AutoZone, Inc.
CEO : Mr. William C. Rhodes III
Quarterly earnings growth(YoY,%)
| Period | Revenue | Operating Income | EPS | Release Date |
|---|---|---|---|---|
| 2023 Q2 | 9.5% YoY | 6.9% | 10.8% | 2023-02-28 |
Bill Rhodes says,
Key Points from AutoZone Q2 2023 Earnings Call
- Total sales growth of 9.5% in Q2 2023
- Double-digit domestic commercial growth and single-digit domestic retail same-store sales growth
- Domestic same-store sales were up 5.3%
- Net income was $477 million and EPS was $24.64 a share
- Inflation is affecting product cost and retails
Jamere Jackson says,
Positive Q2 Results and Growth Initiatives
- 5.3% domestic comp growth, 6.9% increase in EBIT, and 10.5% increase in EPS.
- Continued strength in the industry and solid execution of growth initiatives.
- Commercial business grew just over 13% to $955 million, representing 30% of domestic auto part sales. Weekly sales per program were $14,500, up 7.4%
- Mega-hubs strategy driving strong performance, with 81 total mega-hubs and 25 new ones planned for FY 2023.
- Increasing penetration of ALLDATA shop management software to new and existing customers.
Resilient DIY Business
- DIY business has continued to strengthen competitively, with growth rates remaining solid.
- Positive comp growth despite underlying market headwinds, such as inflation and consumer discretionary spending pressure.
- Forecasting a resilient DIY business for the remainder of FY 2023.
International Growth
- Meaningfully accelerated sales growth in Mexico and Brazil.
- Adding distribution center capacity in Mexico to improve competitive positioning in the market.
- International growth expected to be an attractive and meaningful contributor to AutoZone’s future growth.
Gross Margins and Operating Expenses
- Gross margin down 69 basis points, mainly due to supply chain costs and faster growing, lower gross margin commercial business.
- Operating expenses up 8.8% versus last year, but managing expenses in line with sales growth.
- EBIT up 6.9% versus last year, with interest expense up 54.5% due to higher debt outstanding.
Share Repurchase Program
- Repurchased $906 million of AutoZone stock in Q2, with just under $1.8 billion remaining under the share buyback authorization.
- Remain committed to disciplined capital allocation approach that enables investment in the business and returns cash to shareholders.
Q & A sessions,
AutoZone’s Q2 2023 Earnings Call Highlights
- AutoZone to open roughly 200 stores across the U.S., Mexico and Brazil, including many more mega-hub and hub stores.
- AutoZone remains bullish on their industry and their own opportunities for the remainder of the year.
- AutoZone focuses on execution and cost management to drive continued share gains and achieve store opening goals.
- Mid-teens market share in retail business and 4% total market share in commercial business gives a tremendous runway for growth.
- Domestic commercial growth was 13% and commercial quarterly records were set with $955 million in sales in Q2 2023.
- Average ticket growth in both retail and commercial experienced solid mid single-digit growth.
- AutoZone experienced substantially higher wage inflation than historically in the mid single-digit range.
- AutoZone is experiencing signs of product cost and freight inflation slowing down and expects them to return to historical norms over time.
No bad stock 