AutoZone Earnings Preview

AutoZone AZO plans to announce its 4Q earnings this morning followed by a conference call at 10. Citi is expecting $5.31 per share while the Street is at $5.44. Management has indicated that going forward, GMs should benefit from direct sourcing and supply chain initiatives. In Q3, operating expenses declined due to tighter expense control and leverage from higher sales volume, partially offset by higher investment in hub stores and pension expenses. Citi is expecting Q4 to benefit from benign industry trends, effective supply chain management and share buyback activity. AutoZone needs to focus on significant margin expansion drives, which will better expected EPS growth, as well as overall comps accelerating beyond mid-single digits for the next several quarters. AutoZone closed Monday at $220.14