AutoZone Q1 Misses Wall Street Marks, But CEO Sees Bright Road Ahead

On Tuesday, Automotive retailer AutoZone, Inc (NYSE: AZO ) reported fiscal first-quarter earnings per share of $32.52, missing the Street view of $33.76 .

Quarterly revenues of $4.28 billion (+2.1% year over year) missed the analyst consensus of $4.30 billion .

AutoZone said the company’s same-store sales increased 0.4% (or 1.8% in constant currency), while domestic sales grew 0.3%.

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The quarter’s gross profit margin was 53.0%, up 16 basis points, driven by higher merchandise margins. Operating profit decreased 0.9% to $841.1 million.

Under its share repurchase program, AutoZone repurchased 160 thousand shares of its common stock at an average price per share of $3,156, for a total investment of $505.2 million.

Since the inception of the share repurchase program, the company has repurchased 155 million shares of its common stock at an average price of $241, for a total investment of $37.5 billion. At the end of the first quarter, the company had $1.7 billion remaining under its current share repurchase authorization.

During the quarter, AutoZone opened 23 new stores in the U.S., 6 in Mexico, and 5 in Brazil, for a total of 34 net new stores.

AutoZone’s sales per average store reached $0.57 million, down from $0.58 million Y/Y. The sales per average square foot was $85, down from $86 Y/Y. Total auto parts sales reached $4.2 billion, up from $4.12 billion Y/Y.

The domestic commercial sales for the quarter reached $1.13 billion, up from $1.09 billion Y/Y.

The company had 6,455 stores in the U.S., 800 in Mexico, and 132 in Brazil, for a total store count of 7,387.

AutoZone CEO Phil Daniele was impressed with the progress in its DIY same-store sales result from the prior quarter as average ticket and traffic trends improved. While currency rate moves depressed reported sales and earnings growth, the international performance remains encouraging as the company focuses on opening more stores in these markets.  AutoZone is well-positioned for growth heading into the remainder of the fiscal year, backed by its initiatives to improve customer service and grow market share, he added.

Autozone stock surged over 29% year-to-date. Investors can gain exposure to the stock through VanEck Retail ETF (NASDAQ: RTH ) and Hennessy Stance ESG ETF (NYSE: STNC ).

Price Action: AZO stock closed at $3,324.01 on Monday.

Photo via Shutterstock.

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