AutoZone (NYSE:AZO) Reviews Gross sales Beneath Analyst Estimates In Q1 Earnings
Auto elements and equipment retailer AutoZone (NYSE:)
reported outcomes in keeping with analysts’ expectations in Q1 FY2024, with income up 5.1% yr on yr to $4.19 billion. It made a GAAP revenue of $32.55 per share, enhancing from its revenue of $27.45 per share in the identical quarter final yr.
Is now the time to purchase AutoZone? Find out by reading the original article on StockStory.
AutoZone (AZO) Q1 FY2024 Highlights:
- Income: $4.19 billion vs analyst estimates of $4.19 billion (small miss)
- EPS: $32.55 vs analyst estimates of $31.61 (3% beat)
- Free Money Move of $594.8 million, down 12.4% from the identical quarter final yr
- Gross Margin (GAAP): 52.8%, up from 50.1% in the identical quarter final yr (beat)
- Similar-Retailer Gross sales had been up 3.4% yr on yr (Home same-store gross sales of 1.2% yr on yr missed)
- Retailer Areas: 7,165 at quarter finish, growing by 187 during the last 12 months
Aiming to be a one-stop store for the DIY buyer, AutoZone (NYSE:AZO) is an auto elements and equipment retailer that sells the whole lot from automotive batteries to windshield wiper fluid to brake pads.
Auto Elements RetailerCars are complicated machines that want upkeep and occasional repairs, and auto elements retailers cater to the skilled mechanic in addition to the do-it-yourself (DIY) fixer. Work on automobiles could entail changing fluids, elements, or equipment, and these shops have the elements and equipment or these jobs. Whereas e-commerce competitors presents a danger, these shops have a leg up because of the mixture of broad and deep choice in addition to experience offered by gross sales associates. One other change on the horizon might be the growing penetration of electrical autos.
Gross sales GrowthAutoZone is among the bigger firms within the shopper retail business and advantages from economies of scale, enabling it to realize extra leverage on mounted prices and provide customers decrease costs.
As you’ll be able to see beneath, the corporate’s annualized income development charge of 10.1% during the last 4 years (we evaluate to 2019 to normalize for COVID-19 impacts) was spectacular because it opened new shops and grew gross sales at present, established shops.
This quarter, AutoZone grew its income by 5.1% yr on yr, lacking Wall Road’s expectations. Wanting forward, analysts anticipate gross sales to develop 7.4% over the following 12 months.
Variety of StoresWhen a retailer like AutoZone is opening new shops, it often means it is investing for development as a result of demand is larger than provide. Since final yr, AutoZone’s retailer depend elevated by 187 areas, or 2.7%, to 7,165 complete retail areas in probably the most lately reported quarter.
Taking a step again, the corporate has usually opened new shops during the last eight quarters, averaging 2.8% annual development in its bodily footprint. That is respectable retailer development and in keeping with different retailers. With an increasing retailer base and demand, income development can come from a number of vectors: gross sales from new shops, gross sales from e-commerce, or elevated foot visitors and better gross sales per buyer at present shops.
Similar-Retailer SalesSame-store gross sales development is a vital metric that tracks demand for a retailer’s established brick-and-mortar shops and e-commerce platform.
AutoZone’s demand inside its present shops has usually risen during the last two years however lagged behind the broader shopper retail sector. On common, the corporate’s same-store gross sales have grown by 5.4% yr on yr. With optimistic same-store gross sales development amid an growing bodily footprint of shops, AutoZone is reaching extra prospects and rising gross sales.
Within the newest quarter, AutoZone’s same-store gross sales rose 3.4% yr on yr. This development was a deceleration from the 5.6% year-on-year improve it posted 12 months in the past, displaying the enterprise remains to be performing properly however misplaced a little bit of steam.
Key Takeaways from AutoZone’s Q1 Outcomes
Sporting a market capitalization of $46.98 billion, greater than $283 million in money readily available, and optimistic free money stream during the last 12 months, we consider that AutoZone is attractively positioned to spend money on development.
It was good to see AutoZone beat analysts’ gross margin and working revenue expectations this quarter regardless of a small income miss. Zooming out, we expect this was a blended quarter. The inventory is down 1.3% after reporting, buying and selling at $2,625 per share.
