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AutoZone's (AZO) Q2 Earnings Top, Sales Miss Estimates

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AutoZone, Inc. AZO has reported earnings of $12.39 per share in the second quarter of fiscal 2020 (ended Feb 15, 2020), up from the prior-year quarter figure of $11.49. Further, the reported figure surpassed the Zacks Consensus Estimate of $11.87. Net income inched up 1.6% year over year to $299.3 million.

In the reported quarter, net sales increased 2.6% year over year to $2,513.7 million. However, the top line missed the Zacks Consensus Estimate of $2,580 million.

Domestic commercial sales totaled $556.9 million, up from the $514.6 million recorded in the year-ago quarter. Domestic same-store sales (sales at stores open at least for a year) edged down 0.8% year over year.

Gross profit increased to $1,366 million from the prior-year quarter’s $1,325.1 million. Operating profit also went up to $407.9 million from the $400 million registered in the year-ago period.

AutoZone, Inc. Price, Consensus and EPS Surprise

Store Opening & Inventory

During the fiscal second quarter, AutoZone opened 25 stores in the United States, two in Mexico and one in Brazil. It exited the quarter with 5,815 stores in the United States, 608 in Mexico and 38 in Brazil. The total store count was 6,461 as of Feb 15, 2020.

AutoZone’s inventory improved 7% year over year in the reported quarter, aided by store openings and increased product placement. At the end of the quarter, inventory per location was $713,000, up from the year-ago figure of $690,000.

Financials and Share Repurchases

AutoZone had cash and cash equivalents of $152.97 million as of Feb 15, 2020, down from $195.66 million as of Feb 9, 2019. Total debt amounted to $5,451.5 million, marking an increase from $5,111.2 million as of Feb 9, 2019.

In the fiscal second quarter, AutoZone repurchased 267,000 shares for $314.8 million at an average price of $1,180 per share. At the end of this period, the company had shares worth $962 million remaining in the current repurchase authorization.

Zacks Rank & Stocks to Consider

AutoZone currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Auto-Tires-Trucks sector include LCI Industries (LCII - Free Report) , SPX Corp. SPXC and Adient PLC (ADNT - Free Report) . While LCI sports a Zacks Rank #1 (Strong Buy), SPX and Adient carry a Zacks Rank of 2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

LCI has an estimated earnings growth rate of 20.72% for the ongoing year. The company’s shares have gained 22.7% in a year’s time.

SPX has an expected earnings growth rate of 6.52% for 2020. The stock has rallied 23% in the past year.

Adient has a projected earnings growth rate of 17.79% for the current year. The company’s shares have appreciated 23.4% over the past year.

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