AutoZone, Inc. (AZO – Analyst Report) is one of the nation’s leading specialty retailers of automotive replacement parts and accessories, operating in the Do-It-Yourself (“DIY”) retail, Do-It-for-Me (“DIFM”) commercial and other customer markets. The company is focused on increasing sales through store expansion and boosting earnings via an aggressive share repurchase program.

However, AutoZone has been facing challenges in terms of declining cash flow, consolidation among vendors and a heavy reliance on private-label brands, which may affect margins.

Estimate Trend & Surprise History

Investors should note that the fourth quarter of fiscal 2015 (ended Aug 29, 2015) earnings estimates for AutoZone have moved down marginally recently. The Zacks Consensus Estimate has inched down to $12.67 from $12.68 a week ago.

However, the company delivered a positive earnings surprise of an impressive 49.77% in the third quarter. It also recorded positive earnings surprises in each of the trailing four quarters with an average beat of around 13.42%. Investors have been eagerly awaiting AutoZone’s latest earnings report to see whether it delivers an earnings beat in the fourth quarter.

Zacks Rank

AutoZone currently has a Zacks Rank #3 (Hold), but that could change following its earnings report which was just released. We have highlighted some of the key stats from the company’s earnings announcement below:

Earnings Surpass Estimates, Up Y/Y

AutoZone reported earnings of $12.75 per share in the fourth quarter of fiscal 2015, comfortably surpassing the Zacks Consensus Estimate of $12.67. Earnings were significantly higher than $11.28 generated in the year-ago quarter.

Revenues Beat Estimates, Rise Y/Y

AutoZone logged revenues of $3.29 billion, beating the Zacks Consensus Estimate of $3.25 billion. Moreover, revenues were 7.9% higher than $3.05 billion posted a year-ago.

Key Stats/Developments to Note

AutoZone opened 72 stores in the U.S., 23 stores in Mexico and 2 Interamerican Motor Corporation (“IMC”) branches during the quarter. Additionally, it relocated 2 stores in the U.S. As of Aug 29, 2015, the company had 5,141 stores in 49 states, the District of Columbia and Puerto Rico in the U.S., 441 stores in Mexico, 7 stores in Brazil and 20 IMC branches. Thus, the total store count was 5,609 as of that date.

Market Reaction

AutoZone’s shares were inactive following the release.  It would be interesting to see how the market reacts to the results during the trading session today.

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