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AutoZone, Inc. Stock Price: Quote, Forecast, Splits & News (AZO)

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Company Profile

New

AutoZone, Inc. Price & Performance (AZO)

Stock Performance

Updated Mar 24, 7:07 PM UTC

AZO:NYSE

$3,654.79USD

1.34% · $48.45

Open

$3.64K

High

$3.68K

Low

$3.62K

Market Cap

$61.34B

P/E Ratio

24.5

Volume

56.43K

Year High

$3.70K

Year Low

$2.73K

News & Market Insights

AutoZone's Stock Performance Remains Strong Despite Earnings Miss
today
AutoZone's stock opened at $3,605.88 today, nearing its 52-week high of $3,704.43. Despite missing earnings expectations with $28.29 EPS versus $29.11 consensus, the company maintains a robust market cap of $60.51 billion. Analysts anticipate EPS of 152.94 for the fiscal year, reflecting confidence in the retailer's long-term growth.123
Institutional Activity Boosts AutoZone's Market Outlook
today
Institutional investors have continued to drive AutoZone's stock momentum, with strong buy-in since early 2024. Despite a 4.9% decline in operating profit last quarter, the company's robust financial health and aggressive share repurchase strategy have sustained investor confidence, pushing shares toward record highs.345
AutoZone Expands Store Count Amidst Mixed Financial Results
today
AutoZone added 45 new stores in Q2, including 28 in the U.S., 13 in Mexico, and 4 in Brazil, bringing its total to 7,432. Despite 2.9% same-store sales growth, operating profit fell 4.9%, reflecting increased costs. The company emphasizes international growth as a key strategy moving forward.365

What's Happening

Peers

Earnings

Report Date

Mar 4, 2025

Reported Revenue

Avg 1d Change

1.13%

Report Period

Q2 2025

Reported EPS

28.29

Implied Move 1d

4.97%

Transcript

10m 13s

Forward looking statements are not guarantees of future performance. Please refer to this morning's press release and the company's most recent annual report on Form 10 ks and other filings the Securities and Exchange Commission a discussion of important risks and uncertainties that could cause actual results to differ materially from expectations. Forward looking statements speak only as of the date made and the it takes no obligation to update such statements. Today's call will also include certain non GAAP measures. A reconciliation of GAAP to non GAAP financial measures can be found in our press release.

10m 46s

Good morning.

10m 47s

And thank you for joining us today for AutoZone's twenty twenty five second quarter conference call. With me today are Jameer Jackson, Chief Financial Officer and Brian Campbell, Vice President, Treasurer, Investor Relations and Tax. Regarding the second quarter, I hope you had a chance to read our press release and learn about this quarter's results. If not, the press release along with slides complementing our comments today are available on our website www.autozone.com AutoZone, under the Investor Relations link Please click on the quarterly earnings conference calls to see them.

11m 26s

We begin today, we want to thank our more than 125,000 AutoZoners across the globe for their commitment to delivering on our pledge to always put customers first.

11m 37s

Their contributions allow us to deliver the consistent performance we have enjoyed over many years. We can only succeed if we all work together to deliver our goals. First off this morning, I'll say the quarter played out the way we thought it might. We felt optimistic that our execution could drive sales increases. And we also believed we would experience winter weather earlier in the quarter than we did last year during our second quarter. Now let me highlight a few highlights from this quarter and give a little more color on our execution the current environment and our outlook For the quarter, with our continued focus on what we call Wow [indiscernible] our total sales grew 2.4% while earnings per share decreased 2.1%. We delivered positive 2.9% total company same store sales with domestic same store sales growth of 1.9% and our domestic commercial sales grew 7.3% and were up 10% on a two year stack basis. International same store sales increased 9.5% on a constant currency basis. While our international business continued to comp impressively, we faced an approximate 1,900 basis points of currency headwind which resulted in an unadjusted 8.2% international comp. As you know, the U. S. Dollar has continued to have a negative impact on our reported sales operating profit and EPS.

13m 13s

We expect this trend to continue for the remaining two quarters of this fiscal year. Jameer will provide more color on our foreign currency impact for the third and fourth as well as the full fiscal year. In terms of execution, specifically related to our domestic commercial business, our focus on improving both availability and speed of delivery helped us significantly improve our year over year sales growth. We drove commercial sales up 7.3% versus up 3.2% in the first quarter. We believe the initiatives we have in place have a long runway will drive further improvement. We are pleased with our efforts and execution thus far. Secondly, did improve as we experienced winter weather earlier than we had the last [indiscernible] Due to a colder November, and early December, our sales noticeably increased.

14m 12s

Our domestic same store sales cadence was 4.3% in the first four weeks plus 2.8 in our second four weeks and a negative 1.2 over our last four weeks. This compares to the previous year's second quarter where domestic sales positive 1.4% in the first four weeks a negative 4.9 in the second four weeks and a positive 4.4 in the last four weeks.

14m 41s

On a two year basis, DAF comps were a positive 5.7% in the first four weeks a negative 2.1 in the second four weeks and a positive 3.2 in the last four weeks segment. It is important to point out that the Arctic cold that came early this year came later in the last four weeks segment last year. That is why the last four weeks segment was such a difficult comparison for us. Thirdly, the domestic comp variation over the four week segment was driven by volatility in our retail business. In fact, The last week of the quarter was by far the worst week with our DIY comp being down almost 7%. It was understandable.

15m 29s

That week, much of the country was very cold weather, along with heavy snowfall and it hurt our customer traffic. That is what happens during the winter quarter, which is always the most volatile. During the weeks where weather is extreme, our traffic softened significantly but returns once people are able to get back out to shop. We seem to capitalize on the pent up demand. Our commercial comp on the other hand was much more consistent over the twelve weeks of the quarter. This consistency was very encouraging to us and informs us that we are on the right track to continued future commercial sales growth. We While the macro environment has continued to force customers to be cautious with their spending, the consistency of our failure and maintenance business continued this past quarter. Weather in Q2 always had such a big impact on our results. With a winter that started earlier, we benefited this year from more failure related part sales, Winter also causes discretionary categories to be at a lower percentage of our sales mix. Now let me make a few comments on our DIY business. Our domestic DIY results showed an improvement to last quarter as Q2's DIY comps were plus 10.1%.

16m 49s

Our discretionary merchandise category continued to be the lowest performer across domestic DIY sales. For our second quarter, discretionary category sales were approximately 16% of our mix and they were down on a same store sales basis. Our belief is the discretionary sales will continue to be pressured until the customer gets some economic relief and consumer confidence improves. Our DIY comp was up 2.9% in the first four weeks segment, plus 2% in the second four weeks segment and down 4.3% during the third fourth week segment.

17m 27s

That compares to last year's Q2 DIY comps 0.7% in the first four weeks negative 6.2% in the second four weeks, and a positive 4.8 in the third fourth week segment. We saw both DIY average ticket and average like for like same SKU inflation up slightly for the quarter. [indiscernible] continue to expect that inflation in our ticket will be up approximately 3% over and we anticipate average ticket growth will return to a historical industry growth rates as we move farther away from the hyperinflation of the last couple of years. We also saw DIY transaction count down approximately 1%. This too was better than the down 1.8% we [indiscernible] we do not have final share data for the last segment of the quarter, we were encouraged by the recent favorable share trends. We believe we have a best in class product offering and service offering and this gives us confidence that when customers return to their historical shopping habits, we will be the beneficiaries Next, I'll speak to our regional DIY performance. We saw slightly weaker performance in the Northeast, Midwest or Mid Atlantic Sorry, and Rust Belt versus the rest of the country. These markets were up 0.5% versus 1.1% across the rest of the domestic markets as sales are heavily dependent on winter weather.

19m 5s

Winter weather benefited these Northeastern and Rust Belt markets earlier in the quarter and our sales increased nicely during those times versus Q2 last year. However, the last week of the quarter was much weaker in the Northeastern and Rust Belt markets as they were down 10% versus the rest of the country being down roughly one. Again, weather created a lot of volatility during the second quarter of our fiscal year. We would expect our performance to improve as our customers are now able to get back out and shop. Next, I will touch on U. S. Commercial business. Commercial sales were up 7.3% for the quarter versus last year and this compares to 3.2% total commercial growth in Q1 for commercial. The first four weeks of our twelve week quarter grew 8.8% due to the impact for from winter weather previously discussed. The second four week period grew 5.9% and the last four week period grew 7.1%. Commercial was also impacted by the last week of the quarter due to the severe winter storm. More broadly across The U. S, our commercial business grew at a slower pace in the Northeast and the Rust Belt versus the rest of the country.

20m 19s

The spread was pronounced 600 basis points between the Northeast and Rust Belt versus the rest of the country, as many of our customers close their businesses while these storms roll through these markets.

20m 32s

We expect performance in the Northeast and the Rust Belt markets to improve over the remainder of the year as the colder winter weather has historically led to parts failures and increased maintenance as the summer goes along.

20m 47s

While we have continued to see wide variations in performance, across the more weather sensitive markets, we remain confident in our initiatives. Are very encouraged with our improved satellite store inventory availability, significant improvements in hub and mega hub stores coverages the strength of our Duralast brand, and good execution on our initiatives to improve speed of delivery. And improve customer service which gives us confidence as we move throughout the year. This quarter, year over year inflation on a like for like same SKU basis in our commercial business increased versus Q1, contributing to our average ticket growth of 0.5%. Lastly, while ticket growth was slightly positive, we were very pleased with the growth in our commercial transactions year over year. Our sales growth will be driven by our continued ability to gain market share and an expectation that like for like same SKU inflation will accelerate as the year moves along.

21m 46s

For the quarter, we opened a total of 28 net domestic stores. We remain committed to more aggressively opening regular stores, and mega hub stores.

21m 57s

Hubs and mega hubs comps continue to grow and we are going to continually aggressively deploy these assets In FY 2025, our openings will continue to be skewed to the back half of the fiscal year.

22m 13s

For the third quarter, we expect both our DIY and commercial sales trends to improve as our comparisons become slightly easier and we gain momentum from our growth initiatives.

22m 25s

We will, as always, be transparent about what we are seeing and provide color on our markets, and outlook as trends emerge. Now let me take a moment and discuss our international business. In Mexico and Brazil, we opened a total of 17 new stores in the quarter and now have nine forty nine total international stores. As you can see from our press release, our same store sales were up 9.5% on a constant currency basis.

22m 53s

While slightly below double digit growth we remain very positive on our growth opportunities in this market. Today, we have just under 13% of our total store base outside of The U. S. And we expect this number to grow as we accelerate our international store openings. For the fiscal year, expect to open around 100 international stores. And we will accelerate our openings over the remaining two quarters of the fiscal year. While there will always be tailwinds and headwinds in any quarter's results, What has been consistent is our focus on driving sustainable, long term results We continue to invest in improving customer service, product assortment initiatives and our supply chain. We believe we are well positioned for future upswings in consumer demand. We are investing in both CapEx and operating expense at the right time for market share growth. I'd like to recognize all AutoZoners who helped to get our two new domestic distribution centers open this quarter.

23m 56s

Both our California and Virginia DC will help us tremendously with the future parts needs of our customers. The Virginia distribution center will be AutoZone's largest DC and both DCs will deploy new technology and automation We are very excited by the supply chain efficiencies these facilities will provide us. In summary, we have continued to invest in driving traffic and sales growth. This year, we expect again to invest more than $1,000,000,000 in CapEx in order to drive our strategic growth priorities. We are investing in accelerated store growth, specifically hubs and mega hubs, placing inventory closer to our customers. Distribution centers that drive efficiency, and reduce supply chain costs, and leveraging technology and our IT systems that improve customer service and our AutoZoners' ability to deliver on our promise of Wow! Customer service. We believe this is exactly the right time to invest in these initiatives in order to grow market share now and be ready when industry demand ramps up. Now I will turn the call over to Jameer Jackson. Thanks, Phil, and good morning, everyone. For the quarter, total sales were $4,000,000,000 and were up 2.4%. Our domestic same store sales grew 1.9% and our international comp was up 9.5% on a constant currency basis.

25m 19s

Total company EBIT was down 4.9% and our EPS was down 2.1 As Phil discussed earlier, we had a headwind from foreign exchange rates this quarter for Mexico FX rates weakened 19% versus the U. S. Dollar for the quarter resulting in a $91,000,000 headwind to sales, a $30,000,000 headwind to EBIT and $1.22 a share drag on EPS versus the prior year. Excluding the 2.1% for the quarter.

25m 49s

We continue to deliver solid results as the efforts of our AutoZoners and our stores and distribution centers have enabled us to continue to grow our business. Me take a few moments to elaborate on the specifics in our P and L for Q2 and [indiscernible] give a little more color on sales and our growth initiatives. Starting with our domestic commercial business for the first quarter, our domestic DIFM sales increased 7.3% to $1,100,000,000 For the quarter, our domestic commercial sales represented 31% and twenty seven percent of our total company sales. Our average weekly sales per program were $14,700 up 4.3% versus last year's second quarter. Our commercial acceleration initiatives are continuing to deliver good results as we grow share by winning new business and increasing our share of wallet with existing customers. We continue to have our commercial program in approximately 92% of our domestic stores, which leverage our DIY infrastructure, and we're building our business with national, regional and local accounts. This quarter, we opened 27 net new programs finishing with 5,962 total programs. Importantly, we continue to have a tremendous opportunity to expand sales per program and open new programs.

27m

We plan to aggressively grow our share of wallet with existing customers and add new customers. MegaHub stores are a key component of our current and future commercial growth. We finished the second quarter with 111 mega hub stores and we expect to open at least 19 more locations over the next two quarters. As a reminder, our mega hubs typically carry over 100,000 SKUs and drive a tremendous sales lift inside the store box as well as serve as an expanded assortment source for other stores The expansion of coverage and parts availability continues to deliver a meaningful sales lift to both our commercial and DIY business. Surrounding AutoZone stores is giving our customers access to thousands of additional parts and lifting the entire network. While I mentioned a moment ago, our commercial weekly sales per program average was $14,700 per program, the 111 megahubs averaged significantly higher sales and are growing much faster than the balance of the commercial business in Q2. We continue to target having just under 300 mega hubs at full build out. Our customers are excited by our commercial offering as we deploy more parts and local markets to the customer, while improving our service levels.

28m 10s

On the domestic retail side of our business, our DIY comp was up 0.1% for the quarter, As Phil mentioned, we saw traffic down approximately 1% along with a positive one ticket growth DIY comps were up 2% each of the first two periods and down 4.3% over the last four weeks as we were up against a difficult comparison from an extremely cold period of Europe ago along with very difficult DIY same store sales the last week of the quarter. As we move forward, we would expect to see slightly declining transaction counts offset by low single digit ticket growth. In line with the long term historical trends for the business driven by changes in technology and the durability of new parts. Our DIY share has remained strong behind our growth initiatives and we are well positioned when the industry reaccelerates its growth. Importantly, the market is experiencing a growing and aging car park and a challenging new and used car sales market for our customers which continues to provide a tailwind for our business. These dynamics, ticket growth, growth initiatives, and macro car park tailwinds, we believe will continue to drive a resilient DIY business environment for the balance of FY 2025. [indiscernible] I'll say a few words regarding our international business.

29m 20s

We continue to be pleased with the progress we're making in our international markets During the quarter, we opened 13 new stores in Mexico to finish with eight thirteen stores. Four new stores in Brazil, ending with 136. Our same store sales grew 9.5% on a constant currency basis and negative 8.2% on an unadjusted basis. We remain committed to international and we're pleased with our results in these markets. We will accelerate the store opening pace going forward as we're bullish on international being an attractive and meaningful contributor to AutoZone's future sales and operating profit growth. Now let me spend a few minutes on the rest of the P and L and gross margins. For the quarter, our gross margin was 53.9%, flat to last year.

30m 2s

This quarter, we had a $14,000,000 or 36 basis points unfavorable LIFO comparison to last year. Excluding LIFO from last year's results, we had a 36 basis point improvement in gross margin driven by continued improvement in merchandising margins. As a result for Q3 last year, we had a $24,000,000 credit And while this Q3, we're not expecting to record any LIFO impacts. So in Q2 quarter end, we still had $19,000,000 in cumulative life of charges yet to be reversed through our P and L. And as I previously said, once we credit back the $19,000,000 through the P and L, we will not take any more credits as we will begin rebuild an unrecorded LIFO result. So just a reminder, for Q3 last year, we had a $24,000,000 credit and Q3 this year, we're not expecting to record any LIFO impacts. Now let me take a moment and discuss the impact tariffs could have on our results. Recently, 20% tariffs were instituted on all SKUs purchased from China. Now there are several outcomes that may impact our go forward results, including vendor absorption, diversifying sourcing taking pricing actions or some combination of the three. To be clear, we intend to maintain our margin profile post tariff and we expect the entire industry will behave in a rational way as our historical experience has shown.

31m 22s

Moving on to operating expenses, our expenses were up 6.4% versus last year as SG and A as a percentage of sales deleveraged 134 basis On a per store basis, our SG and A was up 2.9% versus last year's Q2.

31m 37s

While we're managing our SG and A spend in a slower growth environment in a disciplined way, we will continue to invest at an accelerated pace and initiatives that we believe will help us continue to gain share. These investments will pay dividends in customer experience, speed of delivery, and productivity. From our past experiences, we believe investing now at a reasonable pace is key for us to gain future market share. We will remain committed to being disciplined on SG and A growth as we move forward and we will manage expenses in line with sales growth over time. To the rest of the P and L. EBIT for the quarter was $7.00 $7,000,000 down 4.9% versus the prior year. I previously mentioned, FX rates reduced our EBIT by $30,000,000 On a constant currency basis, our EBIT would have been down 0.9%.

32m 23s

Interest expense for the quarter was $108,800,000 up 6% from Q2 a year ago as our debt outstanding at the end of the quarter was $9,100,000,000 versus $8,600,000,000 a year ago. We're planning interest in the $110,000,000 range for this third quarter of FY twenty twenty five versus $104,000,000 last year. Higher debt levels and borrowing rates are continuing to drive interest expense increases. For the quarter, our tax rate was 18.4% and down from last year's 19.6% driven by one time discrete items. This quarter's rate also benefited two thirty nine basis points from stock options exercise while last year benefited three sixty basis points.

33m 3s

For the third quarter of FY twenty twenty five, we suggest investors model us at approximately 23.2% before any assumption on credits due to stock option exercises. And once again, we suggest investors model Q3 option exercises to be significantly less than Q3 last year which had four seventy nine basis points of benefit. Moving to net income and EPS. Net income for the quarter $488,000,000 down 5.3% versus last year. Our diluted share count of $17,200,000 was 3.3% lower than last year's quarter The combination of lower net income and lower share count drove earnings per share for the quarter to $29 down 2.1% As a reminder, the unfavorable FX comparison drove our EPS down $1.22 year. Now let me talk about our free cash flow. For the second quarter, we generated $291,000,000 in free cash flow versus $179,000,000 last year in Q2, We expect to continue being an incredibly strong cash flow generator going forward and we remain committed to returning meaningful amounts of cash to our shareholders. Position remains very strong and our leverage ratio finished at 2.5 times EBITDAR. Inventory for short was up 6.8% versus Q2 last year, while total inventory increased 10.4% over the same period last year, driven by additional inventory investment to support our growth initiatives.

34m 30s

Net inventory, defined as merchandise inventories less accounts payable on a per store basis was a negative 161,000 versus negative 164,000 last year and negative $166,000 last quarter. As a result, accounts payable as a percent of gross inventory finished the quarter at 118.2% versus last year's Q2 of 119.8%. Lastly, I'll spend a moment on capital allocation and our share repurchase program. We repurchased $330,000,000 of AutoZone stock in the quarter and quarter end we had $1,300,000,000 remaining under our share buy buy buy authorization. Our ongoing strong earnings, balance sheet and powerful free cash continues to allow us to return a significant amount of cash to our shareholders through our buyback program.

35m 18s

We bought back over 100% of the VIN out while investing in our existing assets and growing our business. We remain committed to this disciplined capital allocation approach that will enable us to invest in the business and return meaningful amounts of cash to shareholders.

35m 36s

To wrap up, we remain committed to driving long term shareholder value by investing in our growth initiatives, driving robust earnings and cash, and returning excess cash to our shareholders. Our strategy continues to work. As we remain focused on gaining market share improving our competitive positioning in a disciplined way. As we look forward to the remainder of FY 2025, we're bullish on our growth prospects behind a resilient DIY business a fast growing international business and a domestic commercial business that is gaining momentum and growing share.

36m 8s

We continue to have tremendous confidence in our ability to drive significant and ongoing value for our shareholders behind a strong industry winning strategy and an exceptional team of AutoZone. Before handing the call back to Phil, I want to remind you that we report revenue comps on a constant currency basis to reflect our operating performance. We generally don't take on transactional risks, so our results primarily reflect the translation impact for reporting purposes. As mentioned earlier in the quarter, foreign currency resulted in a headwind on revenue and EPS. If yesterday spot rates held for Q3, then we expect approximately $106,000,000 drag on revenue a $34,000,000 drag on EBIT and $1.41 a share drag on EPS. And for our fourth quarter of FY twenty twenty five, we would expect $101,000,000 drag on revenue a $37,000,000 drag on EBIT and $1.53 a share drag on EPS. And finally, if rates remain at the current spot rates for the balance of fiscal year 2025, we would now expect the $356,000,000 impact of revenues $118,000,000 add impact to EBIT and a $4.82 a share impact to full year EPS. And now I'll turn it back to Phil. We are excited about where we are striving to accomplish for the remainder of FY 2025.

37m 27s

We promise to continue to focus on improving our execution, and delivering Wow! Customer service. We are pleased with the progress we have made on our initiatives are on track for the back half of the year. We are well positioned to grow sales across our domestic and our international store basis. With both our retail and our commercial customers. And our operating expense is appropriately scaled for future growth. We continue to put our capital to work we'll have the biggest impact on sales, and profits and that is our stores, distribution centers, and leveraging technology to build a superior customer experience where we are able to say yes to our customers' needs. The top focus areas for fiscal twenty twenty five will remain growing share in our domestic commercial business and continuing our momentum in our international markets. We believe we have a solid plan in place for the remainder of the fiscal year. We know our focus on parts availability and what we call Wow customer service will lead to sales growth and gains in market share. We are excited to ramp up our efforts in calendar 2025. We are going to have a very busy remainder of our fiscal year and we have to remain the execution machine we have always been.

38m 47s

Fiscal twenty twenty five's top priorities are based on improving execution and Wow! Customer service. We will continue to invest in the following strategic projects. Ramp up our domestic and international store growth, As discussed, our international teams posted same store sales comps a constant currency basis of just under 10%, continuing several years of strong growth. Reaccelerate our new hub and mega hub openings, as we are planning 19 more mega hubs to open in the back half of fiscal year. These stores do take time, we are incredibly excited about their continued performance. And most importantly, reaccelerate our domestic commercial sales growth which we are doing in a meaningful way. We are excited about what we can accomplish and our AutoZoners are committed to delivering on our commitments in 2025. We believe AutoZone's best days are ahead of us. Now we would like to open the call for questions.

39m 43s

Certainly. Everyone at this time will be conducting a question and answer session Your line is live.

40m 16s

Good morning, guys.

40m 18s

Good morning, Brett.

40m 21s

In the press release, you talked about operating expense deleverage with investment support growth Was there anything beyond the accelerating store growth or hub openings that was investing? Is it technology or could you talk about sort of the SG and A spend in the quarter.

40m 39s

Yes. I mean, we've talked pretty extensively about investing in a disciplined way in IT. Which quite frankly is enabling growth in both DIY and commercial, nearly every one of our growth initiatives is underpinned by some investments that we're making in technology. [indiscernible] That is a dynamic that's happened for the last few years or so. And we're pretty excited about that. It's helping us with speed. It's helping us productivity. It's helping us with the customer experience. So the combination of investments that we're making and our commercial business to accelerate sales growth and all the things that we're investing in from an IT standpoint. Are the things that we think will give us a competitive advantage and enable us to grow sales in the future.

41m 22s

Okay. And as a question on Mexico, I mean, obviously, varied under the FX. But as you build the store base down there, is sort of a tip point where you start getting better leverage off the distribution expense and the investment being in the market where profitability accelerates? Is there sort of a a number that you get to where you get an incremental benefit Yes. I think there are a couple of things about our investments in Mex pleased with the growth that we're seeing both in terms of new store growth, also with the same store sales that we're seeing from our existing stores. And so we're also investing there in a very disciplined way. Not just in what we're seeing from an SG and A standpoint, as we've talked about on previous calls, we're investing in distribution center capability that's going to help us in the future. One, get parts to the market faster and support the growing store base that we have there. So we're pleased with the profitability there. We're pleased with the growth prospects there. And the team there is executing in an exceptional way.

42m 25s

Thank you.

42m 28s

Thank you. Your next question is coming from Simeon Gutman from Morgan your line is live.

42m 35s

This is Lauren Ng on for Simeon. Thanks for taking our question. Our first one is we wanted to touch on the 1.9 domestic comp on a constant currency basis. This is the strongest comp that the business has seen over the several quarters. We were wondering if do you think this is driven more so by strategic initiatives within DIY and commercial [indiscernible] Just how should we think about the 1.9 in context for the rest of the year?

43m 1s

Yes. I think it's a little bit of of all of the above. The weather was clearly a better year than we have had historically over the last two or three years. But I also we've spent quite a bit of effort over the last year really improving our execution at the store level, both on DIY and the commercial business We've been investing in growth opportunities around hubs, mega hubs and assortment. We also have some some pretty significant fulfillment strategies specifically on the commercial side of the business that we're seeing nice progress on and we think we have continued momentum for the long haul, with some of those strategies being executed more frequently and expanding those opportunities. So it's showing up across both businesses and we frankly feel like we have pretty good momentum going into the second half of the year.

43m 57s

Great. Thank you. And our follow-up is just on gross margins. Freight costs are picking up and there's some inflation concerns. I guess how can we expect this to impact gross margins in 2025? Could this be offset by strength in merch margins? Just any color on the cadence of gross margins for '25 would be helpful. Thank you.

44m 15s

No, from a gross margin standpoint, a couple dynamics are happening. One is we're going to see some gross margin drag just because our commercial business is accelerating. And we like the fact that we're investing in commercial and we like the fact that we're accelerating that growth. So there's going to be a little bit of drag there from a gross margin standpoint. One of the things that we've been really pleased with is that the actions that our merchants taking to drive merch margin improvement is more than offset that commercial mix drag, if you will. So you'll have those dynamics happening. And then the only other comment that I'll make is I'll just to remind you again that we had $24,000,000 of benefit booked in the third quarter for LIFO, which we're not expecting to repeat. So that will be a drag. But overall, the underlying gross margins are healthy. The teams are doing a great Great job. I think there is some potential for inflation to come back into the marketplace. And if that does happen, we'll respond accordingly.

45m 22s

Great. Thank you.

45m 25s

Thank you. Your next question is coming from Christopher Horvers from JPMorgan. Your line is live. Hi, good morning.

45m 32s

It's Christian Carley in for Chris.

45m 35s

How should we think about the potential impact of tariffs this time given the China tariffs had a long list of exclusions last time?

45m 42s

And as well, how should we think about your Mexico sourcing exposure and any comments on whether the suppliers with facilities in the free trade zones be how will they be impacted by tariffs that start today if at all?

45m 55s

Yes, that's it's a great question and I'll to be quite frank, I think some of this is still an unknown, specifically when it comes to your topic around exclusions. You're right. In 2016 and 2017, there were several exclusions based on the categories part types depending on what the product was coming out of China. We have worked diligently since those original rounds of tariffs to do all of the activities you would expect us to do, try to multi source by category, multiple countries, [indiscernible] vendors have done a lot of work to move manufacturing to various places that could still be lower cost. And we've negotiated with vendors to understand exactly what the free trades zone impacts would be. That's really challenging for us to understand. But we will and continue to negotiate with vendors to try to improve our cost of acquisition of parts And those conversations will continue. It's very fast moving as you know. And to try to stay on top of it is difficult. But our merchants are doing a great job.

47m 2s

I want to mention Tamir mentioned it just a second ago, our merch team, if you take out the LIFO impact, did a pretty nice job of growing Marsh gross margin last quarter. We do have a bit of a headwind from a compare against last year's LIFO impact, but our merchant teams are doing a great job of working with the vendors to try to make sure that we keep our margin structure intact. And we believe we'll be able to do that because the industry has been rational with pricing for a very long period of time.

47m 31s

Got it. That's really helpful. And to follow-up on the operating expenses, could you talk about to what degree is this just wrapping up the DIFM reacceleration initiatives versus leaning into share, adding drivers and trucks given one of your competitors closing stores just how should we think about this going forward? Like is the step up structural or do you expect to lap these investments at some point?

47m 55s

Well, the step up is clearly intentional. We see opportunities to grow market share both in DIY and commercial. And we're investing in a disciplined way to be able to take advantage of that. And so so that's meant making sure that we have assets and infrastructure in the market to take advantage of market opportunities as they present themselves. And then as I mentioned before, on an ongoing basis, we have several growth initiatives that we've been working on and focusing on for several years. And quite frankly, a lot of that investments is in our IT organization and it's paying dividends for us in terms of speed and productivity and better customer experience. And so we're going to do that in a disciplined way and lean into the opportunities that are in the marketplace.

48m 43s

Got it.

48m 44s

Thank you very much. Best of luck.

48m 46s

Thank you.

48m 49s

Thank you. Your next question is coming from Zach Fadem from Wells Fargo. Your line is live.

48m 55s

Hey, good morning. As you look back over the past year at flattish to negative DIY performance, curious to what extent you'd call out weakness at the lower income consumer as a driver And as you look out over the next couple of quarters, is there any reason to believe that the lower income consumer could improve, maybe gas prices as tax refund? Or conversely, do you think headwinds from from policy, immigration, etcetera, could drive more uncertainty there?

49m 26s

Yes. I think that lowering consumer has been pressured for quite some time. The massive inflation that we had over the last several years impacts that consumer the most. I also think they still have some inflation pressure coming at them. I mean, you probably we've all read the news and car inflation is still up significantly higher. So I think that the lower end consumer is under pressure and will continue to be under pressure The one thing that I do think is positive is we believe that because of our improved execution, our assortment improvements, our mega hub deployment, all of those things we've been working on over the last couple of years we believe we will still gain share in this tougher market. With consumer confidence. But eventually that will turn and we think we are well positioned to capitalize on it in the current market and as consumer confidence improves.

50m 23s

Got it. And then on the commercial business acceleration, could you talk through the performance of your national accounts versus independents? And any differences in the relative performance there or maybe new business adds? And then, Jameer, in light of the progress, is it fair to call this high single digit growth level the right run rate for the business today?

50m 48s

Yes. Specifically about our our kind of our segmentation of commercial business, I'd say largely we're growing both in the what we call the up and down the street customer that's not the national accounts and all the branded national accounts all of those businesses are very good.

51m 6s

One business that we've talked about over the last couple of quarters that has been tougher for us would be the segment of segmentation of customers that are associated with new and used cars, that business is still pretty tough. But I think it makes sense Interest rates are high, The consumer that bought a used car during the height of the pandemic when used car prices had accelerated so much they're probably still underwater. And if you're going to go out and get a new loan today, your loan value is probably higher today than it would have been back then. So Those segments are pretty tough. But again, we feel really good about the standard shop used or new car or I'm sorry, national account up and down the streets, regional customers, those types of businesses are growing nicely for us.

51m 54s

Yes. And what I'll say is that to Phil's point, our growth was broad based across our business in total and it was pretty broad based across categories. So real underlying strength there in commercial. We've talked historically on the second part of your question on where our growth rate will be for commercial. And what I'll say is that we've been investing in a very disciplined way to grow our share. And while our growth rates tapered off somewhat over the last several quarters or so. We still believe we've been growing share in that environment. I'll just remind you that we're roughly a five share and what's approaching $110,000,000,000 to $115,000,000,000 market. And all the investments that we've made that Phil talked about.

52m 40s

The quality of our parts, the expanded assortments with our mega hubs, improving delivery times, leveraging technology, the things that we've done for pricing, all of those things give us a tremendous amount of confidence about our business moving forward. We had good momentum coming out of the second quarter. We're expecting a very strong second half of the year.

53m 2s

Thanks for the time.

53m 4s

Thank you.

53m 7s

Thank you. Your next question is coming from Seth Basham from Wedbush. Your line is live.

53m 16s

Thanks a lot and good morning. Just want to follow-up on the tariffs question. Jamere, I think you made a comment that you expect to maintain gross margin rate even with tariffs. What's the breakpoint? In other words, if we do see 20% tariffs incrementally on Chinese sourced goods, and 25% on Mexican sourced goods. Do you still think you can maintain margin rate? And what incremental on top of that would be the break point where you couldn't? [indiscernible] As we mentioned, I mean, there are several outcomes that may impact our go forward results including vendor absorption of the higher costs, diversifying our sourcing, which we've done in the past, taking pricing actions or some combination of the three. But to be clear, we intend to maintain our margin profile post tariffs and we expect the entire industry will behave in a rational way just as our historical experience has shown. So don't know that there's necessarily a breakpoint. I think we have a number of tools that are disposal lots of things that we'll negotiate and lots of past practices that quite frankly has resulted in us being able to maintain margins. And we're very confident in that as our go forward position.

54m 26s

Got it. And then my follow-up question is just on SG and A. As you accelerate the investments here, what's the timeframe that will normalize to growing SG and A in line with sales?

54m 39s

We expect to invest at a pretty accelerated pace. For the next few quarters or so. The opportunities that we see in the marketplace both on the DIY side of the business and the commercial side of the business, suggest that we should be leaning in and investing at accelerated pace. And we're going to do that over the next couple of quarters. And you should expect to see some acceleration in our comps as a result of that. We've been very disciplined about SG and A growth over time. And we've been able to manage the SG and A line in line with sales. And to the extent that comps don't materialize, then we know all the plays book that we need to run to manage that SG and A number down. But right now, we see an opportunity and we're going to invest and we're going to do it in a disciplined way like we always have.

55m 29s

Thank you.

55m 31s

Thank you. Your next question is coming from Kate McShane from Goldman Sachs. Your line is live.

55m 38s

Good morning. This is Mark Jordan on for Kate.

55m 42s

Thinking about the domestic DIFM side of the business, came in much stronger than expected for the quarter. Aside from weather, is there anything to call out from a regional standpoint Maybe are you seeing any market share gains in any particular markets where competitors are closing stores? I would say from a commercial perspective, the growth, as Tamir just mentioned, is very broad based.

56m 7s

It's geographic, it's in the categories And we think, yes, there's going to be opportunities Because of competitors as you mentioned I think what is most impactful is what we're doing how we're going to market today Our execution is significantly improved on the commercial side of the house, we've done a great job with our outside sales team. Spent the appropriate time and effort training our folks our AutoZoners. AutoZone invested in assortment strategies, We've invested in our hubs and our mega hubs.

56m 42s

And we've spent considerable time over the last year working on strategic efforts to improve our delivery [indiscernible] [indiscernible] to those customers.

56m 51s

Specifically hard to find parts. And I feel like we're in a really good spot. We've spent a lot of time and effort over the first two quarters this year being prepared for this summer selling season and I believe we're we are where we need to be If you think about how execution, what we talked about, for example, our in stock levels are bumping up against all time highs, numbers we haven't frankly seen since the early twenty twenty feel really good about where we are and we believe we have momentum going into the second half of the year.

57m 26s

Okay, perfect. And then just thinking about mega hubs 2019 expected for the back half of the year. Can you talk about the timeline to open a location, how long it might take? And we should think of as a good cadence for openings in the coming years?

57m 41s

No, it takes way too long as Phil continues to remind me every single day when we're dealing with these. And these are typically 30,000 square foot boxes. That are difficult to find and it find it and get it open. But we're pretty pleased with where we are. Right now, we have 91 mega hubs in the pipeline today, and we're adding to that pipeline every day. Our teams in store development are doing a fantastic job of identifying these opportunities, working with our operations teams in the local markets and we're pretty excited about the future prospects a full build out to have close to 300 mega hubs and that will serve as a tremendous lift for both our DIY and our commercial business.

58m 34s

We continue to give Jameera a hard time. He's responsible for our store development team. And we did have a little bit of a lull coming into this year, but the pipeline is really healthy. And like you said, we hope to get 2019 open between now and the end of the calendar year. [indiscernible] those help with all those strategies I mentioned just a minute ago, assortments, specifically on harder to find parts that are that are more impactful on the commercial consumer. They help DIY too, but it's a big impact on the commercial side of the house. And it also helps with speed of delivery and this fulfillment process that we've improved on.

59m 8s

So feel great about the second half of the year. And the pipeline of those hubs and mega hubs is really strong. In much better shape than it's been over the last several years.

59m 19s

Great. Thank you very much.

59m 22s

Thank you. Your next is coming from Steve Forbes from Guggenheim.

59m 26s

Your line is live.

59m 29s

Good morning. Maybe just a a follow-up on the DIFM performance and it might be a difficult question to answer, but it's really nice to see the growth with an average weekly sales per commercial program. And you guys sound really excited right about some of the initiatives whether it be delivery time, deeper assortment, etcetera. So I don't know if you can maybe help us reframe how we should be thinking about the evolution of that that core KPI or metric on a go forward basis maybe like what is the range right between the lowest productive program versus the highest productive program or is there sort of like a longer term target to think about as we see those commercial programs [indiscernible] could help you provide all of us with greater conviction around sort of what that longer term opportunity is as you see these investments maturing? I think the biggest opportunity the way we think about it there's wide variation in store performance from the low to the high. Mean significant variances. The way we think about it is, we have five percent share in an enormous market. And lots of room to grow.

1h 46s

Add us add up all the public competitors, us, Advance O'Reilly, Napa, you just barely get over 20% of the available market share. That means there's 75% to 80% that's available for all of us to go take share of wallet and share of customers. That's way we think about it.

1h 1m 6s

The opportunities are so enormous We just need to figure out how to how to efficiently get better each and every day and gain market share with those customers. And it's a wide variation. Those customers all have different needs as well.

1h 1m 19s

And we go to market very specifically on each one of those types of customers.

1h 1m 23s

But again, 5% share is our current opportunity.

1h 1m 30s

Maybe just a follow-up on that. As we think about delivery times, because I think you guys were sort of leaning into some initiatives to improve delivery times specifically.

1h 1m 39s

Any way to help frame sort of some learnings or success stories that you guys have seen and is that result increasing number of delivery windows right at the local level or where are we just sort of in in how the market response is to the improved delivery window promise that AutoZone is going to market with. [indiscernible] So essentially what we've done with our fulfillment and things of that nature is We have changed the strategy. We've used a lot of technology to help us improve our delivery time specifically on the harder to find parts. The challenge in this industry is and probably always will be where is the part How quick does that part move?

1h 2m 26s

And how soon does that shop need to part And we think we've spent a lot of time over the last eighteen months improving that algorithm and improving the way we go to market and how we deliver those parts to the customer. Again leveraging technology, [indiscernible] we think we are much better than we were We still frankly think there's an opportunity to get better.

1h 2m 48s

So [indiscernible] projects are relatively new and we believe they have a long maturity curve and we believe we will continue to optimize them.

1h 2m 59s

And the big enablement to that is what we've done with our hubs and our mega hubs. Two things that are really clear about what we've done in the commercial businesses. We've made a commitment and have a concerted effort to jam more parts in the local market closer to customers. And by doing that and leveraging the technology, as Phil has mentioned, that's enabled us to improve our value prop to all of the customers that we're serving and the ones that we're going to serve in the future. And so deploying those assets, leveraging technology is a winning formula. And we know that in the commercial side of the business, if you have parts availability and you can get them there fast, you have an opportunity to grow your market share and that's where we're focused. That's right.

1h 3m 49s

Thank you. Your next question is coming from David Bellinger from Mizuho. Your line is live.

1h 3m 55s

Hey guys, good morning. Thanks for the question. Maybe just a clarification on an earlier one, but are you seeing anything in terms of the immigration policy or are there certain markets that have ticked down similar to what occurred back in mid-twenty seventeen?

1h 4m 8s

Is it getting worse in recent weeks? And anything you can share on quarter to date trends being impacted would be helpful.

1h 4m 15s

Yes, great question. To date, and this is still early, but to date, I don't think we can show anything empirically that says that that high the Hispanic hibernation that happened back in 2016 and 'seventeen is happening and materialized.

1h 4m 32s

We don't see anything empirically that would say that. [indiscernible] we have lots of stores in and around the border on both sides of the border and nothing at this point would indicate that there's something like going on.

1h 4m 46s

Okay. Appreciate that.

1h 4m 48s

And then just switching topics on the new distribution centers.

1h 4m 52s

Including some automation in those facilities. Can you help us with any details on the benefits you expect to see How should those layer in as volumes ramp up? And do you now have an opportunity to go back and retrofit some of the older buildings with automation?

1h 5m 6s

That's a great question. One of the questions that I'm asking our supply chain teams all the time is how do we continue to leverage some of the new technology that's going into our newer distribution centers of the things that happen in both of these facilities that are opening is we've talked about them at various times is the direct import facility, the Virginia DC will have an additional direct import facility for the Eastern Half Of The United States and the Chowchilla California Distribution Center will institute some of this what we call, long tail distribution, the slower moving parts so that we're able to keep in stock and replenish those stores on this slower moving merchandise faster. Both of those technology elements are in those two DCs. We're still retrofitting is the wrong word, but we're still ramping up automation in our Redlands direct import facility. So all of these elements we believe will help us improve efficiencies in our supply chain and distribution nodes over time which will help us leverage that supply chain expense.

1h 6m 9s

And ultimately get parts, faster to our stores So lots of opportunity.

1h 6m 16s

Great. Thanks very much. Thank you. Your next question is coming from Scott Ciccarelli from Truist.

1h 6m 24s

Your line is live. Hi, good morning. This is Josh Young on for Scott.

1h 6m 30s

So with the potential for new car prices to move a lot higher given tariffs, how much of an impact do you guys think that could have on your business in calendar twenty twenty five as consumers potentially focus more on repairing their existing vehicle as opposed to buying something new?

1h 6m 44s

Still early to tell, what the calendar '25 benefit would be, if any. But what we know over time is that when new car prices get expensive or used car prices get expensive Consumers tend to hang on to their vehicles a little bit longer. Repair the vehicles that they have, to ride to the other side of a tougher economic situation. We've seen that historically in the business. We would expect that to be the case. [indiscernible] still early innings in terms of what it's going to mean for pricing and what it's going to mean for consumer behavior But generally speaking, higher prices in new and used ends up being a tailwind for our business. [indiscernible] two of the other key elements in KPIs that are impactful for the aftermarket auto parts are long the cars stay on the road, and we're up at twelve point six years probably going to be over fourteen, I would suggest over the next couple of years and miles driven. Those two appear to be tailwinds that don't appear to be slowing down. We like the age of the vehicle, and miles driven and they continue to both increase.

1h 7m 56s

Which are healthy for the industry. Got it.

1h 7m 57s

That's helpful.

1h 8m 1s

We have time for one more call. Absolutely. Our last question is coming from Brian Nagel from Oppenheimer.

1h 8m 7s

Your line is live.

1h 8m 11s

Next quarter, congratulations. Thank you. Thanks Brian.

1h 8m 15s

So first question I have, I want to bounce back to tariffs. I know it's been addressed a bit already, but Look, as you mentioned, as we've seen, AutoZone in your sector have been very good over time of managing higher input costs But the question I want to ask, just as we look at this new this latest tariff news, which could be substantial, Is your so to say testing, is your constantly evaluating your business, is anything changed here from your standpoint to suggest maybe a different elasticity of demand, particularly with the consumer overall by other indications, maybe more inflation wary than they have been in the past?

1h 8m 52s

I mean, from our vantage point, again, when you think about our business, the lion's share of our business is relatively inelastic. And so so to the extent that the consumer feels additional pressure as it relates [indiscernible] then we would expect that the lion's share of our business will continue to perform in a way that it has historically. Obviously, more discretionary parts of retail including in our own business come under pressure when they're hyperinflation scenarios. But we would expect that the lion's share of our business will perform just fine.

1h 9m 26s

I think one other thing to think about is we're not importing [indiscernible] So 10% our average ticket at the end of the day is relatively low 10% on a $30 item [indiscernible] It's not like it's a $60,000 $70,000 automobile a large piece of furniture or something of that nature, The average ticket is relatively low. Yes, that bottom end consumer has been under pressure and this could potentially put more pressure on them. But to Jamere's point, it's break fix for the most part or maintaining a vehicle that you believe you probably are going to have to keep longer than you would have thought two years ago, of interest rates. I think those at the end of the day industry tailwinds that are positive for us.

1h 10m 11s

That's helpful. The second question I have with respect to weather.

1h 10m 16s

So so we had erratic weather. It seems as though looking at your [indiscernible] I guess the question I have is what was the nature of that demand? Is it was it was weather related demand here in the period incremental? Did it potentially come at the expense of sales in in future periods? And then conversely, as we've seen in the past, when you have these harsh weather periods, it actually can lead to better sales down the road. So I guess is it maybe contextual, I mean, what I'm asking is can you contextualize the weather dynamic here and how that's affected sales?

1h 10m 51s

Yes. Great question. I think if you're thinking of it right, Certain categories when you get these extreme cold events or hot events will accelerate. Batteries in the cold, as an example, gets cold outside, your car won't start.

1h 11m 3s

Conversely, when it's really hot and the southern markets in the summer, air conditioning spikes. So those two are true. The other thing that happens with cold weather, specifically harsh cold weather in the Northeast Mid Atlantic, [indiscernible] when you get cold precipitation, salt on the road, you also have lingering effects that show up later in the spring and summer with people replace brakes, suspension parts have to take all the hard hits from potholes in the road. Those things all become true when you have these harsh winter months and that impacts some other categories later in the year, which failures don't show up immediately. They show up over time or they become maintenance where somebody may replace the brakes because their suspension parts are rusty making noise or not stopping So I think you're thinking about it correctly.

1h 12m 3s

Appreciate it. Thank you.

1h 12m 6s

Great.

1h 12m 9s

So in closing, before we conclude the call, want to take a moment and reiterate that we believe our industry and is in a strong position and our business model is solid. We are excited about our growth prospects for the year but we will take nothing for granted as we understand our customers have alternatives have exciting plans that will help us succeed for the future. But I want to stress that this is a marathon and not a sprint.

1h 12m 35s

As we continue to focus on flawless execution and strive to optimize shareholder value for the future, we are confident AutoZone will be successful. Thank you for participating in today's call.

1h 12m 51s

Thank you. Everyone, this concludes today's event. You may disconnect at this time and have a wonderful day. Thank you for your participation. [indiscernible]

Key Insights

AutoZone reported a 2.4% increase in total sales for the quarter, with domestic same-store sales growing 1.9% and international same-store sales up 9.5% on a constant currency basis. However, earnings per share (EPS) decreased by 2.1%, impacted by foreign exchange headwinds.
The domestic commercial business saw a 7.3% increase in sales, driven by improved inventory availability, speed of delivery, and strategic initiatives. MegaHub stores continue to play a significant role, with plans to open at least 19 more locations in the back half of FY 2025.
The company remains committed to investing over $1 billion in capital expenditures for FY 2025, focusing on store growth (including hubs and mega hubs), distribution centers, and technology to enhance customer service and operational efficiency.
AutoZone's international business continues to grow, with 17 new stores opened in Mexico and Brazil during the quarter. The company plans to open around 100 international stores for the fiscal year, aiming to accelerate growth in these markets.
For the remainder of FY 2025, AutoZone expects continued momentum in both DIY and commercial sales, supported by strategic initiatives and easier comparisons. However, foreign exchange rates are projected to negatively impact full-year revenue by $356 million and EPS by $4.82.

Recent Transcripts

Q2 sales grew 2.4%, but earnings per share fell 2.1%.

Income Statement

Revenue

	2020	2021	2022	2023	2024
Revenue	$13B	$15B	$16B	$17B	$18B
Cost of Revenue	$5.9B	$6.9B	$7.8B	$8.4B	$8.7B
Gross Profit	$6.8B	$7.7B	$8.5B	$9.1B	$9.8B
Gross Profit %	54%	53%	52%	52%	53%
R&D Expenses	$0	$0	$0	$0	$0

2020

2021

2022

2023

2024

Revenue

$13B

$15B

$16B

$17B

$18B

Cost of Revenue

$5.9B

$6.9B

$7.8B

$8.4B

$8.7B

Gross Profit

$6.8B

$7.7B

$8.5B

$9.1B

$9.8B

Gross Profit %

54%

53%

52%

53%

R&D Expenses

Cash Flow

Net Income

	2020	2021	2022	2023	2024
Net Income	$1.7B	$2.2B	$2.4B	$2.5B	$2.7B
Dep. & Amort.	$397M	$408M	$442M	$498M	$550M
Def. Tax	$51M	-$34M	$186M	-$26M	-$254M
Stock Comp.	$45M	$56M	$71M	$93M	$106M
Chg. in WC	$483M	$906M	$72M	-$206M	-$32M

2020

2021

2022

2023

2024

Net Income

$1.7B

$2.2B

$2.4B

$2.5B

$2.7B

Dep. & Amort.

$397M

$408M

$442M

$498M

$550M

Def. Tax

$51M

-$34M

$186M

-$26M

-$254M

Stock Comp.

$45M

$56M

$71M

$93M

$106M

Chg. in WC

$483M

$906M

$72M

-$206M

-$32M

Balance Sheet

Cash

	2020	2021	2022	2023	2024
Cash	$1.8B	$1.2B	$264M	$277M	$298M
ST Investments	$76M	$46M	$50M	$40M	$0
Cash & ST Inv.	$1.8B	$1.2B	$264M	$277M	$298M
Receivables	$365M	$378M	$505M	$520M	$546M
Inventory	$4.5B	$4.6B	$5.6B	$5.8B	$6.2B

2020

2021

2022

2023

2024

Cash

$1.8B

$1.2B

$264M

$277M

$298M

ST Investments

$76M

$46M

$50M

$40M

Cash & ST Inv.

$1.8B

$1.2B

$264M

$277M

$298M

Receivables

$365M

$378M

$505M

$520M

$546M

Inventory

$4.5B

$4.6B

$5.6B

$5.8B

$6.2B

Go Deeper

Financial information provided by Financial Modeling Prep. Options data provided by Unusual Whales. Live transcripts provided by Quartr. All data is provided for informational purposes only, and is not intended for trading purposes or financial, investment, tax, legal, accounting or other advice. · See all tickers.

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News & Market InsightsNews & Market Insights
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RelatedRelated
EarningsEarnings
Income StatementIncome Statement
Cash FlowCash Flow
Balance SheetBalance Sheet

Earnings

Report Date

Mar 4, 2025

Reported Revenue

Avg 1d Change

1.13%

Report Period

Q2 2025

Reported EPS

28.29

Implied Move 1d

4.97%

Transcript

10m 13s

10m 46s

Good morning.

10m 47s

11m 26s

We begin today, we want to thank our more than 125,000 AutoZoners across the globe for their commitment to delivering on our pledge to always put customers first.

11m 37s

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For the quarter, we opened a total of 28 net domestic stores. We remain committed to more aggressively opening regular stores, and mega hub stores.

21m 57s

Hubs and mega hubs comps continue to grow and we are going to continually aggressively deploy these assets In FY 2025, our openings will continue to be skewed to the back half of the fiscal year.

22m 13s

For the third quarter, we expect both our DIY and commercial sales trends to improve as our comparisons become slightly easier and we gain momentum from our growth initiatives.

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Certainly. Everyone at this time will be conducting a question and answer session Your line is live.

40m 16s

Good morning, guys.

40m 18s

Good morning, Brett.

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Thank you.

42m 28s

Thank you. Your next question is coming from Simeon Gutman from Morgan your line is live.

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45m 22s

Great. Thank you.

45m 25s

Thank you. Your next question is coming from Christopher Horvers from JPMorgan. Your line is live. Hi, good morning.

45m 32s

It's Christian Carley in for Chris.

45m 35s

How should we think about the potential impact of tariffs this time given the China tariffs had a long list of exclusions last time?

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48m 43s

Got it.

48m 44s

Thank you very much. Best of luck.

48m 46s

Thank you.

48m 49s

Thank you. Your next question is coming from Zach Fadem from Wells Fargo. Your line is live.

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Thanks for the time.

53m 4s

Thank you.

53m 7s

Thank you. Your next question is coming from Seth Basham from Wedbush. Your line is live.

53m 16s

54m 26s

Got it. And then my follow-up question is just on SG and A. As you accelerate the investments here, what's the timeframe that will normalize to growing SG and A in line with sales?

54m 39s

55m 29s

Thank you.

55m 31s

Thank you. Your next question is coming from Kate McShane from Goldman Sachs. Your line is live.

55m 38s

Good morning. This is Mark Jordan on for Kate.

55m 42s

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And we've spent considerable time over the last year working on strategic efforts to improve our delivery [indiscernible] [indiscernible] to those customers.

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59m 8s

So feel great about the second half of the year. And the pipeline of those hubs and mega hubs is really strong. In much better shape than it's been over the last several years.

59m 19s

Great. Thank you very much.

59m 22s

Thank you. Your next is coming from Steve Forbes from Guggenheim.

59m 26s

Your line is live.

59m 29s

1h 46s

1h 1m 6s

1h 1m 19s

And we go to market very specifically on each one of those types of customers.

1h 1m 23s

But again, 5% share is our current opportunity.

1h 1m 30s

Maybe just a follow-up on that. As we think about delivery times, because I think you guys were sort of leaning into some initiatives to improve delivery times specifically.

1h 1m 39s

1h 2m 26s

1h 2m 48s

So [indiscernible] projects are relatively new and we believe they have a long maturity curve and we believe we will continue to optimize them.

1h 2m 59s

1h 3m 49s

Thank you. Your next question is coming from David Bellinger from Mizuho. Your line is live.

1h 3m 55s

1h 4m 8s

Is it getting worse in recent weeks? And anything you can share on quarter to date trends being impacted would be helpful.

1h 4m 15s

1h 4m 32s

1h 4m 46s

Okay. Appreciate that.

1h 4m 48s

And then just switching topics on the new distribution centers.

1h 4m 52s

1h 5m 6s

1h 6m 9s

And ultimately get parts, faster to our stores So lots of opportunity.

1h 6m 16s

Great. Thanks very much. Thank you. Your next question is coming from Scott Ciccarelli from Truist.

1h 6m 24s

Your line is live. Hi, good morning. This is Josh Young on for Scott.

1h 6m 30s

1h 6m 44s

1h 7m 56s

Which are healthy for the industry. Got it.

1h 7m 57s

That's helpful.

1h 8m 1s

We have time for one more call. Absolutely. Our last question is coming from Brian Nagel from Oppenheimer.

1h 8m 7s

Your line is live.

1h 8m 11s

Next quarter, congratulations. Thank you. Thanks Brian.

1h 8m 15s

1h 8m 52s

1h 9m 26s

1h 10m 11s

That's helpful. The second question I have with respect to weather.

1h 10m 16s

1h 10m 51s

1h 11m 3s

1h 12m 3s

Appreciate it. Thank you.

1h 12m 6s

Great.

1h 12m 9s

1h 12m 35s

As we continue to focus on flawless execution and strive to optimize shareholder value for the future, we are confident AutoZone will be successful. Thank you for participating in today's call.

1h 12m 51s

Thank you. Everyone, this concludes today's event. You may disconnect at this time and have a wonderful day. Thank you for your participation. [indiscernible]

Key Insights

AutoZone reported a 2.4% increase in total sales for the quarter, with domestic same-store sales growing 1.9% and international same-store sales up 9.5% on a constant currency basis. However, earnings per share (EPS) decreased by 2.1%, impacted by foreign exchange headwinds.
The domestic commercial business saw a 7.3% increase in sales, driven by improved inventory availability, speed of delivery, and strategic initiatives. MegaHub stores continue to play a significant role, with plans to open at least 19 more locations in the back half of FY 2025.
The company remains committed to investing over $1 billion in capital expenditures for FY 2025, focusing on store growth (including hubs and mega hubs), distribution centers, and technology to enhance customer service and operational efficiency.
AutoZone's international business continues to grow, with 17 new stores opened in Mexico and Brazil during the quarter. The company plans to open around 100 international stores for the fiscal year, aiming to accelerate growth in these markets.
For the remainder of FY 2025, AutoZone expects continued momentum in both DIY and commercial sales, supported by strategic initiatives and easier comparisons. However, foreign exchange rates are projected to negatively impact full-year revenue by $356 million and EPS by $4.82.

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