AutoZone’s recent revenues
In 3Q17, which ended May 6, 2017, AutoZone (AZO) reported total revenues of $2.6 billion with about a 1.0% YoY (year-over-year) increase. In 3Q16, AZO reported revenues of $3.3 billion. Now, let’s look at analysts’ estimates for the company’s 4Q17 revenues.
Estimates for 4Q17 revenue
Analysts expect AutoZone’s 4Q17 revenues to be up ~2.7% to $3.5 billion. In 4Q16, the company reported revenues of $3.4 billion. Expectations of a sales recovery in the domestic market along with the company’s plans to expand its business in international markets could be key reasons for these high expectations.
In the last few quarters, AutoZone’s management has emphasized the importance of international business expansion.
Will DIY segment show strength?
AutoZone’s do-it-yourself (or DIY) segment is considered a major part of the company’s business. The segment sells parts to customers without providing mechanic assistance to fit or change parts in vehicles. Currently, the majority of AZO’s revenues come from its DIY operations. In the last couple of quarters, AZO hasn’t seen any major expansion in its domestic DIY segment market share. The company typically generates higher profit margins from its DIY segment as compared to the commercial segment.
Expectations of improvements in the US DIY segment could be another reason why analysts expect AutoZone’s 4Q17 revenues to be firm.
Continue to the next part to learn about analysts’ estimates for AZO’s 4Q17 margins.