AutoZone Revs Up Sales Despite Chilly Quarter
AutoZone reported a solid second quarter, despite the challenges posed by unseasonably cold weather across the United States. The company's total sales grew 2.4% during the period, driven in part by its focus on delivering "WOW! Customer Service".
In a conference call to discuss the results, Philip Daniele, AutoZone's CEO, highlighted several key highlights from the quarter. The company's Domestic Commercial business experienced significant growth, with sales up 7.3% and 10% on a two-year stack basis. This success was attributed to efforts to improve both availability and speed of delivery.
Domestic same-store sales also saw a positive result, growing by 1.9% despite the impact of winter weather. The quarter's performance was bolstered by colder temperatures earlier in the period than last year, resulting in noticeable sales increases during November and early December.
"The environment did improve as we experienced winter weather earlier than we had the last couple of years," Daniele noted. "Our sales noticeably increased due to a colder November and early December." The company's Domestic same-store sales cadence showed 4.3% growth in the first four weeks, 2.8% in the second four weeks, and a decline of 1.2% over the last four weeks.
AutoZone also saw significant growth in its International business, with same-store sales increasing by 9.5% on a constant currency basis. However, the company faced an approximate 1,900 basis points of currency headwind, resulting in an unadjusted negative 8.2% International comp.
"The U.S. dollar has continued to have a negative impact on our reported sales, operating profit, and EPS," Daniele noted. "We expect this trend to continue for the remaining two quarters of this fiscal year."
The company's efforts to deliver WOW! Customer Service appear to be paying off, as customers responded positively to improved availability and speed of delivery in the Domestic Commercial business.
AutoZone's results demonstrate the resilience of its business model despite challenging weather conditions. The company remains focused on delivering exceptional customer service and driving growth across all segments."
