AutoZone Sinks 10% Despite Q3 Beat as Analysts Flag Margin Pressure and Slowing Sales
Updated
Updated · CNBC · May 26
AutoZone Sinks 10% Despite Q3 Beat as Analysts Flag Margin Pressure and Slowing Sales
3 articles · Updated · CNBC · May 26
AutoZone shares fell more than 10% Tuesday, putting the stock on track for its worst day in over six years even after fiscal third-quarter earnings topped Wall Street estimates.
Q3 EPS came in at $38.07 versus $36.28 expected, while revenue was $4.84 billion against a $4.83 billion consensus, but analysts focused on weak international growth, margin compression and slower year-over-year sales.
Philip Daniele blamed the sales slowdown on unseasonably cool weather that hurt heat-related categories, while executives said inflation should persist but be slightly muted on year-over-year comparisons.
Analysts also pressed management on supply-chain risks tied to the war in Iran and possible motor-oil shortages; AutoZone said lubricant constraints may emerge but are unlikely to be material.
The concern comes as Toyota and Nissan dealers are already rationing or allocating motor oil supplies, underscoring broader pressure on the auto-service supply chain.
With a confirmed oil crisis looming, why did AutoZone's CEO dismiss the supply chain threat?
AutoZone beat earnings yet its stock crashed. What deep industry risks are spooking Wall Street?
As global conflicts disrupt oil supplies, are consumers facing historic price hikes for car maintenance?