Investing.com -- AutoZone Inc. (NYSE: AZO) shares fell 2.4% premarket on Tuesday after the auto parts retailer reported first-quarter earnings that missed analyst expectations, as investments in growth initiatives weighed on profitability despite solid sales growth.

The company reported earnings per share of $31.04 for the first quarter ended November 22, 2025, falling short of analyst estimates of $32.87. Revenue rose 8.2% YoY to $4.63 billion, slightly below the consensus estimate of $4.64 billion. Same-store sales increased 5.5%, with domestic same-store sales rising 4.8%.

The earnings miss came as gross profit margin decreased 203 basis points to 51.0%, primarily due to a 212 basis point non-cash LIFO impact. Operating expenses as a percentage of sales increased to 34.0% from 33.3% last year, which the company attributed to investments supporting growth initiatives.

"I would like to thank our AutoZoners for delivering another quarter of strong sales growth," said Phil Daniele, President and Chief Executive Officer. "Our Domestic and International businesses performed well throughout the quarter as we continue to execute on our growth initiatives."

AutoZone opened 53 new stores during the quarter, including 39 in the U.S., 12 in Mexico, and two in Brazil, bringing its total store count to 7,710. The company’s inventory increased 13.9% compared to the same period last year, driven by growth initiatives and inflation.

Commercial sales, a key growth area for AutoZone, increased 14.5% to $1.29 billion compared to the same period last year, with average weekly sales per program rising 10.1%.