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    Do AutoZone’s (AZO) Rising Sales But Softer Earnings Recast Its Store Expansion Strategy?

    Simply Wall St·12/15/2025 00:24:28
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    • AutoZone, Inc. has reported past first-quarter 2025 results, with sales rising to US$4,628.63 million while net income and earnings per share declined year over year.
    • The combination of higher revenue but lower profitability, alongside management’s commitment to opening more locations, highlights both growth ambition and cost pressures.
    • We’ll now examine how AutoZone’s higher sales but softer earnings shape its investment narrative and the outlook for continued store expansion.

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    AutoZone Investment Narrative Recap

    To be comfortable owning AutoZone, you likely need to believe its core auto parts business can keep generating steady demand while management balances growth with disciplined costs. The latest quarter fits that picture: sales climbed to US$4,628.63 million, but net income and earnings per share softened, reinforcing that the near term catalyst is continued revenue growth while the key risk is margin pressure from higher expenses and expansion. For now, this earnings miss does not significantly alter that risk and reward mix.

    Among recent developments, AutoZone’s decision on October 9, 2025 to lift its share repurchase authorization by US$1,500 million, to a total of US$33,750 million, stands out. This ongoing buyback program can support earnings per share even as profitability has come under strain, which matters for investors watching how the company manages softer margins while funding new stores, technology, and supply chain investments.

    Yet investors should be aware that persistent cost inflation and expansion spending could keep pressuring margins if...

    Read the full narrative on AutoZone (it's free!)

    AutoZone's narrative projects $22.5 billion revenue and $3.1 billion earnings by 2028.

    Uncover how AutoZone's forecasts yield a $4369 fair value, a 27% upside to its current price.

    Exploring Other Perspectives

    AZO 1-Year Stock Price Chart
    AZO 1-Year Stock Price Chart

    Two fair value estimates from the Simply Wall St Community span a wide range, from about US$3,295.56 to US$4,369.08, underscoring how far apart individual views can be. When you weigh those opinions against the recent pattern of rising sales but weaker earnings, it becomes even more important to compare several perspectives on how AutoZone’s growth plans might affect future profitability.

    Explore 2 other fair value estimates on AutoZone - why the stock might be worth just $3296!

    Build Your Own AutoZone Narrative

    Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.