AutoZone Drops 9% After $38.07 Q3 EPS Beat as Margin, Growth Fears Deepen
Updated
Updated · CNBC · May 26
AutoZone Drops 9% After $38.07 Q3 EPS Beat as Margin, Growth Fears Deepen
3 articles · Updated · CNBC · May 26
Summary
A 9% slide left AutoZone shares at their worst close in more than four years, even after the auto-parts retailer topped quarterly profit estimates and kept falling in after-hours trading.
Q3 EPS came in at $38.07 versus $36.28 expected, while revenue of $4.84 billion roughly matched forecasts, but analysts pressed management on weak international growth, margin compression and slower year-over-year sales.
Cooler weather hurt heat-related categories that usually strengthen ahead of summer, CEO Philip Daniele said, while executives also warned inflation pressures would persist, though they should be slightly muted on year-over-year comparisons.
Iran war-related supply risks added to investor concern after reports of motor-oil shortages at Toyota and Nissan dealers, though AutoZone said lubricant constraints were unlikely to be material.
The selloff showed investors were focused less on the earnings beat than on whether AutoZone can protect margins and sustain growth as costs and supply-chain risks build.