AutoZone Gears Up to Report Q3 Earnings: Here's What to Expect

AutoZone (AZO) is expected to release fiscal Q3 2025 earnings on May 27th, with consensus estimates pointing to EPS of $36.78 and revenue of $4.4 billion, representing slight year-over-year growth. While the company has a history of strong sales, recent earnings have missed estimates, though a positive Earnings ESP of +0.28% and a Zacks Rank #3 suggest a potential beat this quarter, driven by DIY and commercial business strength and store expansion.

Analysis

AutoZone (AZO) is scheduled to release its third-quarter fiscal 2025 results on May 27, with consensus estimates at $36.78 for earnings per share (EPS) and $4.4 billion for revenues, reflecting anticipated year-over-year growth of 0.25% and 3.95%, respectively. This follows a mixed recent performance, as the company missed earnings estimates in three of the trailing four quarters, delivering an average negative surprise of 3.23%; its Q2 fiscal 2025 adjusted EPS of $28.29 not only missed the consensus of $29.16 but also decreased from $28.89 in the prior-year quarter, while Q2 net sales of $3.95 billion also missed estimates despite a 2.4% year-over-year increase. Despite these recent bottom-line pressures and a 10-cent downward revision in Q3 EPS estimates over the past 30 days, AutoZone has a historical precedent of 35 consecutive years of record sales and projects continued growth in fiscal 2025, highlighted by a 5.7% revenue increase to $18.5 billion in fiscal 2024. Growth is expected to be driven by its DIY and commercial businesses, enhanced parts availability, and an expected same-store sales growth of 1.3% for the fiscal third quarter. Strategic expansion remains a focus, with 111 mega hub locations operational by the end of Q2 fiscal 2025 (halfway towards its 200+ target) and at least 19 more planned for the second half of fiscal 2025, complemented by plans for approximately 100 new international stores in the current fiscal year. Notably, Zacks' proprietary model predicts an earnings beat for the upcoming quarter, supported by a positive Earnings ESP of +0.28% and a Zacks Rank #3 (Hold). This outlook is set against a backdrop of varied peer performance, where Advance Auto Parts (AAP) reported a narrower-than-expected Q1 loss and O’Reilly Automotive (ORLY) posted Q1 results that missed both EPS and revenue consensus despite some underlying growth.

Key Decisions for Investors

• Given the positive Earnings ESP of +0.28% and ongoing strategic initiatives like mega hub expansion, investors should consider the potential for a near-term positive catalyst from the Q3 earnings report, balanced against the company's recent pattern of three earnings misses in four quarters.
• Key metrics to scrutinize in the upcoming report include the actual same-store sales growth against the projected 1.3%, progress on the mega hub rollout towards the 200+ target, international store opening pace, and management's commentary on the performance and outlook for both DIY and commercial segments, which are vital for validating the growth narrative.
• Investors should evaluate AutoZone's execution relative to peers such as Advance Auto Parts and O'Reilly Automotive, whose recent mixed results highlight varied sector challenges and opportunities, focusing on how AZO's specific strategies in parts availability and store formats are translating into market share gains and profitability.