Home > Investing > Trade Wars Could Push Market Down 20% Investing One reason the stock market reacts so violently to trade talk is that the president can change his mind from day to day. In this market, it is impossible to forecast the future of many companies and industries. The president's plans can disrupt some days and be calm on others. The slow pace of tariff talks with China has upset President Trump. It is impossible to say whether he will change his tariff plans if those talks quicken. A Trade War ...

This is a special anniversary episode of Wall Street Week. I'm David Weston bringing you stories of capitalism. It was just a year ago that we debuted this new version of our program.It's been through several lives since Lewis Ruckiser first broadcast his original version on PBS back in November of 1970. >> Good evening. I'm Louisis Rukiser.This is Wall Street Week. Welcome back. >> Well, folks, it's New Year's again.Abby, welcome back. You've made this walk 10 times. I think you know the way.Thank you, Luk ...

Financial Performance - CarMax reported quarterly earnings of $0.64 per share, missing the Zacks Consensus Estimate of $1.03 per share, and down from $0.85 per share a year ago, representing an earnings surprise of -37.86% [1] - The company posted revenues of $6.59 billion for the quarter ended August 2025, missing the Zacks Consensus Estimate by 6.52%, and down from $7.01 billion year-over-year [2] - Over the last four quarters, CarMax has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2] Stock Performance - CarMax shares have lost about 30.2% since the beginning of the year, while the S&P 500 has gained 12.9% [3] - The current Zacks Rank for CarMax is 3 (Hold), indicating that shares are expected to perform in line with the market in the near future [6] Future Outlook - The current consensus EPS estimate for the coming quarter is $0.82 on revenues of $6.41 billion, and for the current fiscal year, it is $3.89 on revenues of $27.18 billion [7] - The outlook for the Automotive - Retail and Wholesale - Parts industry, where CarMax operates, is currently in the bottom 25% of Zacks industries, which may impact stock performance [8]

Group 1 - Analysts are optimistic about Aptiv PLC (NYSE:APTV) due to its expansion mode and upcoming spin-off of its software business, which is expected to enhance growth potential [1] - The total addressable market for Aptiv's software segment is estimated at $90 billion, with growth projected in the mid-single digits [1] - ClearBridge Large Cap Growth Strategy sold its position in Aptiv, citing weak global auto demand and slower-than-expected market share capture as reasons for their decision [1] Group 2 - The company has executed well on profitability and is currently trading at a cheap valuation, but growth relative to the market remains weak, limiting potential for multiple expansion [1]

Because of President Trump's tariff-policy decisions this year, AutoZone is under increasing pressure to significantly increase prices on many of the auto parts it sells in its 6,600 U.S. stores. The tariffs put in place so far have increased effective import taxes to 17.4%, the highest since 1935, according to Yale Budget Lab. That's a problem for auto-parts retailers, including AutoZone, because many auto parts are made in places like China, Germany and Japan. AutoZone at a glance: Annual revenue in f ...

Core Viewpoint - AutoZone's Q4 earnings report indicates a stable performance amidst macroeconomic challenges, with share buybacks significantly contributing to stock price gains and a bullish outlook for future growth [1][2][10]. Financial Performance - AutoZone reported Q4 revenue of $6.24 billion, reflecting a 0.5% increase year-over-year, which adjusts to a 6.9% growth when accounting for an extra week in the fiscal year [6]. - The company experienced a decline in net income to $837 million, with GAAP EPS at $48.71, but maintained a buyback ratio of approximately 53% [7]. Share Buybacks - The company reduced its share count by nearly 2% year-over-year in Q4 and by 3.2% for the year, enhancing leverage for investors [2]. - Persistent buyback activity has led to a shareholder deficit on the balance sheet, but this is overshadowed by its positive impact on stock price and cash flow [3]. Asset Management - At the close of fiscal 2025, AutoZone's cash declined by 8.8%, but this was offset by a $1 billion increase in current assets and a $2.2 billion increase in total assets, alongside a reduction in debt [4]. Growth Strategy - The company is accelerating store count openings and increasing inventory, which is expected to support future growth despite current margin pressures [3][8]. - Analysts forecast mid-single-digit revenue growth in 2026, with earnings expected to grow at an accelerated mid-teens pace [9]. Analyst Sentiment - AutoZone stock has a consensus Moderate Buy rating from 25 analysts, with a price target of $4,449.18, indicating a potential upside of 7.64% [10]. - The stock is projected to reach a new all-time high, with a high-end forecast of $4,925, representing a 20% upside [11].

Core Viewpoint - AutoZone Inc. reported fourth-quarter earnings that fell short of Wall Street expectations, primarily due to a significant LIFO charge, despite achieving solid sales growth [1]. Financial Performance - Adjusted earnings per share were $48.71, missing the consensus estimate of $50.93 [2]. - Revenue reached $6.24 billion, aligning with analyst forecasts, while sales increased 6.9% year-over-year when excluding the impact of an additional week in the previous year's quarter [2]. - Same-store sales rose 5.1% on a constant currency basis, with a 4.8% increase in domestic stores [2]. Profitability Metrics - Gross profit margin decreased by 98 basis points to 51.5%, impacted by an $80 million non-cash LIFO charge compared to none in the prior-year quarter [3]. - Operating expenses as a percentage of sales increased to 32.4% from 31.6%, reflecting investments in growth initiatives [3]. Growth and Expansion - AutoZone added 141 net new stores globally, bringing the total store count to 7,657 [4]. - Inventory rose by 14.1% year-over-year [4]. - For fiscal 2025, net sales were reported at $18.9 billion, up 2.4% from the previous year, while annual EPS decreased by 3.1% to $144.87 from $149.55 [4].

Financial Data and Key Metrics Changes - Total sales for the quarter were $6.2 billion, up 0.6% compared to the previous year, with a 6.9% increase on a 16-week basis [19][7] - Earnings per share (EPS) decreased by 5.6%, but adjusted for the previous year's extra week, EPS grew by 1.3% [7][19] - Excluding an $80 million LIFO charge, EPS would have increased by 8.7% on a 16-week basis [8][19] - Net income for the quarter was $837 million, down 0.5% year-over-year on a 16-week basis [30] Business Line Data and Key Metrics Changes - Domestic commercial sales grew by 12.5% on a 16-week basis, with same-store sales growth of 4.8% [5][19] - Domestic DIY same-store sales increased by 2.2%, with a positive average ticket growth of 3.9% [11][23] - International same-store sales were up 7.2% on a constant currency basis, but faced a 5-point currency headwind, resulting in a 2.1% unadjusted comp [8][19] Market Data and Key Metrics Changes - Domestic same-store sales showed a positive trend with a cadence of 4.4%, 2.4%, 6%, and 6.4% over the four segments of the quarter [10] - The company opened 90 net new domestic stores and 51 international stores during the quarter, totaling 304 net new stores for the year, the highest since 1996 [14][16] Company Strategy and Development Direction - The company plans to continue aggressive store openings, targeting 325 to 350 new stores in the Americas for FY26 [34][81] - Focus areas for FY26 include growing share in the domestic commercial business and maintaining momentum in international markets [35][38] - Investments in technology, customer service, and supply chain improvements are prioritized to enhance operational efficiency and customer experience [17][38] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about sales growth and market share gains, particularly in the domestic commercial segment [9][15] - The company anticipates continued inflationary pressures but remains confident in maintaining gross margins through disciplined pricing strategies [55][85] - Management highlighted the importance of customer service and execution as key drivers for future growth [35][39] Other Important Information - The company invested approximately $1.4 billion in capital expenditures for strategic growth priorities, with plans for similar investments in the upcoming year [17][30] - Free cash flow generated for the quarter was $511 million, contributing to a total of $1.8 billion for FY2025 [30][31] - The liquidity position remains strong, with a leverage ratio of 2.5 times EBITDA [31] Q&A Session Summary Question: Inflation expectations and pricing strategy - Management expects inflation to be at least 3% and possibly higher, using pricing strategies to cover costs while remaining competitive [45][55] Question: Growth in discretionary categories - Recent growth in discretionary categories is noted, but management cautions that the lower-end consumer remains under pressure [46] Question: LIFO charges outlook - LIFO charges are expected to be around $120 million in Q1, with potential pressure in subsequent quarters [51][53] Question: SG&A growth dynamics - SG&A growth is primarily due to investments in new stores, with expectations for mid-single-digit growth moving forward [56][58] Question: Growth opportunities in Mexico - Management sees significant growth potential in Mexico, with plans to accelerate store openings and expand market share [73][77]

Financial Data and Key Metrics Changes - Total sales for the quarter were $6.2 billion, up 0.6% compared to the previous year, and up 6.9% on a 16-week basis [18] - Earnings per share (EPS) decreased by 5.6% for the quarter, but would have increased by 8.7% when excluding an $80 million LIFO charge [6][7] - Net income for the quarter was $837 million, down 0.5% on a 16-week basis, while for the full year, net income was $2.5 billion, down 6.2% [29][19] Business Line Data and Key Metrics Changes - Domestic commercial sales grew by 12.5% on a 16-week basis, while domestic DIY same-store sales increased by 2.2% [5][14] - International same-store sales were up 7.2% on a constant currency basis, but faced a 5-point currency headwind, resulting in a lower unadjusted comp of 2.1% [7][16] - The average weekly sales per commercial program were approximately $18,200, up 9% year-over-year [20] Market Data and Key Metrics Changes - Domestic same-store sales grew by 4.8%, with a sales cadence showing positive trends throughout the quarter [10][18] - The company opened 90 net domestic stores and 51 international stores during the quarter, totaling 304 net new stores for the year, the most since 1996 [14][15] - The international store base now comprises over 13% of total stores, with plans for continued expansion [16] Company Strategy and Development Direction - The company aims to continue investing in customer service, product assortment, and supply chain improvements to drive long-term growth [16][17] - Plans for FY26 include opening 325 to 350 new stores in the Americas, with a focus on hubs and megahubs to enhance inventory availability [33][34] - The company is committed to maintaining a disciplined approach to capital allocation while returning cash to shareholders through buybacks [30][31] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about sales growth in FY26, driven by strong DIY and commercial sales trends [15][34] - The company anticipates continued inflationary pressures but believes it can manage pricing effectively without significantly impacting demand [72] - Management highlighted the importance of maintaining gross margins while expanding the commercial business [75] Other Important Information - The company invested approximately $1.4 billion in capital expenditures for growth initiatives and plans to invest a similar amount in the upcoming year [17] - The gross margin for the quarter was 51.5%, down 103 basis points year-over-year, primarily due to the LIFO charge [25] - Free cash flow generated for the quarter was $511 million, contributing to a total of $1.8 billion for FY2025 [29] Q&A Session Summary Question: Inflation expectations for the fiscal first quarter - Management expects inflation to be at least 3% and possibly higher, indicating a disciplined approach to pricing to cover costs [43][53] Question: Growth in discretionary categories - Management noted that discretionary categories have shown growth for the first time in a while, but the lower-end consumer remains under pressure [44][45] Question: LIFO charges outlook - Management anticipates LIFO charges of approximately $120 million in Q1, with potential pressure in subsequent quarters [50][51] Question: SG&A growth dynamics - SG&A growth is expected to remain elevated due to investments in new stores, with a plan to manage it in line with sales growth [54][55] Question: Growth opportunities in Mexico - Management sees significant growth potential in Mexico, with plans to accelerate store openings and expand market share [64][66]

Group 1: Earnings Performance - AutoZone reported quarterly earnings of $48.71 per share, missing the Zacks Consensus Estimate of $50.52 per share, representing an earnings surprise of -3.58% [1] - The company posted revenues of $6.24 billion for the quarter ended August 2025, surpassing the Zacks Consensus Estimate by 0.35%, compared to year-ago revenues of $6.21 billion [2] - Over the last four quarters, AutoZone has not been able to surpass consensus EPS estimates [2] Group 2: Stock Performance and Outlook - AutoZone shares have increased approximately 28.7% since the beginning of the year, outperforming the S&P 500's gain of 13.8% [3] - The current consensus EPS estimate for the coming quarter is $36.84 on $4.55 billion in revenues, and for the current fiscal year, it is $167.37 on $20.18 billion in revenues [7] - The estimate revisions trend for AutoZone was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Group 3: Industry Context - The Automotive - Retail and Wholesale - Parts industry is currently in the bottom 26% of over 250 Zacks industries, which may impact AutoZone's stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that investors should monitor these revisions closely [5]