Yahoo Finance Why Is AutoZone (AZO) Up 7.1% Since Last Earnings Report?
It has been about a month since the last earnings report for AutoZone (AZO). Shares have added about 7.1% in that time frame, outperforming 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 its most recent earnings report in order to get a better handle on the important catalysts.
AutoZone Pulls Off a Surprise in Q3 Earnings, Sales Miss
AutoZone reported earnings of $36.69 per share for third-quarter fiscal 2024 (ended May 4, 2024), up 7.5% year over year. Earnings surpassed the Zacks Consensus Estimate of $35.72 per share. Net sales grew 3.5% year over year to $4,235.5 million. The top line marginally missed the Zacks Consensus Estimate of $4,292 million.
In the reported quarter, domestic commercial sales totaled $1.14 billion, up from $1.11 billion recorded in the year-ago period. Domestic same-store sales (sales at stores open at least for a year) were flat.
Gross profit increased to $2.26 billion from the prior-year quarter’s $2.14 billion. Operating profit increased 4.8% year over year to $900 million.
Store Opening & Inventory
During the quarter, AutoZone opened 32 new stores in the United States. It opened 12 new stores in Mexico and one in Brazil. It exited the quarter with 6,364 stores in the United States, 763 in Mexico and 109 in Brazil. The total store count was 7,236 as of May 4, 2024.
Its inventory increased 8% year over year in the reported quarter. At quarter-end, the inventory per store was $851,000 compared with $810,000 a year ago.
Financials and Share Repurchases
As of May 4, 2024, AutoZone had cash and cash equivalents of $275.4 million, down from $277.1 million as of Aug 26, 2023. Its total debt amounted to $8.5 billion as of May 4, 2024, compared with $7.67 billion as of Aug 26, 2023.
The company repurchased 242,000 shares of its common stock for $737.7 million during the fiscal third quarter at an average price of $3,036 per share. At quarter-end, it had $1.4 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 fresh estimates.
VGM Scores
At this time, AutoZone has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, 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 C. 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, Inc. (AZO) : Free Stock Analysis Report
