Market Minute: Tuesday Earnings Rundown: AZO, OLLI, GME

Let’s take a look at AutoZone (AZO) and Ollie’s Bargain Outlet (OLLI) out now, and preview GameStop (GME), which reports after the close. 

AutoZone (AZO), which sells car parts, is lower premarket after missing on the top and bottom line for 1Q25. GAAP EPS was $32.52, while revenue was $4.28 billion. The stock hit an all-time high of $3,345.28 just yesterday and is still up over 25% year-to-date. Same-store sales were up 1.8%, though inventory rose 8.7%. The company bought back 160K shares for $505.2 million in the quarter. 

AutoZone benefitted from the pandemic – a 5-year chart is basically straight line higher – when the difficulty in constructing new cars led to a surge in used car sales and repairs, a trend that has continued as interest rates remain high and large purchases remain out of many consumers’ reach. Though investors could take this miss as the first rumbles of an oncoming storm, AutoZone’s CEO says DIY customers are strengthening, with average ticket higher, and international business is solid. 

Ollie’s Bargain Outlet (OLLI) is a discount retailer chain that’s much smaller than TJX (TJX), but still growing – the company opened 24 new stores in 3Q. The stock is up premarket after beating estimates with EPS of $0.58 and revenue of $517.4 million, though comparable sales fell 0.5%. Ollie’s announced that Eric Van der Valk, the President since June, will become CEO at the beginning of FY25. 

While Ollie’s is up around 30% year-to-date, the stock traded around these levels before, most recently in mid-2021 before a quarterly report sent shares tumbling. Investors should consider whether they believe in its story – while many network guests say that consumers are looking for bargains, Ollie’s has a number of competitors and despite consumers shifting towards e-commerce, hasn’t made its website browser-friendly.

GameStop (GME) reports 3Q after the close, with Benzinga estimating a loss of -$0.03 per share and revenue of $887.7 million. Meme traders may be especially excited for this report after “Roaring Kitty”, an influencer for and shareholder in the stock, posted cryptically for the first time in months. However, the current implied move is only about $3.5 dollars. 

Wedbush wrote a few days ago that shares are trading at a level that ignores the company’s issues. The damning note says that its growth plan faces “insurmountable barriers,” while the company has “no clear strategy to leverage its store base” and “management indirectly appears to be in the midst of closing down its core business.” If true, traders should be wary of playing hot potato with the stock. 

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