Investing.com -- AutoZone Inc. (NYSE: AZO) reported third-quarter results that beat earnings expectations but fell short on revenue, sending shares down 3.95% premarket following the announcement.

The automotive parts retailer posted adjusted EPS of $38.07 for the quarter ended May 9, 2026, surpassing the analyst consensus of $36.22 by $1.85. However, revenue of $4.84 billion missed estimates of $4.86 billion, though it represented an 8.4% increase from $4.46 billion in the prior year period. Domestic same-store sales rose 4.1%, while total company same-store sales increased 3.9% on a constant currency basis.

The revenue shortfall appeared to drive the negative market reaction despite the earnings beat. Gross margin declined 57 basis points to 52.2%, primarily due to a 77 basis point non-cash LIFO impact. Operating expenses as a percentage of sales improved to 33.1% from 33.3% last year, driven by strong sales growth and expense management.

"I want to thank our AutoZoners across the globe for delivering on our promise of 'WOW' customer service and strong financial results this past quarter," said Phil Daniele, President and Chief Executive Officer. "Along with strong domestic sales results, we managed our expenses well and returned to an operating margin north of 19% for the quarter."

Net income increased to $641.5 million from $608.4 million in the same quarter last year. The company opened 82 new stores globally during the quarter, including 57 in the U.S., 20 in Mexico, and five in Brazil, bringing total store count to 7,856.