AZO - AutoZone Fiscal Q1: Firmly In The Zone But Don't Chase

2023-12-05 10:11:03 ET

Summary

• AutoZone, Inc. beat revenue and EPS estimates in its fiscal Q1, with net sales up 5% YoY and EPS up nearly 20% YoY.
• International sales outperform domestic sales, with a 25% YoY increase.
• AutoZone continues its tradition of retiring shares, spending $1.5 billion to retire 580,000 shares in Q1.
• AutoZone stock might be a little pricey here given business cycle and expected earnings growth.

AutoZone, Inc. ( AZO ) has just reported its fiscal Q1 earnings results (period ended November 18th) as Seeking Alpha has reported here . The company beat on both top and bottom lines, and the stock is trending up more than 2.50% pre-market. How did AutoZone do in Q1 and what does that mean for the stock hereon? Let's find out in the latest version of The Good, The Bad, and The Ugly.

The Good

• Q1 marks at least the 13th consecutive time that AutoZone has beaten revenue estimates dating back to at least November 2021. Q1's net sales of $4.2 billion went up 5% YoY. In addition, EPS of $32.55 went up nearly 20% YoY, which is quite impressive for a nearly $50 billion worth enterprise.

• The company highlighted its international sales strength in the earnings results, and justifiably so. International sales went up 25% YoY compared to domestic sales going up just 1.2%. Investors may recall that at the end of FY 2023, the company had more than 800 stores internationally .

• AutoZone has retired more than 30% of its shares outstanding over the last 5 years and the company continued this rich tradition in Q1 as well. AutoZone spent $1.5 billion towards retiring 580,000 shares in Q1, paying an average price of $2,590 per share, which is about $150 lower than the current market price.

• From a technical perspective, AutoZone stock was a little weak heading into Q1 report, with a Relative Strength Index [RSI] of 43. This strong report should help the stock continue its recent recovery of moving past all the commonly used moving averages. I won't be surprised to see buying momentum from here onward push the stock's RSI to at least 60.

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