AutoZone Shares Decline as Q4 Earnings Fall Short of Expectations

AutoZone recently announced its fourth-quarter earnings, which fell short of analysts’ expectations, causing shares to drop by 2.7% in premarket trading.

For the quarter ending August 31, the auto parts retailer reported adjusted earnings per share of $48.11, below the consensus estimate of $53.61. Revenue reached $6.2 billion, just shy of the anticipated $6.23 billion but reflecting a year-over-year increase of 9.0%. When excluding an additional week in this year’s quarter, adjusted sales showed a modest rise of 2.6%.

On a same-store basis, sales were up 0.7% over a 16-week period, with domestic same-store sales rising only 0.2%. The company acknowledged ongoing difficulties stemming from deferrals in discretionary merchandise categories.

Phil Daniele, President and CEO, commented, “Domestically, our business continues to be challenged by deferrals across our discretionary merchandise categories, but we were pleased to see accelerating Commercial sales performance.”

The gross profit margin decreased by 21 basis points to 52.5%, largely due to a 53 basis point non-cash LIFO impact. Additionally, operating expenses as a percentage of sales increased to 31.6%, up from 31.2% the previous year.

For the entire fiscal year 2024, AutoZone reported sales of $18.5 billion, representing a 5.9% increase year-over-year, while earnings per share rose by 13.0% to $149.55.