Goldman Sachs Sees AutoZone's Softer Domestic Comp As Dampener, Raises Other Concerns Too

Goldman Sachs analyst Kate McShane's rating on AutoZone Inc AZO stands at Buy with a price target of $3,000.

Today, the company reported Q1 FY24 sales growth of 5.1% Y/Y to $4.19 billion, marginally missing the analyst consensus of $4.198 billion. EPS of $32.55 beat the consensus of $31.57.

AZO's EPS figure came above GS estimate of $32.17. Domestic same store sales increased 1.2%, below the GS estimate of 2.3% and consensus of 2.6%.

On the conference call, McShane will be looking for commentary regarding quarter-to-date trends (mainly in DIFM), the health of the DIY consumer, details on inventory

availability, the state of the supply chain, margin expectations and, same-SKU inflation expectations.

The analyst notes several downside risks, including a slowdown in DIFM growth, worse-than-expected DIY trends, lower-than-expected EBIT margins, and increased competition.

The analyst estimates revenue and EPS of $18.874 billion and $146.13 for FY24, $19.483 billion and $150.65 for FY25 and $20.484 billion and $160.73 for FY26, respectively.

Price Action: AZO shares are trading higher by 0.27% at $2,671.22 on the last check Tuesday.

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