Autozone

Autozone’s CEO said the company had increased pricing due to inflation and “that following periods of higher inflation, our industry has historically not reduced pricing to reflect lower ultimate cost.” ”William C. Rhodes — Chairman, President and Chief Executive Officer, Customer Satisfaction: Let me also address inflation and pricing. This quarter, we saw our sales increase by 7.8% from inflation, in line with the cost of goods inflation, which was up similarly at 7.2% on a like-for-like basis. We believe both numbers for the fourth quarter could be slightly higher than this past quarter’s increases. As rising raw material pricing, labor and transportation costs are all impacting us and our suppliers, inflation has been prevalent in the aftermarket space. We have no way to say how long this will last, but our industry has been disciplined about pricing for decades, and we expect that to continue. It is also notable that following periods of higher inflation, our industry has historically not reduced pricing to reflect lower ultimate cost.” (Autozone Q3 2022 Earnings Call, 5/25/2022)

Autozone’s CFO: “inflation has been a little bit of our friend in terms of what we see in terms of retail pricing.”“Jamere Jackson — Chief Financial Officer: Yes. On the first part of your question, I mean, there’s no question, we’re seeing cost inflation in certain categories. We’re also seeing higher transportation costs. We’re seeing higher fuel costs. However, as we reiterated on the call, the industry pricing is rational, and we’re actually pricing to recover all of those inflationary impacts, just as we’ve done in the past. So you’ve seen us move retail prices up. As inflation has moved up mid-single digits, our pricing has moved. I think our entire industry has done that. And as I’ve said before, inflation has been a little bit of our friend in terms of what we see in terms of retail pricing.” (Autozone Q3 2022 Earnings Call, 5/25/2022)

Autozone’s CFO stressed they were running their “pricing playbook” and “we’re pricing our retails accordingly to make sure that we maintain our margin structure going forward.” “Jamere Jackson — Chief Financial Officer: Yes. If you look at diesel in particular, it’s up probably 50% versus a year ago. That does show up in our SG&A expenses. So as we’re running the cost playbook and we’re running our pricing playbook, we have to take all of those things into account. And as I said before, when we look at our business in total, and look at all of the inflationary impacts, we’re pricing our retails accordingly to make sure that we maintain our margin structure going forward.” (Autozone Q3 2022 Earnings Call, 5/25/2022)