Fri, Jun 13, 8:13 PM (30 days ago)
**AutoZone, Inc. (AZO) Q1 2025 Financial Performance Summary** **Financial Health and Performance Metrics:** - **Revenue:** $4.5 billion for Q1 2025, a 5.4% increase from the prior year. - **Profit Margins:** Gross profit margin was 52.7% for Q1 2025, down from 53.5% in the prior year due to higher inventory shrink, commercial mix, and LIFO impact. - **Net Income:** $608.4 million for Q1 2025, a 6.6% decrease from the prior year. - **Earnings per Share (EPS):** Diluted EPS was $35.36 for Q1 2025, a 3.6% decrease from the prior year. - **Cash Flow:** Operating cash flow was $2.2 billion for the 36 weeks ended May 10, 2025, up from $1.9 billion in the prior year. **Quarterly Performance Discussion:** - **Sales Growth:** Driven by a 5.4% increase in same-store sales on a constant currency basis and new store openings, partially offset by unfavorable foreign currency exchange rates. - **Operating Profit:** Decreased by 3.8% to $866.2 million due to foreign currency exchange rates and LIFO impact. - **Net Income:** Decreased by 6.6% to $608.4 million due to the factors mentioned above. - **EPS Impact:** Stock repurchases increased EPS by $0.26 per share. **Trends and Uncertainties:** - **Economic Factors:** The business is impacted by inflation, interest rates, consumer debt levels, fuel costs, and geopolitical factors. - **Weather Impact:** Short-term sales mix can be affected by weather, but long-term impact is minimal. - **Market Growth Indicators:** Miles driven and the number of older vehicles on the road are key indicators for market growth. **Future Operations Impact:** - **Investments:** The company plans to increase investments in growth initiatives, including new stores and hub expansions. - **Liquidity:** With $268.6 million in cash and $2.2 billion in undrawn capacity on the Revolving Credit Agreement, AutoZone is well-positioned to fund operations and growth initiatives. - **Debt Management:** The company is in compliance with all covenants and expects to remain so. The Revolving Credit Agreement has been extended to November 15, 2028. **Stock Repurchase Program:** - **Activity:** Repurchased 70,115 shares at an aggregate cost of $1.1 billion during the 36 weeks ended May 10, 2025. - **Remaining Authorization:** $1.1 billion remaining under the Board’s authorization. **Non-GAAP Measures:** - **Adjusted After-Tax ROIC:** 43.5% for the trailing four quarters ended May 10, 2025, down from 51.4% in the prior year. - **Adjusted Debt to EBITDAR Ratio:** 2.5:1, indicating a stable debt level relative to earnings. **Risk Factors:** - **Economic and Market Risks:** Including changes in fuel prices, energy prices, weather, competition, credit market conditions, and geopolitical factors. - **Operational Risks:** Including supply chain disruptions, tariffs, and new accounting standards. **Conclusion:** AutoZone, Inc. (AZO) demonstrated solid revenue growth and maintained strong liquidity, despite challenges from foreign currency exchange rates and economic uncertainties. The company is focused on strategic investments and shareholder returns through its stock repurchase program.