Advest Trims AutoZone Estimates

Analyst Derrick Irwin keeps the neutral rating on the car-parts retailer

Advest cut its estimates on AutoZone (AZO ).

Analyst Derrick Irwin says comp-store sales for the first seven weeks of the fourth quarter are down 1%, with retail sales down 3%. He thinks the retailer continues to lose market share to competitors. He says while a soft retail environment and mild weather may be at play, the key thing is that AutoZone is struggling with store-level execution.

He's concerned that past inventory reductions and cost-cutting steps at the store level have driven market share erosion that will take time to recover. He believes recent initiatives aren't gaining traction.

Irwin cut the $2.68 fourth-quarter EPS estimate to $2.54, cut the $6.70 fiscal 2004 (Aug.) estimate to $6.57, and cut the $7.56 fiscal 2005 estimate to $7.39.

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