Autozone Inc (NYSE:AZO) Surpasses Expectations

Autozone Inc (NYSE:AZO) stock rose 1.03% (As on February 28, 11:20:25 AM UTC-4, Source: Google Finance) after the company reported a better-than-expected quarterly profit, helped by a Do-It-Yourself(DIY) trend among customers wanting to keep their older cars on the road. The demand for auto parts stayed resilient during the quarter as surging prices of new and used vehicles discouraged some buyers from buying new ones. The company has also benefited from some motorists staying away from modern, tech-heavy cars in favour of older model vehicles.

Moreover, AutoZone’s domestic same-store sales only grew by 0.3%, below the 1.3% analysts projected. But comparable sales may have bottomed out if the weather normalizes, Evercore analyst Greg Melich wrote in a note. Sales of the Memphis, Tennessee-based company’s commercial business, which grew by 2.7%. A mild winter in the first eight weeks of the quarter, and a polar vortex that led to an extended period of snow on the ground in the eastern US, muted commercial sales. There is an increase of 10.6% international comp on a constant currency basis and a 10.9% increase in EBIT. The domestic DIFM sales increased 2.7% to $980 million and were up 15.8% on a two-year stack basis. This quarter, the company has opened 20 net new programs finishing with 5,823 total programs. Mega Hubs continue to average significantly higher sales than the balance of the commercial programs and grew more than three times the rate of the overall commercial business in Q2. The company is planning to open more mega hubs, it now has 101, and aims to have more than 200. Sales at these spots grew three times faster in the quarter than the overall commercial business. AutoZone is trying to increase its share of commercial sales by improving faster delivery times and parts availability, as the company believes AutoZone only has about a 5% share of the commercial market now.

AZO in the second quarter of FY 24 has reported the adjusted earnings per share of $28.89, beating the analysts’ estimates for the adjusted earnings per share of $26.28. The company had reported the adjusted revenue growth of 4.6 percent to $3.86 billion in the second quarter of FY 24, beating the analysts’ estimates for revenue of $3.84 billion, according to LSEG data. EBIT for the quarter was $743 million, up 10.9% versus the prior year. Net income for the quarter was $515 million, up 8.1% versus last year. For the second quarter, AZO has generated $179 million in free cash flow.

Copyright © 2024. All Rights Reserved. FXDailyReport.Com
Risk Warning: Trading CFDs is a high risk activity and you may lose more than your initial deposit. You should never invest money that you cannot afford to lose. FXDailyReport.com will not accept any liability for loss or damage as a result of reliance on the information contained within this website including data, quotes, charts and buy/sell signals. Please be fully informed regarding the risks and costs associated with trading the financial markets.