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AutoZone (AZO) Warms Up to Q4 Earnings: What's in the Offing?

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AutoZone, Inc. (AZO - Free Report) is set to release fourth-quarter fiscal 2021 results tomorrow, before the opening bell. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings and revenues is pegged at $30.2 per share and $4.5 billion, respectively.

The leading provider of automotive replacement parts posted outstanding results for the last reported quarter on robust comparable sales growth. Over the trailing four quarters, AutoZone surpassed the Zacks Consensus Estimate on all occasions, with the average being 20.3%. This is depicted in the graph below:

AutoZone, Inc. Price and EPS Surprise

AutoZone, Inc. Price and EPS Surprise

AutoZone, Inc. price-eps-surprise | AutoZone, Inc. Quote

Trend in Estimate Revision

The Zacks Consensus Estimate for fiscal fourth-quarter earnings per share has moved 24 cents north in the past seven days. The bottom-line projection compares unfavorably with the year-ago earnings of $30.93 per share. The Zacks Consensus Estimate for quarterly revenues implies an insignificant change from the prior-year level.

Factors to Note

Sales growth in both retail DIY (‘Do-It-Yourself) and commercial DIFM (‘Do-It-For-Me) businesses is likely to have boosted the firm’s revenues during the to-be-reported quarter. The Zacks Consensus Estimate for domestic commercial sales is pegged at $1,103 million, calling for an increase from $976 million recorded in the year-ago quarter. Store expansion initiatives, fast delivery and high-quality products are also anticipated to have positively impacted the company’s top line in the fiscal fourth quarter. The consensus mark for the total number of AutoZone stores for the to-be-reported quarter stands at 6,744, calling for a jump from the year-ago period’s 6,549.

On the flip side, with the auto industry reeling under chip crisis, AutoZone is likely to have bore the brunt of rising commodity costs, which may have clipped gross margins. A tight labor market and global logistical challenges are also likely to have impacted the bottom line. Further, high SG&A expenses amid technological investments and the opening of distribution centers, mega hubs as well as stores may have dented operating margins in the quarter-to-be-reported.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for AutoZone this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Earnings ESP: AutoZone has an Earnings ESP of -4.11%. This is because the Most Accurate Estimate is pegged at $28.96 per share, which is $1.24 lower than the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: AutoZone — whose peers include Advance Auto Parts (AAP - Free Report) , O’Reilly Automotive (ORLY - Free Report) and CarMax (KMX - Free Report) — carries a Zacks Rank of 2 currently. You can see the complete list of today’s Zacks #1 Rank stocks here.