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Why AutoZone Has Underperformed S&P 500 in 2017 So Far

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Sep. 14 2017, Updated 11:17 a.m. ET

AutoZone

AutoZone (AZO), one of the largest US auto parts retailers by number of stores, is expected to release its 4Q17 earnings on September 19, 2017. For AutoZone, 4Q17 refers to the 12 weeks ended on August 26, 2017. Before we start looking at analysts’ estimates for the company’s upcoming earnings, let’s take a quick look at its recent stock price performance.

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Underperforming S&P 500 Index

As of September 12, AutoZone’s stock was trading at $551.55 with about a 4.4% rise in September so far. However, AutoZone has seen a massive fall of about 30.2% in 2017 so far, which is much worse than the 11.5% positive return from the S&P 500 benchmark (SPY).

AutoZone’s mixed fundamentals such as stagnated year-over-year same-store sales and falling gross profit margins could be the primary reasons for the pessimism in its stock.

On a YTD (year-to-date) basis, the performances of AutoZone’s direct peers haven’t been much different. For this period, while O’Reilly Automotive (ORLY) has witnessed a value erosion of 28.4%, Advance Auto Parts (AAP) has fallen about 42.5%.

In 2017 so far, Tesla (TSLA) and Ferrari (RACE) have risen sharply by 69.8% and 89.1%, respectively.

In this series

In this series, we’ll take a look at Wall Street analysts’ revenue and margins estimates for 4Q17. Also, we’ll explore what other key announcements investors can expect from the company’s upcoming earnings.

We’ll begin with a quick recap of AZO’s 3Q17 earnings, and then we’ll move on to the company’s 4Q17 earnings estimates.

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