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Why Is AutoZone (AZO) Down 3.1% Since its Last Earnings Report?
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A month has gone by since the last earnings report for AutoZone, Inc. (AZO - Free Report) . Shares have lost about 3.1% in that time frame.
Will the recent negative trend continue leading up to its next earnings release, or is AZO due for a breakout? 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 reported earnings per share of $10.38 for second-quarter fiscal 2018 (ended Feb 10, 2018), beating the Zacks Consensus Estimate of $8.81.
Revenues improved 5.4% year over year to $2.41 billion in the reported quarter. Also, the figure surpassed the Zacks Consensus Estimate of $2.39 billion. Domestic same-store sales (sales of stores open at least for one year) also rose 2.2% year over year.
Gross profit increased to $1.28 billion from $1.21 billion in the prior-year quarter. Operating profit (EBIT) declined to $205.1 million from $384 million registered in the second quarter of fiscal 2017. Operating expenses, as a percentage of sales, increased to 44.4% from 35.9% a year ago.
Store Opening & Inventory
During the quarter, AutoZone opened 35 new stores and closed one in the United States. The company also opened three new stores in Mexico and two in Brazil. As of Feb 10, the company had 5,514 stores across 50 states in the United States, the District of Columbia and Puerto Rico; 532 in Mexico; 26 Interamerican Motor Corp. branches and 16 stores in Brazil. The total store count was 6,088 as of that date.
AutoZone’s inventory improved 4.7% year over year in the quarter, driven by store openings and increased product placement. Inventory per store increased to $671,000 from the year-ago figure of $665,000.
Share Repurchases
In the second quarter of fiscal 2018, AutoZone repurchased 227,000 shares for $174.9 million, reflecting an average price of $769 per share. The company had shares worth $296 million remaining for repurchase at the end of the second quarter.
Financial Details
AutoZone had cash and cash equivalents of $288.5 million as of Feb 10, 2018, up from $210.6 million as of Feb 11, 2017. Total debt amounted to $5.04 billion as of Feb 10, 2018, compared with $5.15 billion as of Feb 11, 2017.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. There have been six revisions higher for the current quarter compared to four lower.
At this time, AZO has a great Growth Score of A, though it is lagging a lot on the momentum front with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for growth investors than value investors.
Outlook
Estimates have been broadly trending upward for the stock and the magnitude of these revisions looks promising. Notably, AZO has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is AutoZone (AZO) Down 3.1% Since its Last Earnings Report?
A month has gone by since the last earnings report for AutoZone, Inc. (AZO - Free Report) . Shares have lost about 3.1% in that time frame.
Will the recent negative trend continue leading up to its next earnings release, or is AZO due for a breakout? 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's Q2 Earnings & Revenue Surpass Estimates
AutoZone reported earnings per share of $10.38 for second-quarter fiscal 2018 (ended Feb 10, 2018), beating the Zacks Consensus Estimate of $8.81.
Revenues improved 5.4% year over year to $2.41 billion in the reported quarter. Also, the figure surpassed the Zacks Consensus Estimate of $2.39 billion. Domestic same-store sales (sales of stores open at least for one year) also rose 2.2% year over year.
Gross profit increased to $1.28 billion from $1.21 billion in the prior-year quarter. Operating profit (EBIT) declined to $205.1 million from $384 million registered in the second quarter of fiscal 2017. Operating expenses, as a percentage of sales, increased to 44.4% from 35.9% a year ago.
Store Opening & Inventory
During the quarter, AutoZone opened 35 new stores and closed one in the United States. The company also opened three new stores in Mexico and two in Brazil. As of Feb 10, the company had 5,514 stores across 50 states in the United States, the District of Columbia and Puerto Rico; 532 in Mexico; 26 Interamerican Motor Corp. branches and 16 stores in Brazil. The total store count was 6,088 as of that date.
AutoZone’s inventory improved 4.7% year over year in the quarter, driven by store openings and increased product placement. Inventory per store increased to $671,000 from the year-ago figure of $665,000.
Share Repurchases
In the second quarter of fiscal 2018, AutoZone repurchased 227,000 shares for $174.9 million, reflecting an average price of $769 per share. The company had shares worth $296 million remaining for repurchase at the end of the second quarter.
Financial Details
AutoZone had cash and cash equivalents of $288.5 million as of Feb 10, 2018, up from $210.6 million as of Feb 11, 2017. Total debt amounted to $5.04 billion as of Feb 10, 2018, compared with $5.15 billion as of Feb 11, 2017.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. There have been six revisions higher for the current quarter compared to four lower.
AutoZone, Inc. Price and Consensus
AutoZone, Inc. Price and Consensus | AutoZone, Inc. Quote
VGM Scores
At this time, AZO has a great Growth Score of A, though it is lagging a lot on the momentum front with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for growth investors than value investors.
Outlook
Estimates have been broadly trending upward for the stock and the magnitude of these revisions looks promising. Notably, AZO has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.