Financial Performance - Q2 FY2025 - Net sales increased by 2.4% [11] - Total company same store sales (SSS) increased by 2.9%, with domestic SSS up by 1.9% and international SSS up by 9.5% (constant currency) [11] - Diluted weighted average shares outstanding decreased by 3.3% compared to Q2 FY24 [11] - Gross margin remained consistent at 53.9% [8] - Operating profit (EBIT) decreased by 4.9% [8] - Net income decreased by 5.3% [8] - Diluted EPS decreased by 2.1% [8] Financial Performance - YTD Q2 FY2025 - Net sales increased by 2.3% [16] - Total company SSS increased by 2.4%, with domestic SSS up by 1.0% and international SSS up by 11.5% (constant currency) [16] - Diluted weighted average shares outstanding decreased by 4.0% compared to Q2 FY24 [16] Capital Allocation - The company repurchased $329 million in AutoZone stock during Q2 FY25 [11] - The company repurchased $834.6 million in AutoZone stock YTD FY25 [16] Store Expansion - The company expanded its US footprint 4.7% compared to Q2 FY24 [20] - Mexico footprint increased 8.3% compared to Q2 FY24 [21] - Brazil store count increased 25.9% since Q2 FY24 [21] Commercial Program - Domestic commercial sales increased by 7.3% versus Q2 FY24 [23]

Core Insights - AutoZone Inc. reported earnings of $28.29 per share for Q2 fiscal 2025, missing the Zacks Consensus Estimate of $29.16 and down from $28.89 per share in the same quarter of fiscal 2024 [1] - Net sales increased by 2.4% year over year to $3.95 billion, but also fell short of the Zacks Consensus Estimate of $3.99 billion [1] Financial Performance - Domestic commercial sales reached $1.05 billion, up from $980.1 million in the prior year [2] - Domestic same-store sales grew by 1.9% [2] - Gross profit rose to $2.12 billion from $2.08 billion year over year [2] - Operating profit decreased by 4.8% year over year to $706.8 million [2] Store Expansion and Inventory - AutoZone opened 28 new stores in the U.S., 13 in Mexico, and 4 in Brazil, bringing the total store count to 7,432 as of February 15, 2025 [3] - Inventory increased by 10.3% year over year, with inventory per store at $877,000 compared to $830,000 a year ago [3] Cash and Debt Position - As of February 15, 2025, AutoZone had cash and cash equivalents of $300.9 million, slightly up from $298.2 million as of August 31, 2024 [4] - Total debt stood at $9.05 billion, an increase from $9.02 billion as of August 31, 2024 [4] Share Repurchase Activity - The company repurchased 100,000 shares for $329.4 million during the fiscal second quarter at an average price of $3,291 per share [5] - At the end of the quarter, AutoZone had $1.3 billion remaining under its current share repurchase authorization [5] Market Position - AutoZone currently holds a Zacks Rank of 3 (Hold) [6] - Other better-ranked stocks in the auto sector include Geely Automobile Holdings Limited, Dana Incorporated, and Strattec Security Corporation, all with a Zacks Rank of 1 (Strong Buy) [6]

Core Insights - AutoZone reported $3.95 billion in revenue for the quarter ended February 2025, a year-over-year increase of 2.4%, but fell short of the Zacks Consensus Estimate by -0.89% [1] - The EPS for the same period was $28.29, down from $28.89 a year ago, representing an EPS surprise of -2.98% compared to the consensus estimate of $29.16 [1] Financial Performance Metrics - Same store sales in the domestic market increased by 1.9%, exceeding the seven-analyst average estimate of 1.3% [4] - Total Same Store Sales (Constant Currency) grew by 2.9%, compared to the 2.1% average estimate based on five analysts [4] - The total number of AutoZone stores reached 7,432, slightly above the four-analyst average estimate of 7,430 [4] - Domestic store count was 6,483, compared to the average estimate of 6,481 [4] - Net Sales for Auto Parts were reported at $3.87 billion, below the $3.91 billion average estimate, but showed a year-over-year increase of +2.3% [4] - Domestic Commercial sales reached $1.05 billion, surpassing the estimated $1.02 billion, reflecting a +7.3% change year-over-year [4] Stock Performance - AutoZone shares returned +1.3% over the past month, while the Zacks S&P 500 composite experienced a -2.3% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Insights - AutoZone reported quarterly earnings of $28.29 per share, missing the Zacks Consensus Estimate of $29.16 per share, representing an earnings surprise of -2.98% [1] - The company posted revenues of $3.95 billion for the quarter, missing the Zacks Consensus Estimate by 0.89%, compared to $3.86 billion in the same quarter last year [2] - AutoZone shares have increased by approximately 8.6% since the beginning of the year, while the S&P 500 has declined by -0.5% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $38.33 on revenues of $4.41 billion, and for the current fiscal year, it is $153 on revenues of $18.8 billion [7] - The estimate revisions trend for AutoZone is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Automotive - Retail and Wholesale - Parts industry is currently in the top 24% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8]

Core Viewpoint - AutoZone Inc. reported its fourth consecutive revenue miss in the fiscal second quarter, leading to a 1.1% decline in premarket shares [1] Financial Performance - Net income for the quarter ending February 15, 2025, was $488 million, or $28.29 per share, compared to $515 million, or $28.89 per share, in the same quarter of the previous year [1] - Analysts had anticipated earnings of $29.05 per share, indicating a shortfall in expected performance [1]

Core Insights - AutoZone, Inc. reported net sales of $4.0 billion for Q2 FY2025, reflecting a 2.4% increase from the same quarter in FY2024 [1] - Same store sales showed mixed results, with domestic sales increasing by 1.9% and international sales decreasing by 8.2% [1][24] - The company opened 45 new stores during the quarter, bringing the total store count to 7,432 [6] Financial Performance - Gross profit margin remained flat at 53.9%, with operating expenses increasing to 36.0% of sales compared to 34.6% last year [2] - Operating profit decreased by 4.9% to $706.8 million, and net income fell by 5.3% to $487.9 million [3] - Diluted earnings per share decreased by 2.1% to $28.29 [3] Inventory and Sales Metrics - Inventory increased by 10.4% year-over-year, with net inventory per store slightly improving to negative $161 thousand [4][25] - Total auto parts sales reached $3.87 billion, a 2.3% increase compared to the previous year [23] - Domestic commercial sales increased by 7.3% to $1.05 billion [23] Strategic Initiatives - The company continues to focus on growing its domestic DIY and commercial sales, with positive momentum heading into the spring and summer selling season [5] - AutoZone's international business showed strong results with same store sales growth of 9.5% on a constant currency basis [5] Share Repurchase and Capital Management - Under its share repurchase program, AutoZone repurchased 100,000 shares at an average price of $3,291, totaling $329.4 million [3] - The company has $1.3 billion remaining under its current share repurchase authorization [3]

Core Viewpoint - AutoZone, Inc. is expected to report an increase in quarterly earnings and revenue in its upcoming financial results, indicating positive growth trends for the company [1]. Financial Performance - AutoZone is projected to report quarterly earnings of $28.98 per share, an increase from $28.89 per share in the same period last year [1]. - The company anticipates quarterly revenue of $3.98 billion, compared to $3.86 billion a year earlier [1]. - In the fiscal first quarter, AutoZone reported earnings per share of $32.52, which was below the expected $33.76 [2]. Stock Performance and Analyst Ratings - AutoZone shares closed at $3,493.01, reflecting a gain of 1.4% [2]. - Barclays analyst Matthew McClintock raised the price target for AutoZone from $3,024 to $3,585, maintaining an Overweight rating [3]. - Argus Research analyst Bill Selesky increased the price target from $3,560 to $3,678 while maintaining a Buy rating [3]. - TD Cowen analyst Max Rakhlenko raised the price target from $3,450 to $3,800, also maintaining a Buy rating [3]. - BMO Capital analyst Tristan Thomas-Martin initiated coverage with an Outperform rating and a price target of $3,700 [3]. - Wells Fargo analyst Zachary Fadem increased the price target from $3,450 to $3,750 while maintaining an Overweight rating [3].

Core Insights - AutoZone is a leading player in the automotive parts retail industry with over 7,000 stores globally, showing strong Moneyball scores that indicate potential for further growth despite its premium valuation [1][11]. Financial Performance - AutoZone's Superscore is 74/100, with an exceptional Financial score of 93/100, reflecting strong overall business fundamentals [3][10]. - The company generated $1.9 billion in free cash flow over the past year, supported by steady revenue growth and excellent margins [6]. - AutoZone's GARP score of 88/100 suggests attractive growth potential relative to its stock valuation, with a 42% reduction in diluted share count over the past decade, enhancing per-share metrics [7][10]. Efficiency Metrics - The Return on Unleveraged Net Tangible Assets (ROUNTA) is 95.4%, indicating exceptional efficiency in generating cash flow from its asset base [5][10]. Technology and Innovation - AutoZone's Technology score is 55/100 and AI score is 37/100, indicating areas for improvement in digital transformation, although it ranks higher than peers Advance Auto Parts and O'Reilly Automotive in these metrics [8][10]. Valuation and Market Position - AutoZone shares trade at 22.7 times trailing earnings, the highest multiple in the past decade, necessitating the company to prove its ability to sustain these Moneyball scores and navigate industry disruptions [11].

Core Viewpoint - The article discusses the reliability of Wall Street analysts' recommendations, particularly focusing on AutoZone (AZO), and highlights the potential misalignment of brokerage firms' interests with those of retail investors [1][4]. Group 1: Brokerage Recommendations - AutoZone has an average brokerage recommendation (ABR) of 1.48, indicating a consensus between Strong Buy and Buy, based on 26 brokerage firms [2]. - Out of the 26 recommendations, 20 are Strong Buy and one is Buy, which accounts for 76.9% and 3.9% of all recommendations respectively [2]. Group 2: Limitations of Brokerage Recommendations - Solely relying on brokerage recommendations for investment decisions may not be advisable, as studies show they often fail to guide investors effectively towards stocks with high price appreciation potential [4]. - Analysts from brokerage firms tend to exhibit a strong positive bias in their ratings, issuing five "Strong Buy" recommendations for every "Strong Sell" [5]. Group 3: Zacks Rank vs. ABR - Zacks Rank is a proprietary stock rating tool that categorizes stocks into five groups based on earnings estimate revisions, which is a more effective indicator of near-term stock price performance compared to ABR [7][10]. - The Zacks Rank is updated more frequently than ABR, reflecting timely changes in earnings estimates, while ABR may not always be current [11]. Group 4: Current Earnings Estimates for AutoZone - The Zacks Consensus Estimate for AutoZone's current year earnings has declined by 0.1% to $152.94, indicating growing pessimism among analysts regarding the company's earnings prospects [12]. - Due to the recent changes in consensus estimates and other related factors, AutoZone has received a Zacks Rank of 4 (Sell), suggesting caution despite the Buy-equivalent ABR [13].

Core Viewpoint - AutoZone is set to report its earnings on March 4, 2025, with expectations of a slight increase in EPS and revenue compared to the previous year [2][3]. Company Performance - AutoZone's stock closed at $3,427.55, reflecting a +0.22% change from the previous day, which is lower than the S&P 500's gain of 0.67% [1]. - Over the past month, AutoZone shares have appreciated by 5.19%, underperforming the Retail-Wholesale sector's gain of 7.15% but outperforming the S&P 500's gain of 2.07% [1]. Earnings Estimates - The upcoming earnings report is expected to show EPS of $29.11, a 0.76% increase year-over-year, and net sales of $3.98 billion, up 3.13% from the prior year [2]. - Full-year estimates project earnings of $152.94 per share and revenue of $18.79 billion, representing year-over-year changes of +4.65% and +1.63%, respectively [3]. Analyst Sentiment - Recent changes in analyst estimates indicate a favorable outlook on AutoZone's business health and profitability [3]. - The consensus EPS projection has moved 0.09% lower in the past 30 days, and AutoZone currently holds a Zacks Rank of 3 (Hold) [5]. Valuation Metrics - AutoZone is trading with a Forward P/E ratio of 22.36, which is below the industry average of 25.02, indicating a discount compared to its peers [6]. - The company has a PEG ratio of 1.89, aligning with the average PEG ratio for the Automotive - Retail and Wholesale - Parts industry [7]. Industry Context - The Automotive - Retail and Wholesale - Parts industry is ranked 66 in the Zacks Industry Rank, placing it in the top 27% of over 250 industries [8].