AutoZone's (AZO) fiscal second-quarter earnings unexpectedly edged down, while revenue fell short of market estimates amid foreign-exchange headwinds.

The auto parts retailer on Tuesday reported net income of $28.29 a share for the three months through Feb. 15, nudging lower from $28.89 a year earlier. The consensus on FactSet was for the metric to rise to $29.29. Sales rose to $3.95 billion from $3.86 billion, but missed Wall Street's view for $3.98 billion.

"We had a headwind from foreign exchange rates this quarter from Mexico, weakened 19% versus the US dollar for the quarter, resulting in a $91 million headwind to sales," Chief Financial Officer Jamere Jackson said during an earnings call, according to a FactSet transcript. Based on current rates, foreign exchange is expected to be a roughly $106 million drag on revenue in the ongoing quarter and a $101 million hit in the subsequent quarter, according to Jackson.

Domestic same-store sales grew 1.9% in the second quarter, accelerating from a 0.3% increase in the prior-year period, while international comparable sales fell 8.2%. Overall same-store sales moved 0.5% higher, trailing the average analyst estimate for a 1.9% gain.

"Domestically, both (do-it-yourself) and commercial continued to perform well and sales accelerated from the previous quarter," Chief Executive Phil Daniele said in a statement. "While currency rate moves pressured reported sales and earnings, our international performance remains encouraging as we continue to focus on opening more stores in these markets."

Jackson told analysts there are several outcomes from potential tariffs that may influence AutoZone's results, "including vendor absorption, diversifying, sourcing, taking pricing actions, or some combination of the three." The retailer aims to maintain its margin profile post-tariffs and expects the entire auto industry to "behave in a rational way," Jackson said on the call.

President Donald Trump's recently announced 25% tariffs against Canada and Mexico went into effect Tuesday, while the US government doubled its levy on Chinese imports to 20%.

China and Canada responded with retaliatory tariffs on US goods, with Beijing announcing 15% tariffs on chicken, wheat, corn, and cotton imports and a 10% levy on certain other products, according to media reports. Canada reportedly vowed to implement a 25% tariff on CA$30 billion ($20.65 billion) worth of US goods immediately, followed by an additional CA$125 billion in three weeks' time.

Mexico's response is expected Sunday, media outlets reported, citing President Claudia Sheinbaum.

Higher tariffs could be a "major lever" to AutoZone's sales acceleration, both from higher same stock keeping unit inflation and a potential shift towards auto repair from new vehicle purchases, Truist Securities said in a Tuesday client note.