Did US Presidential Election Hurt AutoZone’s 1Q17 Revenues?


Dec. 8 2016, Published 10:21 a.m. ET

AutoZone’s 1Q17 earnings

AutoZone (AZO), based in Memphis, Tennessee, 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 also increased the future growth potential for 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 1Q17 revenues.

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AutoZone’s revenues

In 1Q17, AutoZone reported solid revenues of $2.5 billion, which was ~3.0% higher than the corresponding quarter of the previous year. According to the company, its continued focus on customer service, improving parts availability, and new stores helped the retail business grow.

In the company’s 1Q17 earnings conference call, AutoZone’s president and CEO (chief executive officer) Bill Rhodes said, “This quarter’s sales were consistent until the last couple of weeks of the quarter. Our sales were challenged the week of the presidential election, which slowed our performance.”

Impact of the US election on the auto industry

The result of US presidential election was surprising for many people. Right after Donald Trump was declared the winner, Wall Street witnessed a roller coaster ride. While uncertainty loomed about the future of many industries, some industries, including automotive, rose.

High expectations from a Trump administration to relax environmental laws could be the primary reason for this optimism among auto investors. For more on this, read the Market Realist series Trump versus Machines: What to Expect in the Auto Industry.

In the next part, we’ll see how AutoZone’s two key business segments performed in 1Q17.


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