A month has gone by since the last earnings report for AutoZone (AZO). Shares have lost about 1.2% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is AutoZone due for a breakout? 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 drivers.
AutoZone Q1 Earnings Miss Expectations, Revenues Rise Y/Y
AutoZone reported earnings of $32.52 per share for the first quarter of fiscal 2025 (ended Nov. 23, 2024), which missed the Zacks Consensus Estimate of $33.54. The company reported earnings of $32.55 per share in the corresponding quarter of fiscal 2024. Net sales grew 2.1% year over year to $4.28 billion. The top line, however, missed the Zacks Consensus Estimate of $4.29 billion.
In the reported quarter, domestic commercial sales totaled $1.13 billion, up from $1.09 billion recorded in the year-ago period. Domestic same-store sales (sales at stores open at least for a year) were up 0.3%.
Gross profit increased to $2.27 billion from the prior-year quarter’s $2.21 billion. Operating profit decreased 0.8% year over year to $841 million.
Store Opening & Inventory
During the quarter, AutoZone opened 23 new stores in the United States. It opened six new stores in Mexico and five in Brazil. It exited the quarter with 6,455 stores in the United States, 800 in Mexico and 132 in Brazil. The total store count was 7,387 as of Nov. 23, 2024.
Its inventory increased 8.7% year over year in the reported quarter. At quarter-end, the inventory per store was $849,000 compared with $806,000 a year ago.
Financials and Share Repurchases
As of Nov. 23, 2024, AutoZone had cash and cash equivalents of $304 million, up from $298.2 million as of Aug. 31, 2024. Its total debt amounted to $9.01 billion as of Nov. 23, 2024, compared with $9.02 billion as of Aug. 31, 2024.
The company repurchased 160,000 shares of its common stock for $505.2 million during the fiscal first quarter at an average price of $3,156 per share. At quarter-end, it had $1.7 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 a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
