Yahoo Finance Why Is AutoZone (AZO) Up 6% Since Last Earnings Report?
A month has gone by since the last earnings report for AutoZone (AZO). Shares have added about 6% 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 the most recent earnings report in order to get a better handle on the important catalysts.
AutoZone Q2 Earnings & Sales Beat Estimates, Rise Y/Y
AutoZone reported earnings of $28.89 per share for second-quarter fiscal 2024 (ended Feb 10, 2024), up 17.2% year over year. Earnings surpassed the Zacks Consensus Estimate of $26.08 per share.
Net sales grew 4.6% year over year to $3.86 billion. The top line marginally surpassed the Zacks Consensus Estimate of $3.85 billion.
In the reported quarter, domestic commercial sales totaled $980.1 million, up from $954.6 million recorded in the year-ago period. Domestic same-store sales (sales at stores open at least for a year) rose 0.3%.
Gross profit increased to $2.08 billion from the prior-year quarter’s $1.93 billion. Operating profit increased 10.9% year over year to $743.2 million.
Store Opening & Inventory
During the quarter, AutoZone opened 19 new stores in the United States and closed three. It opened six new stores in Mexico and four in Brazil. It exited the quarter with 6,332 stores in the United States, 751 in Mexico and 108 in Brazil. The total store count was 7,191 as of Feb 10, 2024.
Its inventory increased 4.2% year over year in the reported quarter, led by new store growth. At quarter-end, the inventory per location was negative $164,000 compared with negative $227,000 a year ago.
Financials and Share Repurchases
As of Feb 10, 2024, AutoZone had cash and cash equivalents of $304.1 million, up from $277.1 million as of Aug 26, 2023.
Its total debt amounted to $8.63 billion as of Feb 10, 2024 compared with $7.67 billion as of Aug 26, 2023.
The company repurchased 84,000 shares of its common stock for $223.8 million during the fiscal second quarter at an average price of $2,676 per share. At quarter-end, it had $2.1 billion remaining under its current share repurchase authorization.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
VGM Scores
At this time, AutoZone has a subpar Growth Score of D, however its Momentum Score is doing a bit better 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 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 upward for the stock, and the magnitude of these revisions looks promising. 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
