AutoZone Q3 Misses Wall Street Marks: Earnings Dip, But CEO Sees Bright Road Ahead
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Dec 10 2024
0mins
Should l Buy AZO?
Source: Benzinga
Earnings Report: AutoZone reported fiscal first-quarter earnings per share of $32.52, falling short of the expected $33.76, with revenues of $4.28 billion also missing analyst estimates. Same-store sales increased by 0.4%, while gross profit margin improved to 53.0%.
Growth Initiatives: The company opened 34 new stores across the U.S., Mexico, and Brazil, and has a remaining $1.7 billion for share repurchases, indicating a focus on growth and market expansion despite currency challenges affecting reported sales.
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Analyst Views on AZO
Wall Street analysts forecast AZO stock price to rise
20 Analyst Rating
17 Buy
3 Hold
0 Sell
Strong Buy
Current: 3735.850
Low
3550
Averages
4328
High
4800
Current: 3735.850
Low
3550
Averages
4328
High
4800
About AZO
AutoZone, Inc. is a retailer and distributor of automotive replacement parts and accessories in the Americas. Its Auto Parts Stores segment is a retailer and distributor of automotive parts and accessories through its approximately 7,353 stores in the United States, Mexico and Brazil. Each store carries an extensive product line for cars, sport utility vehicles, vans and light duty trucks, including new and remanufactured automotive hard parts, maintenance items, accessories and non-automotive products. The Company also sells automotive hard parts, maintenance items, accessories and non-automotive products through www.autozone.com, and its commercial customers can make purchases through www.autozonepro.com. In addition, the Company sells the ALLDATA brand of automotive diagnostic, repair, collision and shop management software through www.alldata.com. It also provides product information on its Duralast branded products through www.duralastparts.com.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Operational Restructuring: CEO Shane O'Kelly's comprehensive restructuring includes closing over 700 locations and opening new stores in market-leading areas, aimed at improving inventory management efficiency and same-day delivery capabilities, thereby enhancing the company's competitive edge.
- Market Outlook: Despite weak demand in the auto parts market, Advance Auto Parts could potentially report improvements in profit margins and positive cash flow guidance in its upcoming earnings, which, if achieved, could positively impact the stock price.
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- Management Overhaul: CEO Shane O'Kelly's comprehensive restructuring plan is viewed as the most significant attempt in the company's history, leveraging his experience from HD Supply to effectively manage inventory and enhance customer delivery efficiency, potentially leading to a turnaround.
- Store Strategy Shift: O'Kelly's aggressive closure of over 700 locations, coupled with the opening of new stores in market-leading areas and a focus on larger market hub stores, aims to increase SKU availability and improve same-day delivery capabilities, thereby enhancing competitive positioning.
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See More
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- Loyalty Program Launch: The company has introduced a loyalty program for DIY customers, designed to boost customer loyalty and optimize inventory management for same-day delivery, addressing a long-standing challenge faced by auto parts retailers.
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See More
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- Customer Loyalty Program: The company has introduced a loyalty program aimed at rewarding its DIY customers, which seeks to enhance customer retention through incentives; although O'Kelly's success is not guaranteed, his restructuring efforts are viewed as the most fundamental shift the company has undertaken, attracting increasing interest from value investors.
See More
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- Operational Restructuring: CEO Shane O'Kelly's comprehensive restructuring includes closing over 700 locations and opening new stores in market-leading areas, aimed at improving inventory management efficiency and same-day delivery capabilities, thereby enhancing the company's competitive edge.
- Market Outlook: Despite weak demand in the auto parts market, Advance Auto Parts could potentially report improvements in profit margins and positive cash flow guidance in its upcoming earnings, which, if achieved, could positively impact the stock price.
- Competitive Comparison: With operational metrics still lagging behind peers like O'Reilly Automotive and AutoZone, any improvement towards their levels could lead to a significant stock price increase, highlighting the ongoing deep value investment opportunity in Advance Auto Parts.
See More
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- Stock Surge: Advance Auto Parts' stock rose 5.4% today and has increased by 51.9% in 2026, reflecting investor optimism ahead of the upcoming fourth-quarter earnings report, with hopes for improved profit margins and positive guidance for 2026.
- Management Overhaul: CEO Shane O'Kelly's comprehensive restructuring plan is viewed as the most significant attempt in the company's history, leveraging his experience from HD Supply to effectively manage inventory and enhance customer delivery efficiency, potentially leading to a turnaround.
- Store Strategy Shift: O'Kelly's aggressive closure of over 700 locations, coupled with the opening of new stores in market-leading areas and a focus on larger market hub stores, aims to increase SKU availability and improve same-day delivery capabilities, thereby enhancing competitive positioning.
- Market Environment Challenges: Despite facing a weak market environment from companies like 3M and RPM International, Advance could report weak sales growth; however, if profit margins and cash flow guidance indicate progress, the stock may respond positively to the forthcoming earnings report.
See More
Tenet Healthcare and AutoZone See Active Options Trading
- Tenet Healthcare Options Activity: Tenet Healthcare Corp. recorded an options trading volume of 5,517 contracts, equating to approximately 551,700 shares, which represents about 58.6% of its average daily trading volume of 940,865 shares over the past month, indicating heightened market interest in its future performance.
- High Strike Call Options: Notably, the $200 strike call option expiring on February 20, 2026, has seen 1,818 contracts traded today, representing around 181,800 underlying shares, suggesting that investors are increasingly optimistic about Tenet Healthcare's stock price appreciation.
- AutoZone Options Dynamics: AutoZone, Inc. has seen an options trading volume of 1,001 contracts, which translates to approximately 100,100 shares, accounting for 57.4% of its average daily trading volume of 174,495 shares over the past month, reflecting active market interest in its stock.
- High Strike Call Option Analysis: The $4000 strike call option expiring on February 20, 2026, has recorded a trading volume of 504 contracts today, representing about 50,400 underlying shares, indicating investor confidence in AutoZone's future growth potential.
See More
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Price Increase Announcement: UBS has raised the target price for AutoZone shares to $4,555 from a previous target of $4,325.
Market Implications: This adjustment reflects UBS's positive outlook on AutoZone's performance in the market.
See More
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- Stock Price Surge: Advance Auto Parts (AAP) shares spiked 5.2% this morning, reflecting market recognition of its deep value opportunity, with a year-to-date increase of over 28%, indicating investor confidence in the company's restructuring plan.
- Comprehensive Restructuring: CEO Shane O'Kelly's restructuring plan is the most extensive yet, having closed over 700 locations and opened new stores in areas where Advance Auto holds a leadership position, aimed at enhancing operational efficiency and profit margins to strengthen market competitiveness.
- Loyalty Program Launch: The company has introduced a loyalty program for DIY customers, designed to boost customer loyalty and optimize inventory management for same-day delivery, addressing a long-standing challenge faced by auto parts retailers.
- Cautious Market Outlook: While 3M has a pessimistic view on the auto aftermarket outlook for 2026, if O'Kelly's strategic restructuring succeeds, it could provide significant upside potential for AAP, attracting the attention of value investors.
See More
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- Strong Stock Performance: Advance Auto Parts stock surged 5.2% today, and as of 11 a.m., it has risen over 28% year-to-date, indicating market recognition of its deep value opportunity and reflecting investor optimism about the company's future performance.
- Profitability Challenges: Despite a bleak market outlook, with 3M describing a weak auto aftermarket entering 2026, Advance Auto Parts' EBITDA margin is significantly lower than peers AutoZone and O'Reilly Automotive, resulting in a notably low price-to-sales ratio compared to competitors, highlighting potential for profitability improvement.
- Strategic Restructuring Plans: CEO Shane O'Kelly's strategic restructuring involves closing over 700 locations and opening new stores in areas where Advance Auto has a strong leadership position, while also launching larger market hub stores to tackle inventory management challenges and enhance customer satisfaction.
- Customer Loyalty Program: The company has introduced a loyalty program aimed at rewarding its DIY customers, which seeks to enhance customer retention through incentives; although O'Kelly's success is not guaranteed, his restructuring efforts are viewed as the most fundamental shift the company has undertaken, attracting increasing interest from value investors.
See More
