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Why Is AutoZone (AZO) Down 2.5% Since Last Earnings Report?

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It has been about a month since the last earnings report for AutoZone (AZO - Free Report) . Shares have lost about 2.5% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is AutoZone due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

AutoZone Q2 Earnings & Sales Beat Estimates

AutoZone reported reported earnings of $24.64 per share for second-quarter fiscal 2023, up 10.5% year over year. Earnings surpassed the Zacks Consensus Estimate of $21.33 per share. Net sales grew 9.5% to $3,690.9 million. The top line beat the Zacks Consensus Estimate of $3,539 million.

In the reported quarter, domestic commercial sales totaled $954.6 million, up from $843.8 million recorded in the year-ago period. Domestic same-store sales (sales at stores open at least for a year) rose 5.3%. Gross profit increased to $1,930 million from the prior-year quarter’s figure of $1,785 million. Operating profit slipped 6.9% year over year to $670 million.

Store Opening & Inventory

During the quarter ended Feb 11, AutoZone opened 30 new stores in the United States, one in Mexico and five in Brazil. It exited the quarter with 6,226 stores in the United States, 707 in Mexico and 81 in Brazil. The total store count was 7,014 as of Feb 11.

AutoZone’s inventory increased 13.9% year over year in the reported quarter, led by growth initiatives and inflation. At quarter-end, the inventory per location was negative $227,000 compared with negative $198,000 a year ago.

Financials and Share Repurchases

As of Feb 11, 2023, AutoZone had cash and cash equivalents of $301.3 million, up from $239.4 million on Feb 12, 2022. The total debt amounted to $7,042.3 million as of Feb 11, marking an increase from $5,840.8 million on Feb 12, 2022.

Under its share repurchase program, AutoZone repurchased 372,000 shares of its common stock for $906 million during the fiscal second quarter of 2023, at an average price of $2,434 per share. At quarter-end, it had nearly $1.8 billion remaining under its current share repurchase authorization.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review.

VGM Scores

At this time, AutoZone has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.


Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, AutoZone has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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