter of fiscal 2025, which ended on May 10, 2025. The company reported net sales of $4.5 billion, marking a 5.4% increase compared to the same 12-week period in fiscal 2024. While these sales figures surpassed analyst expectations (which were around $4.35 billion, compared to the reported $4.46 billion by some outlets), the company's earnings per share of $35.36 fell short of the consensus estimate of $37.17.

During the third quarter, AutoZone's total company same-store sales saw a reported increase of 3.2%. When excluding the impacts from foreign exchange rate fluctuations, same-store sales grew by 5.4% on a constant currency basis. Domestic same-store sales in the U.S. were strong, posting a 5.0% increase on a constant currency basis. The international segment also demonstrated robust performance, with same-store sales growing by 8.1% on a constant currency basis, despite reported international sales being down 9.2% due to unfavorable currency movements.

Gross profit for the quarter rose to $2.35 billion from $2.26 billion in the prior year. However, as a percentage of sales, gross profit was 52.7%, a decrease of 77 basis points compared to the third quarter of fiscal 2024. This decline in gross margin was attributed to several factors, including higher inventory shrink, an increased commercial sales mix, costs associated with new distribution center startups, and a non-cash LIFO (Last-In, First-Out) inventory accounting impact of $8 million, which accounted for 21 basis points of the decrease.

Operating expenses for the quarter increased as a percentage of sales, reaching 33.3% compared to 32.2% in the corresponding quarter of the previous year. This deleverage was primarily driven by higher self-insurance expenses and strategic investments aimed at supporting the company's ongoing growth initiatives. Consequently, operating profit experienced a 3.8% year-over-year decline, amounting to $866.2 million.

Phil Daniele, AutoZone's President and Chief Executive Officer, commented on the results, stating, “Our international business also continued to deliver strong results, as same-store sales grew 8.1% on a constant currency basis.” He acknowledged the pressure from currency rate movements on reported sales and earnings but emphasized that “we believe our international operations are positioned well as we continue to focus on opening more stores in these markets.” Daniele further expressed optimism, adding, “We are excited about our momentum heading into the last quarter of the fiscal year, and we are well prepared for our summer selling season.”

In line with its expansion strategy, AutoZone added 84 net new stores during the third quarter. This expansion included 54 new stores in the U.S., 25 in Mexico, and 5 in Brazil. With these additions, AutoZone's total store count reached 7,516 locations across these three countries. The company concluded the quarter with cash and cash equivalents valued at $268.625 million.

Following the release of the earnings report on Tuesday, May 27, 2025, AutoZone's shares (AZO) were observed trading approximately 1.06% lower in premarket activity, at $3,785.80 per share.