AutoZone (NYSE:AZO) shares are in the green today after the retailer of automotive parts and accessories delivered a robust first-quarter performance. Revenue increased by 5.1% year-over-year to $4.2 billion, exceeding estimates by $10 million. Moreover, EPS of $32.55 raced past expectations by $0.98.
During the quarter, Domestic same-store sales increased by 1.2%, while International same-store sales jumped by 25.1%. Further, the company’s gross margin improved by 279 basis points to 52.8%. This uptick was driven by higher merchandise margins, lower supply chain costs, and non-cash LIFO favorability.
These gains also helped the company increase its operating profit by 17.4% to $848.6 million. Additionally, AutoZone opened 25 net new stores across the U.S., Mexico, and Brazil. As of November 18, its total store count stood at 7,165, with 6,316 stores in the U.S. Further, the company repurchased $1.5 billion worth of shares in Q1 and had $333.1 million remaining under its current stock buyback program.
Is AZO a Good Investment?
Overall, the Street has a Strong Buy consensus rating on AutoZone. Following a nearly 14% rise in the company’s share price over the past six months, the average AZO price target of $2,845.77 implies a modest 6.8% potential upside.
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