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Category: Stock Market and AutoZone
Date: 25 September 2019 Stock Price: $1096.63 We take a look at the 4th quarter earnings release of their 2019 fiscal year of Autozone a automotive replacement parts supplier operating in the Americas.
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About AutoZone
AutoZone is the leading retailer and a leading distributor of automotive replacement parts and accessories in the Americas. Each AutoZone store carries an extensive product line for cars, sport utility vehicles, vans and light trucks, including new and remanufactured automotive hard parts, maintenance items, accessories, and non-automotive products. Many stores also have a commercial sales program that provides commercial credit and prompt delivery of parts and other products to local, regional and national repair garages, dealers, service stations and public sector accounts.
Overview of AutoZone's latest earnings report
The numbers we are interested in (for the quarter):
- Net sales: $3.988 billion (up from $3.558 billion from the same quarter of the previous year)
- Revenue increased by 12.1% over the last 12 months
- Cost of Sales: $1.858 billion (up from $1.650 billion for the same quarter of the previous year)
- Total operating expenses increased by 12.6% over the last 12 months
- Net income: $565.2 million (up from $400.3 million for the same quarter of the previous year)
- Diluted income per share: $22.59 (up from $15 for the same quarter of the previous year)
- Diluted weighted-average shares outstanding: 25.019 million (down from 26.649 million for the same quarter of the previous year)
- Cash and cash equivalents: $176 million
- Cash and cash equivalents per share: $7.03
- Cash and cash equivalents makes up 0.64% of AutoZone's market capital
- Cash and cash equivalents makes up 1.78% of AutoZone's total assets
- Inventories : $4,319 billion
- Inventories makes up 43.6% of AutoZone's total assets
AutoZone's management commentary on the results and earnings guidance
MEMPHIS, Tenn., Sept. 24, 2019 (GLOBE NEWSWIRE) -- AutoZone, Inc. (NYSE: AZO) today reported net sales of $4.0 billion for its fourth quarter (17 weeks) ended August 31, 2019, an increase of 12.1% from the fourth quarter of fiscal 2018 (16 weeks). Excluding sales from the additional week included in this year’s quarter, adjusted sales were up 5.4%. Domestic same store sales, or sales for stores open at least one year, increased 3.0% for the quarter. Same store sales are computed on a 16-week basis.
“I would like to congratulate and thank our entire organization for the solid performance they delivered in our fourth quarter and fiscal year. Our customer service and trustworthy advice are what continue to differentiate us across our industry, and our AutoZoners’ passion to deliver superior service has allowed us to consistently deliver strong financial results. For the year, we delivered several impressive accomplishments which include a record $11.9 billion in total sales, three percent same store sales growth, domestic Commercial sales grew by 13.4% (on a 52-week basis), the opening of 209 stores globally and 152 additional domestic Commercial programs, and repurchasing a record $2 billion of our common stock.
I am especially proud to say our organization delivered on the major initiatives we set for ourselves at the beginning of the year: we invested in incremental wages for our most tenured hourly store AutoZoners’ and we accelerated our investment in information technology with specific emphasis on expanding our Omnichannel initiatives, which contributed to us gaining market share across our industry. We also improved our return on invested capital from the prior year of 32.1% to 35.7%. As we start a new fiscal year, we promise to remain committed to delivering exceptional customer service while growing our Retail, Commercial, and International businesses. We will maintain our disciplined approach to growing operating earnings and utilizing our capital effectively,” said Bill Rhodes, Chairman, President and Chief Executive Officer.
During the quarter ended August 31, 2019, AutoZone opened 86 new stores in the U.S., 28 stores in Mexico and 10 stores in Brazil. As of August 31, 2019, the Company had 5,772 stores in 50 states in the U.S., the District of Columbia, Puerto Rico and Saint Thomas, 604 stores in Mexico and 35 stores in Brazil for a total count of 6,411
“I would like to congratulate and thank our entire organization for the solid performance they delivered in our fourth quarter and fiscal year. Our customer service and trustworthy advice are what continue to differentiate us across our industry, and our AutoZoners’ passion to deliver superior service has allowed us to consistently deliver strong financial results. For the year, we delivered several impressive accomplishments which include a record $11.9 billion in total sales, three percent same store sales growth, domestic Commercial sales grew by 13.4% (on a 52-week basis), the opening of 209 stores globally and 152 additional domestic Commercial programs, and repurchasing a record $2 billion of our common stock.
I am especially proud to say our organization delivered on the major initiatives we set for ourselves at the beginning of the year: we invested in incremental wages for our most tenured hourly store AutoZoners’ and we accelerated our investment in information technology with specific emphasis on expanding our Omnichannel initiatives, which contributed to us gaining market share across our industry. We also improved our return on invested capital from the prior year of 32.1% to 35.7%. As we start a new fiscal year, we promise to remain committed to delivering exceptional customer service while growing our Retail, Commercial, and International businesses. We will maintain our disciplined approach to growing operating earnings and utilizing our capital effectively,” said Bill Rhodes, Chairman, President and Chief Executive Officer.
During the quarter ended August 31, 2019, AutoZone opened 86 new stores in the U.S., 28 stores in Mexico and 10 stores in Brazil. As of August 31, 2019, the Company had 5,772 stores in 50 states in the U.S., the District of Columbia, Puerto Rico and Saint Thomas, 604 stores in Mexico and 35 stores in Brazil for a total count of 6,411
AutoZone (NYSE: AIT) stock price history
The image below, obtained from Google, shows the stock price history of AutoZone (NYSE: AZO) over the last 5 year. And it's been a good time for AutoZone stockholders. 5 years ago the stock of AutoZone was trading at $508 a stock, and its currently it's trading at $1096.63. Thats s return of 115.7% offered over the last 5 years. The stock is also trading at a lot closer to its 52 week high of $1186.60 than it is to its 52 week low of $705 which to us is a clear indication that the short term sentiment and momentum of the stock is very positive.
Recent coverage of AutoZone (AZO)
The extract below, obtained from Zacks discusses AutoZone's recent earnings report.
AutoZone, Inc. (AZO - Free Report) has reported earnings of $22.59 per share in the fourth quarter of fiscal 2019 (ended Aug 31, 2019), up from $15.02 in the prior-year period. Further, the figure surpassed the Zacks Consensus Estimate of $21.64. Net income rose 41.2% year over year to $565.2 million, benefitting from lower effective income tax rate.
In the reported quarter, net sales improved 12% year over year to $3,988.4 million. The top line also beat the Zacks Consensus Estimate of $3,940 million.
Domestic commercial sales totaled $886.5 million, up from $731.8 million in the year-ago quarter.Domestic same-store sales (sales at stores open at least for a year) rose 3% year over year, driven by improved performances of DIY and commercial businesses.
Gross profit increased to $2,130.4 million from $1,907.8 million in the prior-year quarter. Operating profitalso rose to $780.7 million from $591.3 million registered in the year-ago period.
Read the original article here
AutoZone, Inc. (AZO - Free Report) has reported earnings of $22.59 per share in the fourth quarter of fiscal 2019 (ended Aug 31, 2019), up from $15.02 in the prior-year period. Further, the figure surpassed the Zacks Consensus Estimate of $21.64. Net income rose 41.2% year over year to $565.2 million, benefitting from lower effective income tax rate.
In the reported quarter, net sales improved 12% year over year to $3,988.4 million. The top line also beat the Zacks Consensus Estimate of $3,940 million.
Domestic commercial sales totaled $886.5 million, up from $731.8 million in the year-ago quarter.Domestic same-store sales (sales at stores open at least for a year) rose 3% year over year, driven by improved performances of DIY and commercial businesses.
Gross profit increased to $2,130.4 million from $1,907.8 million in the prior-year quarter. Operating profitalso rose to $780.7 million from $591.3 million registered in the year-ago period.
Read the original article here
AutoZone (NYSE: AZO) latest stock valuation
So based on the earnings report of AutoZone (NYSE: AZO) and the latest earnings guidance provided what do we value AutoZone (AZO) stock at? Based on their latest earnings report our target (full value) price for AutoZone at $1014 a stock. We therefore believe the stock of AutoZone is overvalued
We usually suggest long term fundamental and value investors look to enter the stock at least 10% below our target price, which in this case is $1014 Therefore we believe the a good entry point into the stock is below $912. We believe the stock of AutoZone will pull back from current levels to levels closer to our valuation levels in coming weeks and months.
We usually suggest long term fundamental and value investors look to enter the stock at least 10% below our target price, which in this case is $1014 Therefore we believe the a good entry point into the stock is below $912. We believe the stock of AutoZone will pull back from current levels to levels closer to our valuation levels in coming weeks and months.