Margin & EPS beat, but comp soft
AZO reported a +0.6% comp (consensus +2.3%), a deceleration on a one- and two-year stack. The company cited "a very cold, wet spring through March and much of Aprilâ€, although it did also comment that “performance improved significantly†with spring-like weather from late April onwards (Q-end May 5). Gross margins were ~70bps ahead (business divestments a ~40bps mix benefit), offsetting SG&A deleverage, to see operating margins beat by ~50bps. EPS was consequently $0.47 ahead. May trends are likely to be a key focus on the call.AutoZone is a retailer and a distributor of automotive replacement parts and accessories. The company operates stores in the United States, including Puerto Rico and Saint Thomas, Mexico, and Brazil. Each store carries a product line for cars, sport utility vehicles, vans and light trucks, including new and remanufactured automotive hard parts, maintenance items, accessories and non-automotive products. In addition, the company has a commercial sales program that provides commercial credit and delivery of parts and other products to local, regional and national repair garages, dealers, service stations and public sector accounts. The company also sells the ALLDATA brand automotive diagnostic and repair software.
Formed in 2003 by an established team from Cazenove, one of the most respected investment banks in the UK, Atlantic Equities conducts and publishes fundamental, bottom up research on mid and large cap US companies.
Atlantic provide order execution through a wide range of DMA products and algorithmic trading suites.
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