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AutoZone: gasoline prices hit auto parts industry

AutoZone noted that high gasoline prices affected its customers’ revenues and the auto parts industry in general.

During its fiscal year 2021, which ended on August 28, the average price per gallon of unleaded gasoline in the United States was $ 2.62, compared with $ 2.32 during fiscal year 2020.

In general, AutoZone believes that fluctuations in gasoline prices affect the level of disposable income of its customers.

With approximately 10 billion gallons of unleaded gasoline used each month in the United States, every dollar of pump decline brings about $ 10 billion of additional spending capacity for consumers each month.

Given the unpredictability of gasoline prices, AutoZone cannot predict whether gas prices will increase or decrease, nor can it predict how future changes in gasoline prices will affect your sales in future periods.

AutoZone

AutoZone also experienced continued and accelerating pressure on wages in the United States during fiscal 2021.

Some of this is attributed to regulatory changes in certain states and counties, while most of it is being driven by general market pressures and some specific actions recently taken by other retailers.

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Regulatory changes are expected to continue, as evidenced by areas that have passed laws to substantially increase employee wages over the next several years, but the company is still evaluating the extent to which these changes will affect its earnings growth in future periods. .

During fiscal 2021, failure and maintenance-related categories accounted for the majority of its sales mix, approximately 83% of total sales, and failure-related categories continue to make up its largest set of categories.

While the company has seen no fundamental changes to its category sales mix compared to previous years, its US stores continue to see a slight increase in the discretionary category sales mix compared to last year.

AutoZone estimates that the improvement in this sales category resulted from the pandemic, as many of its customers continue to have more time to work on discretionary projects.

 

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