AutoZone’s recent revenues
In 4Q16, which ended August 27, 2016, AutoZone (AZO) reported total revenues of $3.4 billion. This reflected about 3% YoY (year-over-year) growth from the company’s revenues of $3.3 billion in the corresponding quarter of the previous year. Approximately 90% of AutoZone’s total revenues came from its home market. Now, let’s look at analysts’ estimates for the company’s 1Q17 revenues.
1Q17 revenue estimates
Analysts are estimating AutoZone’s 1Q17 revenues to be at $2.5 billion, up ~4.4% from revenues of $2.4 billion in the corresponding quarter last year. Continuing strong sales in the domestic market along with the company’s plans to expand its business in international markets could be the key reasons for this high expectation.
Note that during its 4Q16 conference call, AutoZone’s management emphasized the importance of international business expansion. During this call, Bill Rhodes, president and CEO of AutoZone, mentioned, “While the domestic business dominates our sales mix and continues to be our primary focus, we believe we have great growth opportunities outside the U.S. for many years to come. I would expect the international mix of our business to only grow from here.”
Will DIY segment continue to strengthen?
AutoZone’s do-it-yourself (or DIY) segment is a major part of the company’s business. The segment sells auto parts to customers without providing a mechanic’s assistance to fit or change vehicle parts. Currently, the majority of the company’s revenues come from its DIY operations. In the last couple of quarters, AZO has been able to expand its market share in the domestic DIY segment, which typically yields high profitability for the company.
Ongoing strength in the US DIY segment could be another reason why analysts are expecting AutoZone’s 1Q17 revenues to grow positively.
Read on to the next part to learn about analysts’ estimates for AZO’s margins.