AutoZone Reports Q1 Fiscal 2025 Results with Revenue Growth but Earnings Shortfall

AutoZone Inc. (AZO - Free Report) disclosed its earnings for the first quarter of fiscal 2025, which ended on November 23, 2024. The company reported earnings of $32.52 per share, falling short of the Zacks Consensus Estimate of $33.54. In comparison, the earnings from the same period in the previous fiscal year (2024) were recorded at $32.55 per share. Net sales also reflected growth, increasing by 2.1% year over year to reach $4.28 billion, although this figure also missed expectations as it was below the analysts' consensus estimate of $4.29 billion.

Sales and Performance Insights

In the recent quarter, AutoZone's domestic commercial sales reached $1.13 billion, a slight rise from $1.09 billion in the prior year's quarter. Additionally, domestic same-store sales, which track sales at locations open for at least a year, grew by 0.3%.

The company experienced an increase in gross profit, which rose to $2.27 billion compared to $2.21 billion from the same quarter a year earlier. However, operating profit saw a decline of 0.8% year over year, totaling $841 million.

Store Expansion and Inventory Management

During this quarter, AutoZone expanded its operations by opening 23 new stores in the United States. Internationally, it opened six new stores in Mexico and five in Brazil. By the end of the quarter, AutoZone had a total of 6,455 stores in the U.S., 800 in Mexico, and 132 in Brazil, summing up to 7,387 stores worldwide.

AutoZone's inventory levels increased by 8.7% compared to the previous year. At the conclusion of the quarter, the inventory per store averaged $849,000, up from $806,000 a year ago.

Financial Position and Share Buybacks

As of November 23, 2024, AutoZone held $304 million in cash and cash equivalents, which is an increase from $298.2 million on August 31, 2024. The company reported total debt amounting to $9.01 billion, a slight decrease from $9.02 billion recorded at the end of August.

During the first quarter of fiscal 2025, AutoZone repurchased 160,000 shares of its common stock, totaling $505.2 million at an average price of $3,156 per share. At the end of the quarter, the company had $1.7 billion left under its ongoing share repurchase authorization.

Market Position and Comparable Stocks

Currently, AutoZone holds a Zacks Rank of #4 (Sell), indicating a less favorable market position. In comparison, other companies in the auto sector that are ranked higher include Tesla, Inc. (TSLA - Free Report), Dorman Products, Inc. (DORM - Free Report), and Blue Bird Corporation (BLBD - Free Report), all holding a Zacks Rank of #1 (Strong Buy) at the moment.

The Zacks consensus estimates suggest that Dorman Products' sales and earnings for 2024 will grow by 3.66% and 51.98%, respectively. Similarly, Tesla's 2024 sales are expected to see a growth of 2.97%, with its earnings per share estimates improving recently. Blue Bird Corporation is projected to have year-over-year growth of 10.97% in sales and 12.14% in earnings for fiscal 2025.

AutoZone, Earnings, Revenue