As we’ve discussed, AutoZone’s (AZO) results were unable to boost investors’ confidence despite positive growth in earnings and sales. In general, the company has a stable business model with lower investment requirements to drive growth than auto manufacturing. Let’s see what analysts expect for AutoZone’s upcoming earnings.
Analysts’ estimates for fiscal Q4
Analysts expect AutoZone’s positive YoY (year-over-year) earnings trend to continue in the fourth fiscal quarter. They expect its adjusted EPS to rise 14.5% YoY to $17.48 from $15.27, and its net profit to rise 8.6% YoY to of $471 million. Its net profit margin is expected to expand YoY from 12.4% to 13.1%.
According to Autodata, US auto sales’ SAAR (seasonally adjusted annual rate) rose YoY to 17.2 million units from 17.1 million in April, mainly due to strong truck demand. These higher US truck sales have boosted profitability for mainstream auto companies (XLY) such as General Motors (GM), Ford (F), and Fiat Chrysler (FCAU) in recent quarters.
Analysts expect AutoZone’s sales to continue to grow in the fourth fiscal quarter. They expect its revenue to rise ~2.8 YoY to $3.6 billion in Q4 2018, and 2.3% YoY to $2.6 billion in Q1 2019. Continue to the next part for a look at AutoZone’s valuation after its earnings announcement.