AutoZone’s 3Q16 earnings
AutoZone (AZO) is the largest US auto parts seller. Based in Memphis, Tennessee, the company generates revenue by selling auto parts and accessories primarily in the United States, Puerto Rico, Mexico, and Brazil. In the last couple of years, US automakers (FXD) such as General Motors (GM) and Ford (F) have benefited from higher auto demand. This positive trend has helped US auto parts sellers, including AutoZone, O’Reilly Automotive (ORLY), and Advance Auto Parts (AAP). Now, let’s take a closer look at AutoZone’s fiscal 3Q16 revenues.
In fiscal 3Q16, AutoZone’s revenues were solid at $2.6 billion. That was ~4% higher than the corresponding quarter of the previous year. According to the company, its continued focus on customer service, improving parts availability, and lower overall gas prices helped its retail business grow.
During its fiscal 3Q16 earnings conference call, AutoZone’s president and CEO (chief executive officer) William C. Rhodes III noted, “As I talk to customers, I continue to see tremendous opportunity to grow sales, and we continue to be excited about the performance and future benefit of our inventory availability initiatives.”
AutoZone’s do-it-yourself segment
AutoZone’s do-it-yourself (or DIY) segment is a major part of the company’s business. This refers to selling auto parts to customers without providing a mechanic’s assistance to fit or change vehicle parts. During fiscal 3Q16, AutoZone’s DIY traffic count turned slightly negative while still gaining market share in the segment. The company remains positive about the future growth prospects of the segment.
Commenting on this, Rhodes said, “While the overall macro economy remains favorable for DIY, we also continue to gain share, and would attribute those share gains to our investments in store labor and our inventory availability initiatives.”
In the next part, we’ll look at AutoZone’s profitability in fiscal 3Q16.