AutoZone Inc. (NYSE:AZO) shares fell 6% intra-day on Tuesday after the auto parts retailer reported first-quarter earnings that missed analyst expectations, as increased spending on growth initiatives weighed on profitability despite steady sales momentum.

The company posted earnings of $31.04 per share for the quarter ended November 22, 2025, below the consensus estimate of $32.87. Revenue rose 8.2% year-over-year to $4.63 billion, narrowly missing expectations of $4.64 billion. Same-store sales increased 5.5%, with U.S. same-store sales up 4.8%.

Gross margin fell 203 basis points to 51.0%, largely due to a 212-basis-point non-cash LIFO adjustment. Operating expenses reached 34.0% of sales, up from 33.3% a year earlier, as the company continued to invest in strategic expansion.

AutoZone opened 53 new stores during the quarter, including 39 in the U.S., 12 in Mexico, and two in Brazil, bringing its total footprint to 7,710 locations.