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AutoZone (AZO) Q3 Earnings and Sales Top Estimates, Down Y/Y

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AutoZone, Inc. (AZO - Free Report) has delivered earnings of $14.39 per share in the third quarter of fiscal 2020 (ended May 9, 2020), down from the prior-year quarter figure of $15.99. The reported figure, however, surpassed the Zacks Consensus Estimate of $13.82. Net income declined 15.5% year over year to $342.9 million.

In the fiscal third quarter, net sales slid 0.14% year over year to $2.78 billion. Yet, the top line surpassed the Zacks Consensus Estimate of $2.72 billion.

Domestic commercial sales totaled $573.8 million, down from the $614.8 million recorded in the year-ago quarter. Domestic same-store sales (sales at stores open at least for a year) edged down 1% year over year.

Gross profit decreased to $1,490.6 million from the prior-year quarter’s $1,492 million. Operating profit also went down to $491.7 million from the $547.5 million registered in the year-ago period.

AutoZone, Inc. Price, Consensus and EPS Surprise

Store Opening & Inventory

During the fiscal third quarter, AutoZone opened 21 stores in the United States, two in Mexico and none in Brazil. It exited the quarter with 5,836 stores in the United States, 610 in Mexico and 38 in Brazil. The total store count was 6,484 as of May 9, 2020.

AutoZone’s inventory improved 2.7% year over year in the reported quarter on store openings and increased product placement. At the end of the quarter, inventory per location was $685,000, down from the year-ago figure of $688,000.

Financials and Share Repurchases

AutoZone had cash and cash equivalents of $509.12 million as of May 9, 2020, up from $174.1 million as of May 4, 2019. Total debt amounted to $5,418.3 million as of May 9,2020, marking an increase from $5,151.9 million as of May 4, 2019.

In the fiscal third quarter, AutoZone repurchased 156,000 shares for $166.1 million at an average price of $1,064 per share. At the end of this period, the company had shares worth $796 million remaining in the current repurchase authorization. However, the company temporarily suspended its share-repurchase program on the coronavirus scare.

Zacks Rank & Stocks to Consider

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

Some better-ranked stocks in the same sector are Veoneer, Inc. , Unique Fabricating, Inc. and Tesla, Inc. (TSLA - Free Report) , each carrying a Zacks Rank of 2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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