AutoZone Surges 7.6% on Solid Q1 Beat

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American retailer of aftermarket automotive parts and accessories, AutoZone, Inc. (AZO) delivered better-than-expected first-quarter results with both earnings and sales outpacing estimates. Following the news, shares jumped 7.6% to close at $2,023.57 on December 7.

Better-Than-Expected Results

AutoZone’s earnings rose 38% to $25.69 per share, exceeding analysts’ estimates of $20.87 per share.

Moreover, AZO registered net sales of $3.66 billion, up 16.3% compared to the prior-year quarter, surpassing analysts’ estimates of $3.37 billion. Similarly, domestic same-store sales grew 13.6% year-over-year.

At quarter-end, AutoZone had a total of 6,785 operational stores across the U.S., Mexico, and Brazil.

Management Comments

Chairman, President, and CEO of AutoZone, Bill Rhodes, said, “While the COVID-19 pandemic continues to impact our customers’ and AutoZoners’ lives, our primary focus remains the wellbeing and safety of our customers and AutoZoners. We will continue to invest to make our stores the best and safest place to shop for everyone’s automotive needs… We are optimistic about our growth prospects for the balance of the fiscal year.”

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Analysts’ View

Impressed with AutoZone’s quarterly performance, analyst Zachary Fadem of Wells Fargo reiterated a Buy rating on the stock, while lifting the price target to $2,200 (8.7% upside potential) from $2,050.

According to Fadem, “Attractive category dynamics and rising shareholder returns drive our Overweight view, and we see potential for accelerating shares gains, sustainable strong margins and elevated buyback activity. Longer-term we see growth opportunities via AZO’s under-indexed commercial business (22% of sales), international footprint (Mexico/Brazil), and budding online sales platform.”

Overall, the stock has a Moderate Buy consensus rating based on 9 Buys, 4 Holds, and 1 Sell. The average AutoZone price target of $1,852.14 implies 8.5% downside potential to current levels. However, AZO shares have gained 84.6% over the past year.

Website Traffic

TipRanks’ Website Traffic tool, which uses data from SEMrush Holdings (SEMR), the world’s biggest website usage monitoring service, offers insight into AZO’s performance.

In November, AutoZone website traffic recorded a 4.15% year-over-year increase in monthly visits. However, year-to-date website traffic growth decreased by 8.99%, compared to the same period last year.

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