December 7, 2016, 12:12 PM

AutoZone’s online sales fall in latest quarter, but omnichannel orders drive growth

Online orders picked up in stores are “growing rapidly,” CEO Bill Rhodes tells analysts.

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AutoZone Inc.’s sales from customers who order online and pick up in the store are rising, but the company is struggling with online sales shipped directly to consumers, CEO Bill Rhodes said Tuesday in a conference call with analysts.

The company reported online sales were down 4.2% for the fiscal first quarter of 2017, which ended Nov. 19. But that decrease reflected only online orders shipped directly to consumers. Online purchases picked up in stores are recorded in-store sales, and growth of those online orders helped grow the company’s total sales for the period by 3.3%.

“While our (online order,) pickup-in-store business continues to thrive and is growing rapidly, our ship-to-home businesses were softer than last year,” Rhodes said, according to a Seeking Alpha transcript.

AutoZone is No. 103 in the Internet Retailer 2016 Top 500 Guide.

AutoZone sells the AllData brand diagnostic and repair software through AllData.com as well as automotive hard parts, maintenance items, accessories, and non-automotive products through Autozone.com. Via its Autoanything.com site, the company sells accessories, performance and replacement parts. Commercial customers can make purchases through AutozonePro.com and imcparts.net.   

“We see customers doing lots of research to learn about the products and how to do repairs,” Rhodes said. “While these (online) businesses are small for us at less than 5% of our total sales mix for the quarter, the omnichannel experience is important and we will continue to invest in our e-commerce platform.”

For fiscal Q1 ended Nov. 19, AutoZone reported:

  • Online sales of $78.3 million, down 4.2% from $81.7 million from the year-earlier quarter.
  • Net sales of $2.47 billion, an increase of 3.3% from the $2.39 billion.
  • Net income of $278.1 million, up 7.7% from $258.1 million.
  • Domestic commercial sales of $460.6 million, up 6.3% from $433.3 million.
  • Domestic same-store sales increased 1.6%. 
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