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AutoZone (AZO) Up 0.9% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for AutoZone (AZO - Free Report) . Shares have added about 0.9% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is AutoZone due for a pullback? 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 Q3 Earnings Beat Estimates, Revenues Miss
AutoZone Inc. reported earnings of $34.12 per share for third-quarter fiscal 2023 (ended May 6, 2023), up 17.5% year over year. Earnings surpassed the Zacks Consensus Estimate of $30.84. Net sales grew 5.8% year over year to $4,090.5 million. The top line, however, lagged the Zacks Consensus Estimate of $4,102.8 million.
In the reported quarter, domestic commercial sales totaled $1,110.5 million, up from $1,044.3 million recorded in the year-ago period. Domestic same-store sales (sales at stores open at least for a year) rose 1.9%. Gross profit increased to $2,146.1 million from the prior-year quarter’s figure of $2,006.4 million. Operating profit increased 9.3% year over year to $858.5 million.
Store Opening & Inventory
During the quarter, AutoZone opened 22 new stores in the United States, six in Mexico and two in Brazil. It exited the quarter with 6,248 stores in the United States, 713 in Mexico and 83 in Brazil. The total store count was 7,044 as of May 6, 2023.
AutoZone’s inventory increased 7.4% year over year in the reported quarter, led by growth initiatives and inflation. At quarter-end, the inventory per location was negative $215,000 compared with negative $216,000 a year ago.
Financials and Share Repurchases
As of May 6, 2023, AutoZone had cash and cash equivalents of $274.9 million, up from $263 million as of May 7, 2022. The total debt amounted to $7,340.5 million as of May 6, marking an increase from $6,057.4 million as of May 7, 2022.
AutoZone repurchased 356,000 shares of its common stock for $908.2 million during the fiscal third quarter of 2023 at an average price of $2,551 per share. At quarter-end, it had $843.6 million 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 a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, 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.
Outlook
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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AutoZone (AZO) Up 0.9% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for AutoZone (AZO - Free Report) . Shares have added about 0.9% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is AutoZone due for a pullback? 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 Q3 Earnings Beat Estimates, Revenues Miss
AutoZone Inc. reported earnings of $34.12 per share for third-quarter fiscal 2023 (ended May 6, 2023), up 17.5% year over year. Earnings surpassed the Zacks Consensus Estimate of $30.84. Net sales grew 5.8% year over year to $4,090.5 million. The top line, however, lagged the Zacks Consensus Estimate of $4,102.8 million.
In the reported quarter, domestic commercial sales totaled $1,110.5 million, up from $1,044.3 million recorded in the year-ago period. Domestic same-store sales (sales at stores open at least for a year) rose 1.9%. Gross profit increased to $2,146.1 million from the prior-year quarter’s figure of $2,006.4 million. Operating profit increased 9.3% year over year to $858.5 million.
Store Opening & Inventory
During the quarter, AutoZone opened 22 new stores in the United States, six in Mexico and two in Brazil. It exited the quarter with 6,248 stores in the United States, 713 in Mexico and 83 in Brazil. The total store count was 7,044 as of May 6, 2023.
AutoZone’s inventory increased 7.4% year over year in the reported quarter, led by growth initiatives and inflation. At quarter-end, the inventory per location was negative $215,000 compared with negative $216,000 a year ago.
Financials and Share Repurchases
As of May 6, 2023, AutoZone had cash and cash equivalents of $274.9 million, up from $263 million as of May 7, 2022. The total debt amounted to $7,340.5 million as of May 6, marking an increase from $6,057.4 million as of May 7, 2022.
AutoZone repurchased 356,000 shares of its common stock for $908.2 million during the fiscal third quarter of 2023 at an average price of $2,551 per share. At quarter-end, it had $843.6 million 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 a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, 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.
Outlook
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.