AutoZone (AZO) Poised to Deliver Q4 Earnings Beat: Here's Why

AutoZone, Inc. AZO is set to release fiscal fourth-quarter 2020 results on Sep 22, before the opening bell. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings and revenues is $24.69 per share and $4.05 billion, respectively.

The leading provider of automotive replacement parts posted better-than-expected results for the last reported quarter. As far as earnings surprises are concerned, the company displays an excellent record of surpassing estimates in each of the trailing four quarters, with an average surprise of 4.3%.

AutoZone, Inc. Price and EPS Surprise

AutoZone, Inc. Price and EPS Surprise

AutoZone, Inc. price-eps-surprise | AutoZone, Inc. Quote

Investors are expecting an earnings beat for AutoZone — whose peers include Advance Auto Parts AAP, O’Reilly Automotive ORLY and CarMax KMX — this time as well. Encouragingly, our model also indicates the same.

Trend in Estimate Revision

The Zacks Consensus Estimate for fiscal fourth-quarter earnings per share has been upwardly revised by $1.61 in the past seven days. This indicates a 9.3% increase from the year-ago reported earnings of $22.59 per share. The Zacks Consensus Estimate for revenues also indicates year-over-year growth of 1.5%.  

Earnings Whispers

Our proven model predicts an earnings beat for AutoZone this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

AutoZone has an Earnings ESP of +12.90% and currently carries a Zacks Rank #3.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors to Note

Sales growth in both retail DIY (‘Do-It-Yourself) and commercial DIFM (‘Do-It-For-Me) businesses is likely to have boosted the firm’s bottom line in the to-be-reported quarter. Store expansion initiatives, fast delivery and high-quality products are anticipated to have positively impacted the company’s market share, as well as the top line.

AutoZone has been focusing on expansion and development of stores to boost sales. The Zacks Consensus Estimate for the total number of AutoZone stores for the to-be-reported quarter stands at 6,571, indicating an increase from 6,411 in the year-ago period. In addition, inventory-assortment improvements, technological advancements, strong reputation of the Duralast brand and greater engagement from store-operating teams are likely to have aided the company’s quarterly performance.

Omni-channel efforts to improve customers’ shopping experience are anticipated to have fetched impressive sales in fourth-quarter fiscal 2020.AutoZone’s initiatives to enhance in-store systems and website traffic are likely to reflect on the results. Ship-to-home next day, buy online and curbside pickup options are expected to have bolstered AutoZone’s sales despite the coronavirus pandemic. Further, focus on cost discipline is anticipated to have aided margins.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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