Latest news with #AutoZoneInc
Yahoo
2 days ago
- Automotive
- Yahoo
JPMorgan Trims AutoZone (AZO) PT to $4,200 Despite Domestic Sales Beat, Cites Margin Pressures
On Wednesday, JPMorgan lowered its price target for AutoZone Inc. (NYSE:AZO) to $4,200 from $4,350, while maintaining an Overweight rating on the shares. This revision follows the company's FQ3 2025 report, which saw AutoZone deliver a domestic comparable sales beat but experience worse-than-expected margin pressures. The reported earnings essentially aligned with JPMorgan's forecast, which was already below broader Street expectations. A technician in a mechanic's uniform replacing an A/C compressor, signifying the company's automotive replacement parts business. In FQ3, AutoZone reported total sales of $4.5 billion, which was a 5.4% increase year-over-year. Domestic comparable sales were up 5%, while international comparable sales were up 8.1% on a constant currency basis. Domestic commercial sales demonstrated strong growth of 10.7% year-over-year, marking the first double-digit growth since FY2023, and the commercial segment surpassed $5 billion in sales on a rolling 4-quarter basis for the first time. The company also opened 54 net new domestic stores and 30 new international stores and brought the total international store count to 979. JPMorgan noted that the domestic business is stabilizing at a 4% comparable sales rate due to AutoZone's efforts to accelerate market share gains and potential for further pricing. The firm anticipates that AutoZone will continue to invest to gain market share and widen its moat against competitors. AutoZone Inc. (NYSE:AZO) retails and distributes automotive replacement parts and accessories in the US, Mexico, and Brazil. While we acknowledge the potential of AZO to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than AZO and that has 100x upside potential, check out our report about the cheapest AI stock. READ NEXT: and . Disclosure: None. This article is originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Epoch Times
3 days ago
- Automotive
- Epoch Times
AutoZone's Profit Margins Shrink, Company Remains Confident in Market-Share Growth
Shares of auto parts giant AutoZone Inc. fell on May 27 after the company reported higher fiscal third-quarter revenue and same-store sales, but a decline in profit margins. The company expressed confidence in future growth, noting its exposure to China has declined 'significantly.' According to its earnings During the company's pre-market conference call with Wall Street analysts, AutoZone CEO Phil Daniele downplayed the margin decline, saying the company will continue to prioritize its growth strategy of boosting same-store sales in its almost 7,500 locations in the United States, Mexico and Brazil. 'The top focus areas for this last quarter of 2025 remains growing share in our domestic commercial business and continuing our momentum in our international markets,' Daniele said. 'We understand we cannot take things for granted, [but] we must remain laser focused on customer service execution, and gaining share in every market in which we operate.' For the period ended May 10, AutoZone reported net income of $608 million, or $35.36 per share, down 6.6 percent from net income of $651.7 million, or $36.69 per share, in the third quarter of 2024. Total sales rose 5.4 percent to $4.46 billion, compared with $4.23 billion a year ago. The company's same-store sales increased by 3.2 percent compared with 0.9 percent a year ago. That improvement was primarily driven by a 5 percent increase at the company's 6,483 U.S. stores opened a year or more. However, same-store sales declined by 9.2 percent at the company's 949 locations in Mexico and Brazil. Related Stories 5/6/2025 5/2/2025 Excluding the impact of foreign currency exchange rates, the auto aftermarket retailer would have reported international same-stores sales of 8.1 percent, which Daniele highlighted during its conference call. AutoZone's results received mixed reviews on Wall Street, as it was expected to report third-quarter earnings of $37.07 per share on sales of $4.42 billion, according to FactSet. AutoZone's chief finance officer Jamere Jackson said the company's inventory increased 10.8 percent over the same period last year, driven by new store growth and same store sales growth initiatives. In highlighting the company's third-quarter performance, Daniele said AutoZone opened 54 new stores in the United States, 25 in Mexico, and five in Brazil, for a total of 84 net new stores. Altogether, the auto aftermarket reseller had 6,537 stores in the United States, 838 in Mexico, and 141 in Brazil, for a total store count of 7,516. With 58 store openings year-to-date, AutoZone expects to open around 100 total international locations in fiscal 2025. Going forward, Daniele said the company plans to invest $1.3 billion to expand its satellite store operations and larger mega-hubs locations, especially in the fast-growing international markets in Mexico and Brazil. 'We remain confident in our growth opportunities in this market. Today, [we] have 13 percent of our total store base outside of the [United States] and we expect this number to grow as we accelerate our international store openings,' Daniele said. In response to analyst questions about the impact of tariffs and U.S. trade policies with China, Daniele said the impact on AutoZone operations has been minimal. Although China is AutoZone's largest net importer of car parts, that percentage has declined 'significantly over the last couple of years' since the first round of tariffs in 2016. Ahead of the release of the earnings report, Bank of America analyst Robert Ohmes on May 21 upgraded AutoZone's upside after raising the company's stock from a 'neutral' to a 'buy.' He also bumped the auto parts retailer's price target from $3,900 to $4,800 per share, based on the company 'recession resilient history' in the face of potential prices increases from inflation and tariffs. Ohmes told The Epoch Times that he remains bullish on AutoZone as the auto parts aftermarket could benefit from the Trump administration's 25 percent auto tariffs, which could drive down new car sales. He also noted that AutoZone only has about 35 percent of its product sourced from China, significantly reducing its exposure to import levies. 'We see opportunities for a return to 2-4 percent industry inflation as auto parts retailers raise price to offset incremental tariff pressures,' Ohmes said via email. 'We also think the auto aftermarket could benefit from lower new car sales and higher used car pricing, as consumers may hold onto and repair existing vehicles.' Ohmes added that AutoZone is taking advantage of strategic investments to seize opportunities to gain market share on both the DIY retail and commercial pro sides of the auto parts business. He noted that the company could gain further market share after rival Advance Auto Parts (AAP) announced in late 2024 that it planned to 'AutoZone continues to invest in labor to maintain relationships with the up and down the street accounts to grow its commercial segment,' Ohmes said, adding that AutoZone and AAP stores are often located in close proximity. The company's shares fell 3.42 percent to close at $3,695.66 during the May 27 trading session. The stock has outperformed the broader market over the past 12 months, gaining 32.32 percent versus the S&P 500's return of 11.63 percent. Under the company's stock buyback program, AutoZone repurchased 70,000 shares of its common stock at an average price of $3,571 per share, for a total investment of $250.3 million. The company has an additional $1.1 billion to repurchase shares under the board's $5 billion authorization program.
Yahoo
4 days ago
- Automotive
- Yahoo
AutoZone's third quarter profit falls 6.6% on currency headwinds
(Reuters) -AutoZone Inc on Tuesday reported a 6.6% drop in quarterly profit, as softening demand and currency fluctuations weighed on the auto parts retailer's margins. The Memphis, Tennessee-based auto parts retailer has been under pressure from consumers pulling back on buying certain parts, pressuring margins. Its domestic same-store sales rose 5% in the third quarter ended May 10, compared to a flat growth last year, aided by sustained demand from commercial customers. The industry has also been dealing with higher supply chain costs due to U.S. President Donald Trump's tariffs, while consumers have also tightened their budgets amid concerns of a recession. Trump's shifting tariff policies and trade war rhetoric have also led to volatility in global markets, and put pressure on the U.S. dollar. AutoZone's quarterly net sales rose 5.4% to about $4.5 billion, topping estimates of about $4.36 billion, according to data compiled by LSEG. The company's net income fell to $608.4 million, or $35.36 per share, in the third quarter, compared with $651.7 million, or $36.69 per share, a year ago. Sign in to access your portfolio
Reuters
4 days ago
- Automotive
- Reuters
AutoZone's third quarter profit falls 6.6% on currency headwinds
May 27 (Reuters) - AutoZone Inc (AZO.N), opens new tab on Tuesday reported a 6.6% drop in quarterly profit, as softening demand and currency fluctuations weighed on the auto parts retailer's margins. The Memphis, Tennessee-based auto parts retailer has been under pressure from consumers pulling back on buying certain parts, pressuring margins. Its domestic same-store sales rose 5% in the third quarter ended May 10, compared to a flat growth last year, aided by sustained demand from commercial customers. The industry has also been dealing with higher supply chain costs due to U.S. President Donald Trump's tariffs, while consumers have also tightened their budgets amid concerns of a recession. Trump's shifting tariff policies and trade war rhetoric have also led to volatility in global markets, and put pressure on the U.S. dollar. AutoZone's quarterly net sales rose 5.4% to about $4.5 billion, topping estimates of about $4.36 billion, according to data compiled by LSEG. The company's net income fell to $608.4 million, or $35.36 per share, in the third quarter, compared with $651.7 million, or $36.69 per share, a year ago.
Yahoo
5 days ago
- Automotive
- Yahoo
JPMorgan Hikes AutoZone Price Target Ahead of Q3 Earnings
On May 24, JPMorgan raised its price target for AutoZone Inc. (NYSE:AZO) from $3,830 to $4,350 while keeping an Overweight rating. The change took place prior to the company's third-quarter earnings release which is scheduled on May 28. According to JPMorgan analysts, AutoZone Inc. (NYSE:AZO) is anticipated to gain market share and profit from self-help programs. Although margins have been high, JPMorgan expects the profit and loss statement to be favorable, indicating that any possible share price weakness after the earnings report would offer investors a decent chance to buy the company's shares. JPMorgan emphasized AutoZone's process and technology improvements, including delivery routing and inventory allocation systems, which have enhanced the company's core capabilities. Furthermore, the firm indicates that AutoZone Inc. (NYSE:AZO) is probably only one or two quarters away from growth, taking into account factors such as tariff-driven inflation and the difficulties facing smaller competitors. Although its gross margin and operating margin estimates of 53.2% and 19.9%, respectively, are marginally below the Street's projections, the firm holds a cautious but optimistic outlook on AZO. While we acknowledge the potential of AZO to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than AZO and that has 100x upside potential, check out our report about the cheapest AI stock. Read More: and Disclosure: None.
