AZO - Embedded Expectations Analysis - 2020 06 03
AutoZone, Inc. (AZO:USA) trades near corporate averages relative to UAFRS-based (Uniform) earnings, with a 22.3x Uniform P/E. At these levels, the market has expectations for profitability to remain stable, but management may be concerned about their supply chain initiatives, DIY and DIFM business slowdown, and their MegaHub strategySpecifically, management may lack confidence in their ability to continue to execute their MegaHub strategy, pass tariff costs onto consumers by raising retail prices, and improve Do-It-Yourself (DIY) and Do-It-For-Me (DIFM) sales performance through supply chain initiatives. Furthermore, they may be concerned about the potential of further slowdowns in their DIY and DIFM businesses and their ability to lower acquisition costs. Finally, they may be exaggerating their focus on optimizing long-term shareholder value and they may lack confidence in their ability to implement automation to boost productivity
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.
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