AutoZone, Inc. (NYSE:AZO) Q1 2019 Earnings Conference Call Transcript

Dec 04, 2018 • 10:00 am ET

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AutoZone, Inc. (NYSE:AZO) Q1 2019 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 of the conference. Please be advised, today's call is being recorded. If you have any objections please 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, 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)

Operator
Operator

I would now like to hand it -- the call over to Mr. Bill Rhodes. Please go ahead.

Executive
William Rhodes

Good morning, and thank you for joining us today for AutoZone's 2019 first quarter conference call. With me today are Bill Giles, our EVP, CFO; and Brian Campbell, VP, Treasurer, IR and Tax. Regarding the first quarter, I hope you 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 during our first fiscal quarter. Their dedication and commitment to superior service resulted in a strong start to our new year. As we entered the quarter, we knew we had a difficult sales comparison due to the sales favorability we experienced last year from three significant widespread hurricanes. Last year we highlighted that our sales increased an additional 50 basis points to 60 basis points from the effects of those hurricanes. Unfortunately this fall, many people were also impacted by the two hurricanes that struck our shores and the terrible wildfires out west. While certain areas experienced significant damage, the effects of the storms weren't as widespread as last year and the impact on our business this year was negligible. Unfortunately, we have AutoZoners and customers who were severely impacted, and we've worked diligently to help them where possible.

Ultimately, considering the more challenging comparisons to last year, we were pleased with our same store sales growth of 2.7%. Regarding the cadence during the quarter, results were generally consistent except in the weeks and markets that we were lapping the hurricane events from last year. And the last week of our quarter was particularly strong as much of the country experienced the first major cold weather which accelerated our sales. Over time, weather effects normalized, but in certain weeks, it can have a meaningful impact on our sales.

We previously mentioned that our DIY market share gains were strong in the first half of last fiscal year and that growth materially subsided in the second half. Recently, our market share has continued to grow and improved slightly which we consider encouraging as we are lapping the large