AutoZone’s fiscal 4Q17 review
AutoZone (AZO), one of the largest US auto part retailers, released its fiscal 4Q17[1. fiscal 4Q17 ended August 26, 2017] earnings on September 19, 2017. In fiscal 4Q17, AutoZone’s adjusted EPS (earnings per share) stood at $15.27, which is ~6.8% higher than its EPS of $14.30 in fiscal 4Q16.
AZO’s earnings stood higher than Wall Street analysts’ estimates of $15.23 per share. Now, let’s take a quick look at the market reaction to AutoZone’s fiscal 4Q17 earnings results.
Negative reaction on Wall Street
On the day of its fiscal 4Q17 earnings release, AutoZone stock fell sharply to end the session with about 5.0% value erosion. Despite the company’s higher-than-estimated fourth-quarter earnings and revenues, its weak future growth outlook could be the key reason for pessimism on Wall Street.
On September 19, 2017, AutoZone stock delivered a return of about -32.2% on a YTD (year-to-date) basis, which was much worse than the 12.0% YTD gains seen in the S&P 500 (SPY) benchmark.
For the same period, the performance of AutoZone’s direct peers has not been much different. While O’Reilly Automotive (ORLY) has lost about 27.1% YTD, Advance Auto Parts (AAP), another US auto part retail giant, has fallen ~43.9% in 2017 so far.
In this series, we’ll take a closer look at some key factors that drove AutoZone’s fiscal 4Q17 earnings. We’ll also see how the company has been doing in terms of revenues and profitability. At the end of this series, we’ll take a look at AutoZone’s valuation multiples and some key technical levels for its stock.