AutoZone Inc. (AZO) reported earnings of $36.69 per share for the third quarter of fiscal 2024 (ended May 4, 2024), marking a 7.5% increase from the previous year. Surpassing the Zacks Consensus Estimate of $35.72 per share, the earnings painted a positive picture amid a challenging economic landscape. However, the company faced a slight setback in net sales, which grew 3.5% year over year to $4,235.5 million, just missing the Zacks Consensus Estimate of $4,292 million.
During this period, domestic commercial sales rose to $1.14 billion, a slight uptick from the $1.11 billion recorded in the same quarter of the previous year. Meanwhile, domestic same-store sales remained flat, showcasing the company’s ability to maintain stability despite market fluctuations.
The increase in gross profit to $2.26 billion from $2.14 billion in the prior-year quarter and the 4.8% year-over-year rise in operating profit to $900 million reflect AutoZone’s resilience and strategic financial management.
Store Opening & Inventory
Throughout the quarter, AutoZone expanded its footprint with the launch of 32 new stores in the United States, as well as 12 new stores in Mexico and one in Brazil. This strategic expansion brought the total store count to 7,236 as of May 4, 2024. Concurrently, the company experienced an 8% year-over-year growth in inventory, underscoring its commitment to meeting customer demand effectively.
Financials and Share Repurchases
By May 4, 2024, AutoZone held cash and cash equivalents amounting to $275.4 million, a slight decrease from the $277.1 million recorded as of August 26, 2023. Simultaneously, the company’s total debt increased to $8.5 billion as of May 4, 2024, compared to $7.67 billion as of August 26, 2023. Despite these fluctuations, the company’s share repurchase activities remained robust, with 242,000 shares bought back for $737.7 million during the fiscal third quarter. AutoZone revealed that it still had $1.4 billion remaining under its current share repurchase authorization, signaling confidence in its financial future.
Zacks Rank & Key Picks
AutoZone currently holds a Zacks Rank #3 (Hold). In the auto sector, other promising players include Blue Bird Corp. (BLBD), Oshkosh Corp. (OSK), and Ford (F). Among these, Blue Bird Corp. stands out, with a Zacks Rank #1 (Strong Buy) and significant year-over-year growth projections. Oshkosh Corp. and Ford also demonstrate positive growth potential, with their 2024 earnings and sales estimates showing promising upticks.
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