At one point, Autozone (NYSE:
AZO
) was widely regarded as the leader in the group, but that's not
the case anymore. Earlier today, the company reported fiscal
fourth-quarter profit of $8.46 a share, up 18 percent from a year
ago. Sales rose 5 percent to $2.8 billion. The Thomson/Reuters
estimate was for profit of $8.41 a share on sales of $2.8
billion.
Same-store sales in the quarter rose a disappointing 2.1
percent, down from 4.5 percent growth in the year-ago quarter. CEO
Bill Rhodes said: "While our same-store sales performance was below
our expectations for the quarter, we are confident we are well
positioned to again deliver strong results for our new fiscal
year."
The company opened 72 new stores in the quarter, including 24
stores in Mexico. As of August 25, the company had 4,685 stores in
49 states and 321 stores in Mexico.
From a technical perspective, Autozone's chart is an example of
what slack buying demand looks like. There's been a lack of
interest in this stock since it started to consolidate gains in
early May. After a lengthy run that saw the stock gain 128 percent
from March 2009 through 2011, it was definitely looking tired ahead
of today's earnings report. It's made a series of lower highs and
has repeatedly met with resistance (selling pressure) at its
10-week moving average. Recent price and volume trends say it's not
likely Autozone will resume a leadership role anytime soon.
The bulls will argue that a lot of bad news has been priced in
already and it's only a matter of time before names like Autozone,
Advance Auto Parts (NYSE:
AAP
), O'Reilly Automotive (NASDAQ:
ORLY
) and Monroe Muffler Brake (NYSE:
MRO
) start to rally again. It's possible, but what's clear right now
is that all four stocks have suffered much technical damage in
recent months due to repeated bouts of institutional selling. Their
charts will improve when institutional investors like mutual funds
start buying again, but it's not clear it'll happen anytime soon.
Technical damage like this usually takes a while to recover
from.
Stock chart: (c) 2012 Benzinga.com. Benzinga does not provide
investment advice. All rights reserved.