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Why Is AutoZone (AZO) Down 5.3% 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 5.3% 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 its most recent earnings report in order to get a better handle on the important catalysts.
AutoZone Q1 Earnings & Sales Beat Estimates
AutoZone reported earnings of $32.55 per share for first-quarter fiscal 2024 (ended Nov 18, 2023), up 18.6% year over year. Earnings surpassed the Zacks Consensus Estimate of $31.01 per share. Net sales grew 5.1% year over year to $4,190.3 million. The top line also surpassed the Zacks Consensus Estimate of $4,171.9 million.
In the reported quarter, domestic commercial sales totaled $1,092.9 million, up from $1,034.4 million recorded in the year-ago period. Domestic same-store sales (sales at stores open at least for a year) rose by 1.2%.
Gross profit increased to $2,214 million from the prior-year quarter’s figure of $1,994.6 million. Operating profit increased 17.4% year over year to $848.6 million.
Store Opening & Inventory
During the quarter, AutoZone opened 17 new stores and closed one store in the United States, five new stores in Mexico and four stores in Brazil. It exited the quarter with 6,316 stores in the United States, 745 in Mexico and 104 in Brazil. The total store count was 7,165 as of Nov 18, 2023.
Its inventory increased by 3% year over year in the reported quarter, led by new store growth. At quarter-end, the inventory per location was negative $197,000 compared with negative $249,000 a year ago.
Financials and Share Repurchases
As of Nov 18, 2023, AutoZone had cash and cash equivalents of $282.9 million, up from $269.7 million as of Nov 19, 2022.
Its total debt amounted to $8,583.5 million as of Nov 18, 2023, increasing from $6,328.3 million as of Nov 19, 2022.
The company repurchased 580,000 shares of its common stock for $1.5 billion during the fiscal first quarter at an average price of $2,590 per share. At quarter-end, it had $333.1 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 strong Growth Score of A, though it is lagging a lot 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 top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. 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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Why Is AutoZone (AZO) Down 5.3% Since Last Earnings Report?
It has been about a month since the last earnings report for AutoZone (AZO - Free Report) . Shares have lost about 5.3% 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 its most recent earnings report in order to get a better handle on the important catalysts.
AutoZone Q1 Earnings & Sales Beat Estimates
AutoZone reported earnings of $32.55 per share for first-quarter fiscal 2024 (ended Nov 18, 2023), up 18.6% year over year. Earnings surpassed the Zacks Consensus Estimate of $31.01 per share. Net sales grew 5.1% year over year to $4,190.3 million. The top line also surpassed the Zacks Consensus Estimate of $4,171.9 million.
In the reported quarter, domestic commercial sales totaled $1,092.9 million, up from $1,034.4 million recorded in the year-ago period. Domestic same-store sales (sales at stores open at least for a year) rose by 1.2%.
Gross profit increased to $2,214 million from the prior-year quarter’s figure of $1,994.6 million. Operating profit increased 17.4% year over year to $848.6 million.
Store Opening & Inventory
During the quarter, AutoZone opened 17 new stores and closed one store in the United States, five new stores in Mexico and four stores in Brazil. It exited the quarter with 6,316 stores in the United States, 745 in Mexico and 104 in Brazil. The total store count was 7,165 as of Nov 18, 2023.
Its inventory increased by 3% year over year in the reported quarter, led by new store growth. At quarter-end, the inventory per location was negative $197,000 compared with negative $249,000 a year ago.
Financials and Share Repurchases
As of Nov 18, 2023, AutoZone had cash and cash equivalents of $282.9 million, up from $269.7 million as of Nov 19, 2022.
Its total debt amounted to $8,583.5 million as of Nov 18, 2023, increasing from $6,328.3 million as of Nov 19, 2022.
The company repurchased 580,000 shares of its common stock for $1.5 billion during the fiscal first quarter at an average price of $2,590 per share. At quarter-end, it had $333.1 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 strong Growth Score of A, though it is lagging a lot 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 top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. 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.