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AutoZone’s 1Q18 Results Didn't Boost Investors’ Confidence

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AutoZone’s 1Q18 Results Didn't Boost Investors’ Confidence PART 1 OF 7

AutoZone Stock Remained Mixed after Its 1Q18 Results

AutoZone’s 1Q18 earnings

AutoZone (AZO), one of the largest US auto parts retailers, released its fiscal 1Q18 earnings on December 5, 2017. AutoZone’s 1Q18 earnings cover the 12 weeks that ended on November 18. For the quarter, the company’s adjusted EPS (earnings per share) stood at $10.00—6.8% higher than its EPS of $9.36 in the same quarter of the previous year.

AutoZone also beat Wall Street analysts’ EPS estimates of $9.82. Now, let’s see how investors reacted to AutoZone’ 1Q18 earnings results.

AutoZone Stock Remained Mixed after Its 1Q18 Results

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Mixed reaction on Wall Street

On the day of AutoZone’s 1Q18 earnings release, its stock opened on a bullish note with ~5.2% gains. However, most of the gains were wiped out by the end of the session. AutoZone stock closed with minor gains of 0.4%.

Despite higher-than-estimated 1Q18 results, the company’s lower operating margin and high dependence on weather patterns could be the main reasons for investors’ mixed sentiments on Wall Street.

As of December 5, AutoZone stock has delivered a negative return of ~9.3% YTD (year-to-date), which was much worse than 17.5% YTD gains in the S&P 500 (SPY) (SPX-INDEX).

In comparison, the performance of AutoZone’s direct peers hasn’t been much different. While O’Reilly Automotive (ORLY) has lost ~10.1% YTD, Advance Auto Parts (AAP) has fallen ~40.2% in 2017.

Series overview

Recently, Tesla’s (TSLA) CEO, Elon Musk, unveiled the company’s first electric semi truck. However, it wasn’t able to keep optimism alive among investors. Read Tesla Unveils Semi: Moving Beyond Cars to learn more.

In this series, we’ll take a look at some key factors that drove AutoZone’s 1Q18 results. We’ll also see how the company has been doing in terms of revenues and profitability. At the end of the series, we’ll take a look at AutoZone’s valuation multiples and some key technical levels for its stock.

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