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AutoZone Inc AZO

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Sales Continue to Surge at AutoZone, With Encouraging Channel Balance, but Shares Trade Fairly

Zain Akbari, CFA Equity Analyst

Analyst Note

| Zain Akbari, CFA |

Second-quarter performance at narrow-moat AutoZone built on recent momentum, with 15% same-store sales growth coming after 12% in the first quarter. The expansion will moderate (likely into the midsingle digits for the full year), but the brisk growth across the do-it-yourself and professional segments suggests that the firm remains in hale health despite pandemic-related volatility. We still expect mid-single-digit top-line growth and high-teens operating margins long term.

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Company Profile

Business Description

AutoZone is the premier seller of aftermarket automotive parts, tools, and accessories to do-it-yourself customers in the United States. The company derives an increasing proportion of its sales from domestic commercial customers, roughly three quarters in fiscal 2020, and has a growing presence in Mexico and Brazil. AutoZone had 6,549 stores in the U.S. (5,885), Mexico (621), and Brazil (43) as of the end of fiscal 2020.

123 South Front Street
Memphis, TN, 38103
T +1 901 495-6500
Sector Consumer Cyclical
Industry Specialty Retail
Most Recent Earnings Feb 28, 2021
Fiscal Year End Aug 28, 2021
Stock Type Cyclical
Employees 100,000