Core Viewpoint - AutoZone reported its fourth-quarter earnings, missing profit estimates despite a rise in same-store sales, leading to a decline in early trading [2] Financial Performance - Same-store sales increased by 4.5% during the quarter, surpassing the consensus estimate of 4.4% [2] - Domestic same-store sales rose by 4.8%, compared to a consensus of 4.3% [2]

[Executive Summary & Financial Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Financial%20Highlights) AutoZone's executive summary highlights sales growth, margin pressures from LIFO and investments, ongoing share repurchases, and increased inventory to support growth initiatives [Fourth Quarter & Annual Overview](index=1&type=section&id=Fourth%20Quarter%20%26%20Annual%20Overview) AutoZone reported sales growth for Q4 and full-year FY2025, with net sales reaching $6.2 billion and $18.9 billion respectively, despite declines in gross margin and operating profit due to LIFO and growth investments Key Financial Data for Q4 and Full-Year FY2025 | Metric | Fourth Quarter (16 weeks) | YoY Change | Full Year (52 weeks) | YoY Change | | :------------------- | :---------------- | :--------- | :---------------- | :--------- | | **Net Sales** | $6.2 billion | +0.6% (GAAP), +6.9% (Adjusted) | $18.9 billion | +2.4% | | **Gross Margin** | 51.5% | -98 bps | 52.6% | -50 bps | | **Operating Profit** | $1.2 billion | -7.8% | $3.6 billion | -4.7% | | **Net Income** | $837.0 million | -7.2% | $2.5 billion | -6.2% | | **Diluted EPS** | $48.71 | -5.6% | $144.87 | -3.1% | - Fourth quarter gross margin decreased by **98 basis points**, primarily due to a **128 basis point non-cash LIFO impact** ($80 million LIFO charge this quarter, none in the prior year period)[2](index=2&type=chunk) - Operating expenses as a percentage of sales increased from **31.6%** in the prior year period to **32.4%**, mainly due to investments supporting growth initiatives[2](index=2&type=chunk) [Share Repurchase Program](index=1&type=section&id=Share%20Repurchase%20Program) AutoZone consistently executed its share repurchase program in Q4 and full-year FY2025, returning value to shareholders Share Repurchase Activity | Period | Shares Repurchased (thousands) | Total Investment ($ millions) | Average Repurchase Price (per share) | | :--- | :-------------- | :------------------ | :------------------- | | Fourth Quarter | 117 | $446.7 | $3,821 | | Fiscal Year | 447 | $1.5 billion | $3,425 | | Remaining Authorization | - | $632.3 | - | - As of the fiscal year-end, the company had **$632.3 million** remaining under its existing share repurchase authorization[5](index=5&type=chunk) [Inventory Overview](index=1&type=section&id=Inventory%20Overview) Company inventory increased by 14.1% year-over-year, driven by growth initiatives, with net inventory per store improving to negative $131,000 - Company inventory increased by **14.1%** compared to the prior year, primarily driven by growth initiatives[6](index=6&type=chunk) - Net inventory per store (merchandise inventory less accounts payable) was **negative $131,000**, an improvement from negative $163,000 in the prior year and negative $142,000 last quarter[6](index=6&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) President and CEO Phil Daniele expressed satisfaction with strong Q4 sales growth, highlighting successful domestic and international DIY and commercial strategies, with plans for aggressive new store openings to expand market share and create shareholder value through disciplined profit and cash flow growth - The company is pleased with the results of its domestic and international DIY and commercial sales strategies, with domestic sales showing continuous improvement throughout the quarter[7](index=7&type=chunk) - International business continued its strong performance, with comparable store sales increasing by **7.2%** on a constant currency basis[7](index=7&type=chunk) - A total of **141 net new stores** were opened globally this quarter, with **304 net new stores** for the full year, and plans for aggressive store expansion in the new fiscal year[7](index=7&type=chunk) [Company Overview](index=2&type=section&id=Company%20Overview) AutoZone is a leading retailer and distributor of automotive replacement parts and accessories in the Americas, offering a wide product range to DIY and commercial customers through physical stores and various online platforms, without providing automotive repair or installation services - AutoZone is the leading retailer and distributor of automotive replacement parts and accessories in the Americas[9](index=9&type=chunk) - The company offers a wide range of products, including new and remanufactured automotive hard parts, maintenance items, accessories, and non-automotive products, serving repair garages, dealers, and other commercial customers through its commercial sales program[9](index=9&type=chunk) - Products and information are sold through online channels including www.autozone.com, www.autozonepro.com, www.alldata.com, and www.duralastparts.com[9](index=9&type=chunk) [Conference Call Information](index=2&type=section&id=Conference%20Call%20Information) AutoZone will host a conference call on Tuesday, September 23, 2025, at 10:00 AM EDT to discuss Q4 results, accessible via the company's website or by phone - The conference call to discuss fourth quarter results will be held on **Tuesday, September 23, 2025, at 10:00 AM EDT**[10](index=10&type=chunk) - Investors can access the webcast and supporting slides through the "Investor Relations" section of AutoZone's website or by dialing **(888) 506-0062 (passcode 347798)**[10](index=10&type=chunk) [Non-GAAP Financial Measures](index=2&type=section&id=Non-GAAP%20Financial%20Measures) The company utilizes non-GAAP financial measures like adjusted sales, ROIC, and adjusted debt ratios to provide clearer year-over-year operational performance insights and manage its investment-grade credit rating [Explanation of Non-GAAP Measures](index=2&type=section&id=Explanation%20of%20Non-GAAP%20Measures) The company uses non-GAAP financial measures such as adjusted sales, Return on Invested Capital (ROIC), adjusted debt, and adjusted debt to EBITDAR ratio to present clearer year-over-year operating performance and assist management in maintaining an investment-grade credit rating - Non-GAAP measures include adjustments to exclude the impact of an extra week in the prior year's fourth quarter and fiscal year, Return on Invested Capital, Adjusted Debt, and Adjusted Debt to EBITDAR ratio[11](index=11&type=chunk) - The company believes these non-GAAP measures are useful to investors for a clearer understanding of year-over-year operating performance but should not be considered substitutes for GAAP measures[11](index=11&type=chunk) - Management maintains an investment-grade credit rating through capital structure management, deeming it critical for debt levels and share repurchase management[11](index=11&type=chunk) [Adjusted Debt / EBITDAR](index=6&type=section&id=Adjusted%20Debt%20%2F%20EBITDAR) The company reported an Adjusted Debt to EBITDAR ratio of 2.5x for both FY2025 and FY2024, demonstrating stability in its debt management Adjusted Debt / EBITDAR (in thousands of dollars) | Metric | FY2025 (52 weeks) | FY2024 (53 weeks) | | :------------------- | :---------------- | :---------------- | | EBITDAR | $4,811,103 | $4,892,402 | | Adjusted Debt | $11,977,901 | $12,109,980 | | **Adjusted Debt/EBITDAR** | **2.5** | **2.5** | - Adjusted debt includes debt, financing lease liabilities, and six times rent[19](index=19&type=chunk) [Adjusted Return on Invested Capital (ROIC)](index=6&type=section&id=Adjusted%20Return%20on%20Invested%20Capital%20(ROIC)) Adjusted Return on Invested Capital (ROIC) for FY2025 was 41.3%, a decrease from 49.7% in FY2024, reflecting increased invested capital and reduced adjusted after-tax return Adjusted Return on Invested Capital (ROIC) (in thousands of dollars) | Metric | FY2025 (52 weeks) | FY2024 (53 weeks) | | :------------------- | :---------------- | :---------------- | | Adjusted After-Tax Return | $3,246,514 | $3,380,045 | | Invested Capital | $7,869,085 | $6,798,295 | | **Adjusted ROIC** | **41.3%** | **49.7%** | - Invested capital calculation includes average debt, average shareholder deficit, six times rent, and average financing lease liabilities[20](index=20&type=chunk)[21](index=21&type=chunk) [Rent Expense Reconciliation](index=7&type=section&id=Rent%20Expense%20Reconciliation) The company provided a rent expense reconciliation under ASC 842, showing the difference between total lease cost and rent expense, primarily due to financing lease interest and amortization, and variable operating lease components Rent Expense Reconciliation (in thousands of dollars) | Metric | FY2025 (52 weeks) | FY2024 (53 weeks) | | :------------------------------------------------- | :---------------- | :---------------- | | Total Lease Cost under ASC 842 | $626,625 | $588,835 | | Less: Financing Lease Interest and Amortization | ($119,801) | ($103,670) | | Less: Variable Operating Lease Components related to Insurance and Common Area Maintenance | ($43,793) | ($37,472) | | **Rent Expense** | **$463,031** | **$447,693** | - The effective tax rates for FY2025 and FY2024 were **20.3%** and **20.2%**, respectively[22](index=22&type=chunk) [Forward-Looking Statements & Risk Factors](index=2&type=section&id=Forward-Looking%20Statements%20%26%20Risk%20Factors) This press release contains forward-looking statements protected by the Private Securities Litigation Reform Act of 1995, based on management's assumptions and assessments, subject to various risks and uncertainties including product demand, energy prices, competition, credit market conditions, inflation, and supply chain disruptions, where actual results may differ materially - Forward-looking statements are based on management's assumptions and assessments of experience, historical trends, current conditions, and anticipated future developments[12](index=12&type=chunk) - Risks and uncertainties include, but are not limited to, product demand, energy prices, weather, competition, credit market conditions, cash flow, financing, stock repurchases, recession impacts, consumer debt levels, legal and regulatory changes, war, public health issues, inflation, exchange rates, employee recruitment and retention, construction delays, IT system failures, cyberattacks, credit rating downgrades, reputational damage, international market challenges, supplier costs, inventory availability, supply chain disruptions, tariffs, and geopolitical factors[12](index=12&type=chunk) - Forward-looking statements are not guarantees of future performance, and actual results may differ materially from expectations[12](index=12&type=chunk) [Financial Performance](index=3&type=section&id=Financial%20Performance) This section presents AutoZone's condensed consolidated statements of operations, selected balance sheet information, and other key financial data for the reported periods [Condensed Consolidated Statements of Operations](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) [Fourth Quarter](index=3&type=section&id=Fourth%20Quarter) For Q4 FY2025 (16 weeks), net sales were $6.243 billion, gross profit was $3.216 billion, net income was $837.0 million, and diluted EPS was $48.71; adjusted Q4 FY2024 (16 weeks) net sales were $5.840 billion, net income was $841.5 million, and diluted EPS was $48.11 Condensed Consolidated Statements of Operations for Q4 FY2025 (GAAP) (in thousands of dollars) | Metric | Q4 FY2025 (16 weeks) | Q4 FY2024 (17 weeks) | | :------------------- | :------------------------ | :------------------------ | | Net Sales | $6,242,726 | $6,205,380 | | Cost of Sales | $3,026,233 | $2,947,517 | | Gross Profit | $3,216,493 | $3,257,863 | | Operating, Selling and Administrative Expenses | $2,020,428 | $1,961,183 | | Operating Profit (EBIT) | $1,196,065 | $1,296,680 | | Net Interest Expense | $148,087 | $153,151 | | Income Before Taxes | $1,047,978 | $1,143,529 | | Income Tax Expense | $211,027 | $241,321 | | Net Income | $836,951 | $902,208 | | Diluted EPS | $48.71 | $51.58 | | Diluted Weighted Average Shares (thousands) | 17,181 | 17,491 | Condensed Consolidated Statements of Operations for Q4 FY2025 (Adjusted) (in thousands of dollars) | Metric | Q4 FY2025 (16 weeks) | Q4 FY2024 (16 weeks) | | :------------------- | :------------------------ | :------------------------ | | Net Sales | $6,242,726 | $5,839,501 | | Cost of Sales | $3,026,233 | $2,770,662 | | Gross Profit | $3,216,493 | $3,068,839 | | Operating, Selling and Administrative Expenses | $2,020,428 | $1,858,905 | | Operating Profit (EBIT) | $1,196,065 | $1,209,934 | | Net Interest Expense | $148,087 | $144,142 | | Income Before Taxes | $1,047,978 | $1,065,792 | | Income Tax Expense | $211,027 | $224,297 | | Net Income | $836,951 | $841,495 | | Diluted EPS | $48.71 | $48.11 | | Diluted Weighted Average Shares (thousands) | 17,181 | 17,491 | [Fiscal Year](index=4&type=section&id=Fiscal%20Year) For FY2025 (52 weeks), net sales were $18.939 billion, gross profit was $9.966 billion, net income was $2.498 billion, and diluted EPS was $144.87; adjusted FY2024 (52 weeks) net sales were $18.124 billion, net income was $2.602 billion, and diluted EPS was $146.14 Condensed Consolidated Statements of Operations for FY2025 (GAAP) (in thousands of dollars) | Metric | FY2025 (52 weeks) | FY2024 (53 weeks) | | :------------------- | :---------------- | :---------------- | | Net Sales | $18,938,717 | $18,490,268 | | Cost of Sales | $8,972,243 | $8,673,216 | | Gross Profit | $9,966,474 | $9,817,052 | | Operating, Selling and Administrative Expenses | $6,356,318 | $6,028,344 | | Operating Profit (EBIT) | $3,610,156 | $3,788,708 | | Net Interest Expense | $475,824 | $451,578 | | Income Before Taxes | $3,134,332 | $3,337,130 | | Income Tax Expense | $636,085 | $674,703 | | Net Income | $2,498,247 | $2,662,427 | | Diluted EPS | $144.87 | $149.55 | | Diluted Weighted Average Shares (thousands) | 17,245 | 17,803 | Condensed Consolidated Statements of Operations for FY2025 (Adjusted) (in thousands of dollars) | Metric | FY2025 (52 weeks) | FY2024 (52 weeks) | | :------------------- | :---------------- | :---------------- | | Net Sales | $18,938,717 | $18,124,389 | | Cost of Sales | $8,972,243 | $8,496,361 | | Gross Profit | $9,966,474 | $9,628,028 | | Operating, Selling and Administrative Expenses | $6,356,318 | $5,926,066 | | Operating Profit (EBIT) | $3,610,156 | $3,701,962 | | Net Interest Expense | $475,824 | $442,569 | | Income Before Taxes | $3,134,332 | $3,259,393 | | Income Tax Expense | $636,085 | $657,679 | | Net Income | $2,498,247 | $2,601,714 | | Diluted EPS | $144.87 | $146.14 | | Diluted Weighted Average Shares (thousands) | 17,245 | 17,803 | [Selected Balance Sheet Information](index=5&type=section&id=Selected%20Balance%20Sheet%20Information) As of August 30, 2025, total assets were $19.355 billion, an increase from the prior year, primarily driven by higher merchandise inventory and net property and equipment, with an improved shareholder deficit and continued negative working capital Selected Balance Sheet Information (in thousands of dollars) | Metric | August 30, 2025 | August 31, 2024 | | :------------------- | :---------------- | :---------------- | | Cash and Cash Equivalents | $271,803 | $298,172 | | Merchandise Inventory | $7,025,688 | $6,155,218 | | Total Current Assets | $8,341,379 | $7,306,759 | | Net Property and Equipment | $7,062,509 | $6,183,539 | | Total Assets | $19,355,324 | $17,176,538 | | Accounts Payable | $8,025,590 | $7,355,701 | | Total Current Liabilities | $9,519,397 | $8,714,243 | | Total Debt | $8,799,775 | $9,024,381 | | Shareholder Deficit | ($3,414,313) | ($4,749,614) | | Working Capital | ($1,178,018) | ($1,407,484) | - Merchandise inventory increased by **14.1%** year-over-year, reaching **$7.026 billion**[17](index=17&type=chunk) - Shareholder deficit improved from **negative $4.750 billion** in FY2024 to **negative $3.414 billion** in FY2025[18](index=18&type=chunk) [Other Selected Financial Information](index=7&type=section&id=Other%20Selected%20Financial%20Information) The company disclosed cumulative share repurchases, remaining repurchase authorization, depreciation and amortization, operating cash flow, and capital expenditures, with cumulative share repurchases exceeding $38.5 billion and operating cash flow reaching $3.155 billion in FY2025 Other Selected Financial Information (in thousands of dollars) | Metric | August 30, 2025 | August 31, 2024 | | :------------------- | :---------------- | :---------------- | | Cumulative Share Repurchases ($) (since FY1998) | $38,517,689 | $36,986,031 | | Remaining Share Repurchase Authorization ($) | $632,311 | $2,163,969 | | Shares Outstanding at Quarter End (thousands) | 16,665 | 16,926 | | **Period Metrics** | **FY2025 (52 weeks)** | **FY2024 (53 weeks)** | | Depreciation and Amortization | $613,199 | $549,755 | | Cash Flow from Operating Activities | $3,155,401 | $3,004,116 | | Capital Expenditures | $1,365,321 | $1,072,696 | - Cash flow from operating activities for FY2025 was **$3.155 billion**, up from **$3.004 billion** in FY2024[23](index=23&type=chunk) - Capital expenditures for FY2025 increased to **$1.365 billion** from **$1.073 billion** in FY2024[23](index=23&type=chunk) [Operational Highlights](index=8&type=section&id=Operational%20Highlights) Operational highlights include continued store expansion, detailed sales and store statistics, same-store sales performance, and inventory management metrics [Store Expansion](index=8&type=section&id=Store%20Expansion) AutoZone continued to expand its store network in Q4 and full-year FY2025, opening 141 net new stores globally in Q4 and 304 for the full year, bringing the total store count to 7,657 Store Count and Regional Distribution | Region | August 30, 2025 (End of Period Store Count) | August 31, 2024 (End of Period Store Count) | | :--- | :-------------------------- | :-------------------------- | | United States | 6,627 | 6,432 | | Mexico | 883 | 794 | | Brazil | 147 | 127 | | **Total** | **7,657** | **7,353** | | **Net New Stores (Q4)** | **141** | **117** | | **Net New Stores (FY)** | **304** | **213** | - In Q4 FY2025, **91 new stores** opened in the US (1 closed), **45** in Mexico, and **6** in Brazil, totaling **141 net new stores**[8](index=8&type=chunk) [Store & Sales Statistics](index=8&type=section&id=Store%20%26%20Sales%20Statistics) In FY2025, AutoZone saw growth in average sales per store and per square foot, with domestic commercial sales continuing to increase and average sales per program per week significantly improving Store & Sales Statistics | Metric | Q4 FY2025 (16 weeks) | Q4 FY2024 (17 weeks) | FY2025 (52 weeks) | FY2024 (53 weeks) | | :------------------- | :------------------------ | :------------------------ | :---------------- | :---------------- | | Average Sales Per Store (thousands of dollars) | $823 | $835 | $2,523 | $2,505 | | Average Sales Per Square Foot ($) | $122 | $124 | $374 | $373 | | Total Domestic Commercial Sales (thousands of dollars) | $1,761,960 | $1,662,596 | $5,212,294 | $4,882,764 | | Domestic Commercial Sales YoY Growth | 6.0% | 10.9% | 6.7% | 6.2% | | Average Sales Per Program Per Week ($) | $18.2 | $16.7 | $16.7 | $15.9 | | Average Sales Per Program Per Week YoY Growth | 9.0% | 0.0% | 5.0% | -0.6% | - In FY2024, an extra week of sales contributed approximately **$359.1 million** to total sales, including **$95.7 million** in domestic commercial sales, benefiting average sales per store by **$49,000** and per square foot by **$7,000**[25](index=25&type=chunk) [Same Store Sales](index=9&type=section&id=Same%20Store%20Sales) In Q4 FY2025, total same store sales grew by 4.5%, or 5.1% on a constant currency basis, with domestic same store sales increasing by 4.8% and international same store sales by 7.2% at constant currency Same Store Sales Growth Rate | Category | Q4 FY2025 (16 weeks) | Q4 FY2024 (16 weeks) | FY2025 (52 weeks) | FY2024 (52 weeks) | | :------------------- | :------------------------ | :------------------------ | :---------------- | :---------------- | | Domestic | 4.8% | 0.2% | 3.2% | 0.4% | | International | 2.1% | 4.9% | -3.2% | 16.1% | | **Company Total** | **4.5%** | **0.7%** | **2.4%** | **2.1%** | | International (Constant Currency) | 7.2% | 9.9% | 9.3% | 10.2% | | Company Total (Constant Currency) | 5.1% | 1.3% | 3.9% | 1.4% | - Same store sales are calculated based on sales from stores open for at least one year, with constant currency same store sales excluding the impact of foreign exchange fluctuations[26](index=26&type=chunk) [Inventory Statistics](index=9&type=section&id=Inventory%20Statistics) As of August 30, 2025, total company inventory was $7.026 billion, with inventory per store at $918,000, an accounts payable to inventory ratio of 114.2%, net inventory (less accounts payable) of negative $999.9 million, and net inventory per store of negative $131,000 Inventory Statistics (in thousands of dollars) | Metric | August 30, 2025 | August 31, 2024 | | :------------------- | :---------------- | :---------------- | | Accounts Payable/Inventory | 114.2% | 119.5% | | Inventory | $7,025,688 | $6,155,218 | | Inventory Per Store | $918 | $837 | | Net Inventory (less Accounts Payable) | ($999,902) | ($1,200,483) | | Net Inventory Per Store | ($131) | ($163) | | **Inventory Turnover** | **1.4 x** | **1.5 x** | - Inventory turnover decreased from **1.5x** in FY2024 to **1.4x** in FY2025[27](index=27&type=chunk)

Core Insights - AutoZone, Inc. reported net sales of $6.2 billion for Q4 FY2025, a 0.6% increase from Q4 FY2024, with adjusted sales up 6.9% when excluding the additional week from the previous year [1][4] - The company opened 141 net new stores globally in the quarter, contributing to a total of 304 net new stores for the fiscal year [7][8] Financial Performance - Gross profit margin for Q4 FY2025 was 51.5%, down 98 basis points from the previous year, primarily due to a non-cash LIFO charge of $80 million [2][3] - Operating profit decreased by 7.8% to $1.2 billion, while net income fell to $837 million, a decrease of 7.2% from the prior year [3][4] - For the fiscal year, net sales reached $18.9 billion, a 2.4% increase, with net income decreasing by 6.2% to $2.5 billion [4][15] Store Expansion and Sales Growth - Domestic same-store sales increased by 4.8% for the quarter, while international same-store sales grew by 2.1% [1][25] - The company continues to focus on expanding its market share, with plans to aggressively open new stores in the upcoming fiscal year [7][8] Share Repurchase Program - During Q4 FY2025, AutoZone repurchased 117,000 shares at an average price of $3,821, totaling $446.7 million [5] - For the fiscal year, the total share repurchase amounted to 447,000 shares at an average price of $3,425, totaling $1.5 billion [5] Inventory Management - Inventory increased by 14.1% year-over-year, driven by growth initiatives, with net inventory per store improving to negative $131, compared to negative $163 the previous year [6][26] - The company reported an accounts payable to inventory ratio of 114.2%, indicating effective inventory management [26]

Earnings Reports - AutoZone Inc. is expected to report quarterly earnings of $50.83 per share with revenue of $6.24 million [2] - Firefly Aerospace Inc. reported a second-quarter loss of $5.78 per share, an increase from a loss of $4.60 per share a year ago, with sales declining to $15.549 million from $21.071 million [2] - AAR Corp. is anticipated to post earnings of 98 cents per share on revenue of $688.72 million for the latest quarter [2] - Micron Technology Inc. is expected to report quarterly earnings of $2.86 per share with revenue of $11.22 billion [2] Stock Performance - AutoZone shares decreased by 0.5% to close at $4,121.00 [2] - Firefly Aerospace shares fell by 12.4% to $43.38 in after-hours trading [2] - AAR shares increased by 0.5% to $77.28 in after-hours trading [2] - MBX Biosciences Inc. shares declined by 2.1% to $19.58 in after-hours trading [2] - Micron shares rose by 1% to $166.30 in after-hours trading [2]

Market Overview - Major indexes reached record-setting closing highs last week, but pre-market futures indicate a sell-off with the Dow down 170 points, S&P 500 down 22 points, Nasdaq down 92 points, and Russell 2000 down 5.5 points [1] - Bond yields remain flat, with the 10-year yield at 4.13% and the 2-year yield at 3.58% [1] Earnings Reports and Economic Data - No major earnings reports or economic data are expected today, as the market is in between quarterly earnings seasons [2] - Early Q3 earnings season is considered underway, with companies like FedEx already reporting [5] - Upcoming earnings reports include AutoZone, Micron, KB Home, and Costco [5] Economic Indicators - This week will see the release of New & Existing Home Sales figures for August, flash Services PMI from S&P and ISM, Retail/Wholesale Inventories, Durable Goods Orders, and the final print on Q2 GDP [6] - Personal Consumption Expenditures (PCE) for August will be released on Friday, which is the Fed's preferred gauge of inflation [6] Inflation Metrics - Headline PCE year over year is expected to increase by 10 basis points to +2.7%, following two months at +2.6% and a low of +2.2% in April [7] - Core PCE year over year is expected to remain at +2.9%, consistent with previous months [8] - The Fed's optimal inflation level is +2.0%, with the closest metric reaching +2.6% in April of this year [8]

Market Overview - Major indexes reached record-setting closing highs last week, but pre-market futures indicate a sell-off with the Dow down 170 points, S&P 500 down 22 points, Nasdaq down 92 points, and Russell 2000 down 5.5 points [1] - Bond yields remain flat, with the 10-year yield at 4.13% and the 2-year yield at 3.58% [1] Earnings Reports and Economic Data - No major earnings reports or economic data are expected today, as the market is in between quarterly earnings seasons [2] - Early Q3 earnings season is considered underway, with companies like FedEx already reporting [5] - Upcoming earnings reports include AutoZone, Micron, KB Home, and Costco [5] Federal Reserve Insights - Fed officials, including New York Fed President John Williams and others, will be speaking today [2] - Recent monetary policy decisions included a 25 basis points cut in interest rates, with Stephen Miran advocating for a more aggressive 50 basis points cut [3][4] - The Fed's preferred gauge of inflation, Personal Consumption Expenditures (PCE), is set to be released, with expectations for a year-over-year increase to 2.7% for August [6][7] Inflation Metrics - Core PCE is expected to remain at 2.9%, with the Fed's optimal inflation level at 2.0% [8]

Group 1 - AutoZone is expected to announce earnings on September 23, 2025, with forecasted revenue of approximately $6.25 billion, reflecting a 1% increase from the previous year [2] - Projected earnings per share are around $51, which is roughly unchanged from last year, indicating stable performance [2] - The company has a market capitalization of $71 billion, with total revenue over the past twelve months at $19 billion, operating profits of $3.7 billion, and net income of $2.6 billion [2] Group 2 - Historical data shows that AutoZone has recorded 20 earnings data points over the last five years, with 7 positive and 13 negative one-day returns, resulting in a 35% chance of positive returns [6] - The percentage of positive one-day returns drops to 25% when considering the last three years, indicating a potential decline in performance [6] - The median of positive returns is 3.7%, while the median of negative returns is -2.8%, highlighting the variability in post-earnings performance [6]

Economic Data Releases - This week will see the release of key economic indicators including the personal consumption expenditures price index, purchasing managers indexes, and home sales numbers [1] Company Earnings Reports - Companies such as CarMax, Cintas, and KB Home are scheduled to report their earnings this week [1]

Group 1 - Macquarie Asset Management's "Macquarie Core Equity Fund" reported a return of 11.94% in Q2 2025, outperforming the S&P 500 Index which rose by 10.94% [1] - The strong performance of the equity market was attributed to reduced concerns over potential tariffs from President Trump, leading to a pause in tariff implementation [1] - The fund's relative performance was primarily driven by sector selection (80%) and individual security selection (20%) [1] Group 2 - AutoZone, Inc. (NYSE:AZO) had a one-month return of 0.54% and a 52-week gain of 36.82%, with a market capitalization of $69.137 billion as of September 18, 2025 [2] - Despite its defensive nature, AutoZone's shares lagged behind the benchmark returns during the quarter as investors shifted towards more offensive securities [3] - AutoZone was held by 65 hedge fund portfolios at the end of Q2 2025, a decrease from 67 in the previous quarter, indicating a slight decline in popularity among hedge funds [3]

Core Viewpoint - AutoZone is a leading retailer and distributor of automotive replacement parts in the U.S., with a significant market presence and competition from other major players in the industry [1] Financial Performance Expectations - AutoZone is expected to release its quarterly earnings on September 23, 2025, with Wall Street estimating earnings per share (EPS) of $51.10 and projected revenue of approximately $6.25 billion, indicating a potential year-over-year increase in earnings driven by higher revenues for the quarter ending August 2025 [2] - The stock's movement will depend on the actual results compared to these estimates, with potential stock price increases if earnings surpass expectations, and declines if results fall short [3] Market Valuation Metrics - AutoZone has a price-to-earnings (P/E) ratio of approximately 27.65, indicating how the market values its earnings [4] - The price-to-sales ratio stands at about 3.75, reflecting the market's valuation of its revenue [4] - The enterprise value to sales ratio is around 4.38, suggesting how the market values the company in relation to its sales, including debt [4] - The enterprise value to operating cash flow ratio is approximately 25.57, indicating how the market values its cash flow from operations [5] - AutoZone's earnings yield is about 3.62%, providing insight into the earnings generated per dollar invested [5] - The debt-to-equity ratio of approximately -3.07 highlights its capital structure and leverage [5] - The current ratio of around 0.84 indicates its ability to cover short-term liabilities with short-term assets [5]