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These Factors Drove AutoZone’s 2Q18 Revenue Higher

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Mar. 6 2018, Published 4:12 p.m. ET

AutoZone’s business

Memphis-based AutoZone (AZO) generates revenue by selling auto parts and accessories, primarily in US, Puerto Rican, Mexican, and Brazilian markets. In 2016, US auto companies (XLY) General Motors (GM) and Ford (F) benefited from strong US demand for utility vehicles and trucks. This demand also boosted future growth potential for US auto part sellers such as AutoZone, Advance Auto Parts (AAP), and O’Reilly Automotive (ORLY). In this part, we’ll look at AutoZone’s 2Q18 revenue.

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AutoZone’s 2Q18 revenue

Between 2Q17 and 2Q18, AutoZone’s revenue rose ~5.4% to $2.4 billion, and its domestic same-store sales growth rate fell to 2.2% from 2.3%.

AutoZone’s management highlighted that the sales growth remained strong in the middle of the quarter when the season’s first winter storm hit. In 1Q18, major hurricanes in the United States impacted the company’s sales growth.

In the last few quarters, AutoZone has been collecting data on its customers’ shopping patterns, which could ensure that they get more customized shopping experiences in the future.

Mega Hub update

The company’s management also noted that sales at existing Mega Hubs remained strong in 2Q18. However, AZO didn’t open any new Mega Hubs during the quarter, as it had guided for during its 1Q18 earnings conference call. The company plans to open about ten locations fiscal 2018, two of which opened in 1Q18. Continue to the next part, where we’ll discuss how AutoZone’s key business segments performed in 2Q18.

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