AutoZone (AZO) 21 Sep 212021 Q4 Earnings call transcript

Greetings and welcome to AutoZone’s 2021 Fourth Quarter Earnings Release Conference Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder this conference is being recorded. It is now my pleasure to introduce Brian Campbell. you. Thank

begin. may You

forward-looking please subject today’s provisions to Litigation to XXXX. Private begin, future guarantees statements Please performance. of includes that Securities refer The of Act are the Reform are note we not call of that forward-looking the statements actual Before Safe this that of with to annual and the results on morning’s Exchange the could important XX-K expectations. Form Commission recent release most and discussion risks Securities uncertainties and and cause press for from materially company’s report other differ Harbor filings

speak found Forward-looking of include reconciliation the such our in certain obligation as statements. statements undertakes update be A measures. non-GAAP only press and release. to the date to also non-GAAP company GAAP made Today’s financial will call can no measures

And Officer us Jackson, Vice are Brian today, AutoZone’s you today With conference Financial morning. Jamere President, quarter Investor thank and joining Chief for and call. President, for Tax. fourth XXXX Relations me Treasurer, Campbell, Executive Vice Good

quarter, Relations the press on not release are our under Regarding the about comments our to with complementing If learn earnings results. to Investor click our website, I opportunity them. an fourth calls on slides quarter's the see today, the release, and link. read along press Please available had you've quarterly www.autozone.com hope conference

store results our As said especially without have we the of supply not could entire outstanding kind team, have I of the previously, throughout we chain the deliver performance our AutoZoners. pandemic, and

historic the continue enthusiastically embrace to remained our challenge. As AutoZoners sales meet have all time our at hides volumes and

performance you to our and of retails how and versus how remarkable. our our keeping affecting XX them This quarter, a also who categories we committed review any the the they our overall share being DIY our for costs extra highest think weeks will Again, trends, I owe priority regional they're morning sales inflation are you, store merchandise AutoZoners and same all tremendous also we and say, that remains gratitude. we the we remainder As the Thank AutoZoners. the customers impact and mile of going the debt drove discrepancies will year. sales safe. our DIFM reiterate is of of cadence calendar for want over business to customers our

our exceptionally none Onto last this were of year's same our sales impressive quarter, this high we results, This year, again performed of Okay. team quarter growth. AutoZoners again, positive a congratulations time domestic XX.X% an delivering an level, comp once top to no but store at vision, last historic had X.X% on sales our everywhere.

rates growth strong and commercial domestic for Our retail XX%. growth were both north of commercial with

quarter, set record $X.X commercial billion incredible a accomplishment. for sales an Our quarter in business with this the

over versus $XX,XXX store Additionally, an year increase. impressive for with annual in sales year. we reached billion per new a in billion reach finishing records $X year billion just commercial in annual the XX% the We a $XX,XXX sales sales $X.X in surpassing new sales last volumes milestone for up $X.X from year ago, set

basis performance. the from last our consistent our very year stability stimulus from further further as of more proud in this some two be our our DIY a I'm were quarter we the We We roughly two substantially round of quarter, same on store We the sales were quite of very continue also year of well domestic ran and proud performance. more pleased comp got quarter, decelerated over deceleration our couldn't sales. after year's with our commercial stack two on we year's and recent with in to increasing in team's well last DIY we while March. XX% fourth flat expecting execute success. a organization last stack, third In back were comp commercial year

let's Sorry, cadence. performance. on last sales \ focus quarter’s Now our

This quarter early the from May to August. of end stretched

weeks, comp The the eight easier weeks the In first half comparisons last was of year. quarter, X.X%. The attributable quarter comp to strength averaged our last of in to the X.X%. our was eight the back

dynamics who've of benefited others Given past two of more the sales months, XX comp. we it to pandemic the look the insightful the stack like lumpiness year at believe a is from

QX XX.X%, year period was XX.X%. cadence was XX.X% our four For two and quarter our each week two XX.X%. a XX.X%, the year On comp of basis, for

and strong Our two year quarter. were sales the trends comp fairly across remarkably consistent

Midwest drove chain a there. experienced the on our warmer we summer years, to out impacts Overall whether which summer performance. Northeast, we than a helped previous milder sales noticeably which weather were our in but west experienced Regarding and in sales, the our underperform neutral

growth, versus our roughly quarters big ticket Stay the automotive year. box traffic X%. X% retail expected our down last as orders traffic was up retail drove outsize stimulus. home This was ticket traffic departments Regarding retail was and some at closures, service while

of vast like momentum existing from fiscal transaction XXXX. and for remain we into majority the growth It the encouraging from new commercial sales was to customers. are both year see seeing in this heading us saw come businesses and Our quarter, growth we trends business strong domestic

comp markets. some and quarter, that were we than saw the and the of always commercial the Mid-Atlantic in North-eastern customer roughly XXX both country. are. there The did regions underperform, Across the share as in gained these our points some remainder data During better versus geographic Midwest, bases, basis have actually others that there markets retail we suggests

despite of large that remain believe automotive comp closed year. service the time this retailers, the a departments summer share contributor in sales box across was we there. were to However, results last our And weather big trends country our reopening the milder strong retail,

gained we retained share our XX% last have the roughly market year. We have in pleased sales been business we retail floor very that

vaccination provide to their for step completed to fourth Our the I a our number AutoZoners the while that's would first, customers COVID every quarter $X.X QX’s a one doing have our commitment provide shared in logical health, we We with XX, the AutoZoner, continue call that working This team's next the for to our hundred priority efforts of part-timers. by once AutoZoners. AutoZoner safety, to wellbeing continues safety what was and environment and vaccine. every incentive PPP as and On be we dollar spent efforts. our inspired be with they million putting our right, our deeply caring is reimbursing safe management in shopping we on-going and board another for including AutoZoners.

culture our encouraging on and vaccine get strongly display as of of for XX are We another values have months. our one to care taking the past AutoZoners the been

on into performance our move let's quarter. the more for specifics Now

year's sales Our same versus fourth store were up quarter. last X.X%

was our EPS XX fourth year's $XX million and was above XX.X% a quarter. share, income Our $XXX net last

business. us. sales a provide and you fragmented The this grow we domestic total while per significantly have retail, the We down market, highly Our $XX grew remained was business same which share per strong. initiatives record we million Commercial in a is our in slightly and easily believe billion that were I'll to opportunity place $XX over and quarter time. sales for averaged in store XX%. $XX,XXX sales, offerings service program market approximately an remind remarkably tremendous sales helping product meaningfully us commercial all-time that which commercial week, are weekly approximately our sales for was our

about merchandise the I'll Next trends our across categories, in particularly retail talk business.

lighting the wipers, fluids part Our categories with showing hard categories continue all like outpace sales and for categories string. to

parts Ran our We We line year like especially will last as parts believe with our business were batteries. Our pleased continue very business in strong, business hard in our parts strengthen with our especially customers flat was last more. expectations. hard to as roughly hard drive was categories year.

seeing we and in what address space. our Let me pricing from also are inflation

in see This cost both increases the impacting goods digit basically merchandise the numbers retail suppliers. and sales while will first many quarter, raw retails We system. we believe and as positively saw single labor year-over-year are by inflation, about be can higher material, our from We way transportation cost our their as quarter costs categories rising flat. impacted through of was us our X% low in inflation in work

about say for has but no have pricing will We it decades. to way our industry been long last, disciplined how

we quarter the exited were than environment, fundamentals strong in forecast with we be is to fiscal sales. the we will and What expected, encouraged it I current with sales our business. While near term year better say past this to continue sales difficult is

sales execute on is our we be business led initiatives, we term. DIY XXXX, solid are our believe for in the positioned performance long FY industry will the For by that commercial as an commercial our have continued we growth maintaining. and that in share are both that strength we for And considerable gained

share exceed We hope we will earn and expectations. fair our to

resiliency In in future economic high addition, believe significant times. confidence be prospects. our and products services to continue during difficult more demand about this our gives us we And will

outlook our be always as provide will we we trends as year, the seeing on about through and are color and progress we As transparent what emerge. markets

call will turn I Now, Jamere? over Jamere the to Jackson.

everyone. morning, good And Bill. Thanks,

another we As had Bill great mentioned, quarter.

initiatives to are specifics to have morning, let on growth and stores AutoZoners take efforts the enabled strong to of Our continuing in start elaborate maintain QX. results this few us centers results. distribution in our me and our To for strong a deliver minutes our the P&L

were our For up and auto auto Brazil parts our total the billion sales, up domestic, X%. which the sales Mexico $X.X XX.X%. includes year, parts for were stores, And $XX.X quarter total total billion

in commercial up our sales local our year sales. our growth for our weekly of broad based quarter. XX% $XX,XXX more quarter, the sales two a with give our me domestic stack our to and was program over DIFM Sales $X.X XX% on little fourth were grew business, Once and were sales and all increased represented the million basis. and weekly XX% billion national for average up as sales let total Now our total a color again, in as XX% on counts initiatives. commercial Starting we XX% customers growth $XX per DIFM

two year, commercial and full basis. year the XX.X% grew on stack a For our XX% sales

we're fragmented building on our acceleration of business. as in results XX% execution building domestic have our growing making we in is share, and of portion tremendous a Our making focused this accounts. The in regional delivering business grow, our with investments national the We stores, local faster program growing business helping focus our progress and market. commercial we're exceptional highly on now disciplined we're and us over our of commercial are initiatives

we finishing new This with X,XXX quarter, XX total net opened programs. programs

with commercial our existing our leverage increase way. continue year And will and of wallet XXXX We to lead growth customers. infrastructure the share fiscal DIY

continue work continue to Our growth strategies we grow as to share.

our focus enabled past the for the us well five assortment, committed quarters an core staying areas maintaining position competitive exceptional sales in to share. to execution making providing of We delivering remain on we gaining believe in brand, will with and confident quality parts, Duralast in the improvements focused particularly our improvements in are our growth continue and service. and double-digit and as We strategies pricing, have our These marketplace. drive

we forward, our As will our we accelerate initiatives believe focused sales on move that further. we're even core

Let initiative brighter me highlight our an that's performance one and future us businesses. retail our key driving and our in even positioning And that hub commercial strategy. mega for in is

Our we expect We and mega XX and has months. momentum, we strategy XX to the open more given us tremendous now over mega next are have doubling XX locations, down. hub hub approximately

As deliver strategy SKUs greater leveraging hubs XXX With serve a hundred commercial results. expansion you source that coverage reach, product a The sophisticated testing hubs and density to our availability to carry and we're I and will sales remind this closer effort, fulfilment store sales sales drive as a our times. tremendous of better delivery hubs. even of analytics our our other XXX expansion proximity for both customers are mega to well to and envisions box, us DIY expand current lift, market continues thousand a availability help of our parts we to our improve stores. and reminder, drive and hubs the typically give roughly business as our a meaningful to hub us inside as total mega a mega mega to mega lift

our assets as continue However, significantly further. outperform these we would expand expectations, to expect to

our its commercial this accelerate work and growth. We are to ability further excited about

growing ability competitive to us efforts our our a of confidence faster give are business. building create and tremendous meaningful, All advantage in

business XX just points, down year two On our stack. the up but our retail a domestic of was retail side business, XX.X% basis on

a start on been For year, maintained basis. pandemic. XXX gained points XX.X% year business market resilient The the has was nearly the the we and stack since the share and have of full retail business of XX.X% up remarkably as two

and growth excited on drove are been initiatives about the tremendous share our We AutoZoners our that stores distribution the the in and and centers execution focus relentless has sales by remarkable.

our winning in execution are competitive care marketplace We who a AutoZoners advantage. of key taking the the are customers of and remains our

really to our work I'm hub strong improving XXXX, fiscal fundamentals assortment, expanding have last the strong of pleased the done of led have a network has our and experience, exit with and results our customer the have leveraging comps are we DIY the growth tremendous while going to we our because of and The contributor pricing As hub been company over of business shopping on past two competitive and competitive outlook business DIY forward. never years. our mega performance, the positioning maintaining difficult stronger. been our

Our strategy solid delivering and execution are results.

Now a our I'll few words regarding say business. international

We be with making continue in Brazil. pleased we're to progress Mexico the and

basis. significant opened Brazil new stores both finish we to expect be accelerated with finish future. contributors to growth to Mexico saw to markets in XX stabilize, and constant remain Most we on in sales store both schedules and quarter, in stores a We in in the with economy those stores countries. growth opening to committed the new and XXX our sales a can XX currency both During five importantly, earnings as

say our international words few I'll Now business. a regarding

We continue to the be and we're progress pleased making Brazil. in with Mexico

both we constant currency and growth importantly, new Most five opened to committed countries. opening stores stores in new we saw in XX. schedules and in we growth quarter, XXX a finish markets, economies both to to to the the finish in store to sales as expect basis, was in stabilized with accelerated those XX earnings both and On contributors stores Mexico significant Brazil future. sales be remain During our

and a on few gross the me margins. P&L minutes spend let Now

profit quarter XXX in in quarter, For range gross I shift down down primarily margin third but commercial accelerated our where XX pressure, mentioned points the initiatives by similar a were basis investment down to where margin on our in points. gross with gross growth driven that drove by margin our have dollars expected increased basis was our coupled the business, the quarters last mix our the X.X%. call in to we we our

better has team inflation primarily margin the offset driving that been expected improvements outcome. than focused a pricing drive on However, actions through to

power, pricing inflationary accordingly. retails. Bill As To pricing have we're cost certain been the to rising clear we rational thus along mentioned the we far at product higher have beginning pricing and through earlier and overall, Overall passing be transportation inflation successful see categories industry consistent remains with prior in cycles, call, our costs. these in cross with we're

in DIY positioning a fair committed down the significantly All quarter of in the to at expect quarter. and share while than the margins in us rate a DIFM should our actions overall we're competitive our to similar businesses taking range And first have faster growing disciplined way. resulted market. the we're We in fourth our to a be improving our capturing

autoparts gross on driving at focused rate and however are profit faster than dollars a growing new to absolute our customers historic in total We AutoZone segments. overtime, operating

that The by deleverage higher payroll X.X% versus IT related by expenses points. and basis previous sales our the were of Moving were our XX sales offset to a customer expenses higher lower primarily and year's These growth to operating underpin partially was pandemic our as up expenses dynamics in investments initiatives. last percentage QX initiatives as service support deleverage SG&A expenses, driven year.

AutoZoners period of during SG&A our high historical a levels been been dollar growth times. of While care these during higher and service our has rate growth customer taking focused accelerated maintaining on of difficult averages, than we've

to expenses we continue with in move SG&A will growth over forward time. be as sales We line on manage disciplined growth and

fiscal billion XXXX. first EBIT $XX up year year end was up quarter million million first last was versus prior $X down Moving the XX.X% for top $X.X year’s driven billion from We're the year QX for by in XX.X% $XX for debt in just strong expense of just the the to year. a million XXXX range to versus interest fiscal EBIT quarter ago quarter. our $X.X X.X% growth. planning $XX just $XX was versus million of as at outstanding over the the year’s quarter of billion Interest $X.X under was just the over just XXXX for billion last over quarter rest the fiscal P&L, versus line quarter over

our For quarter. fourth in versus the XX.X% last rate XX.X% quarter, was tax year's

last This stock benefited while options quarter's rate exercise, benefited XX XXX basis year points. from points basis it

quarter due XXXX, us X% first model the credits investors approximately exemptions to before stock suggest we of exercises. XX. For on at any option

Moving in net was fourth EPS, the and up income net X.X% $XXX versus year's quarter income for quarter. million last

combination fourth lower to year's of X.X% the earnings for Our by diluted of was the $XX lower XXXX higher share over quarter, and per a XX.X% share count drove line remarkable per last up share share quarter million top for earnings count share count. income our performance years $XX.XX quarter. fourth outstanding reflecting year fiscal lower the Net was up XX.X% and $XX.XX prior from

Now, let flow. our talk cash me about

generated For of the we cash. billion $X.X fourth operating quarter,

discussed. continued operating benefit strong to sales Our cash results previously from and earnings

You should flow expect forward, cash us committed meaningful amounts our remain incredibly we strong an to shareholders. cash generator be to going of returning and

in have position our $X.X balance cash balance liquidity strong. the on now and sheet, Regarding billion our we nearly sheet remains

$XXX,XXX We well growth same over store up last X.X% last four tenths per increased are percent a inventory defined as last also a last versus driven period store Total of year. payable as our inventory the versus year, negative on negative basis inventory our quarter. $XXX,XXX new managing less stores, was QX was a merchandise net accounts per inventories, year by inventory and $XXX,XXX negative

accounts gross versus last a the result, QX finished payable inventory XXX.X% of XXX.X%. at percent a year's As as of quarter

$XXX share quarter. of in capital a spend repurchase repurchased on our AutoZone moment stock the allocation and Lastly, I'll program. million We

share over $XXX As we cash. fiscal million XX.X over of excess million $XXX end quarter we approximately remaining end, of authorization and just quarter, outstanding. shares of our under had buyback million the had the At

stock, flow cash billion our of year over free XX% million excess with back year the or we has from shares shares. X.X us powerful last For to this the The we beginning carried combined of year, bought at year. back approximately full have generated of the over cash $X.X buy enabled outstanding

our investing of approach, We to back since committed We and remain powerful and to flows cash have of in in nearly business. our in disciplined will this stock inception business XXXX, free us invest to capital cash the we bought while of enable existing outstanding to the our have expect amounts shares return meaningful allocation shareholders. that XX% buyback assets our where growing

So to a com very in X.X% income drove increase highlighted strong which in wrap we a increase EPS. had net up, quarter strong sales, by another and XX.X%

driving term growth are our long earnings and driving cash We shareholders. cash excess by shareholder initiatives, in our value investing to and robust returning

have strategy confidence Our significant and ability tremendous in for drive ongoing to shareholder. value is I our working our and

turn Now back to I'll it Bill.

job. Also, your you anniversary one Nice that Jamere. last celebrated you, Thank AutoZone congratulations year week. on

Been fantastic.

a and you are going accomplished XXXX, launching Year. person, the all exciting meeting extra am and next will XXXX be two In past years, to our superior in first celebrate fiscal hosting we year, be formally customer our new I start a host this to we announce again tell yes, how they operating vaccinated to is I'd like years. flawless about And over New execution. theme have in are masks go It person initiatives. time two going our national will and for who annual on here some theme. service focused are the AutoZoners excited in week week. I we can't wearing As next we to very Memphis fiscal take in to the discuss Being moment for the mile. are sales we

our our growth to and businesses. chain some of We will expansions announcing to Mexico be the domestic fuel supply significant

will new prospects. Brazil bullishness new our industry with open in These We our XXX open hubs retail and that our are support mega capacity notable businesses. business. reflect to our XX the and our also our enhance ability throughout expansion acceleration Americas in domestic own stores growth commercial growth and the We'll targeting U.S. approximately on in investments

being being We disciplined, yet are aggressed. we are

safe board how never last would At manner. across so to a want the have the of commitment and year, we positive very reiterate it our their guessed impact for of I on had in customers our servicing could I pandemic Lastly, start proud have the am to our team the doing sales.

foremost, will success. our Autozoners company I look be on safe with by us providing flows even investors challenge ultimately for future to continuously position extraordinary from and and what We that our secondly, measure bullish challenge. five customers in be these like while years will our automotive must keeping we our ourselves our greater AutoZone. And on their cash three particular and And now. on focus that we during future times needs. industry our First customers know to welcome continue to

to questions. Now, like for we'd call open the up

you. Thank

question-and-answer proceed We Jordan will questions coming Jefferies. with now first question a is your of the session. [Operator conducting Our Instructions] Bret line be Please from with

Hey, good morning guys.

Morning, Brett.

Good morning, Brett.

could little coming and gain, seeing share you other warehouse that it the a particular And guess, then, cadence. I I guess know, give are far you're two color the relative is as outperformance guess from, categories as shares then us more you distributors? I where from bit On step the or distributors there

about points seeing year post You shared you'd share picked last gains Are disruption. continuing? the still of talked that up you the is XX COVID flows maintaining

Yes. Terrific.

you'll commercial clarify I'm jump to So then anything retail then and and if if I in talk come about about and talk Jamere and, bifurcate and and miss back it. going it

on. a mask had I Sorry.

very First that receive. we of It the on we quantifiable have parts the on business, business. not hard data all, is retail

spark So spark parts and and batteries plus it front a including about think counter, as batteries everything in plugs. of and

So traditional of we a data competitors. close larger than data that our in real live have is set just

anticipated, we So as share We time, significantly company's year. that history, we of lose last there. share this might we some share. have in those very lap And facts began gains our to we largest grew

mean, our it. But by to month margin. we negative share lost slightly on the that positive, haven't of It's in grew any basically month. it's XX%. We slightly I dataset

that. roughly And sustaining over anything from XX% I'm we moved our that organization to time. for seen really of So XX% like share never share share. proud I've

side we kind competitors. are look business, obviously overall of our and on the in competitors in of kinds of when data, significantly close outgrowing with that in probably look good growing commercial pretty coming data. three the market. quantifiable that going at but and rates it's clear from? times multiples what's have the going the don't doing insights you're And as do, We He what's see the the on these that we we Where growth On by at probably very has market publicly into as the it that well market very, or both we're retail business We the in two is growth. we look the, available all we're, we commercial other business.

I on now years, us because the three it's think in the standout it's is that embarked our of implemented things. rolling for continuing our doing And great the round really that strategy the growth commercial great that last work, Duralast the people the right hub got where parts this We've got initiatives latest pandemic, making over sure of not brand. We're best because is on we we working to we've have the the belief business. out as mega of we've we're coverage, we're strategy. amplify

looked proposition for made be efficient. we've and competitors, we're sure and service we've the our some delivering. Now necessarily technology that we're close not help in appropriate deeper distributors is of warehouse but And at to versus right, kind value us that implemented also looked the our more priced sure that making we've

those you So anything Jamere, add? are thoughts. to my do have

resilient with it's that you that, is execution business results. strong that One me. to been out stand exceptionally things striving a great remarkably has have, combine you couple we our as and a mentioned, and it's, think I Yes,

We've share. payments, on have away And job Bill further it's readouts of sales loyalty that talked get our of we I executing. and that a give As market doing the from lumpiness we're confidence. been of the lot floor the, maintained. about are us mean, the great a share what clear from programs gains seeing teams great results stimulus got on our our

couple things side, the Bill share commercial see And talked of it's me, that the continuing are initiatives about. we're really those behind behind stand On out a business broad that the significant base. gains to to

We've So of improved last with it's growing snap is seen local counts those national car the back And staffing up and is accounts are executing driven accounts a are fantastic national that miles XX%. and as customers. it's over our doing team year job over and is improving. the

business. we have as is we growing a forward this into move amount So a tremendous us the confidence of helping and create faster year,

you. Thank the at Can of inventory. that And being Jamere, a there think think payable, quick should forward? number this? accounts a I just it range going XXX% that's it go a about on question Is than higher we get Great. a in record or

have to higher frankly, just the amount we on things quite but expect it higher benefited to don't much It's that year, are. expect continuing much go had the significantly we I us based our up because can an to and partners tremendous that last year over last the or manage terms working But, our than, we're where sales in capital to do both with of we've go suppliers over all and been accelerated currently environment. terms We than our with so. wouldn't the

Thank All right. you. Great.

Thank Bret. you,

Thank you.

ISI. question proceed Please Greg Evercore your questions. with the with next coming from is line Melich of Our

going questions. be had through in is us a, the really I a of run mentioned the those One use you Americas. have at breakdown rate stores the forward? sort domestic and should follow-up. I of XXX Thanks. you other walk basically look opportunities look two markets we that you If and and about, what a Could would then

Yes.

to market years couple of the so We've, to XXX more Roughly based so. XXX are opportunities code that probably in will. expect we've can sort the thirds U.S. be zip you doing be if us been that the two we the of going next of at in for that or You or looking stores, marketplace. to on or see in and

or us conditions and could Mexico, from You Brazil. XX depending stores XX market coming to remainder the see on so, in the do, then,

Brazil that for I the earnings opportunities, is in market previous call we been on really or good think think we testing we a and so last the both very for our that see decade be And can about Brazil U.S. and Mexico. market in we've us big talked us. the our for news potential tremendous market in

potential great team got we've leadership So as there. made changes some We've well.

a international a part has Newbern and strategy that go we as Tom forward. of story is forward. is our Tom of efforts operator, experience. So much fantastic to look going leading our And forward bigger our a we ton being

question inflation. the then to linked And and Great. is availability second product

running I line, think forward? industries inflation three it is costs how fourth to through. it going and that now four the going up, are rationally, you mentioned maybe think say about the you that fair passing top that, quarter in Was to

We're not that level Yes. it seeing Greg. yet at

I at we level. it see will that think

time you for that some seeing in to not inflation, it frankly, bit in As direct but is, all know, seeing the price the is the increases or little you're those directly that product the, And in themselves hyperinflation different system. costs. product right through we're cost now the a are work is takes transportation,

and And both how price the having businesses. on we're higher, in cost not and QX, think a be you the ultimately both talking so retail but you're increases will do headed. about prices through even more retail to we're We we the that little in thoughtful about increases domestic, if commercial bit to range see pass be that where seems it QX in the those or

Got it. hasn't in And the products? of product terms been there issue supply an getting

it's, the where merchants it ever have the one so of I that No, difficult other. from X% environment chain lowest it getting well. tell in our This X% are ever the It's, chain most supply seen, is This stock issues supply there category to will you, but I remember. that I absolutely working products. or level and are run, we in we significant are normally can running below moves

so way or market we spot doing competitively. And with very our and I I'm with retail to think where areas when have new suppliers we say I on about in the vendors in along but finding general. proud a talking basis. dissatisfied closely it the are, very we other I'm where of that And competitive, are historical

you’re you a typical tight there. competitively is that your But just than out it. in Got spot in space, feel better

here. for one The has machine the times. has that think, I is success retail Yes. been that our these months core our really decades Greg, both been And that an flawless our And, a AutoZone market execution big at over before didn't piece last we in in to versus and contributor I highlight the known think looked highlight long would as I commercial. uncertain I we got execution XX and outperformance

Well, the team. Right. congrats to you and

Thank very you much.

Thank you.

Please Our with next JPMorgan. your from questions Chris with proceed come of Horvers line questions. the

Thanks. guys. Good morning

DIY versus over then in commercial So July, of to that moderation you a August. some side while like Can what two for on and that, contracts basis? businesses share what the positive that think with moderation? DIY, as you looked the or one-year trend year comparing given flip that related did the in easier did a the to or, a you then And back August to spoke drove about the

Yes.

out further stand year about. things and look obviously quarter. So payments talked at away if But the us. we to business that the is you, further from if a you DIY couple Again, our were moderation, the move our significantly we as we fourth saw. lumpiness we mean, the of stimulus that the last saw in I higher the, trends in most comps where

was, was business Our pretty resilient.

so outperformed And expectations. our actually business our

customers staffing quarter. the are very able as just be. business if business exited been to to to, miles back been as car well. That, that very, with commercial commercial about lot as been we, as strong, And need and is are they And, has things get that we counts, macro The commercial are, improve, is, resilient business, that like we staffing those customers driven. stickier. the business. commercial you a has remarkably have the see are things we driving that it's their The environment levels those relationships fact like Our built think our our where

quarter, quarter. As in been we that were that, were, year the, the, in our were seeing. past know, the I practice, the pleased we don't the we is but talk will confidence you we we of, we see it as first lot of gives early fourth And what as total. the quarter about the exited very of trends But innings in about what typically following say us not only a the with we,

DIY being DIY turned did you positive? weeks spoke that to back to, last in that four so then to And

we or And you It comps was, four to we much in it will. was, first quarter, easier so. get again, if weeks being that got last close flattish when the to

of ought idea seeing So the in you first what that terms quarter. some into to of give moving we're trends

lot of makes a It sense.

here So I sort September. any guess on unemployment summarize because to there, in seen just the pricing out fall of side so, you've so sound insurance it doesn't of expiring like

the to currently to share in you invested the price about side, there's investment share price are a step market feel On How great here make gaps to where plan, not i.e. order retain feel do in, a retain up the your need the continue in our DIY out to, necessarily share. you perspective in in a playing commercial things and the trends? to price you've these that from you price

the those Yes. we, strategy of this we behind to DIY We and we year, strategy. has made in and moves you results the And, the going us. numbers. We the the of terms price on our is we the look mean, just believe year. last see results commercial element it put working. said, been into are we're in one board as going investments our that the price I anniversary, when at start And

story on an commercial technology all standpoint, other sure that So have here. talked have you pricing we with have the made things the the competitive the see products, we've growth right those about and in the we that underpinned that combined our from assortments, that things we've that making the side, investment execution

maintaining retails price and very will, we're very So as we're side, been commercial up disciplined. the share in we're the the the moving We're in as rational. inflationary this DIY that competitive industry you if mentioned, those have differentials But has underpinned on Bill being environment, relative over price last price absolute point. opportunities of doing But the that. we're It's up, but take we've is, point will, have seen to certainly that what's an growth we really you if view important. price year And it's so. or not as a that's

Awesome. Have a great fall. Thanks much. very

you. Thank

you. Thank

proceed question next Michael line UBS. coming Please of the questions. with with is Our your Lasser from

that Why lot on. [ph] a volume maintain the had lot back more give back the industry projects consumers to on sense we normalcy? theme cut as quarters Good morning. from can taking some time case, the market a home, that growth for you the industry of seen DIY question. a how hands cars. from its several has lot, my the get the at to wouldn't the as have to models do their of to manage been have largely last algorithm Bill, over Thanks And staying if that's on tremendous P&L their

Michael, part. let question, first I'll Terrific I'll take out figure part. Jamere the the second

logic sound. sales the On very is your side,

business If at up you versus our overall the, XX% pandemic look roughly levels. pre is

longer around I've to this generally watching it pretty months been in year but nice X% industry and, XX% been for watching grower, You've over a industry grow is the, time. it's a long XX a the phenomenal. grows

lot direct really where talking seen we we I in down in we prepared tail on spent beyond that seen can step to is because grow COVID. the they that correlation to have happens our that we, of last and see we we going we gains round of off as time this sales never comments, they that some, when with And a what's think, were. time we've an expected said, share summer exponential stimulus March. a do rate go think saw we back stimulus, about but then our our the some that Every at sales to

all COVID we our a I done competitors. money and at at comfortable as that of in shopping would job very, a feel go would comfortable create encourage stores encourage, have that us spent a I find, Go think good look in lot making making other safe we environment in a of our and us our as in retailers. versus our really, very our to that related It somewhat we've time, have AutoZoners our I really look stores. to this interesting is safe in sure sure product go versus stores. you believe. sure that making And it's you a I our environment, teams of customers can

necessarily store. that customers so their behaviors. go And to changed have wanting think box not big a shopping I to They're

the a you There XX where above And my I've this The think leveraging in times what be We in been very QX, last would in will period industry you above guidance because deemphasized execution. that difficult long-term career like some refer on confident would back are XX it performance performance industry retailers our happen year, and before to XX. QX QX and that are online I for it or or year? XX, marketplace will would to flawless fortunately going have there think basis. the difficult trends, by in just this three pandemic. very but category XX, this what's during that to industry and would time we was industry happen And, don't tell substantially have trends the tell you be I give about to historical us, all in this norm. we seen win 'XX 'XX been the

levels don't were started go this it. expect but certainly before. the step It waters, the of at All as do I where to step And cause expect of bit, is I we thing like don't down in behaving to will be performing was of to one What most a that, unchartered seen was AutoZone I fashion. more performance that each those maybe, us little back we reintroduced coming relying those we've And exponential back I customers. maybe, know, to the a have out economic shopping an a have down believe some times were industry out I the Well, seems have as those of on many those will lot of think customers difficult changed And following habits to forever. ourselves on an pandemic interesting our don't we before. just that some step This environments. very existing an back frequent basis. industry didn't but times, was I we have best think

pandemic. commercial related the business, think to somewhat I side On of the it's the

winning we're big in way think I the a in marketplace.

think I our have initiatives because all we changed that position the of have. competitive we

the about you of talk bullish business. Jamere, let P&L. I'll think commercial So quite we on the I am, and long the I are term

forward. Yes. to a if that us. growth margins, we top has thing with recall, invest digit existing our And fits lot in algorithm business return have P&L standpoint, confidence that tremendous here's in at is mean, a that's lot this off and I to our From We line interesting business assets. of a business for our a amount the low of invest going works to high an of a you that we shareholders. grow cash mid-single we that

outsize up to Over or that the the years line top we've the have of opportunity so had done. things we've seen last you've couple ratchet and us performance,

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invest return seen our in outsize we've to shareholders. us our, You've an and had in initiatives growth

in that amount quite we've we've done got So works. even business algorithm. where the And cash have for shareholders. the frankly, the to the return we've past. growth accelerated this It's AutoZone worked of It's this our in and more going confidence us grow we've environment a in forward. is through where to sales, done to algorithm past. tremendous firepower going for worked tremendous us had financial prospects We're than And

stabilize that you've helpful. that this lacked my that points that, from, seem Very be your the almost also factors there's will follow-up And is margins price peak. on you gross year to starting the either basis to investments have hundred is contribute down some made, of from is or question which you your to suggest other XX.X% because pace margin a gross

that you right suggesting peak we now way think you've the back or forward. it to that you moving level gross about is lower, the you are margin get So based this to the can

get going think I to particular back any to Michael. that Yes, not we're level, we're projecting

in what saying are of we actions those is many have the done, us. are part, actions are retail most think behind the that taken I for we

but bit more We've DIY. on looked call very June. a took that the competitors, competitors, pleased pleased but we position We business, commercial a step been in were those we've we beginning it in call the close our fairly this at that they finished the much In actions or significant beyond significant are They we were quarter that, have. away. of, with pricing in the margin commercial, past those with little of in actions. competitive to I’ll a And position competitive half always our with

and six took markets rolled to started So, and We some those roll it it chain. we and went to with the in. time markets we to XX

fourth of So that. to in the the smaller quarter. good annualize first year's We we're beginning annualize beginning tranches about in of that good, were we've element, as They our our in that we will of performance, the element marketplace winning are not we an in next feel And big the really really strategy, actions you way. taken. but in the commercial a can see

this think to that was, pleased So both pricing or in we the will what how with This annualize do. we're I planning very DIY commercial. is And tranche do that are have wanted have out. next We not in we in nine we played so. of to strategies or months do

our, that those that The merchants historically that that add core changed. the terms our haven't done things things is see the The industries, the inside assortment that awesome capability changed. only over there of of Yes. the terms our hasn't things the in thing company, worked we've have years, work on pricing dynamics, we I'll in

said often very point these a go and gross the hasn't and that, the time. business look core been at I've we So, dynamics, at disciplined. in But through over we've we fundamentals pricing very, changed over the to of core margins long tend term, the capability time. as

inflationary pricing. that in that that, And hit in very disciplined I've, in inflation about seen said been often regard. our friend we've is we've the raising business, I've As that we're impacts

we needed margins has changed. growth done in So of that is, categories terms business capabilities certain competitively our core about as our we've to of the to changes changed. rate our and Bill some nothing fundamental businesses made we expand else said in have hasn't improved What where be

we have work capability forward. that the great done still in that past, So going all the we've

so helpful. much. you Very Thank

Thank you.

you. Thank

Please Simeon questions. with your Our of come next Gutman from line has the question with proceed Morgan Stanley.

little a heard then process maybe you of I answer, we maybe of down you last laughed progresses? Maybe from price a that maybe different the little and price Hey there about I sort we that's which pre new were there, on gross have could anything the in nice the margin flattish is could subject up Jamere been thread out little gross where issues. anything it's from investments think the previously with the, is, even comparer these results. these wrong sort is we everyone, investments base. once to a Because bit, which after But up said how investments, what the continuing in, into, normal margin there a go-forward the the And phrase these mixed think a inflation, thought at year? move price we

mix. said would accelerated commercial I than you that versus a add that'll I to it thing business The it mentioned think is, did incremental rate you I business, our retail If grow better Simeon. only our provide at substantially and to headwind. continues

Okay. Got it.

in is call algo I could just terms any be if sales additional follow-up, if but any meant then or maybe you quote for aspiring about, Is was year. investments, curious it the And reason growth Bill, I those it to thing The fair. shouldn't investment, then, you one what theoretically not in it's XXXX? of or Bill the sales can if capital is heard fiscal on back mentioning, the That's a lapping. complex there year prospects the, And XXXX different, can for current the out we it's other. to sure year the because because had of progression. aiming hit mentioned you you you're in be that by Okay. EBIT be assume press only speak P&L be you're different the without about this release my you're, and

off It's Yes. year and questions. mask I have take, to and just would would've the in I we're taking been to Jamere normalized mean, I answer are people this get have environment. Simeon, a, I time XXXX but on year we told with you going out. interesting what's we'll dreamt it's never the sitting FY you mask would our happen way were an do can't last tell going here be I with June, in us. are what's off here done is all is now I front thing a bit not will on only is Delta think that I here company we're you can't And that right? change. algorithm them. the right we with took We The in little of going and to so more tell variants, different our on. spend mask highlight of to you we the CapEx.

to One of our plan points. probably to for is, three volume enormous importantly the XX% has optimal We things decimal didn't more XX it supply people. chain the we facilities, I That put have on that keep strain supply that our sustained as on we've calling to in an surge learned operated our chain level is months. our

volatility to chain bit about a little supply over future, handle to we're We're as going more a capacity for more the our we aggressive. of have period time So have think we in career this in be the first going the time. my to that little seen bit

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Good Got Thanks. it, luck. okay.

Thank Simeon. you,

Thank you.

the with Suzuki from proceed America. your questions. of come with questions final Our line Liz of Bank Please

you. Thank Great.

question on, there, retail business the So I same about channel on the that inflation points was just benefit a commercial guess first, consistent two as well? mentioned you had percentage in of skew that

Yes, we in retail inflation both saw and similar commercial.

been Great. And able have we how just we expansion, cost impact cost be versus that about up, modeling And costs as price in about increases, that? sell think the should as just on raise period of an acceleration enable think where we did gross experience sell the product about to could a start sold really out inflation? which before would out, some as of modeling really think that went when may you inventory, cadence set to margin of acquired you the you're there

our really also the in and way the us the at a see inflation third up the marketplace. kept negotiating of of it's system. of ended We and quarter good through And, a that, Yes, to actually a all have end point. making retails sure raised the that that quarter. competitive fantastic fantastic merchants of job we And way fourth got tail the job the a the, in done done flowing timing cost much started pretty costs in

times before of You we endings, way to you early. And come, their retails costs where accretion make increases raise the we actually margin through. price have all of bit in move extent little as will a at increases, there a little that, are see early bit least typically the the

in help the get accretion you're at So can standpoint. ahead done and we've different a inflation near an seeing the what what bit of term past. margin no that's get those that are least actually out in than, And from little you things of

Yep. Great. And just, on, on sorry, cost. one more follow just up

wage that what into are expectations as rising your Just for year? trend what's wages, think you for could minimum your next and how entry-level about at AutoZone going average,

for disclosed I've ever the talking I entry last will Yes, we wage, in average and is and about, what we've haven't the seen, years, toughest I've been what level I, really labor join get difficult you but been four AutoZoners company. from operating market tell that has that all the our to very, our new It of wage inflation this time. been very of wage It significant. basically retail the during period peers. has to inflation hear I is doubled our

not. in frees the the unemployment labor centers have don't the last with little or But we that's people stores materially time. in slowing market so in I significant and up I've ever dealing know the over most seen. market things that some. And Fortunately the distribution bit. enhanced the improvement five are weeks anticipate inflation both a down in really the that directly until labor have the But a meaningful change to ability we or to if changed hire don't we, in seen related

issue. we've to immune else What macro sort Yes, it. job dynamics good we're is of And very of it's not certainly there. a, a a it's managing that, market done the

of of teams, about what the of product Our terms the and working to that the one in the environment. we're that's, gives turnover inflation, costs, hard chain side this seeing of price, this labor. then, marketplace. industry, a the lot we done, in whether to costs confidence. that's of us impacts discipline our that when transportation to are the influx capability in do underpins or this on We've been industry And with deal power said it's when or it, things have and in supply both manage stores operations really competitive it's the all And pricing

much. Thanks Great. very

you. Thank

Okay.

want conclude call, reiterate. and model solid. our moment We'll our the is nothing I We believe to we to granted. business a industry Before strong take is for take

you understand today's as to continue We the for shareholder us. fall. We'll and we and FY shopping call with in have have to As a value we customers basics beyond. our alternatives participating focus thank strive XXXX to on optimize in great

teleconference. Thank today's appreciate you. We participation. your This does conclude

disconnect at day. a lines Have this time. great your may You