AutoZone (AZO) Earnings Preview: Analysts Expect Flat Revenue, Slight EPS Dip

AutoZone Inc. (NYSE: AZO), a leading retailer of automotive replacement parts and accessories, finds itself at a pivotal juncture as it prepares to release its fourth-quarter fiscal 2025 earnings tomorrow.

Analysts project that AutoZone will report an average earnings per share (EPS) of $50.69, slightly below last year’s EPS of $51.58, indicating a modest year-over-year decline in profitability. Revenue is expected to come in at $6.24 billion, reflecting a 0.61% year-over-year growth. These estimates suggest analysts anticipate relatively flat performance, with stable revenue but slight pressure on earnings.

The automotive aftermarket is facing a blend of tailwinds and headwinds. On the one hand, the increasing age of vehicles on the road should theoretically drive demand for replacement parts. On the other, economic uncertainty, inflation, and shifting consumer preferences are creating a challenging environment for retailers like AutoZone. Recent earnings reports paint a mixed picture, with revenue sometimes falling short of analyst expectations, and net income taking a hit due to currency headwinds and increased supply chain costs.

AutoZone's recent quarterly performances reflect the challenges it faces. In the third quarter of fiscal 2025, the company reported earnings per share (EPS) of $35.36, a 3.62% year-over-year decline. While revenue increased by 3.5% to $4.2 billion, it fell short of analyst estimates of $4.3 billion.

The third quarter saw a 6.6% decline in net income, attributed to currency headwinds and weakening consumer demand. Despite these challenges, domestic same-store sales increased by 5%, driven primarily by commercial customer demand.

Analysts' opinions on AutoZone are divided. DA Davidson recently raised their Q3 2025 EPS estimates for AutoZone to $36.91, maintaining a “Buy” rating with a $4,192.00 price objective. Conversely, Zacks Research lowered their Q4 2025 EPS estimates to $52.95 from $53.90, reflecting a more cautious outlook. This divergence underscores the difficulty in predicting AutoZone's future performance.

The current stock price of over $4,100 reflects high expectations for future growth. However, given the challenges facing the automotive aftermarket, including increasing competition from online retailers and the rise of electric vehicles (which require less maintenance), it is questionable whether AutoZone can sustain its historical growth rates.

Furthermore, the company's reliance on share buybacks to boost EPS raises concerns about its long-term financial strategy. A more conservative valuation, taking into account these risks, might suggest a lower target price for the stock.

The upcoming earnings release will provide valuable insights into AutoZone's current performance and future prospects. Key factors to watch include same-store sales growth, gross margin trends, inventory management efficiency, and capital allocation strategies. AutoZone is navigating a complex and evolving environment.

While the company has demonstrated resilience in the face of challenges, its future success will depend on its ability to adapt to changing consumer preferences, manage costs effectively, and capitalize on growth opportunities. The upcoming earnings release will be a critical test of AutoZone's ability to deliver on its promises. The market is watching closely.