AutoZone, Inc. stock research
FY2024 Q3
AutoZone (AZO) Gross Margin — Quarter Ended May 4, 2024
Revenue and gross profit both increased compared to the prior quarter and the same quarter last year, while cost of revenue also rose. Gross margin weakened slightly from the prior quarter but improved relative to the year-ago period.
Gross margin takeaway
Quarter ended May 4, 2024 · FY2024 Q3
Revenue and gross profit both increased compared to the prior quarter and the same quarter last year, while cost of revenue also rose. Gross margin weakened slightly from the prior quarter but improved relative to the year-ago period.
- The strongest observable margin driver is the relationship between revenue growth and cost of revenue growth; revenue increased more than cost of revenue compared to the year-ago quarter, supporting margin expansion.
- Compared to the prior quarter, gross margin was slightly lower despite higher revenue and gross profit, indicating that cost of revenue grew at a faster pace. Versus the same quarter last year, gross margin was higher, with revenue and gross profit both up and cost of revenue rising less proportionally.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
53.5%
Gross profit
$2.3B
Revenue
$4.2B
Cost of revenue
$2.0B
Quarter-over-quarter change
-0.4 pts
Year-over-year change
+1.0 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 |
|---|---|---|---|---|
| May 6, 2023 | $4.1B | $2.1B | $1.9B | 52.5% |
| Nov 18, 2023 | $4.2B | $2.2B | $2.0B | 52.8% |
| Feb 10, 2024 | $3.9B | $2.1B | $1.8B | 53.9% |
| May 4, 2024 | $4.2B | $2.3B | $2.0B | 53.5% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Feb 10, 2024
-0.4 pts
Year-over-year change
May 6, 2023
+1.0 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver is the relationship between revenue growth and cost of revenue growth; revenue increased more than cost of revenue compared to the year-ago quarter, supporting margin expansion.
Compared to the prior quarter, gross margin was slightly lower despite higher revenue and gross profit, indicating that cost of revenue grew at a faster pace. Versus the same quarter last year, gross margin was higher, with revenue and gross profit both up and cost of revenue rising less proportionally.
Monitor the trajectory of cost of revenue relative to revenue, as its faster growth in the current quarter versus the prior quarter pressured gross margin.