AutoZone(AZO)

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AutoZone(AZO) - 2024 Q3 - Earnings Call Transcript
2024-05-21 17:03
Financial Data and Key Metrics Changes - Total sales increased by 3.5% to $4.2 billion, with operating profit growing by 4.9% and earnings per share (EPS) rising by 7.5% [6][13][18] - Same store sales were up 1.9% overall, with a constant currency increase of 0.9% [6][8] - International same store sales grew by 9.3% on a constant currency basis [8][16] Business Line Data and Key Metrics Changes - Domestic commercial sales increased by 3.3%, while DIY sales saw a decline of 1% [9][10][15] - The commercial business represented 31% of domestic auto part sales, with 92% of stores now having commercial programs [9][13] - Traffic in the DIY segment was down approximately 2%, while average ticket size increased by 1% [11][15] Market Data and Key Metrics Changes - Domestic same store sales were flat, with a negative 0.7% comp in the first four weeks and a positive 0.3% in the last eight weeks of the quarter [8][10] - The Northeast and Midwest markets underperformed compared to other regions, with a disparity of nearly 200 basis points [9][10] Company Strategy and Development Direction - The company is focused on enhancing customer service and expanding its commercial business, which is seen as a significant growth opportunity [12][21] - Two new distribution centers are set to open in Q2 FY25, aimed at improving inventory availability and customer service [12][19] - The strategy includes leveraging technology and expanding mega hubs to improve delivery times and parts availability [14][21] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges from delayed tax refunds and adverse weather impacting sales, but expressed confidence in future sales acceleration [7][8] - The company remains cautious about the outlook for the remainder of the year but is optimistic about long-term growth prospects, particularly in international markets [8][12][21] Other Important Information - Gross margin improved to 53.5%, driven by better core business performance and vendor negotiations [17][18] - Free cash flow for the quarter was $434 million, with plans for significant capital expenditures to support growth initiatives [19][20] Q&A Session Summary Question: Can you discuss the cadence in the commercial business? - Management noted that the commercial business has been choppy, with recent weeks being particularly challenging due to weather conditions [24][25] Question: What are your expectations for inflation in pricing? - Management indicated that inflation is expected to normalize, moving away from the hyperinflation experienced in previous years [26][27] Question: Can you elaborate on vendor rebates and gross margin improvements? - Management confirmed that vendor relationships have improved, allowing for negotiations on deflation as inflationary pressures ease [28][29] Question: How are you addressing the performance of tire centers and other customer segments? - Management acknowledged that tire centers have been under pressure, with a flattening trend in that segment [30][31] Question: What is the outlook for mega hubs and their impact? - Management expressed excitement about the future of mega hubs, with plans to open over 200 at full build-out [33][34] Question: Are there specific initiatives to strengthen the business in the near term? - Management highlighted ongoing efforts to improve parts availability and delivery speeds as key initiatives to drive growth [58][59] Question: Are there signs of pressure on lower-income consumers affecting shopping patterns? - Management noted that while there are pressures on consumers, the company remains focused on its growth initiatives and believes in its market position [60]
AutoZone Pulling Back Into the Buy Zone
marketbeat.com· 2024-05-21 16:55
Core Viewpoint - AutoZone reported a solid quarter with mixed results relative to consensus, leading to a pullback in share prices, but the overall uptrend remains intact and may signal a buying opportunity soon [2][3]. Financial Performance - AutoZone's Q3 net revenue reached $4.24 billion, reflecting a 3.7% year-over-year increase, although it missed consensus by 160 basis points [3]. - Comparable store sales in the U.S. were flat, while international business grew at an 18% comparable rate due to new store openings [3]. - The company improved its gross margin by 102 basis points, primarily due to enhanced merchandise margins, resulting in a 4.9% increase in operating profits and a 7.5% increase in GAAP earnings, aided by share repurchases [3]. Share Buybacks and Cash Flow - AutoZone repurchased $735 million worth of shares in Q3, with repurchases in fiscal 2024 supported by the company's free cash flow [3]. - The balance sheet shows a flat cash position, low leverage, and an increasing deficit due to significant share buybacks, which is not viewed as a red flag but rather a strategy to enhance shareholder value [3]. Analyst Sentiment - Analysts maintain a "Moderate Buy" rating for AutoZone, with a price target suggesting an 11% upside from current levels, indicating potential for new all-time highs later in the year [4]. - Institutional support for the stock is solid, with critical support levels identified around $2,700, which, if breached, could lead to further declines before a rebound occurs [4]. Market Context - Despite the current market pullback, the overall outlook for AutoZone remains positive, with expectations of steady growth and solid cash flow continuing into the summer season [3][4].
AutoZone (AZO) Pulls Off a Surprise in Q3 Earnings, Sales Miss
zacks.com· 2024-05-21 16:30
Financial Performance - AutoZone Inc. reported earnings of $36.69 per share for Q3 fiscal 2024, reflecting a 7.5% increase year over year and surpassing the Zacks Consensus Estimate of $35.72 per share [1] - Net sales grew 3.5% year over year to $4,235.5 million, slightly missing the Zacks Consensus Estimate of $4,292 million [1] - Domestic commercial sales reached $1.14 billion, up from $1.11 billion in the prior year, while domestic same-store sales remained flat [1] - Gross profit increased to $2.26 billion from $2.14 billion in the prior-year quarter, and operating profit rose 4.8% year over year to $900 million [1] Store Expansion and Inventory - During the quarter, AutoZone opened 32 new stores in the U.S., 12 in Mexico, and one in Brazil, bringing the total store count to 7,236 as of May 4, 2024 [2] - Inventory increased by 8% year over year, with inventory per store at $851,000 compared to $810,000 a year ago [2] Financial Position and Share Repurchases - As of May 4, 2024, AutoZone had cash and cash equivalents of $275.4 million, a slight decrease from $277.1 million as of August 26, 2023 [3] - Total debt amounted to $8.5 billion, up from $7.67 billion as of August 26, 2023 [3] - The company repurchased 242,000 shares for $737.7 million during the fiscal third quarter at an average price of $3,036 per share, with $1.4 billion remaining under its current share repurchase authorization [3] Market Position - AutoZone currently holds a Zacks Rank 3 (Hold) [4] - Competitors with better rankings include Blue Bird Corp. (Zacks Rank 1), Oshkosh Corp. (Zacks Rank 1), and Ford (Zacks Rank 2) [4][5]
AutoZone (AZO) Q3 Earnings: Taking a Look at Key Metrics Versus Estimates
zacks.com· 2024-05-21 14:31
Core Insights - AutoZone reported revenue of $4.24 billion for the quarter ended May 2024, reflecting a year-over-year increase of 3.5% [1] - The earnings per share (EPS) for the quarter was $36.69, up from $34.12 in the same quarter last year [1] - The reported revenue fell short of the Zacks Consensus Estimate of $4.29 billion, resulting in a surprise of -1.16%, while the EPS exceeded the consensus estimate of $35.67 by 2.86% [1] Financial Performance Metrics - Same store sales in the domestic market showed no change year-over-year, compared to an average estimate of 2.4% growth [2] - Total square footage was reported at 48,567 Ksq ft, slightly below the estimated 48,658.56 Ksq ft [2] - Square footage per store was 6,712 thousand, compared to the average estimate of 6,726.23 thousand [2] - The total number of AutoZone stores reached 7,236, in line with the average estimate of 7,235 [2] - Domestic store count remained at 6,364, matching the average estimate [2] - Sales per average square foot were $86 thousand, below the average estimate of $91.84 thousand [2] - Sales per average store were $576 thousand, compared to the average estimate of $587.29 thousand [2] - In Mexico, 12 new stores were opened, exceeding the average estimate of 9 [2] - In the domestic market, 32 new stores were opened, slightly below the average estimate of 35 [2] - Net sales for auto parts were $4.16 billion, compared to the average estimate of $4.21 billion, marking a 3.5% year-over-year increase [2] - Net sales from all other categories were $79.07 million, slightly above the estimated $78.39 million, representing a 7.1% year-over-year increase [2] - Domestic commercial sales reached $1.15 billion, below the average estimate of $1.18 billion, with a year-over-year increase of 3.3% [2] Stock Performance - Over the past month, AutoZone shares have returned -1.3%, contrasting with the Zacks S&P 500 composite's increase of 7.1% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]
AutoZone(AZO) - 2024 Q2 - Quarterly Results
2024-05-21 10:55
EXHIBIT 99.1 AutoZone 3rd Quarter Total Company Same Store Sales Increase 0.9%; Domestic Same Store Sales were flat; EPS Increases to $36.69 MEMPHIS, Tenn., May 21, 2024 (GLOBE NEWSWIRE) -- AutoZone, Inc. (NYSE: AZO) today reported net sales of $4.2 billion for its third quarter (12 weeks) ended May 4, 2024, an increase of 3.5% from the third quarter of fiscal 2023 (12 weeks). Same store sales, or sales for our domestic and international stores open at least one year, are as follows: Constant Currency 12 We ...
AutoZone 3rd Quarter Total Company Same Store Sales Increase 0.9%; Domestic Same Store Sales were flat; EPS Increases to $36.69
globenewswire.com· 2024-05-21 10:55
MEMPHIS, Tenn., May 21, 2024 (GLOBE NEWSWIRE) -- AutoZone, Inc. (NYSE: AZO) today reported net sales of $4.2 billion for its third quarter (12 weeks) ended May 4, 2024, an increase of 3.5% from the third quarter of fiscal 2023 (12 weeks). Same store sales, or sales for our domestic and international stores open at least one year, are as follows: Constant Currency 12 Weeks 12 Weeks* Domestic0.0% 0.0%International18.1% 9.3%Total Company1.9% 0.9%* Excludes impacts from fluctuations of foreign exchang ...
3 Under-the-Radar Auto Parts Stocks to Buy for Long-Term Growth
investorplace.com· 2024-05-21 10:26
Auto parts stocks often fly under the radar, getting little to no investor attention compared to their larger industry peers. While it’s the big-name car manufacturers that consistently grab headlines and investor focus, auto parts stocks have historically outperformed.Unlike automotive manufacturers, whose sales often fluctuate due to the industry’s cyclical nature, auto parts distributors and retailers experience more stable sales. Even during economic downturns, when new car sales decline, there remains ...
Top 5 Thriving Giants With Solid Upside to Tap Market Rally
zacks.com· 2024-05-20 13:05
U.S. stock markets have resumed momentum with much vigor in May after a brief halt in April. Market participants witnessed an impressive 15-month rally before April. The rebound in May has taken a section of financial experts by surprise as they warned of further downside due to higher stock valuations and the Fed’s decision to keep interest rates higher for longer than expected.Favorable Economic DataWall Street rebounded in early May following a sharp decline in the April job additions, a notable deterior ...
5 Best CEFs This Month For A 10% Yield (May 2024)
seekingalpha.com· 2024-05-19 14:00
Olivier Le Moal In this monthly article, we try to identify five closed-end funds ("CEFs") that have a solid historical performance, pay high enough distributions, and offer reasonable valuations at the current time. We also present a more diversified list of the top 10 funds. Author's Note: This article is part of our monthly series that tries to discover the five best buys in the CEF arena at that time. Certain parts of the introduction, definitions, and sections describing selection criteria/process ...
Wall Street Favorites: 3 Retail Stocks With Strong Buy Ratings for May 2024
investorplace.com· 2024-05-17 20:14
Core Viewpoint - The retail industry has faced significant challenges over the past five years, including the pandemic, store closures, and a shift towards online shopping, compounded by high inflation and interest rates, leading to a slowdown in consumer spending. However, certain retail stocks are still considered viable investment opportunities as interest rates may decrease in the near future [1]. Retail Industry Overview - The recent retail sales report for April indicated flat growth, suggesting a slowdown in consumer spending due to persistent inflation and high interest rates. Economists anticipate potential relief if the U.S. Federal Reserve lowers interest rates in September, which could positively impact retail stocks [1]. Walmart (WMT) - Walmart reported first-quarter earnings per share (EPS) of 60 cents, exceeding the forecast of 52 cents, with revenue of $161.51 billion, surpassing the estimated $159.5 billion. The growth was driven by a 22% year-over-year increase in e-commerce sales and a 24% rise in global advertising sales [4]. - The stock has gained 28% over the past year, with a median price target of $66.64, indicating a potential 3% upside from current levels [3][4]. Lululemon Athletica (LULU) - Lululemon's stock has declined 34% this year, but analysts rate it a strong buy, with a median price target of $472.60, representing a 41% upside. Despite recent challenges, including slowing U.S. sales and plans to close a distribution center, the company reported strong international sales growth of 54% year-over-year, with China sales increasing by 78% [5][6]. - Lululemon's stock has increased 94% over the last five years, indicating long-term growth potential despite current setbacks [6]. AutoZone (AZO) - AutoZone is rated a strong buy by 18 analysts, with a median price target of $3,314.72, suggesting a 13% upside. The company has benefited from a growing trend towards DIY automotive repairs, particularly for older vehicles [7][8]. - AutoZone's stock has risen 13% this year and has nearly tripled over the past five years, with a remarkable increase of 95 times since the company began share repurchases in 1999 [8].