AutoZone Inc.

AutoZone managed to surpass the revenue expectations as well as the earnings expectations of Wall Street, leading to a commendable performance. The vow to prioritizing customers has facilitated a 5.1% growth in total sales. Building on the exceptional performance during the pandemic years of 2020 to 2023, the leadership team is impressed with the post-pandemic sales performance. To provide context, FY 2019 sales stood at $11.6 billion, with trailing 4 quarter sales now exceeding $17.7 billion, signifying a 50%-plus increase over four years. The first quarter’s total company same-store sales were 3.4%, reaching 2.1% on a constant currency basis. International markets, an increasingly significant aspect of the growth strategy, exhibited a robust quarter with a 10.9% increase. Plans include continued growth in mature store volumes for both DIY and DIFM, coupled with an acceleration of new store openings, targeting a minimum of 200 international stores by 2028. Domestic same-store sales for the quarter increased by 1.2%, a slight dip from the previous quarter’s 1.7% and Q1 of the previous year’s 5.6%. Commercial sales accelerated during the quarter, with a 5.7% growth, showing similarity on a 3-year basis despite distorted comparisons from previous years. Analysis of DIY and DIFM results, particularly the second-period sales slowdown, indicates regional impacts, with a 70 basis point performance gap noted between the Northeast and Midwestern markets compared to the rest of the country. While acknowledging dissatisfaction with sales performance, AutoZone reports encouraging trends, including dollar and unit share gains in domestic retail and commercial businesses. Steady progress is observed, with in-stock levels approaching pre-pandemic standards, declining turnover, improved productivity in distribution centers, and positive impacts from new commercial programs, reaching a historic 92% domestic penetration.