AutoZone, Inc. (NYSE:AZO) Q1 2023 Earnings Call Transcript

Mike Baker: Well, if I could ask one more, how about the opposite now? Gas prices, believe it or not, are now lower than they were prior to the Russia-Ukraine situation and essentially flat year-over-year. Historically, can you remind us how much relief does that provide to your customers? And can that help offset some of those pressures that you just talked about?

Bill Rhodes: For sure, Mike. No question about it. If you recall — you followed us for a year. So, one thing that we said that really does matter to our customer is gas prices, and particularly when they get over $4 a gallon. We’ve said that for the last 15 years, there just seems to be something special about that $4 a gallon. Obviously, we’re below that level now. But there’s a lot of puts and takes that are going on with the customer today. We’ve never seen this kind of combination. You got near double-digit inflation. You’ve got low-end wage inflation that’s up 5%, 6% across the marketplace. You’ve got gas prices that went up exponentially and then quickly came back down. So, we’re spending a lot of time looking at different stratus of our customer bases, particularly on the DIY side.

And while we see some people trading down into — on the good, better, best spectrum, we’re not seeing any significant moves at this point in time. But we’re obviously paying a lot of attention to it because these are kind of unprecedented underlying factors that are going into it.

Operator: And that is all the time we have for questions today. I would now like to turn the floor back to Mr. Bill Rhodes for closing remarks.

Bill Rhodes: Great. Thank you. Before we conclude the call, I want to take a moment to reiterate, we believe our industry is strong, and our business model in particular is solid. We will take nothing for granted as we understand our customers have alternatives to shopping with us. We have exciting plans that should help us succeed for the future. But I want to stress again that this is a marathon and not a sprint. As we continue to focus on the basics and strive to optimize shareholder value for the future, we are confident AutoZone will continue to be very successful. I want to wish everyone a happy and healthy holiday season. And thank you for participating in today’s call and for your interest in our company. Have a great day.

Operator: Thank you, ladies and gentlemen. This does conclude today’s conference call. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation.