Why AutoZone Stock Slumped This Week
Shares of AutoZone (NYSE: AZO) sank 13% this week, according to data from S&P Global Market Intelligence. The auto parts retailer was a massive winner over the past five years, only to fall back to earth in recent quarters due to slowing same-store sales growth.
AutoZone's stock is now down 32% from its highs, bringing its valuation much closer to its long-term average. Does that mean you should buy the stock?
As a mature business in the United States, AutoZone's revenue will be driven by per-store productivity, also known as same-store sales growth. Last quarter, same-store sales growth at its domestic locations was 4.1%, below Wall Street expectations. Gross margins also compressed, though that was due to a change in its accounting practices and had nothing to do with the underlying business.
Source Fool.com
