Dec 09, 2020 (IAM Newswire via COMTEX) -- As governments across the globe commit to shortening the deadlines on banning the sale of ICE vehicles, and with manufacturers intensifying their electrification efforts to provide vehicles across all price ranges, electrification is indeed just around the corner.
Interest in EVs in the UK has skyrocketed up by 500%, while Europe sales have reached half a million units this year. The automotive industry is being radically reimagined as we speak and EVs are taking center stage. Tesla's /zigman2/quotes/203558040/composite TSLA -4.84% value topped $500 billion dollars as it will be finally admitted to the S&P 500 this month. Volkswagen /zigman2/quotes/204431732/composite VWAGY +5.31% has built the largest EV production plant in Europe. Moreover, the German giant started delivering its electric ID.3 in September and it became the best-selling electric vehicle on the continent already in October. Meanwhile, General Motor /zigman2/quotes/205226835/composite GM -2.66% and BMW /zigman2/quotes/200850296/composite BMWYY +4.13% are scaling up their electrification efforts and aiming even higher. Yet, due to their lower maintenance cost of these vehicles, we often forget about specialized equipment that is just as important.
Despite their lower maintenance costs, EVs will still need replacement parts. Autozone /zigman2/quotes/200304487/composite AZN -1.19% that just reported earnings already supplies several parts for Tesla's such as brake pads, windshield wipers, headlights, cabin air filters and mirror replacement glass, among others.
Autozone earned $18.61 a share from revenue that rose nearly 13% to $3.154 billion, exceeding analyst estimates of $17.82 and $3.147 billion respectively. Domestic same-store sales rose 12.3% in the first quarter after climbing 3.4% in the year-earlier period with 39 new store openings in the U.S. and two in Brazil during the quarter. But gross-profit margin narrowed down 62 basis points from last year. Gross margin shrank due to one-time factors such as the impact of the pandemic on costs and increase in loyalty rewards shopping by current customers. Although this feared investors as stock dropped after the report, COVID-related factors are already declining, and loyalty programs are always a good sign that customers are coming back. Operating expense as a percentage of sales reduced to 33.6% from 35.8% a year earlier. But the Memphis-based company will take a $50 million second-quarter charge to enhance employee benefits.
Most importantly, company has a long history of growing faster than its peers. Additionally, it has opportunities for continued domestic and international growth as well as a superior customer service that puts it ahead of titans such as Amazon /zigman2/quotes/210331248/composite AMZN -2.89% and Walmart /zigman2/quotes/207374728/composite WMT -1.94% . AutoZone has grown its revenue each year over the past 22 years. While it has the largest number of stores, its average store size is smaller than of its competitors O'Reilly Automotive /zigman2/quotes/207206119/composite ORLY +0.70% and Advance Auto Parts' /zigman2/quotes/202065737/composite AAP +0.60% stores. In this case, smaller seems to be better as Forbes reported AutoZone generates more revenue per square foot of store space than its two competitors. AutoZone's superior profitability is behind the consistent growth in core earnings. Over the past decade, the company has grown core earnings by 9% compounded annually.
Whatever the future holds, Autozone is positioned to benefit from rising used car sales and rising average age of cars on the road whereas Worksport's technology can enhance any pickup, the best-selling vehicle, and make it more sustainable with its solar technology. Moreover, during a recession, people are reluctant to make large purchases and are more likely to enhance their existing vehicles. Therefore, both companies are set to benefit from upcoming trends as the industry continues to evolve. We are entering an era which will be marked by one of the greatest and greenest technological advances in human history with a massive shift happening within the next few years.
This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure . IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: email@example.com Contributors – IAM Newswire accepts pitches. If you're interested in becoming an IAM journalist contact: firstname.lastname@example.org
The post Specialized Equipment Has a Role in Re-Imagining the Automotive Industry appeared first on IAM Newswire .
Is there a problem with this press release? Contact the source provider Comtex at email@example.com. You can also contact MarketWatch Customer Service via our Customer Center.