AutoZone accelerates, Advance Auto stalls
Consumer Discretionary
Northcoast’s latest Auto Parts Price Tracker shows that AZO has taken significantly more aggressive pricing actions than its competitors. By raising prices earlier, AZO may be positioning itself to absorb future tariff-related costs more effectively, limiting the impact on its margins over time. In contrast, AAP does not appear to be taking full advantage of this pricing environment. Not only has it refrained from meaningfully increasing prices, but it has also decreased prices in some categories, despite macro conditions that would typically encourage companies to maintain or raise prices. Northcoast believes this reflects the company’s ongoing struggle to better align its purchasing and pricing strategies. This cautious approach may be limiting its ability to expand margins at a time when passing through higher costs could be both justified and beneficial to the bottom line.
Edition: 210
- 02 May, 2025
Consumer Discretionary
Mar-Apr sales trends are weaker than the Feb-Mar trends, according to Verbatim’s latest channel checks. Overall 3Q24 QTD trends are also weaker than 2Q24 trends. Both DIFM and DIY trends have weakened significantly. Unfavourable weather, rising prices, a weak economy and increased competition are the primary factors contributing to a decline in both Traffic and Ticket levels. Survey feedback also highlights challenges faced by ACDelco brand products due to ongoing labour disputes. Based on weaker trends and an easy multi-year comparison, Verbatim applies a bias factor of negative 250 bps in the current period. With a Mar-Apr Raw Comp of +1.5%, their Mar-Apr Comp Estimate is -1.0%. Their 3Q24 QTD Comp estimate is +0.8%.
Edition: 184
- 19 April, 2024