AutoZone, Inc. (NYSE:AZO) Q1 2018 Earnings Conference Call Transcript

Dec 05, 2017 • 10:00 am ET

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AutoZone, Inc. (NYSE:AZO) Q1 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good morning and welcome to the AutoZone Conference Call. Your lines have been placed on listen-only until the question-and-answer session after conference. Please be advised that today's call is being recorded. If you object, you may disconnect at this time. This conference call will discuss AutoZone's first quarter earnings release. Bill Rhodes, the Company's Chairman, President and CEO, will be making a short presentation on the highlights of the quarter. The conference call will end promptly at 10 a.m. Central Time or 11 a.m. Eastern Time. Before Mr. Rhodes begins, the company has requested that you listen to the following statement regarding forward-looking statements.

Executive
Brian Campbell

(Forward-Looking Cautionary Statements)

Executive
Bill Rhodes

Good morning and thank you for joining us today for AutoZone's 2018 First Quarter Conference Call. With me today are Bill Giles, Executive Vice President, Chief Financial Officer; and Brian Campbell, Vice President, Treasurer, Investor Relations, and Tax. Regarding the first quarter, I hope you've had an opportunity to read our press release and learn about the quarter's results. If not, the press release along with slides complementing our comments today are available on our website, www.autozoneinc.com. Please click on Quarterly Earnings Conference Calls to see them. To begin this morning, I want to thank all AutoZoners across the Company for their tremendous efforts this past quarter. The quarter started out with Hurricane Harvey and finished up with five more natural disasters across North America causing our AutoZoners and customers living in those regions tremendous disruptions in their lives.

From hurricanes to earthquakes in Mexico to wildfires out west, we incurred cost and property damage in each one. While we were able to get back on our feet quickly with Hurricanes Harvey and Irma incurring minimal damage to our stores, Hurricane Maria hit our stores and customers hard in Puerto Rico. We have 43 stores in Puerto Rico and unfortunately, we still have several that are unable to open due to damage incurred. Our thoughts and prayers continue to go out to all the folks on the island for the horrible effects this storm has had on their lives. Our AutoZoners throughout the organization have responded incredibly well and swiftly so that we have been able to get the vast majority of our stores open very quickly following these disasters so our AutoZoners could service our customers when they needed us most. Our support for our AutoZoners and customers in Puerto Rico continues so we can aid them in their rebuilding efforts.

Now for the business results. Our business strengthened during the quarter with improved same-store sales results, including the acceleration in our domestic commercial sales. As mentioned in our press release, the natural disasters impact both our sales and earnings for the quarter. Following the storms, our sales benefited by an estimated 50 basis points to 60 basis points while we experienced costs and damages of $9 million resulting in a net negative estimated impact to EPS of $0.07. We were encouraged that our sales gained momentum from Q4, excluding the estimated disaster