Jump to content

  • Welcome to Auto Parts Forum

    Whether you are a veteran automotive parts guru or just someone looking for some quick auto parts advice, register today and start a new topic in our forum. Registration is free and you can even sign up with social network platforms such as Facebook, X, and LinkedIn. 

     

AutoZone: DIFM Strength Drives 16% Sales Jump In Fiscal Q1


Recommended Posts

Posted

AutoZone reported net sales of $3.7 billion for its first quarter of fiscal-year 2022, a year-over-year increase of 16.3%.

Domestic same-store sales for the quarter, which ended Nov. 20, were up 13.6%.

AutoZone’s DIFM sales in the United States grew by a whopping 29.4% to $900 million – a first-quarter record for the company, according to CEO Bill Rhodes. Over the past four quarters, DIFM sales totaled $3.5 billion, a 27% increase compared to $2.8 billion over the four quarters before that.

During a Dec. 7 conference call with analysts, Rhodes attributed AutoZone’s DIFM strength to a number of factors, including the company’s addition of hub and megahub stores with expanded product assortments, technology investments, competitive pricing and improved delivery times.

“Many people want to understand what’s driving our tremendous sales growth in commercial,” Rhodes said during the call. “In short, it’s not one thing. It’s a whole host of key initiatives we’ve been working on for several years.”

DIFM revenue represented 25% of AutoZone’s total sales in the first quarter. Weekly domestic DIFM sales per store were up 25% to $14,400 – a company record – compared to $11,500 in the first quarter of fiscal-year 2021. According to CFO Jamere Jackson, AutoZone launched 32 new net commercial programs in its U.S. stores in the first quarter, bringing the total to 5,211 programs.

“The disciplined investments we’re making are helping us grow [market] share, and we’re making tremendous progress in growing our business in this highly fragmented portion of the market,” Jackson said during the call. “We now have a commercial program in approximately 86% of our domestic stores, and we’re focused on building our business with national, regional and local accounts.”

Jackson reiterated that AutoZone is “doubling down” on its megahub strategy. Megahub stores typically carry around 100,000 SKUs, and “drive tremendous sales lift inside the store box as well as serve as a fulfillment source for other stores,” Jackson said.

Currently, AutoZone has 62 megahub stores, and expects to open approximately 16 additional megahubs in fiscal-year 2022.

“The expansion of coverage and parts availability continues to deliver a meaningful sales lift to both our commercial and DIY businesses,” Jackson said. “And we’re testing greater density of megahubs to drive even stronger sales results. By leveraging sophisticated predictive analytics and machine learning, we’re expanding our market reach, driving closer proximity to our customers and improving our product availability and delivery times.”

During the conference call, Rhodes pointed out that the megahubs “continued to exceed our expectations.” While the company has publicly stated that its near-term goal is to establish 100 to 110 megahubs, senior executives believe “once we’re finished, we’ll be closer to 200 megahubs,” Rhodes added.

Still, Rhodes emphasized that megahubs are just one important element in AutoZone’s overall growth strategy.  

“A lot of people think that this success that we’re seeing in commercial is either driven by the megahubs or driven by pricing. And frankly, that’s not what we believe,” Rhodes explained. “We talked about it about four years ago that we were developing a new strategic plan for our commercial business, and it has a whole host of elements. Megahubs is a critical part of it. But don’t forget, we also refreshed the assortments in every single AutoZone store in the United States and put those assortments commercial-leaning forward.

“The megahubs are helping us a tremendous amount, but so is the Duralast brand. So is our sales floor. So is the engagement of our store managers and district managers.”

DIY Sales Up 9%

On the DIY side of the business, domestic sales were up 9% compared to the first quarter of fiscal 2021.

“The business has been remarkably resilient as we have gained and maintained over three points of market share since the start of the pandemic,” Jackson asserted during the conference call.

Jackson attributed the increase in DIY sales to a number of factors, including competitive pricing, improved product assortments and expanded product availability via the company’s growing network of hub and megahub stores.

“These dynamics, along with favorable macro trends and miles driven, a growing car parc and a challenging new- and used-car sales market for our customers, have continued to fuel sales momentum in DIY,” Jackson said. “And the execution of our AutoZoners who are taking care of our customers gives us a key competitive advantage.”

Regarding the widespread supply chain challenges in the automotive aftermarket and many other industries, Jackson noted that AutoZone’s in-stock positions are “still below where we would like them to be.” However, he company’s supply chain and merchandising teams “have made great progress in a challenging supply chain environment.”

“We’ve been able to navigate supply and logistics constraints, and have product available to meet our customer’s needs,” he added. “DIY has been a strong contributor to the growth of our company, and while comps are difficult because of our strong past performance, the fundamentals of our business remain strong.”

Rhodes touched on another potential challenge for the automotive aftermarket: inflation. In the first quarter, AutoZone saw a 4% year-over-year sales boost from inflation, while the company’s cost of goods was up around 2%.

“We believe both numbers will be higher in the second quarter as cost increases in many key merchandise categories continue to work their way through the system,” Rhodes added. “We could see mid-single-digit inflation in retails as rising raw-material pricing, labor and transportation costs are all impacting us and our suppliers. We have no way to say how long this will last, but our industry has been disciplined about pricing for decades and we expect that to continue.”

The post

link hidden, please login to view
appeared first on
link hidden, please login to view
.

link hidden, please login to view

Sell your car with CarBrain

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

  • Similar Topics

    • By Counterman
      link hidden, please login to view announced the promotions of two company vice presidents to senior vice presidents. Bailey Childress, vice president, merchandising, has been promoted to senior vice president, omnichannel and merchandising support, and Luke Rauch, vice president, merchandising, has been promoted to senior vice president, merchandising and global sourcing. Childress and Rauch will join the company’s Executive Committee and report to Bill Hackney, executive vice president, merchandising, marketing and supply chain.
      “We are very pleased to announce these promotions,” said Phil Daniele, president and CEO. “Bailey is a proven leader who has delivered outstanding results throughout his career at
      link hidden, please login to view. Luke is an experienced lead merchant who brings a remarkable track record of results across multiple industries to the role. Both are well-positioned to help AutoZone continue serving customers and driving accelerated growth for many years to come.” The post
      link hidden, please login to view appeared first on link hidden, please login to view.
      link hidden, please login to view
    • By AutoZone
      MEMPHIS, Tenn. , Dec. 19, 2024 (GLOBE NEWSWIRE) -- AutoZone, Inc. (NYSE: AZO) today announces two Senior Vice President promotions. Bailey Childress , Vice President, Merchandising, has been promoted to Senior Vice President, Omnichannel and Merchandising Support, and Luke Rauch , Vice President,
      link hidden, please login to view
    • By AutoZone
      MEMPHIS, Tenn. , Dec. 10, 2024 (GLOBE NEWSWIRE) -- AutoZone, Inc. (NYSE: AZO) today reported net sales of $4.3 billion for its first quarter (12 weeks) ended November 23, 2024 , an increase of 2.1% from the first quarter of fiscal 2024 (12 weeks). Same store sales, or sales for our domestic and
      link hidden, please login to view
    • By AutoZone
      MEMPHIS, Tenn. , Dec. 03, 2024 (GLOBE NEWSWIRE) -- AutoZone, Inc. (NYSE:AZO) announced it will hold its Annual Meeting of Stockholders on Wednesday, December 18, 2024 , at the J.R. Hyde III Store Support Center in Memphis, Tennessee . The meeting will begin at 9:00 a.m. (ET) .
      link hidden, please login to view
    • By Counterman
      Auto-Wares announced that Brian Burkett has been named the new director of sales. Burkett began his career as a delivery driver at the Auto Value location in Houghton Lake, Michigan, was later promoted to a salesperson role, and eventually, in 2017, he became district manager, according to Auto-Wares. Burkett’s promotion is a testament to his hard work, leadership and dedication, the company said.

      link hidden, please login to viewadded Burkett attended college career fairs, networked through the Young Automotive Networking Group (YANG), and continually refined his leadership skills, solidifying his impact on the team and the industry. Burkett was awarded several scholarships to support his growth, including the Leadership 2.0 and Heavy-Duty Leadership Scholarships through Northwood University. That growth led Burkett to the director of sales for Auto-Wares Group of Companies. Beyond his new role,
      link hidden, please login to viewsaid Burkett will continue serving as a Tech Expo committee member and lead the Customer Relationship Management program. The post
      link hidden, please login to view appeared first on link hidden, please login to view.
      link hidden, please login to view

×
  • Create New...