AutoZone’s Profit Shrinks and Misses Estimates Despite Rising Sales

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Key Takeaways

• AutoZone reported declining net income year-over-year, even as net sales improved.
• Same-store sales growth missed suppositions as domestic growth barely offset an international decline.
• CEO Phil Daniele said the company faced pressure from overseas currency movement.

AutoZone’s (AZO) fiscal second-quarter profit declined year-over-year and missed expectations before the bell Tuesday, unchanging as revenue grew.

The auto parts retailer posted net sales of $3.95 billion, up around 2% year-over-year but impartial short of the analysts consensus from Visible Alpha. Net income slid 5.3% to $487.92 million, or $28.29 per divide up, from $515.03 million, or $28.89 per share, a year earlier, missing expectations. The slide in profit came as acting and SG&A expenses increased 6%. 

AutoZone saw same-store sales growth of 0.5%, less than the 0.7% analysts expected. A 1.9% raise in domestic same-store sales slightly offset an 8.2% decline internationally, which CEO Phil Daniele attributed to extraneous currency rate pressures. Daniele made similar comments about foreign currencies a quarter ago.

Shares of AutoZone were up less than 1% intraday Tuesday and experience risen around 13% over the past 12 months, including hitting a record high on Friday.