AutoZone Q4: Solid Sales Momentum, Weaker Margins, Reiterate Hold

AutoZone reported accelerated same-store sales growth in Q4, coupled with aggressive store expansion in the U.S., Mexico, and Brazil. Profitability showed considerable pressure. Most of the margin decline was due to transitory gross margin pressure, but operating expense growth could be a more persistent margin headwind. The long-term growth story remains on track. I estimate AZO stock to have a fair value of $4110.