AutoZone Q2 EPS Misses by $0.13 as Revenue Rises 8.1% to $4.27B
AutoZone posted Q2 earnings of $27.63 per share, missing forecasts by $0.13, while revenue rose 8.1% to $4.27B, slightly below estimates. Gross margin fell 137 bps to 52.5% due to a 138 bps LIFO headwind, and operating cash flow plunged to $342.5M from $583.8M year-over-year.
1. Q2 Financial Results
AutoZone reported Q2 EPS of $27.63, missing forecasts by $0.13, while revenue increased 8.1% year-over-year to $4.27 billion, narrowly below expectations. Operating profit declined 1.2% to $698.5 million and net income fell to $468.9 million from $487.9 million a year earlier.
2. Margin Pressure and Inventory
Gross margin contracted 137 basis points to 52.5%, driven by a 138 bps non-cash LIFO headwind. Inventory balances rose 13.1% year-over-year as the company stocked up to support growth initiatives and offset inflationary pressures.
3. Capital Allocation and Store Growth
During the quarter, AutoZone repurchased 85,000 shares for $310.8 million, leaving $1.4 billion available under its authorization. The retailer opened 43 new U.S. stores, 18 in Mexico and three in Brazil, for a net addition of 64 locations.
4. Cash Flow and Liquidity
Operating cash flow decreased to $342.5 million from $583.8 million year-over-year, and the company ended the quarter with $285.5 million in cash and equivalents.