Autozone FY 2Q16 Earnings Call Notes

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AutoZone’s (AZO) CEO Bill Rhodes on Q2 2016 Results

Did not see material change in business trends despite warmer weather

“While winter temperatures were milder this year than last, we did not see a material change in business trends from one month to the next overall. Yes, certain cold-weather categories, those that have larger sales during these months were below last year’s numbers while others balanced out our performance. And yes, as you would expect, our performance in the Midwest and Northeast were below other markets but they were in line with our expectations considering the weather patterns.”

Late tax refunds have an impact

“Probably the biggest unknown for us this quarter was when would income tax refunds begin to be remitted to consumers by the IRS. By quarter end, total refunds were generally comparable to remittances last year but they were issued very very late in our quarter. ”

Got to develop a new type of fastball

“I would say one big thing is a lot of our AutoZoners, myself included, grew up on the retail side of the business, we didn’t grow on the wholesale side of the business. And so to use a baseball analogy, our fastball is retail. Well, we’ve got to develop a fastball that’s also commercial and so we’re really focused on getting everybody in the organization taking our whole one team notion to the next level, and that includes getting our district managers and our store managers along with the sales team even more focused on growing the commercial business.”

Clearly low gas prices are good for us

“Clearly the economic cycle that we’re with lower gas prices which are leading to really really high miles driven is very favorable for us. Those same impacts, those same indicators should impact the commercial business but we believe at this stage in our commercial business development it’s much more on us and our development of that business than it is on economic matter of factors.”