Why Is AutoZone (AZO) Up 7.1% Since Last Earnings Report?

Core Viewpoint - AutoZone reported a mixed performance in its Q3 fiscal 2024 earnings, with earnings per share exceeding estimates but net sales falling short of expectations [2] Financial Performance - Earnings per share for Q3 fiscal 2024 were $36.69, a 7.5% increase year over year, surpassing the Zacks Consensus Estimate of $35.72 [2] - Net sales reached $4,235.5 million, reflecting a 3.5% year-over-year growth, but missed the Zacks Consensus Estimate of $4,292 million [2] - Domestic commercial sales increased to $1.14 billion from $1.11 billion in the prior year, while domestic same-store sales remained flat [2] - Gross profit rose to $2.26 billion from $2.14 billion in the previous year, and operating profit increased by 4.8% year over year to $900 million [2] Store Expansion and Inventory - 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 [3] - Inventory increased by 8% year over year, with inventory per store at $851,000 compared to $810,000 a year ago [3] Financial Position and Share Repurchases - As of May 4, 2024, AutoZone had cash and cash equivalents of $275.4 million, down from $277.1 million as of August 26, 2023 [4] - Total debt increased to $8.5 billion from $7.67 billion as of August 26, 2023 [4] - 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 [4] Market Sentiment and Outlook - Recent estimates for AutoZone have shown a downward trend, indicating a shift in market sentiment [5][7] - The stock has an average Growth Score of C, a Momentum Score of F, and a Value Score of B, placing it in the top 40% for value investment strategy [6] - AutoZone holds a Zacks Rank 3 (Hold), suggesting an expectation of an in-line return in the coming months [7]