AutoZone, Inc. (NYSE: AZO) is a leading retailer and distributor of automotive replacement parts and accessories in the Americas, catering to both retail and commercial customers. As of May 10, 2025, the company operates a total of 7,516 stores, which includes 6,537 in the U.S., 838 in Mexico, and 141 in Brazil.

In Q3 of fiscal year 2025, AutoZone reported a rise in sales, reaching $4.5 billion, marking a 5.4% increase from the same quarter last year. The company delivered a same-store sales growth of 5.0% in its domestic segment, which is the highest recorded since Q2 of fiscal 2022. Internationally, on a constant currency basis, same-store sales increased by 8.1%. However, reported international sales faced a significant decline of 9.2% due to adverse currency exchange effects.

Total earnings before interest and taxes (EBIT) for the quarter decreased by 3.8% to $866 million. The net income for the quarter was $608 million, a drop of 6.6% compared to the same period last year, reflecting diluted earnings per share of $35.36, down 3.6% year-over-year. AutoZone’s gross margin was 52.7%, decreasing by 77 basis points from the prior year, impacted by higher inventory shrinkage, a greater proportion of commercial sales, and costs associated with new distribution centers. The operating expenses increased to 33.3% of sales, up from 32.2% last year.

The company attributed part of the earnings decline to a significant foreign exchange headwind, which reduced sales by $89 million and EBIT by $27 million. Adjusting for the forex impact, the EPS decline would have been just 0.6%. AutoZone reported free cash flow at $423 million, compared to $434 million in the same quarter of the previous year.

During the third quarter, AutoZone opened 54 new domestic stores and expanded internationally with 25 new stores in Mexico and five in Brazil. The company has also been actively repurchasing shares, investing $250 million to buy back 70,000 shares during the quarter, with $1.1 billion remaining under its stock repurchase authorization. The inventory increased by 10.8% year-over-year, driven by new store openings and strategic growth initiatives.

Looking ahead, the company expects sales trends to remain strong as it enters the fourth quarter, with a continued focus on enhancing customer service, optimizing its supply chain, and expanding its store footprint.

Overall, AutoZone displays a stable upward trend in sales growth, although current profitability has been challenged by external currency impacts and increased operational costs.