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Auto parts and accessories retailer AutoZone (NYSE:AZO) missed analysts' expectations in Q2 CY2024, with revenue up 3.5% year on year to $4.24 billion. It made a GAAP profit of $36.69 per share, improving from its profit of $34.12 per share in the same quarter last year.
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AutoZone (AZO) Q2 CY2024 Highlights:
- Revenue: $4.24 billion vs analyst estimates of $4.30 billion (1.4% miss)
- EPS: $36.69 vs analyst estimates of $36.01 (1.9% beat)
- Gross Margin (GAAP): 53.5%, up from 52.5% in the same quarter last year
- Free Cash Flow of $434.4 million, down 21.5% from the same quarter last year
- Same-Store Sales were up 1.9% year on year (Domestic same-store sales of 0.0% missed expectations)
- Store Locations: 7,236 at quarter end, increasing by 192 over the last 12 months
- Market Capitalization: $50.59 billion
Aiming to be a one-stop shop for the DIY customer, AutoZone (NYSE:AZO) is an auto parts and accessories retailer that sells everything from car batteries to windshield wiper fluid to brake pads.
Auto Parts RetailerCars are complex machines that need maintenance and occasional repairs, and auto parts retailers cater to the professional mechanic as well as the do-it-yourself (DIY) fixer. Work on cars may entail replacing fluids, parts, or accessories, and these stores have the parts and accessories or these jobs. While e-commerce competition presents a risk, these stores have a leg up due to the combination of broad and deep selection as well as expertise provided by sales associates. Another change on the horizon could be the increasing penetration of electric vehicles.
Sales GrowthAutoZone is one of the larger companies in the consumer retail industry and benefits from economies of scale, enabling it to gain more leverage on fixed costs and offer consumers lower prices.
As you can see below, the company's annualized revenue growth rate of 9.5% over the last five years was mediocre as it opened new stores and grew sales at existing, established stores.
This quarter, AutoZone's revenue grew 3.5% year on year to $4.24 billion, falling short of Wall Street's estimates. Looking ahead, Wall Street expects sales to grow 7.4% over the next 12 months, an acceleration from this quarter.
Same-Store Sales AutoZone's demand within its existing stores has generally risen over the last two years but lagged behind the broader consumer retail sector. On average, the company's same-store sales have grown by 4.6% year on year. With positive same-store sales growth amid an increasing physical footprint of stores, AutoZone is reaching more customers and growing sales.
In the latest quarter, AutoZone's same-store sales rose 1.9% year on year. This performance was more or less in line with the same quarter last year.
Key Takeaways from AutoZone's Q2 Results It was encouraging to see AutoZone slightly top analysts' gross margin expectations this quarter. On the other hand, its revenue unfortunately missed analysts' expectations on lower-than-expected same-store sales. Overall, this was a mediocre quarter for AutoZone. The stock is flat after reporting and currently trades at $2,945.5 per share.
