AutoNation, the largest auto retailer in the US, has reported unit sales growth for the first time in 8 quarters. The company's CEO, Mike Jackson, attributed the growth to strong demand for used vehicles and increased consumer confidence. AutoNation's revenue for the quarter also exceeded expectations, driven by higher average selling prices. The company's stock price rose following the announcement. [ce3167d4]
Meanwhile, AutoZone, a major consumer stock, has seen significant growth due to the elevated average age of American cars, driving demand for auto parts. The average age of cars and light trucks in the United States has risen to a new record of 12.6 years in 2024. AutoZone operates 6,300 stores in the United States, 740 in Mexico, and 100 in Brazil. The company reported 3.5% higher total sales and same-store sales growth of 1.9% in the third quarter of its 2024 fiscal year. AutoZone is focusing on improving inventory distribution and expanding its footprint in the U.S. and internationally. The company does not pay a dividend but has a healthy balance sheet and substantial free cash flow used for stock buybacks. Analysts expect AutoZone to maintain elevated growth and project EPS growth of 15% this year. However, the current stock price may have gotten ahead of itself, making it less attractive from a risk/reward perspective. [cec102e9]
Demand for auto parts has risen due to limited inventory and high prices for new and used automobiles. AutoZone, along with O'Reilly and Napa, has experienced strong sales performance in the auto parts retail sector. The aging fleet of light vehicles in America has contributed to the rise in demand for brick-and-mortar retail space. The auto parts segment has been an outperformer for a few years running. [3f3a869a]
Advance Auto Parts Inc. is looking to reinvent itself this year, aiming to compete with rivals O’Reilly Automotive Inc. and AutoZone Inc. After reporting its first quarter earnings, Advance Auto Parts' shares have shown little change. The company's net operating cash flow improved to $2.6 million in the past quarter, indicating a more flexible financial position. Analysts at Evercore have boosted Advance Auto Parts' valuation to $78 a share. The company's forward P/E ratio looks reasonably attractive with expected EPS growth of 13.2% this year. Raymond James Associates increased its position in Advance Auto Parts by 24.1% this quarter. The company's short interest also contracted by 2.5% last month. [c2490310]