AutoZone, Inc. stock research
FY2023 Q3
AutoZone (AZO) Gross Margin — Quarter Ended May 6, 2023
Revenue and gross profit both increased compared to the prior quarter and the same quarter last year. Gross margin improved slightly versus both periods, reflecting a favorable relationship between revenue growth and cost of revenue.
Gross margin takeaway
Quarter ended May 6, 2023 · FY2023 Q3
Revenue and gross profit both increased compared to the prior quarter and the same quarter last year. Gross margin improved slightly versus both periods, reflecting a favorable relationship between revenue growth and cost of revenue.
- The strongest observable margin driver is the improvement in gross margin relative to both the prior quarter and the year-ago quarter, as revenue grew faster than cost of revenue.
- Compared to the immediately preceding quarter, revenue and gross profit were higher, while cost of revenue also increased but at a slower pace, leading to a slightly improved gross margin. Versus the same quarter one year earlier, revenue and gross profit were higher, cost of revenue was higher, and gross margin improved.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
52.5%
Gross profit
$2.1B
Revenue
$4.1B
Cost of revenue
$1.9B
Quarter-over-quarter change
+0.2 pts
Year-over-year change
+0.6 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Feb 11, 2023 | $3.7B | $1.9B | $1.8B | 52.3% |
| May 6, 2023 | $4.1B | $2.1B | $1.9B | 52.5% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Feb 11, 2023
+0.2 pts
Year-over-year change
May 7, 2022
+0.6 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver is the improvement in gross margin relative to both the prior quarter and the year-ago quarter, as revenue grew faster than cost of revenue.
Compared to the immediately preceding quarter, revenue and gross profit were higher, while cost of revenue also increased but at a slower pace, leading to a slightly improved gross margin. Versus the same quarter one year earlier, revenue and gross profit were higher, cost of revenue was higher, and gross margin improved.
Monitor the trend in cost of revenue relative to revenue to see if the favorable margin improvement can be sustained.