AZO - AutoZone tops earnings estimates comparable sales impress

AutoZone ( NYSE: AZO ) shares see-sawed on Tuesday despite the company’s Q2 earnings topping analyst expectations.

For the fiscal second quarter, a report of $24.64 in earnings per share came in $3.00 stronger than expected while a 9.5% jump in revenue year over year to $3.69B was $130M above consensus estimates. Domestic same store sales increased 5.3% for the quarter, well above the 3.41% consensus as well.

“We are proud to report solid same store sales growth on top of last year’s 13.8%,” CEO Bill Rhodes commented. “For the remainder of fiscal 2023, we will be laser focused on relentless execution, and we will continue to focus our capital on projects that meet or exceed our return on capital targets. We will take nothing for granted as we will continue to focus on our long-term approach of increasing operating earnings and free cash flows while using our balance sheet effectively.”

Costs remain a concern for the company, however, with the cost of sales rising nearly $180M year over year amid continued inflationary pressures and elevated freight costs in particular. For the first half of the fiscal year, the cost of sales have increased over $430M as compared to 2022.

Shares of AutoZone ( AZO ) rose at the market open before retreating about 1% within the first 30 minutes of trading.

Elsewhere, the company repurchased $906M worth of shares in Q2 at an average price of $2,434 per share. The company said that $1.8B remains available under its current share repurchase authorization.

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