Citi Gives Color On AutoZone Following Recent Earnings Report

AutoZone AZO reported EPS of $3.34 vs. Citi's estimate of $3.02, and street of $3.07. The beat was driven by better sales, higher GM%, slightly better SGA% and share buybacks. Citi views this as a high quality beat, with upside generated across the P&L. AZO repurchased 1.5 million shares at an average price of $257/share during Q2, for $394 million. The company reported having $491 million remaining under its repurchase program at the end of 2Q, vs. $385 at the end of 1Q. There remains significant potential for further share repurchases given the company's considerable cash generation capabilities. AutoZone reported a solid quarter and continues to benefit from strong industry trends, effective supply chain management and share buyback activity. Citi expects the group to move in tandem with AutoZone on these results, especially if the tone of the conference is positive with regard to broader industry momentum. AZO is trading higher at $264.76