AutoZone (AZO) 28 Feb 232023 Q2 Earnings call transcript

Greetings. Welcome to AutoZone’s 2023 Q2 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]

is conference this note, being recorded. Please

begin, forward-looking statements. we the company some read to like would Before

Before please Harbor that XXXX. are Private we forward-looking Litigation subject includes begin, Securities to note that the Act Safe Reform provisions the call of of today’s statements

statements future guarantees of not are Forward-looking performance.

that most for risks other to the filings this company’s Securities release cause a on important report could and and press refer annual to uncertainties Form from Commission discussion results with and of Please expectations. the Exchange differ morning’s recent actual XX-K and materially

date Forward-looking to statements speak made only and statements. such company as obligations of no the undertakes the update

Today’s GAAP non-GAAP certain financial non-GAAP measures call can in also to release. of be include press measures. A will found reconciliation our

turn host, the to Chief over and President now Bill Chairman, Officer. call Sir, may your Executive conference will you Rhodes, begin. I

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

our release, have with Relations Regarding our to under link. results. an I Quarterly Conference press them. quarter, on not, hope Earnings had the Investor today, comments quarter’s Calls on see release available our you the website the and opportunity press to complementing learn first slides are the about If read along www.autozone.com Please click

across the their As we for AutoZoners begin, we thank company our would like to congratulate customer delivering to commitment exceptional service. and

team quarter, line X.X% X.X% first versus quarter, in second of our expectations. our in the total delivered growth sales For with the

domestic last have contributions Once growth sales across these and domestic XX.X% performance growth. same-store up this results without We double-digit AutoZoners’ could organization. single-digit commercial with not were pleased achieved against were quarter. total the our generated in sales growth second we retail efforts year’s again, phenomenal from We as

with last years, our and the top we as the only not we team’s experienced to pleased retain further over continue a grow from ability the tremendous we pandemic, three As the are but further levels. of on result phenomenal very to move away growth societal those impacts of experienced

focused back We Our well-known as quote-unquote, our or, team regarded and it, get mode. must exiting execution. highly on to is normal to pandemic I getting back relentlessly call flawless

In there all still we But to aren’t engine. also our candor, we innovation have yet. reignite

retail We very and of we both for have decade underway in some modernize our it beyond. next expand in have we significant and some development chain, supply the initiatives good in as improvements and and growth commercial,

year feel performance. our fiscal are More AutoZoners performance the encouraging, focused know with our service great keenly the balance and far. terrific year our through we and halfway and pleased are are delivering so we We good on about of

the drove morning, sales trends, over and that we will second performance quarter versus DIFM cadence This quarter, same-store categories regional our some our merchandise DIY review sales, our XX-week call-outs.

We remainder inflation will and impact also affecting our our and for our of will is think year. fiscal retails, we the business share inflation cost how how

our were same-store specifics EPS X.X%, $XXX net was our move was into on and our now a more XX.X%. income sales million Domestic Let’s increasing $XX.XX share, performance. up

was on year’s line same-store X.X% top domestic comp last with comp. last Our and sales quarter’s XX.X% in of

a a we XX.X% XX.X% and On on get comp, three-year a comp. delivered basis, this, a two-year basis, stacked

year. quarterly last entire results of fiscal couple Our the compare team the to the amazing being once again for delivered comparison hardest years despite the

our few me growth, let spend quarter. on in Now growth moments the a dynamics

X% commercial XX%. retail for rates both and growth up with strong, of nearly north were sales Our growth commercial domestic and retail domestic

generated last We sales million $XXX set than continue with quarter records impressive as QX in commercial in another $XXX to quarterly sales, in year. we more million

last year. four-quarter in commercial amazing annual billion delivered sales, XX% trailing up On an basis, under $X.X over a we just

store $XX,XXX auto at this parts per We also last last sales XX% weekly our Domestic year. commercial year. set XX% another $XX,XXX time QX versus represented domestic average versus sales sales record of for

see improving quarter. trends to encouraging was our from It transaction last

were Our while retail digits transactions transactions quarter, mid-single improving. and meaningfully improved and were up X.X% for down commercial just our the

ticket single-digit from growth. mid Our retail this in the growth we commercial and year. experienced to in as both inflation QX acceleration average last solid decelerated time we began experienced lap Ticket

are over inflation begin historical product we of time. beginning see We freight to and to these to and norms return see cost signs to slowing, expect

than mid historical inflation are than -- single-digit experience more We higher see continuing the experience. range, substantially double to to historically our wage in

as and wage is staffing envision continues versus pressures. environment the regulatory abating to year, soon there be don’t we inflation market While substantially improved last this time

to focus and transactions. our units growth, While on manage share in be to profitable forces, we have continues particularly through driving these market external

growth sales make Duralast brand, enhanced initiatives technology effectiveness openings, and by and in pledge growth, our store that we right new force with improved hub unit being us the consistent doing living the the to more easier do efficient, include, times, store availability, improvements for value leveraging and Our proposition and our just delivery satellite deliver. reducing are strength enhancing coverage, with mega-hub of priced business to

the remains in goal commercial. industry Our over DIY and time leader both to become

and Our strategy, forward. us move momentum market confidence execution we give as

X.X% year’s Digging business we domestic deeper comp this our X.X%. on into past last delivered DIY top positive quarter, a of

three-year to and on a last similar two-year basis. were on quarter’s one-year results results basis and a accelerated DIY Our

As up last was our ticket versus year. X% previously growth said,

are results as comparison year. We transaction considering with pleased difficult last down strong, we count the reported are just very to These our X%. improving transactions trends

grow we critical measurement continued we pandemic data majority continue we success. retain the gains available, to the during the From our have a of to built share, share dollar the we unit of and have

the the conviction the our remainder about of sustainability Our us sales year. continued gives growth of performance for

quarter always have second shared impact temperatures, to timing which weather, sales. due all we importantly, most specifically volatile our As holidays, more weekly tremendous can forever, is have quarter and shifts, our sales the a their on the extreme

Christmas cold when temperatures by the the was with and weather This quarter of experienced. followed wet, We quarter around softer very was country with normalized quarter large sales no beginning at the spike the rates. exited different, the with mild growth the a

effects won’t talking the weather about winter several be the believe winter had mild next months. for that mild do weather We lingering of or we enough a we winter harsh

has rebate tax turned drives to demand category. season, attention our historically which now enormous in Our

retail floor our sales parts approximately outperformed hard our a merchandise between categories, with Regarding X.X% difference them.

categories Our to the relative sales outperformance in discretionary is for improvement. attributable categories

of and The the As gas down sales better. come prices quarter. DIY approximately naturally categories in our have performed resiliency, our categories surprising has discretionary consumer XX% discretionary represented shown

encouraged last have year. categories year. our We wiper strong categories see performance lapped oil exceeded and very were well These expectations all to successfully battery, and performed our

and performed below expectations for both DIY Our the quarter. much our of for commercial friction category

continue do However, it and expect believe well continued delivering we sales by encouraged growth spring, driven as We bounced parts continue we this to both initiatives back results. our hard late to improving, our solid are trends. our and miles businesses will while floor recent

QX, quarter we also inflation in me to In inflation numbers will we as lap line pricing. address pricing high experienced in of the believe the cost decrease Let year. last with onset single-digit high begin current We goods. both of

our for wage we about a going slows. clear, we want it economy away, expect especially as and decades, to inflation, bit do disciplined expect highlight be pricing but I industry continue. not the that that inflation to slow believe is been to has To

increased to rates, pricing margin increasing have is that reflect reduced following historically commensurately the low cost. or failure have are the costs our purchases of price of driven dollars. routine elasticity, in notable by Historically, because periods and industry has to Most maintain parts industry as has products maintenance. lower sell increased, this industry pricing also It inflation, margin meaningfully higher not we

encouraged have and to three last keep three-year our the we focus years, a on keen investors Over comparisons. two-year

we relevant. return will comparisons year-over-year to more our and As believe normal, more we be

predict are excited growth about While it’s initiatives. our difficult we to sales,

Our is have we sectors. the gains and both improving execution team in achieved share tremendous

in led we For continued combined sales our DIY on our performance business. the the be execute initiatives, to we third commercial our quarter as differentiating our XXXX, by resilient with business strength expect

and We transparent performance we emerge. will seeing our and what color markets be on trends as always provide as are about

chain call with on back pre-pandemic. Before to where several talking initiatives. handing our I’d brief update about spent position. were start we will were in-stock a I quarters we give not the to how I our like supply to Jamere,

we and to very I are our close report, are improve am continuing to to targets. pleased

supply worked levels diligently our have up, get creatively progress. teams enormous merchandising back chain to and made Our and and we have

by will where few where their of efforts sight are pay we effort thank to we our we community, will know a to behind of as publicly I’d this vendor tremendous not There for taken and well. has categories but a We have we dividends. are want us. this This be, to still them lot line future like -- putting

inventory is highlighted to to to in drive on We chain lead placing more mega-hub have know supply local sales. our are will our say, and often to our and drive our customer we that initiatives Second, to track. markets improved in expanded closer in intelligently more frequently yes, ability flight to customers turn rollouts. One continue availability hub are the

distribution expected announced XXXX. domestic are Additionally, additional are by Mexico. we new capacity efforts have three of and under centers fiscal and development two in previously the completed early All to construction be

us to allow drive distribution also stores These increase not times only reduce will our to capacity. centers but

in we more us sales experienced high inventory that the slower growth carry since capacity additional With turning the have yet to not enable will tremendous XXXX, is demand.

to other recently excited -- handle reduce paying allowing opened we This facility that West import ordered to a the to dividends and by product DCs also safety and products I to drive Coast direct stock new timelier abroad and is am our more excited a I facility productivity. on West Coast am distributed basis. efficient effective already be on

recent customer contributor strategy closer Simply a add Our to our carrying put, success, we time we products intelligently to the been has network more especially grow. believe our focused sales every on is and supply it chain commercial. inventory our significant to in sales

impressive our Mexico and come. on grow almost plan business continuing across two performance we they combined should the and sales to to key markets. These and XXX had at growth profit this contributors to Brazil continue to stores Lastly, quarter for businesses be again in decades

U.S. of the have Mexico the in We offerings Brazil. targeting five we and the next are expand leveraging to store are years. Brazil, significantly aggressively many our In we in and particular, refine over footprint to in our learnings

our excited very internationally. about are prospects We growth

we charge, know, the profitable leading and our growing are We disciplined will with AutoZoners well dedicated very be the successful. our business into continue we in to to and future, a manner

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

morning, good everyone. and Bill, Thanks,

strong we stacked exceptionally on had second a year. quarter top mentioned, Bill As of comps from last strong

to XX.X% we P&L morning, a growth, delivered few let the take a in a To increase our me on quarter QX. in increase moments for This EPS. and EBIT X.X% specifics X.X% domestic elaborate start comp this in

initiatives growth were sales under our total on a in our $X.X and color and up me initiatives. strength billion, quarter, give continued let more growth execution the solid those reflecting For just little X.X%, industry of

Starting commercial with the for our business quarter. second

to over just Our domestic domestic were $XXX sales over to stack auto on domestic of DIFM Sales increased DIFM customers XX% up XX% represented our sales. basis. a our XX% part two-year just and million

as up broad-based sales performed local per X.X% weekly our quarter. both program Our for was national growth the and and were $XX,XXX, well accounts

Our sales record set volume results the history in the highest weekly quarter another quarter second the chain. for for the of

that wallet acceleration on share deliver with increasing to our winning strong of new initiatives share continues reiterate exceptionally want I grow we to customers. business results, commercial our and by existing as execution our

local approximately XX% and commercial accounts. are domestic our national, and which a our stores, with business our in we leverages program have building infrastructure regional DIY We of

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

continue is deliver our faster-growing As growth expected, a and goal becoming way we in to commercial the FY XXXX of on leading business.

in marketplace. strategy well us share to execution and drive gains Our the position continue and

XX We have double-digit for the past delivered quarters. sales growth

penetration our are diagnostic gives as have ALLDATA noted our the which us And on commercial calls, we another to competitive existing strategy mega-hub for an strong in driving key management, businesses. performance new positioning software customers, is of repair and market future and our addition, and us In and increasing retail past brighter shop commercial yet advantage. suite I leading even

I color on again, some progress. Once add our will

us given one As opened we last our have one has new the quarters, in several now have momentum. with mega-hub XX We tremendous QX. mega-hub locations discussed over strategy

higher mentioned than overall sales sales per I moment business grew in commercial was the the significantly While QX. program $XX,XXX, footprint ago, the balance and average faster a of XX commercial averaged significantly our the than commercial weekly mega-hubs

commercial sales store and box, XXX,XXX As in cases tremendous lift DIY as stores. parts to our XX,XXX certain both assortment serve source and a SKUs typically and mega-hubs sales availability and The for meaningful reminder, the well other carry expansion expanded to business. a an drive lift to of more continues inside coverage our deliver as as

entire to These This is surrounding our capability access assets fulfillment well lifting the strategy thousands are not individually, parks but giving stores and of working. customers additional only the the performing AutoZone is for network.

targeting XX to XXX reach our supplemented we hubs. committed mega-hubs, mega-hubs for are and We remain by FY to XXXX new regular objective XXX

data We expand our to continue delivery closer our parts to improving to leverage market our more times. analytics sophisticated customers placing reach, and

We year. over will strong of momentum build our remainder fiscal the on the

Our This managed solid rates resilient to market remain business in deliver domestic QX. we retail as headwinds. was X.X% been growth have comp up despite continue positive comp growth underlying remarkably and to has

last we our year’s As saw from Bill levels. down mentioned, traffic X.X%

However, traffic where was sequentially QX they from X%. improved down

inflationary prices X% to saw continue growth also We in an raise ticket as we environment.

our growth business initiatives. Our DIY has competitively to strengthen continued behind

car aging car market still a addition, park, experiencing market macro challenging customers. our still a used and and and growing on for basis, the sales In new is a

growth despite discretionary in comparisons from stimulus injection car driven pricing the year’s dynamics, and economy. park positive inflation pressure initiatives from tough and consumer macro tailwinds have These last comp overall a spending

forecasting business are DIY We of for resilient XXXX. FY a remainder the

Now our international I say regarding words will businesses. few a

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

we finish quarter, store the with ending five new in stores opened stores with and in XXX Brazil Mexico During one XX. to new

the opening basis, currency countries sales committed sales On the higher schedules contributors future. growth growth saw rates a and in expect markets earnings we be growth constant both overall in in at to accelerated to both in to we meaningfully store than and our remain We significant both business. our countries

total our the expansion to international to outside and way, attractive AutoZone’s growth growth. continued a will meaningful and currently store be of U.S. disciplined base commitment XX% a an future With in contributor

are center market. distribution positioning earlier, We the improve growth, bullish on are Mexico we mentioned in adding to our Bill capacity international as in and competitive

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

the gross points of our our margin business. decline points margin a difference was chain costs lower driven in charge. supply included basis XX was growing quarter, and stemming headwind and quarter, basis LIFO from The XX noncash the for million For a down gross XX-basis-point $XX margin gross commercial a by faster

LIFO balance With taken we $XXX LIFO this have million. to quarter’s our credit charge,

freight over the freight to months Both of to is the outlook have the actuals continued mentioned charges. hyperinflation each quarter driver I continue. last second cost quarter, quarter we As below first and we the trend are expect quarter start primary the for and and the at as few costs this gave abate past

As quarter. minimal the such, we LIFO anticipate any if having during charges third

in contracts As spot rates the have are come down, we have renegotiated some lower of our reflected and long-term outlook. our costs

to We expect abate. freight to costs continue

We expect see only XXXX, possibly, as rebuild P&L the to of have gains to taken balance have we We and reverse incurred, charges thus plan after and reserve P&L historically. have we far reverse have FY taken fully expect done that charges we to we the as unrecorded we LIFO quarterly as charges early gains take QX. extent to quite these to during start the our

Now moving to operating expenses.

versus last year’s levered versus year. QX as up Our X.X% XX basis expenses SG&A points were last

expense These continue invest purposeful accelerated underpin and pace and been an we to are has dividends expected growth our to operating investments to and growth productivity. payroll speed customer as IT experience, at in initiatives. pay Our

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

million, $XXX the up year’s the rest was Moving prior quarter. X.X% to EBIT quarter the of P&L. for the versus

EBIT the would million been $XX have over last charge, X.X% Excluding LIFO year. up

XX.X% billion the year. end quarter at QX a million, the end versus was was for QX our of at the year $X.X $XX.X expense as debt ago, Interest $X last quarter up billion from outstanding

in higher driving $XX in million of quarter for increase. debt fiscal interest Higher quarter. We third versus are the expected year’s third costs million the and XXXX levels borrowing range are continuing last planning $XX this

of For the XX.X% XX.X%. rate last rate quarter, was year’s above our and tax second quarter

This benefit from points. points last quarter’s year’s exercised, benefited rate XXX stock while basis XXX was options basis

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

up net moving income Net income last and was second the quarter year’s to quarter. Now X% $XXX.X for EPS. versus million,

lower million quarter and earnings $XX.XX, ago. last up share year’s count XX.X X.X% of year to net XX.X% versus a share diluted quarter. second The per than drove count combination the income Our of lower higher was share for

income and charge, LIFO net increased EPS increased the our have growth have XX.X%. our would Excluding X.X% would

me our talk Now for free about let cash QX. flow

versus For the flow generated second Year-to-date, $XXX year a ago. cash versus have year we quarter, $XXX $XXX in a million million $XXX free generated million ago. we million

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

remain and Regarding below strong our norms. our our ratios sheet, very position liquidity leverage remains balance our historic

was store total over and inflation, year inventory period, same increased per inventory recoveries. initiatives versus growth our and Our by last QX the primarily XX.X% in-stock up XX.X% driven

was accounts last defined $XXX,XXX Net versus last inventories as a on per year payable a store negative $XXX,XXX $XXX,XXX inventory, less merchandise negative basis negative quarter. and

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

capital spend allocation in authorization. buyback at We million repurchase and and we just moment will under repurchased I Lastly, XXX on our $X.X end, share had under share a quarter AutoZone stock quarter, billion the our remaining of program.

back sheet us Our of generated balance strong in the powerful shares outstanding of total well start XXXX, our growing have our year. our shares allowed in stock to since cash and fiscal buyback inception buy X% of since earnings, assets year of business. the the existing free investing company’s the this back over outstanding We our and while XX% bought

us that while invest shareholders. to in business, amounts to cash committed our remain We of the disciplined approach allocation returning to meaningful capital enables

FY to return Our the at finished QX and remain times leverage to X.X we EBITDAR during area committed ratio XXXX. times X.X

drive excess in and and cash growth driving shareholders. our investing wrap continue by to to cash, up, value long-term returning to our initiatives, we robust So earnings shareholder

our improving and growing share, competitive are we in a positioning disciplined way. We market our are

continues strategy Our to work.

back we DIY industry, prospects a resilient and share. to international on business of have half tremendous business forward to drive continue in growth confidence look our and bullish FY behind businesses we opportunity are are long-term our the considerable our shareholder As growing value. growing I commercial that the XXXX, and fast to

back will Bill. I now turn And it to

Jamere. you, Thank

putting delivered of of our first we superior results is we and to second our continue must focused on Execution be are But customer service We always and execution. customer the quarter. must, team flawless defines what proud the the us. in culture

said in on particular, be we of own a remainder our and on ago, for bullish our Jamere year. continue moment industry, the to As opportunities the

continue We return will the an we and on continue highest. our returns initiatives appropriate drive to invest in that are investing capital where

initiatives we across the launching For Mexico year we the more our many stores Brazil, fiscal exciting hub are will some retail be continue we and would This opening only roughly initiatives. focused driving opening we but businesses. on remainder XXX performance both in XXXX, and very to stores, mega-hub commercial of be strong not are and and U.S.,

we For on keenly the remainder of XXXX, relentless are focused execution.

We will domestically focused and store our goals, on opening internationally. not accept shortcuts. achieving remain We both

are share supply our enhance have chain order achieve focus continued to and this execution costs said, while we gains. appropriately. and exceptional to have we drive We managing expand Simply diligently to on working to in our all growth,

flows which is that measure to challenge. our future and particular, accept ultimately four to that on AutoZoners. We years by industry, from in led be three by cash I and now bullish on continue will we look what welcome and like know AutoZone, investors our us in

would like questions. for open to we the up Now call

today first from [Operator Jefferies. at for Jordan coming Certainly. Instructions] Bret question Your is

guys. Hey. Good morning,

Bret. morning, Good

Hi, Bret.

but the some environment, wage your are margin and down maybe On come supply of to opportunity where have the higher transportation, you costs capture got inflation, to inputs chain this as of benefit? less in firm, going to stay have lower we from over either wage excess margin, are we got might because for some this prices see good of price offset that of peers the or investment customer likely inflation cost talk

fantastic you you if I on start, are to welcome Yeah. build It’s it Bret. Jamere, a will want and to. question,

not to you important all these First cost, saw costs as those pass did along. all of in I all, for spikes think, we the enormous it’s understand, freight we

instance. on the for of were I will pass for rotors brake I use China that rotors, costs time. the of U.S. all cost from to industry. to shipping the a period We mean astronomical brake couldn’t

in margin of issue. recoup this is some get So freight of we some we that will the the percentages gross midst didn’t

the we have gross As piece labor piece. I the forward, look think, from you margin separate to

to growth. continue elevated going wage are see We to

five We it probably have seen Bret. years, for now

We will continue to that. monitor

what those pricing is our focused product freight really and Our costs are. on what more costs are

But of with labor be customer. will generally, a the to do pricing driver We mindful our big what that’s not we of costs.

and to that rates go sure make possible that do What is I back to wage we with time, growth rates. ways we more labor we as think, are need over be efficient have, the to finding as normalized will

in haven’t moves relative seen business, our and same years ago, warehouse couple our And Most which all. moves competitors quite those were our manner nearing improve was we the our competitive were all really hand moves, of frankly, to a actions at much Yeah. the of distributors. how the impact do we targeted by as

haven’t much of what’s to by that, a a as an we of make impact done actions to seen there, newer counter don’t and our pricing we marketplace So in result competitors. need some the of being sort see of

on ALLDATA. And Great. question quick then a Okay.

a would it use shop you tool selling there software, to Is user your to there think the base. product it is your mentioned more I that to way management transactional? link as a expanding or way a they make make inventory

Yeah.

we value at on ALLDATA, ALLDATA ALLDATA. focused our very are customers First at of offerings our all, via to providing

We enhance also at our relationship AutoZone their can look customers. for with ways that commercial we

lot of our cross-selling, that done sales leveraging leads for have two to teams by other. We generate each a

us call national now the some accounts it, made have helps we customer, things but and progress meaningful really have some the, So and some our street them. integrate with lot right underway with far, integrated up we really a haven’t with that exciting down and more of more

make and got that both to that, but on that AutoZone seamless to customer their customer way, we vision have, the how can certainly as we Over product have sure ALLDATA drive in adopt. to the that the we we we time, desktop be a instead offering that don’t that’s a is wants

Thank you. Great.

you. Yeah. Thank

question for is Seth at coming next today from Barclays. Your Sigman

Hey, everybody. less the point, your improvement average growth. question coincides Good just My guess ticket ticket really count. there is that in But, transactions in lot to first it’s I or shouldn’t morning. with around there since So to be based, business you. acceleration transactions? of point Thank that more need something this you elasticity a right? would is driving that that’s Bill, in else

Frankly, question. great I great for a have answer don’t a It’s you.

technology have they the gone I we and example products As you know, into sell XX those you that little that for price been gone because is transaction have that been been following there over one this of and industry this the for the therefore, I and parts the for of industry of decades products of increased. business, the declines basically a that years has down have long dirty increased, time, often has secrets the and used have the count time, in plugs. spark have

costs were and in last miles. we retail X.X% decline is bugs got examples and they good. sell many, When only and very spark they many I business, this clad they it copper transaction we plugs, XX,XXX sold like $X.XX miles. Today that, will Iridium many, counts XXX,XXX in $XX.XX last There’s historically spark would

is mentioned every prepared really I is our everybody, just as -- I remarks, my would it year most in and quarter QX have driven volatile by weather I caution patterns.

see much in were we an too read improvement into to don’t QX, excited so I want it. And very to

do we and QX how QX. in see Let’s

against going XXXX the a that result surge also are as massive since up in still we COVID. of We growth had

a we would give So experienced what focused we we growth some are we that back. during thought time, period of of is, for on the that COVID, sales

even growth we of sitting we sense? make can and thinking initiatives. That’s that maybe year don’t are maybe think we rates what growth Does about slightly are way we the growth to our experienced have now historically, are here and to normalized back, saying, have for are rates we accelerated I going give think last it. here and We because grow the from been and saying, it look, we

side. helpful. That’s that. on Yeah. just cost appreciate one follow-up I Maybe is the

pressures. did You discuss cost external some

I we referring wage that cost your also to look reflects to fair digits, you when is you assume in are its at think of those investing already about SG&A probably AutoZone wages that and talked high-single infrastructure, your I investing reflect pressures that, referring in some have some up to? competitors it its growth that people, guess are does of already investments.

Certainly have does. been mean disciplined way that are the in have of two we that I a a clear going that. grow we done ways and about SG&A growing things the is one really we create that to business faster we as

in high labor One, is maintain investing customer to of levels service.

You saw and that that paid us do throughout great during us for it dividends the pandemic timeframe.

IT, talked in investing The in in enabling other business. about is thing a DIY way we have disciplined which is growth both our and commercial our

or improving business, the business growth element side the investments side the the includes our the of to accelerate commercial experience those in and retail things on initiatives, IT. customer us of of our required whether Every of one some it’s of have some

customer our terms we think the frankly, the like experience for get the of future. those We will improving and we are in benefits improving investments. experience. in They also AutoZoners, productivity quite are They

Great. Okay. Thanks very much.

you. Thank

Zach at Wells Your Fadem question coming is Fargo. next from

the Hey. Good this Could while stepped us performance morning. a quarter last little touch detail a you basis, walk quarter sequential for bit multiyear more back bounced a on through in nicely. down as commercial

the commercial to in second compare walk the looking in QX with from fair through then can us And of the is growth question driving three-year a do-it-for-me is, half be could the tougher, the fluctuation what to the transactions double-digit sustain you So bit could QX? it year? think you that assume

Yeah. Great question.

I things highlight. will of couple a So

of we frankly, six have mentioned, sales of have above last been have growth, double-digit straight I quite As had XX%. XX the and eight quarters

competitive like We in today. marketplace the the dynamics

the are We also fact like underpenetrated. that we

five share billion. that’s a four huge a $XXX in approaching to We are market

tremendous If opportunity a over to faster-growing we on basis a are basis, business. XX%. two-year for there’s our create we stack a at So us two-year look on -- a business

in have we commercial where a are improving our all we competitive the with improving assortments leveraging like lot and our in that expanding the of mega-hubs, saw us our dynamics technology place, a delivery we brand, Duralast standpoint give that a So years from couple confidence pricing the quality our addressed times, we that of we ago marketplace of and the it. initiatives about

been digits. have double we So comfortably

You to to our share a as growing really eye as grow continue goal that that’s that that have that and see. far digits say means heard the is business aspire growing can us double share we to have

your that Does it gross And gradually helpful. Jamere, margin margin line you in a to balance LIFO for That’s it. that million that more impact it the fair expect is QX. to going fair drastically mean stable clarify and or fair QX your $XXX remained just of Got And maybe QX is say in big business gross negative shrink forward? XX% no LIFO then picture, run commentary, sequentially? rate is to or to mentioned

Yeah.

LIFO balance could So LIFO, in $XXX we actually P&L. what we XXXX, the through charges that is would we first, start said minimal XQ on certainly any anticipate to million if the down, that, FY into see means gains quarter burn and we by potentially and which fourth take

will current barring frankly, what we work we our back possibly and expecting I what mentioned transparent past, have It such, back and charges any before, on based seeing quite see to as seeing this us several we take forecast the for seen freight in disruptions we about as to way be But through us fiscal our like again, this moderate. very to of will half not take million we in are gains. $XXX that quarters confidence, any are And gives flipping is are today. year, us the

that and we of put, to gross going it, XX basis business said rate, faster forward. going headwind commercial have let’s points of to margins margin business to on our grow than that’s our basis gross DIY our XX going run is call terms our points In

Now the expect can that doesn’t margins to gross perpetuity. mean you that in deteriorate our

will to some running not company inside We drive all are it. with mute same of margin offset still intensity that the the play of if that, improvement

initiatives. good feel about So pretty we those

but in-stocks, only mentioned Bill not driving are Our and a on chain merchants supply improvement. our margin job, teams tremendous doing before, as working

the the suppliers on it pressures in ease and fulsome some been way and work forward. that us our margins as the some pressures to of going cost more opportunity And have gives of cost an a vendors seeing, marketplace go in

Got it. time. Thanks the for

Yeah.

Ciccarelli is Scot Truist Your Securities. for today from next question coming at

had a to for on I somewhat. guys. for know moderate SKU quick think just question said have of inflation going the outlook same it’s your you rest Hi, I the year. you

Just get that or digits mid-single wondering range? like the do single-digit low you to think would

it our wish seems just I and I in we great am sure a many that. just pushes economy like like answer manage cost are pulls That’s that have. assessment, Yeah. a through right I can answer. could to now with just the That but we not going so question. There’s reasonable we

are our We months XX have gone the last just going and business big over through to some whether going or we pretty we it. through to it’s X% cycles manage manage appropriately, X%, are

of that that mentioned again or earlier there transactions I question, That second offset continue makes Do not of ticket quarter could you. know might Got think to really is on any points accelerated you think data it you you of half? the just in kind an some of happen follow-up a kind of and the kind that, happen a the lot then And decel. sense. in that

We grow challenges goal I we related that’s want about a transactions. think to but that to that, grow I the talked we continue to that transactions. is reasonable assumption. our can to are hope --

we with growth. prepared both how mentioned long we believe the We focused that have share we last that and unit had in the to unit that’s and commercial our continuing years business retail three the the pleased are lifeblood are also on have market over of we we and years. term grow I growth the the and organization the are do grow gains last over we very over even in three remarks have on units been focused had very share we this unit after

Great. Thank you.

Thank you.

for Your Oppenheimer. next from is Brian coming today at question Nagel

morning. Hey, guys. Good

Brian. Hi,

morning. Good

have bit of follow-up to respect the prior a growth, growth a it’s with regard question, a a there while. for commercial first -- seen with just question, my So we substantial but to

longer that move healthy. how do think you pandemic, that how the rates but and effects you about trajectory you growth -- stayed markets business? insight share the a the always that mature of growth give into perspective question maybe growth AutoZone, term from As closer the rate or I some terminal very type at market either are for look you more do for still is past if to commercial more the they of guess moderated, a

commercial pandemic. be in There’s believe business in result growth Well, vast DIY a the the mainly was terrific question. of to three over the business years about the of that last our to the don’t was seen have we no growth clear thing. the The want I I outside majority attributable pandemic. one questions.

positive strategy of began I don’t about we have commercial. But think effects. some the the case deploy performance. sure am four think been really our I what that that ago driver I years to it with had was the commercial --

growing seen we in on further it’s It’s we but mature growth. continue our and to some Now strategy, in further have deceleration commercial still not that as fantastic, the XXs.

that is are on What we going continue and in commercial are grow to goal we to the are as levers speak. to business? the what’s Our we that even next pull now next working

in Now just retail a or business total share reminder, we X% about have got commercial the market have XX% market the mid-teens about and business. share in we

got have we runway front a in So of us. tremendous

our encouraging have certain we the to me and are the been what acceleration how the we across see regions is say markets see, about I certainly to thing some talk you When than has broad-based have mature States. we in others. markets XX would most United that do that more

coverage it that not mature to mega-hub it tell is. going And But to last am I rates. market, significant and rapid arguably where you hub I has coverage our in grow in that continue we was and at market significant week, very has most a market

particularly as -- have have optimistic, so mega-hubs I a we XX am so strategy still And of over little roughly mega-hubs, we deploy today. to continue we the

order hub to are get and stores. We XXX short hopefully, going are we going XXX, to and in to then

States biggest we our stores the have is United be in the historically. XXX part strategy. had So that me, To will of with than materially different that product assortments

that That’s I is, the very made been it you as you question in was winter, that a between weather that the seemed be you comments have that I comps guess, enough typical impacted? then been in mentioned comment. markets weather to different it. as spring quick I States harsh to at it a spread Yeah. prepared of and helpful. you think year, And appreciate the kind have impacted the topic, very, you type The follow-up, business, are those way versus it very your look less of as seeing variable which United across have this have those the much drive

once on winter have historically the my that. snow cold frankly, we we the But months as been the on failure subsides. just of a not where winter we put stress see next over and much in the the spring, months or and to what we that I side and Yeah. failures parts mean, the maintenance see that the summertime side. was, six we the do all It’s we didn’t business just ice years always point just it’s have don’t eight where it’s through and and automobiles see generally

at. So that’s really what getting I was

see a while crawl massive tax right the are our weather, haven’t customers great year worry about are so. I bit during I so right caution a surge need now. little weather We that have one about we to more I underneath their now. rebates rebates these talked week flowing, of discretionary get cars, time last The the had have or in flowing dollars. that bit thing can when DIYers some this tax is, a because good of we do

you. Got helpful. Thank it. Very

Yeah. you. Thank

Thanks.

today Your from Simeon next Morgan is for question at Gutman coming Stanley.

to just cycle tailwind good of used on way for to cars assess landing? is guess kind a that do used guys be car a point become quarter. of where Congrats at any car Is some I on seems ongoing cycle Jackie just industry. in and Hi. that fleet lapping for This Sussman older higher the a we the this Simeon. an expect mix you there or this are on softer or I guess, first, challenge

Yeah.

in still are and are cars tight supply used clearly, prices So, up.

a XX% two-year prices a moderate We but over bit still or so have up basis. year-over-year, seen they little are

dynamic think associated fairly as up costs with second I have gone is, that the fact the significantly well. that financing

So whether have rates significantly interest new more used, financing got have expensive. a vehicle, or it’s you made that

a of in consumer their that, invest of consumers we used conditions when tend tougher I think longer, vehicles be certainly is car the tremendous under think have going pressure, prices spike, that’s whether on vehicles a cycle and repairing the and they those new what those to and two it’s seen the case. to where pressure on recessionary to cycle and it’s side ride market other puts historically hang to dynamics combination we or that the is

quite significantly see So while experience out a market expensive down, consumers pandemic. the that’s more we a that’s the prices have tight and very market there still come today, prior frankly, to what than

mentioned in efficiencies of on And model of you are an the wage as the that or and your you higher fulfillment as there feels have like pressure, cost inflation, on you it structurally guess, stubborn cost to that result helpful. business seems a as within quickly, think offset? about focus I most really way just labor that prepared That’s could it. the Is Thanks. the kind another the Got remarks.

of amplify business normally that rates question no than stick up what that structurally the and just double, to are are wage There’s point, I this they want I to our are your make And inflation. double higher. ribs doing is cost sure more

pandemic up with more. once will to level, the but it on But had years, be It going been hit, forever. for before the significantly this we went going continue. and pandemic us at five acceleration it’s that’s And not

to able But manage it. been we have

kind like but more for, efficient. haven’t ways time. We drive that level which at are But some in of efficiency we will this looking we change, structural for to be of a always without identified more looking business creative be XX-year-old and in point can’t we

being to an push an we in for macro where increasing market regulatory the his think if rates a raise wage standpoint, at the from pressures, with the is I is in future. look and plan which in environment a being minimum rates, combination, -- unemployment in or just the said on pressures are so mean wage this that combination I Bill to remarks, you of have at five we handle them, X.X% a and dynamic And as

all. typically inflationary passing costs expect we of as I very to it’s relative be mean, industry have product good we The those have whether business consumers wages this about seen is about that, it’s for that impacts, at and news, our that the products, again, disciplined is industry not we it’s given demand or freight, to cause seen bread or inelasticity an our wobble our the and butter along to cost

for question at coming David next Bellinger Your Roth MKM. today from is

question. morning. for the taking Thanks Good Hey.

the it, now, one seeing do the the QX lower in happening First also that’s unique customer with period? you the income or, is think you discretionary was sequential there call as categories. anything within base across are well? occurring on Why improvement discretionary improvement differences meaning your lowest demographics, And

consumers. also of across Yeah. fix/failure, end sort that, that’s again, both upper the consumers, if butter will categories. I lion’s our our categories, you our is or business, brake total maintenance been mean what we bread related seen in of have but resilient because has and remarkably our business share And lower income the

along knock that The to to and that folks ride purchases effect butter basket bread are extent for making that those you with the if discretionary built. that on tend will, the the products gets is as of then categories

that regard. we been in So fortunate have

thing our is have and I more initiatives purchase AutoZone. to actually driving customers to we the fact initiatives and other want underestimate I that on the about our underscore, And want been growth that, for are focused occasions more don’t and very growth

that, us market of some for to win the And we result as to continue seeing are a share. opportunity

from in that more impact the into customers things growth of So some of to doing we some been a the traffic are that you drive is improvement sequential seeing of initiative that store. actually our have

before of have where of sense a on do Thanks, commercial, Jamere. And markets market you in highlighted you tracking more some share follow-up should are and mature path programs time? in to in we a my terms the market and as to of share the about in X% these get can this point digits where due at that double potentially newer think the

Yeah.

But X% that We that of I whatever retail, I are of. we need my thing and definitely or commercial think that aware would not am if in the in have double that’s are digits share at have. kind to is we look, in thought in XX% kind can’t we have we markets any of in ballpark. why process maybe

it think we where are I of sometimes about what our challenges one think about we limits the is, and we think possibilities.

We share don’t have in we meaningfully commercial business larger some and are than trying the same the retail mean of glass to business? amount be ceilings, which eliminate why say, of would those both, the would

increasing what good at Bill’s entitlement fair for focused on point, is we it the existing or but customers, And company a customers. as new our news believe what our should getting is of us And be. with share it’s to share not our where are wallet our just that’s we focused

forward. initiatives excited going We those are about pretty

you. Thank Great.

Thank you.

Your today for next from UBS. is question Lasser at coming Michael

for lot our morning. a questions. Good taking Maheswari Lasser. Thanks Atul for on Michael is This

first is to doing business, the in you regularly when to growing commercial XX%. question last XX%-plus XX% compared The year, to on were now

is fewer customer? ticket what So changed, or has it less new customer additions per just

of but what’s think, more, have before, made part not Well, that changed is some on matured they I are commercial the strategy new have massive we our think, I our of as said in from improvements I acceleration -- mature.

with are also I they we accelerated strategy, growth the next of for last months. way, just going we our I to over as so -- this say the said, are growth. the in And items are part we And are drive would that looking it experienced very commercial six are those next have we that pleased

Yeah.

We the growing that would not progress. market share. I are is on are market we we I and venture as to commercial market mean, are the is say to win are growing, with which fast continuing pleased growing that that to knock share as we our

well? near-term how potentially Thank tax you quick but some are data are that. headwinds for as there’s sense. thinking follow-up, makes about of lower talked It And tax it. then you about as trends from know given refunds and that I some then Snap source the refunds, Got a you year-over-year

have available shows we I are our to they big the refunds we think are never data business. Snap. us don’t part remarkably driver and have a last that Look, tax way Yeah. that that’s were slightly year talked up. to for about The similar

that it on happened on see at drop big usually Mondays as tax a was drops the out comes it and week. last We where refunds. last we year data, look big Last week was

track, everything conducive we those we we that concerned, get are are very us. come that far weather and as DIY that’s see customers to on some as hoping great So to we

to luck year. the the of Good you. Thank rest

Thank you very much.

Thanks.

conclude… we before Well,

next Your question…

thought I will were -- I Sorry, ahead. you go

to I and call, take to a is to reiterate, the will XXXX conclude our working. we our solid we year a model continue industry Before moment for business want be believe

granted shopping as we alternatives our to with for customers us. must We have nothing understand take

and exciting want sprint. help plans have to but that that stress us should marathon succeed future, this a I not We the for a is

we As participating you continue for continue for basics and call. in optimize confident today’s will to day. value the Have future, to focus AutoZone on are be Thank the to a strive we shareholder successful. great

This today’s concludes conference.

lines this your your at disconnect may you time. participation. for You Thank