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AutoZone (AZO) Q3 Earnings Surpass Estimates, Revenues Miss

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AutoZone Inc. (AZO - Free Report) reported earnings of $34.12 per share for third-quarter fiscal 2023 (ended May 6, 2023), up 17.5% year over year. Earnings surpassed the Zacks Consensus Estimate of $30.84. Net sales grew 5.8% year over year to $4,090.5 million. The top line, however, lagged the Zacks Consensus Estimate of $4,102.8 million.

In the reported quarter, domestic commercial sales totaled $1,110.5 million, up from $1,044.3 million recorded in the year-ago period. Domestic same-store sales (sales at stores open at least for a year) rose 1.9%. Gross profit increased to $2,146.1 million from the prior-year quarter’s figure of $2,006.4 million. Operating profit increased 9.3% year over year to $858.5 million.

AutoZone, Inc. Price, Consensus and EPS Surprise

AutoZone, Inc. Price, Consensus and EPS Surprise

AutoZone, Inc. price-consensus-eps-surprise-chart | AutoZone, Inc. Quote

Store Opening & Inventory

During the quarter, AutoZone opened 22 new stores in the United States, six in Mexico and two in Brazil. It exited the quarter with 6,248 stores in the United States, 713 in Mexico and 83 in Brazil. The total store count was 7,044 as of May 6, 2023.

AutoZone’s inventory increased 7.4% year over year in the reported quarter, led by growth initiatives and inflation. At quarter-end, the inventory per location was negative $215,000 compared with negative $216,000 a year ago.

Financials and Share Repurchases

As of May 6, 2023, AutoZone had cash and cash equivalents of $274.9 million, up from $263 million as of May 7, 2022. The total debt amounted to $7,340.5 million as of May 6, marking an increase from $6,057.4 million as of May 7, 2022.

AutoZone repurchased 356,000 shares of its common stock for $908.2 million during the fiscal third quarter of 2023 at an average price of $2,551 per share. At quarter-end, it had $843.6 million remaining under its current share repurchase authorization.

Zacks Rank & Key Picks

AZO currently carries a Zacks Rank #3 (Hold).

Some better-ranked players in the auto space are Mercedes-Benz Group AG , BYD Company Limited (BYDDY - Free Report) and Wabash National (WNC - Free Report) , all of which sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Mercedes-Benz develops, manufactures and sells passenger cars, including premium and luxury vehicles. The Zacks Consensus Estimate for MBGAF’s 2023 sales implies year-over-year growth of 6%.

BYD is engaged in the research, development, manufacture and distribution of automobiles, secondary rechargeable batteries and mobile phone components. The Zacks Consensus Estimate for BYDDY’s 2023 sales calls for year-over-year growth of around 209.6%.

Wabash is one of the leading manufacturers of semi-trailers in North America. The Zacks Consensus Estimate for WNC’s 2023 sales and earnings indicates year-over-year growth of 12% and 19.7%, respectively.


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