Auto parts and accessories retailer AutoZone (NYSE:AZO) met Wall Streets revenue expectations in Q4 CY2025, with sales up 8.2% year on year to $4.63 billion. Its GAAP profit of $31.04 per share was 4.2% below analysts’ consensus estimates.
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AutoZone (AZO) Q4 CY2025 Highlights:
- Revenue: $4.63 billion vs analyst estimates of $4.65 billion (8.2% year-on-year growth, in line)
- EPS (GAAP): $31.04 vs analyst expectations of $32.40 (4.2% miss)
- Adjusted EBITDA: $932.4 million vs analyst estimates of $960.6 million (20.1% margin, 2.9% miss)
- Operating Margin: 16.9%, down from 19.7% in the same quarter last year
- Free Cash Flow Margin: 13.6%, similar to the same quarter last year
- Locations: 7,710 at quarter end, up from 7,387 in the same quarter last year
- Same-Store Sales rose 4.7% year on year (0.4% in the same quarter last year)
- Market Capitalization: $62.65 billion
“I would like to thank our AutoZoners for delivering another quarter of strong sales growth. Our Domestic and International businesses performed well throughout the quarter as we continue to execute on our growth initiatives. We were especially pleased to open 53 net new stores globally in the quarter and we plan to aggressively open stores over the remainder of the fiscal year as we continue our focus on gaining market share. As we invest in growing our business, we will remain committed to our disciplined approach of increasing earnings and cash flow to drive shareholder value,” said Phil Daniele, President and Chief Executive Officer.
Company Overview
Aiming to be a one-stop shop for the DIY customer, AutoZone (NYSE:AZO) is an auto parts and accessories retailer that sells everything from car batteries to windshield wiper fluid to brake pads.
Revenue Growth
A company’s long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul.
With $19.29 billion in revenue over the past 12 months, AutoZone is one of the larger companies in the consumer retail industry and benefits from a well-known brand that influences purchasing decisions. However, its scale is a double-edged sword because there is only so much real estate to build new stores, placing a ceiling on its growth. To accelerate sales, AutoZone likely needs to optimize its pricing or lean into international expansion.
As you can see below, AutoZone’s 5.2% annualized revenue growth over the last three years (we compare to 2019 to normalize for COVID-19 impacts) was tepid, but to its credit, it opened new stores and increased sales at existing, established locations.
This quarter, AutoZone grew its revenue by 8.2% year on year, and its $4.63 billion of revenue was in line with Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to grow 7.8% over the next 12 months, an acceleration versus the last three years. This projection is particularly healthy for a company of its scale and suggests its newer products will spur better top-line performance.
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Store Performance
Number of Stores
A retailer’s store count influences how much it can sell and how quickly revenue can grow.
AutoZone operated 7,710 locations in the latest quarter. It has opened new stores quickly over the last two years, averaging 3.4% annual growth, faster than the broader consumer retail sector.
When a retailer opens new stores, it usually means it’s investing for growth because demand is greater than supply, especially in areas where consumers may not have a store within reasonable driving distance.
Same-Store Sales
The change in a company's store base only tells one side of the story. The other is the performance of its existing locations and e-commerce sales, which informs management teams whether they should expand or downsize their physical footprints. Same-store sales provides a deeper understanding of this issue because it measures organic growth at brick-and-mortar shops for at least a year.
AutoZone’s demand rose over the last two years and slightly outpaced the industry. On average, the company’s same-store sales have grown by 2.4% per year. This performance suggests its rollout of new stores could be beneficial for shareholders. When a retailer has demand, more locations should help it reach more customers and boost revenue growth.
In the latest quarter, AutoZone’s same-store sales rose 4.7% year on year. This growth was an acceleration from its historical levels, which is always an encouraging sign.
Key Takeaways from AutoZone’s Q4 Results
We struggled to find many positives in these results. Its EBITDA missed and its EPS fell short of Wall Street’s estimates. Overall, this was a softer quarter. The stock traded down 1.6% to $3,706 immediately following the results.
AutoZone may have had a tough quarter, but does that actually create an opportunity to invest right now? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.