AutoZone (AZO) Pulls Off a Surprise in Q3 Earnings, Sales Miss

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]