AutoZone’s revenue trend
In fiscal 1Q18, AutoZone (AZO) reported total revenues of $2.6 billion, a 4.9% YoY (year-over-year) increase. During the first quarter, the company’s domestic same-store sales continued to improve and rose 2.3%, compared to an increase of 1.0% in 4Q17. Now, let’s look at analysts’ estimates for the company’s fiscal 2Q18 revenues.
Fiscal 2Q18 revenue estimates
Analysts estimate that AutoZone’s 2Q18 revenues will be up ~4.4% YoY at $2.4 billion. In fiscal 2Q17, the company reported revenues of $2.3 billion. Expectations of a sales recovery in the domestic market, along with AutoZone’s plans to expand its international business, could be some key reasons for analysts’ positive revenue growth estimates.
In the last few quarters, AZO’s management has highlighted the importance of international business expansion.
Hopes from the DIY segment
AutoZone’s do-it-yourself (or DIY) segment is a major contributor to the company’s revenues. This segment refers to auto parts sales to customers without providing any mechanic’s help to fit or change vehicle parts.
In the last few quarters, AZO hasn’t seen any major expansion in its domestic DIY segment market share, but still, the majority of its revenues come from DIY operations. The company typically generates higher profit margins from its DIY segment than its commercial segment.
In the last three years, mainstream automakers (IYK) including Ford (F), General Motors (GM), and Fiat Chrysler (FCAU) benefited from solid US vehicle sales. During this period, the demand for trucks has improved significantly while the demand for small cars has dropped.
Read on to the next part of this series to learn about analysts’ estimates for AZO’s fiscal 2Q18 profit margins.