Auto parts retailer AutoZone (AZO) reported a disappointing 7.2% drop in fourth-quarter net income for fiscal 2025, revealing a total of $837.0 million. This was despite analysts' expectations of $867.5 million. Increased spending led to a weaker-than-anticipated quarterly profit, with diluted earnings per share amounting to $48.71, a fall from the projected $50.89. Revenues, however, saw a slight increase of 0.6% to reach $6.24 billion, aligning with forecasts. Simultaneously, same-store sales experienced a minor surge of 4.5%, slightly above estimates. AutoZone's operating, selling, general, and administrative expenses rose 3.0% to $2.02 billion, attributed to the addition of 141 stores and a 14.1% expansion of its inventory. CEO Phil Daniele reassured that this spending trend would persist, with the firm intending to ‘aggressively open stores in the new year’. He emphasized that through reinvestment in the business, they foresee their methodical strategy of augmenting earnings and cash flow substantially bolstering shareholder value. Following the announcement, AutoZone's shares remained flat in morning trading, but have seen a 29% increase year-to-date.
AutoZone Struggles with Lower Profit Amid Rising Spending
AutoZone's net income falls 7.2% due to increased spending, despite a growth in same-store sales and plans for aggressive store openings.
