On Dec 23, 2014, shares of AutoZone, Inc. (AZO) reached a 52-week high of $626.19, before eventually closing at $621.30. The closing price represents a year-to-date return of 31%.
Share Price Drivers
Share price of AutoZone has been mostly moving upward since the company reported a strong year-over-year increase in earnings and revenues in the first quarter of fiscal 2015 (ended Nov 22, 2014). The company reported a 15.6% rise in earnings per share to $7.27 for the first quarter from $6.29 in the year-ago quarter.
Earnings surpassed the Zacks Consensus Estimate of $7.18. Quarterly revenues increased 8% year over year to $2.26 billion, surpassing the Zacks Consensus Estimate of $2.22 billion.
AutoZone uses its significant cash flow to open new stores every year. The company maintains a low-to-mid single-digit square foot growth rate. In fiscal 2014, AutoZone opened 148 new stores in the U.S., 40 stores in Mexico and 2 stores in Brazil. During the first quarter of 2015, the company opened 22 stores in the U.S. and 4 stores in Mexico.
As of Nov 22, 2014, the company had 5,006 stores in 49 states, the District of Columbia and Puerto Rico in the U.S., 406 stores in Mexico, 5 stores in Brazil and 17 IMC branches. Thus, the total store count was 5,434 as of that date.
AutoZone consistently enhances shareholder value through buybacks. In the reported quarter, AutoZone repurchased 571,000 shares for $300 million, reflecting an average price of $525 per share. The company had shares worth $570 million remaining for repurchase at the end of the first quarter.
Currently, AutoZone carries a Zacks Rank #3 (Hold).
Better-ranked automobile stocks worth considering include Gentex Corp. (GNTX), CarMax Inc. (KMX) and O'Reilly Automotive Inc. (ORLY). All these stocks carry a Zacks Rank #2 (Buy).
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