MEMPHIS, Tenn., Feb. 03, 2025 (GLOBE NEWSWIRE) -- AutoZone, Inc. (NYSE: AZO), the leading retailer and distributor of automotive replacement parts and accessories in the Americas, will release results for its second quarter ended Saturday, February 15, 2025, before market open on Tuesday, March 4, 2025. Additionally, the Company will host a one-hour conference call on Tuesday, March 4, 2025, beginning at 10:00 a.m. (ET), to discuss the results of the quarter. This call is being webcast and can be accessed, ...

Group 1: Company Performance - AutoZone's stock closed at $3,372.82, showing a +1.21% change from the previous day's closing price, outperforming the S&P 500 which fell by 1.46% [1] - The stock has increased by 2.8% over the past month, surpassing the Retail-Wholesale sector's gain of 2.27% and the S&P 500's gain of 1.08% [1] Group 2: Financial Projections - AutoZone's projected earnings per share (EPS) for the upcoming release is $29.11, indicating a 0.76% increase from the same quarter last year, with expected revenue of $3.98 billion, a 3.13% increase year-over-year [2] - For the entire fiscal year, earnings are projected at $152.94 per share and revenue at $18.79 billion, reflecting changes of +4.65% and +1.63% respectively from the prior year [3] Group 3: Analyst Estimates and Rankings - Recent analyst estimate revisions indicate optimism about AutoZone's business and profitability, with a Zacks Rank of 3 (Hold) [5][3] - The Zacks Rank system has a strong track record, with 1 stocks averaging a +25% annual return since 1988 [5] Group 4: Valuation Metrics - AutoZone is currently trading at a Forward P/E ratio of 21.79, which is lower than the industry average of 24.18, suggesting a comparative discount [6] - The company has a PEG ratio of 1.84, aligning with the industry average, which also indicates a balanced valuation considering expected earnings growth [7] Group 5: Industry Context - The Automotive - Retail and Wholesale - Parts industry ranks in the top 11% of all industries, with a Zacks Industry Rank of 26 [8] - The top 50% rated industries outperform the bottom half by a factor of 2 to 1, indicating a favorable environment for AutoZone within its industry [8]

Company Performance - AutoZone's stock closed at $3,373.57, reflecting a +1.43% increase, outperforming the S&P 500's gain of 0.53% on the same day [1] - Over the past month, AutoZone's stock has risen by 1.3%, which is below the Retail-Wholesale sector's increase of 2.71% and the S&P 500's increase of 2.69% [1] Upcoming Earnings - AutoZone is expected to report an EPS of $29.11, representing a 0.76% increase from the same quarter last year [2] - The consensus estimate for revenue is $3.98 billion, indicating a 3.13% increase from the prior-year quarter [2] Fiscal Year Estimates - For the entire fiscal year, earnings are projected at $152.94 per share and revenue at $18.79 billion, reflecting changes of +4.65% and +1.63% respectively from the previous year [3] Analyst Estimates - Recent adjustments to analyst estimates for AutoZone are important as they reflect changes in short-term business dynamics, with positive revisions indicating analyst optimism [4] - The Zacks Rank system, which assesses these estimate changes, has a strong track record, with 1 rated stocks averaging a +25% annual return since 1988 [5][6] Valuation Metrics - AutoZone's Forward P/E ratio is currently 21.75, which is lower than the industry's Forward P/E of 23.22, suggesting a valuation discount [7] - The company has a PEG ratio of 1.84, aligning with the average PEG ratio of the Automotive - Retail and Wholesale - Parts industry [8] Industry Context - The Automotive - Retail and Wholesale - Parts industry is part of the Retail-Wholesale sector and holds a Zacks Industry Rank of 14, placing it in the top 6% of over 250 industries [9]

Nikolaos Sismanis holds a BSc in Banking and Finance and has over five years of experience as an equities analyst. He covers a variety of growth stocks and income stocks, including identifying those with the highest expected return potential, and a solid margin of safety. He is a contributing author to the investing group He is a contributing author to the investing group Wheel of Fortune where they share actionable trading ideas across all asset-classes, sectors and industries. The goal of the service is t ...

Company Performance - AutoZone's stock closed at $3,239.62, reflecting a -0.36% change from the previous day, underperforming the S&P 500's gain of 0.16% [1] - The stock has decreased by 3.53% over the past month, contributing to the Retail-Wholesale sector's decline of 4.64% and exceeding the S&P 500's loss of 2.2% [1] Upcoming Earnings - AutoZone is expected to report earnings of $29.16 per share, indicating a year-over-year growth of 0.93% [2] - Revenue is projected to be $3.98 billion, representing a 3.13% increase compared to the same quarter last year [2] Fiscal Year Estimates - For the entire fiscal year, earnings are estimated at $153.09 per share and revenue at $18.79 billion, reflecting changes of +4.76% and +1.63% respectively from the previous year [3] Analyst Estimates - Recent modifications to analyst estimates indicate changing business trends, with upward revisions suggesting analysts' positive outlook on AutoZone's operations [4] - The Zacks Rank system, which incorporates these estimate changes, currently ranks AutoZone at 3 (Hold) [6] Valuation Metrics - AutoZone has a Forward P/E ratio of 21.24, which is lower than the industry's average Forward P/E of 23.69 [7] - The PEG ratio for AutoZone stands at 1.8, compared to the industry average of 1.82 [7] Industry Context - The Automotive - Retail and Wholesale - Parts industry ranks in the bottom 38% of all industries, with a Zacks Industry Rank of 157 [8] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [8]

Core Viewpoint - The Zacks Automotive - Retail and Wholesale - Parts industry faces significant challenges, particularly in the DIY segment, due to cautious consumer spending, while the demand for electric and autonomous vehicles offers growth opportunities, albeit with high capital expenditures impacting cash flows. The increasing average age of light vehicles is a strategic advantage for the industry, with O'Reilly Automotive, Inc. and AutoZone, Inc. positioned to benefit from these market dynamics [1]. Industry Overview - The Zacks Automotive – Retail and Wholesale – Parts industry involves retail, distribution, and installation of vehicle components, including various parts and accessories. Customers can choose between DIY repairs or professional services, with the industry experiencing competitive pressures and transformative shifts due to changing customer preferences and technological advancements [2]. Factors Influencing the Industry Outlook - The average age of vehicles in the U.S. has risen from 11.1 years to 12.6 years over the past decade, leading to increased demand for maintenance and parts replacements as older vehicles require more frequent servicing [3]. Weakness in DIY Segment - The DIY segment is facing challenges due to economic constraints leading to restrained consumer spending. Many customers are forced to undertake repairs out of necessity, which negatively impacts sales and gross margins. Limited recovery prospects in this segment are anticipated over the next 12 to 18 months [4]. High Capital Requirement - Auto part retailers are increasing investments in technology to enhance electronic catalog systems, which may constrain short-term cash flow. Additionally, resources are being allocated for rapid store expansions to bring inventory closer to customers [5]. Zacks Industry Rank - The Zacks Auto Retail & Wholesale Parts industry is ranked 157, placing it in the bottom 37% of approximately 250 Zacks industries, indicating tepid near-term prospects [6][7]. Earnings Outlook - The industry's positioning in the bottom 50% of Zacks-ranked industries is attributed to a negative earnings outlook, with aggregate earnings estimates for 2025 contracting by around 12.7% over the past year [8]. Industry Performance - The Zacks Auto Retail and Wholesale Parts industry has underperformed compared to the Auto, Tires and Truck sector and the Zacks S&P 500 composite, with a growth of 14.8% over the past year, while the sector and S&P 500 grew by 25.2% and 23%, respectively [10][11]. Current Valuation - The industry is currently trading at an EV/EBITDA ratio of 40.46X, significantly higher than the S&P 500's 18.20X and the sector's 21.26X. Over the past five years, the industry has traded between 14.13X and 42.61X, with a median of 28.99X [14][15]. Company Highlights - **O'Reilly Automotive, Inc.**: A leading specialty retailer of automotive aftermarket parts, O'Reilly has expanded into Mexico and Canada, operating 78 stores in Mexico and 26 in Canada. The company has generated record revenues for 31 consecutive years, with growth driven by vehicle longevity and store expansion. The Zacks Consensus Estimate for 2024 sales and EPS implies year-over-year growth of 5.24% and 6.19%, respectively [18][19]. - **AutoZone, Inc.**: A major retailer and distributor of automotive replacement parts, AutoZone is focusing on market penetration through mega hub expansions and plans to open up to 200 stores annually in Mexico and Brazil by 2028. The company's omni-channel efforts are enhancing customer experience and driving growth, with the Zacks Consensus Estimate for fiscal 2025 sales and EPS implying year-over-year growth of 1.63% and 4.76%, respectively [21][22][23].

Core Viewpoint - AutoZone's recent earnings report showed a mixed performance, with earnings per share missing expectations while revenues increased year-over-year. The company faces a downward trend in estimates, indicating potential challenges ahead [2][6][9]. Financial Performance - AutoZone reported earnings of $32.52 per share for Q1 of fiscal 2025, missing the Zacks Consensus Estimate of $33.54. This is a slight decrease from $32.55 per share in the same quarter of fiscal 2024 [2]. - Net sales grew 2.1% year-over-year to $4.28 billion, but also fell short of the Zacks Consensus Estimate of $4.29 billion [2]. - Domestic commercial sales reached $1.13 billion, up from $1.09 billion in the prior year, while domestic same-store sales increased by 0.3% [3]. - Gross profit rose to $2.27 billion from $2.21 billion in the previous year, but operating profit decreased by 0.8% year-over-year to $841 million [3]. Store Expansion and Inventory - During the quarter, AutoZone opened 23 new stores in the U.S., six in Mexico, and five in Brazil, bringing the total store count to 7,387 [4]. - Inventory increased by 8.7% year-over-year, with inventory per store rising to $849,000 from $806,000 a year ago [4]. Financial Position and Share Repurchases - As of November 23, 2024, AutoZone had cash and cash equivalents of $304 million, up from $298.2 million at the end of August 2024. Total debt was $9.01 billion, slightly down from $9.02 billion [5]. - The company repurchased 160,000 shares for $505.2 million at an average price of $3,156 per share, with $1.7 billion remaining under its current share repurchase authorization [5]. Market Sentiment and Outlook - There has been a downward trend in estimates for AutoZone, with a Zacks Rank of 3 (Hold), suggesting an expectation of in-line returns in the coming months [6][9]. - AutoZone has a strong Growth Score of A but lags in Momentum Score with an F, resulting in an aggregate VGM Score of C [7].

Core Viewpoint - AutoZone, Inc. anticipates solid growth in fiscal 2025 driven by strong performance in DIY and commercial businesses, despite high investments in electronic catalog improvements potentially limiting near-term cash inflows [1][7]. Group 1: Financial Performance - AutoZone achieved record sales for 35 consecutive years, with fiscal 2024 revenues of $18.5 billion, reflecting a 5.7% year-over-year increase [2]. - The company expects continued growth in fiscal 2025, supported by strong DIY and commercial business performance, enhanced inventory, and improved customer service [2][5]. Group 2: Expansion Strategies - The expansion of mega hubs and distribution centers is set to enhance market penetration and long-term growth prospects, with 111 mega hub locations established by the end of the first quarter of fiscal 2025 [3]. - AutoZone is focusing on international growth, particularly in Mexico and Brazil, aiming for up to 200 new store openings annually by 2028 [4]. Group 3: E-commerce and Customer Experience - The company's omni-channel efforts, including next-day shipping and in-store pickups, are driving online traffic and enhancing customer experience [5]. - The transformation of the distribution network aims to bring inventory closer to customers, improving efficiency and growth potential [5]. Group 4: Capital Allocation and Share Buybacks - AutoZone's robust share repurchase program saw $505 million in shares repurchased in the first quarter of fiscal 2025, with over $1.7 billion remaining under authorization [6]. - The company has consistently engaged in disciplined capital allocation, having repurchased more than 100% of outstanding shares since 1998 [6]. Group 5: Challenges and Risks - High capital expenditures exceeding $1 billion in fiscal 2024 and expected to remain the same in fiscal 2025 may limit near-term cash inflows [7]. - Foreign currency fluctuations, particularly a 13% decline in the Mexican peso against the U.S. dollar, resulted in significant reductions in sales and earnings in the fiscal first quarter [7].

Financial Performance - Net sales for the twelve weeks ended November 23, 2024, increased by $89.4 million to $4.3 billion, representing a 2.1% growth compared to the prior year period[43] - Domestic commercial sales rose by $35.3 million to $1.1 billion, or 3.2% over the comparable prior year period[43] - Gross profit for the twelve weeks ended November 23, 2024, was $2.3 billion, with a gross margin of 53.0%, up from 52.8% in the prior year[44] - Operating profit decreased by 0.9% to $841.1 million, negatively impacted by $17.0 million due to unfavorable exchange rates[46] - Net income decreased by 4.8% to $564.9 million, with diluted earnings per share slightly down by 0.1% to $32.52[46] Capital Expenditures and Store Openings - Capital expenditures for the twelve weeks ended November 23, 2024, were $247.0 million, driven by growth initiatives including new stores[56] - The company opened 34 net new stores during the twelve weeks ended November 23, 2024, compared to 25 in the prior year[56] Tax and Interest Rates - The effective income tax rate for the twelve weeks ended November 23, 2024, was 23.0% of pretax income, up from 21.6% in the prior year[45] - Net interest expense increased to $107.6 million, with average borrowings at $8.9 billion and a weighted average borrowing rate of 4.43%[51] Debt Management - The adjusted debt to EBITDAR ratio as of November 23, 2024, was 2.5:1, indicating a stable debt management strategy[63] - The company expects to maintain its investment grade credit ratings by targeting a ratio of adjusted debt to EBITDAR[63] - Adjusted debt as of November 23, 2024, was $12,126,520, with an adjusted debt to EBITDAR ratio of 2.5[76] - The company had outstanding fixed rate debt of $8.4 billion as of November 23, 2024, with a potential reduction in fair value of $344.5 million from a one percentage point increase in interest rates[88] Compliance and Financial Measures - As of November 23, 2024, the company was in compliance with all covenants under its borrowing arrangements[65] - The company uses non-GAAP financial measures to evaluate performance and make business decisions[68] Investment and Returns - Adjusted after-tax return on invested capital (ROIC) for the trailing four quarters ended November 23, 2024, was 47.7%, down from 55.0% for the comparable prior year period[62] - The average invested capital for the trailing four quarters ended November 23, 2024, was $7,061,709 thousand[73] Lease and Rent Expenses - Total lease cost per ASC 842 for the trailing four quarters ended November 23, 2024, was $602,034, up from $536,217 for the previous year[79] - Rent expense for the trailing four quarters ended November 23, 2024, was $454,189, compared to $412,210 for the previous year[79] Other Financial Information - The accounts payable to inventory ratio was 119.5% at November 23, 2024, down from 124.4% at November 18, 2023[59] - The company reported a net decrease of $15.0 million in commercial paper since the last report[83] - The fair value of the company's debt was estimated at $8.9 billion as of November 23, 2024, reflecting a decrease of $120.8 million from its carrying value[88] - The company had $565.0 million of variable rate debt outstanding as of November 23, 2024, with a potential annual impact of $5.7 million on pre-tax earnings from a one percentage point increase in interest rates[88] - The average debt for the trailing four quarters ended November 23, 2024, was $8,849,457 thousand[73] - The company amended its Revolving Credit Agreement on November 15, 2024, extending the termination date to November 15, 2028[64]

Company Promotions - AutoZone has announced the promotions of Bailey Childress to Senior Vice President, Omnichannel and Merchandising Support, and Luke Rauch to Senior Vice President, Merchandising and Global Sourcing [1][2][3] - Both promotions are aimed at enhancing AutoZone's leadership team and are expected to contribute to the company's growth and customer service [3] Company Overview - As of November 23, 2024, AutoZone operates a total of 7,387 stores, with 6,455 in the U.S., 800 in Mexico, and 132 in Brazil [4] - AutoZone is recognized as the leading retailer and distributor of automotive replacement parts and accessories in the Americas, offering a wide range of products for various vehicle types [5] - The company provides commercial sales programs and online purchasing options for both retail and commercial customers, without deriving revenue from automotive repair or installation services [5]