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AutoZone Posts Mixed Fiscal Third-Quarter Results

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AutoZone Posts Mixed Fiscal Third-Quarter Results

AutoZone (AZO) reported mixed fiscal third-quarter results on Tuesday, with earnings topping market estimates and revenue falling short.

The auto parts retailer posted net income of $38.07 a share for the three months through May 9, up from $35.36 the year before. The consensus on FactSet was for EPS of $36.21. Sales rose to $4.84 billion from $4.46 billion, but missed the Street's view for $4.86 billion.

Shares of the company plunged 9.5% in Tuesday trade.

Same-store sales increased 5.5%, topping the average analyst estimate for a 5.3% gain.

AutoZone's domestic growth slowed to 4.1% in the third quarter from 5% in the prior-year period. The print likely came in at the lower end of investor expectations that ranged from 4% to 5%, Truist Securities said in a client note.

Domestically, both do-it-yourself and commercial sales grew "impressively," Chief Executive Phil Daniele said in a statement. However, Truist Managing Director Scot Ciccarelli said "the DIY segment is still pressured due to economic issues/gas prices."

Gasoline prices in the US have surged as the Middle East conflict pushed crude oil costs higher due to the effective closure of the Strait of Hormuz.

Last week, Advance Auto Parts (AAP) reported comparable sales growth of 3.5% for its first quarter. Ciccarelli said it was against a "much easier" comparison and that Advance Auto Parts has "significantly more exposure" to the faster-growing commercial segment.

Truist still expects AutoZone to gain market share in the "favorable" do-it-yourself vertical, where it has more exposure than peers.

"While international performance has been below our plan, we believe our market share continues to grow," Daniele said.

Price: $3122.97, Change: $-283.53, Percent Change: -8.32%

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