Overview
- AutoZone reported fiscal third-quarter EPS of $38.07 on $4.84 billion in revenue, beating profit estimates while narrowly missing sales consensus.
- The company recorded a $20 million non-cash LIFO inventory charge in Q3 and guided to about a $30 million LIFO hit in Q4 that management says will materially reduce gross margin and cut reported EPS.
- CEO Philip Daniele said a late-quarter slowdown was driven by unseasonably cool, wet weather that hit summer-related categories and that demand should recover when seasonal buying returns.
- Commercial sales grew 10.4% and AutoZone opened 14 new mega hubs this quarter as it speeds store growth to roughly 365 openings this year and plans about $1.6 billion in capital spending.
- Near-term risks include cooling same-SKU inflation, a 3.6% drop in domestic foot traffic and softness in Mexico and Brazil, while the company leans on buybacks, capex and hub expansion to capture rising repair demand as the U.S. fleet ages.