AutoZone (AZO) Stock Drops After Q1 2026 Earnings Miss: What Today’s Sell-Off Really Means for Investors

On December 9, 2025, AutoZone, Inc. (NYSE: AZO) reported its first quarter of fiscal 2026. Revenue grew solidly, but profits and margins came in weaker than Wall Street hoped, and the stock reacted sharply.

By late afternoon, AZO was trading around $3,510 per share, roughly 6.7% below Monday’s close of $3,766.96, erasing more than $4 billion in market value and making AutoZone one of the day’s worst performers in the S&P 500. ^[1]

At the same time, most analysts still see meaningful upside over the next 12 months, and quantitative models remain broadly constructive on the name. Here’s a structured look at all of today’s key news, forecasts, and analyses around AutoZone stock.

AutoZone Q1 FY2026 Results at a Glance

AutoZone’s quarter (12 weeks ended November 22, 2025) showed strong top-line growth but pressured profitability:

Net sales:
- $4.63 billion, up 8.2% from $4.28 billion in the same quarter last year. ^[2]
Same-store sales (comparable sales):
- Total company: +5.5% (vs. just 0.4% a year ago)
- Domestic (U.S.): +4.8% (vs. 0.3% last year)
- International: +11.2% (constant-currency growth of 3.7%) ^[3]
Profitability:
- Net income:$530.8 million, down from $564.9 million
- Diluted EPS:$31.04, down from $32.52 a year ago ^[4]
- Gross margin:51.0%, down 203 bps year over year, driven largely by a 212 bps non‑cash LIFO impact (inventory accounting). ^[5]
- Operating profit:$784.2 million, down 6.8% from the prior year’s quarter. ^[6]
Store growth:
- 53 net new stores opened in the quarter (39 in the U.S., 12 in Mexico, 2 in Brazil), bringing the total to 7,710 stores across the Americas. ^[7]
Share repurchases and authorization:
- AutoZone repurchased 108,000 shares in Q1 for about $431.1 million at an average price just under $4,000 per share. ^[8]
- The board previously authorized an additional $1.5 billion in buybacks on October 8, 2025, bringing lifetime repurchase authorizations to about $40.7 billion since 1998. ^[9]

In short: sales growth accelerated, comps meaningfully improved versus last year, and the store base kept expanding. But margins compressed, EPS fell year over year, and that combination is what the market punished today.

Why AutoZone’s Earnings Miss Spooked the Market

EPS and revenue fell short of expectations

Different data providers show slightly different consensus numbers, but the story is consistent: AutoZone missed Street estimates on both EPS and revenue.

Zacks, via Nasdaq, reports that AutoZone earned $31.04 per share, versus a consensus of $32.24, a –3.72% earnings surprise and the fourth straight quarter of missing EPS estimates. ^[10]
Revenue of $4.63 billion was just below the roughly $4.64–$4.65 billion analysts were expecting—a miss of about 0.25%. ^[11]

For a stock that trades at a premium multiple and is widely owned by institutions, even a small shortfall can trigger a disproportionately large price reaction, especially when it repeats over multiple quarters.

Margin pressure is now a clear theme

Both the company’s release and third‑party analyses emphasize the same point: margins are under pressure.

Gross margin fell from roughly the 53% area to 51%, with a 212 bps headwind from non‑cash LIFO accounting, which raises reported cost of goods sold when input costs have been rising. ^[12]
Operating margin compressed to about 16.9% from 19.7% in the prior‑year quarter, according to a TradingView/StockStory breakdown. ^[13]
Operating expenses rose to 34.0% of sales, up from 33.3%, reflecting higher store growth, wage and technology investments. ^[14]

The Wall Street Journal highlighted higher costs related to tariffs as a key factor behind the drop in profit despite an 8.2% revenue increase, underscoring that cost pressures may not be purely temporary. ^[15]

Today’s share price reaction in context

Price action on December 9, 2025 was unusually violent for AZO:

Midday, StockAnalysis showed AZO at about $3,503.15, down 7.0% on the session. ^[16]
MarketBeat reported the stock trading around $3,605.88, down 4.3% earlier in the day, with an intraday low of $3,536.96 versus a prior close of $3,766.96. ^[17]
Real‑time data as of late afternoon had AZO around $3,513.79, a 6.7% decline from yesterday’s close, with a day range roughly $3,490–$3,809 on above‑average volume. ^[18]

TradingView’s StockStory notes that AutoZone’s share price rarely moves more than 5% in a single day, so a drop of 6–7% signals the market views this earnings print as meaningfully negative news, at least in the short term. ^[19]

At the same time, the stock remains up year‑to‑date (albeit by a smaller margin after today) and is still trading around 15–19% below its 52‑week high near $4,350–4,400, depending on the data source. ^[20]

What Wall Street Analysts Are Saying About AZO Now

Despite the earnings miss and volatile session, sell‑side analysts remain broadly bullish on AutoZone.

Consensus ratings & price targets

StockAnalysis.com
- 21 analysts cover AZO.
- Consensus rating:“Strong Buy”
- Average 12‑month price target:$4,503, implying about 28.5% upside from around $3,503 at midday.
- Targets range from roughly $3,678 (low) to $4,850 (high). ^[21]
TipRanks
- 22 analysts; overall rating: “Strong Buy”.
- Average price target:$4,630.89, about 21% above a recent reference price near $3,823.
- Target range: $4,050–$4,900. ^[22]
MarketBeat
- Describes the average rating as “Moderate/Strong Buy”, with an average target around $4,545.73 and the overwhelming majority of firms rating the stock Buy or better. ^[23]

Public.com’s aggregation similarly shows 22 analysts with an overall “Buy” consensus and an average target near $4,464.91, reinforcing the idea that most professional coverage remains positive despite a run of EPS misses. ^[24]

Recent rating moves

Several notable moves in recent weeks have reset expectations ahead of and around today’s print:

Baird: Initiated coverage with a Buy rating and a $4,500 price target on December 4, 2025. ^[25]
Goldman Sachs: Upgraded AZO from Hold/Neutral to Strong Buy, raising its target to $4,262 in mid‑November. ^[26]
BMO Capital, Truist, Citi, Morgan Stanley, Roth and others all maintained or raised targets into the $4,500–$4,800+ range in late September, reflecting longer‑term confidence in AutoZone’s business model. ^[27]

A more cautious note from Zacks

One notable outlier is Zacks, which assigns AutoZone a Rank #3 (Hold) after noting that the company has failed to beat EPS estimates in any of the last four quarters. Zacks suggests the stock is likely to track, rather than strongly outperform, the broader market in the near term, absent a positive shift in earnings revisions. ^[28]

Quant and Technical Signals: Oversold or Broken Trend?

Algorithmic and technical services are also reacting to today’s move.

Intellectia.ai, which blends technical indicators, moving‑average trends and short‑selling data, characterizes AZO as a “Strong Buy candidate” in the near term, noting: ^[29]

The stock price fell about 6.9% in the latest session, ending around $3,507–$3,515.
Several momentum indicators (RSI, Stochastics, Williams %R, CCI) are in oversold territory, often associated with potential short‑term rebounds.
However, the short‑ and medium‑term moving‑average setup is more bearish, with the 20‑day below the 60‑day SMA, signaling that the recent downtrend is real, not just a one‑day blip. ^[30]

In simpler terms: technicals say “oversold but still in a down‑swing.” That cocktail often leads to sharp relief rallies, but it can also precede further volatility if fundamentals continue to disappoint.

Long-Term Growth Drivers: Why Many Analysts Stay Bullish

Even on a tough earnings day, much of the commentary emphasizes that AutoZone’s structural story remains intact.

Aging vehicle fleet is a major tailwind

AutoZone lives in the automotive aftermarket, which tends to benefit when:

Vehicles stay on the road longer.
New and used cars are expensive, pushing owners to repair rather than replace.

According to S&P Global Mobility, the average age of vehicles on U.S. roads reached about 12.8 years in 2025, with passenger cars averaging around 14.5 years and light trucks about 11.9 years—both record highs. ^[31]

An older fleet generally means more maintenance, more parts, and more demand for retailers like AutoZone and its competitors.

AutoZone continues to expand its footprint

The company added 53 net new stores this quarter, ending with 7,710 stores across the U.S., Mexico and Brazil. ^[32]
As of August 30, 2025, AutoZone already operated 7,657 stores, suggesting a consistent cadence of openings that targets both the DIY and professional installer markets. ^[33]

Compared with peers, AutoZone is still early in its international build‑out, and analysts often cite room for expansion in Latin America and beyond as a key long‑term growth lever.

Buybacks and capital allocation

AutoZone is famous for aggressive share repurchases:

The board has now authorized a cumulative $40.7 billion in buybacks since 1998. ^[34]
In Q1 FY2026 alone, $431.1 million was spent to retire 108,000 shares, with $1.7 billion still remaining under the current authorization. ^[35]
StockTitan data show a market cap around $63.6 billion, a relatively small share count (float roughly 16.6 million shares) and institutional ownership near 95%, which makes buybacks especially powerful in boosting EPS over time. ^[36]

CFO Jamere Jackson has emphasized that management believes it can fund store growth, maintain investment‑grade credit ratings, and still return large amounts of capital through repurchases—a stance that many analysts view as a core part of the equity story. ^[37]

Street forecasts for revenue and EPS

Wall Street models compiled by StockAnalysis suggest that, despite near‑term margin pressure, analysts expect steady growth over the next few years: ^[38]

Revenue
- FY2025: $18.94 billion (actual)
- FY2026E: $20.67 billion (+9.1%)
- FY2027E: $22.08 billion (+6.8%)
EPS (GAAP historical, forecast forward)
- FY2025: $144.87
- FY2026E: $155.54 (~7.4% growth)
- FY2027E: $183.47 (~18% growth)

In other words, many analysts see mid‑single‑digit to high‑single‑digit revenue growth translating into high‑single‑digit to double‑digit EPS growth, helped by buybacks and operating leverage—assuming the company can stabilize margins.

Key Risks Highlighted in Today’s Coverage

Today’s flurry of notes and articles also underscore several risks investors are watching:

Tariffs and cost inflation
- The Wall Street Journal points to higher costs from tariffs as an ongoing headwind to profitability. ^[39]
Operating expense growth and investments
- A Morgan Stanley report referenced by Finviz/StockStory warns that AutoZone’s increased spending on SG&A, store labor and business investments could pressure margins if not offset by higher productivity or pricing. ^[40]
LIFO accounting volatility
- The current quarter’s 212 bps LIFO hit shows how inventory accounting can significantly swing reported margins when costs move, complicating comparability versus peers using different methods. ^[41]
Inventory build‑up
- Inventory rose 13.9% year over year, which management attributes to growth initiatives and inflation. While that can support better service levels, it also ties up capital and creates risk if demand slows. ^[42]
Valuation and execution risk
- Even after today’s drop, AutoZone is not a “cheap” stock on traditional multiples, and several quarters of EPS misses vs. expectations raise the bar for management to rebuild credibility with investors. ^[43]

Upcoming Catalysts: Dec. 17 Annual Meeting and Beyond

Investors will get another look at management’s messaging shortly:

AutoZone will hold its Annual Meeting of Stockholders on Wednesday, December 17, 2025, at 9:00 a.m. ET at the J.R. Hyde III Store Support Center in Memphis, with a webcast available via the Investor Relations section of AutoZone’s website. ^[44]

That meeting, along with follow‑up commentary from the Q1 earnings call, will be closely watched for:

More detail on tariff impacts and cost control plans
How management prioritizes store growth vs. margin defense
Updates on capital allocation, leverage and the pace of future buybacks

Longer term, investors will also be tracking:

The trajectory of same‑store sales, especially in the professional installer business
Progress in international markets
How sustained an aging vehicle fleet tailwind proves to be if macro conditions change

Bottom Line: How to Read Today’s AutoZone Stock Sell-Off

Putting it all together:

The bad news:
- AutoZone missed both EPS and revenue estimates again, with margin compression and tariff‑related costs weighing on profitability.
- The market delivered a 6–7% one‑day drawdown, unusually large for AZO, and the stock now trades well below its recent highs. ^[45]
The good news:
- Sales growth remains robust, comps improved sharply versus last year, and AutoZone continues to open new stores and gain share, especially internationally. ^[46]
- Analyst sentiment is still strongly positive, with most price targets clustered 20–30% above today’s levels.
- The aging vehicle fleet, heavy institutional ownership, and large, ongoing buybacks all support the long‑term equity story. ^[47]

For investors and traders, December 9, 2025 is likely to be remembered as an inflection point in sentiment: a day when the market firmly signaled that margin stability now matters as much as sales growth for AutoZone.

Whether today’s drop proves to be a buying opportunity or the start of a longer re‑rating will depend heavily on:

Management’s ability to manage tariffs and cost inflation,
The trajectory of EPS vs. expectations over the next few quarters, and
How the broader market values steady, buyback‑driven compounders in a changing rate and macro environment.

Important: This article is for information and news purposes only. It does not constitute investment advice, a recommendation to buy or sell any security, or a substitute for independent financial judgment. Always do your own research and consider speaking with a qualified financial advisor before making investment decisions.