What could explain the persistent EPS surprises in AZO's reports?

The persistent EPS surprises in AutoZone's (AZO) reports can be attributed to several key factors: 1. **Strategic Expansion and Store Growth**: AutoZone has been actively expanding its store network and investing in new distribution centers. This strategic move has likely led to increased sales and potentially more efficient operations, which can positively impact EPS. 2. **International Sales Growth**: The company has reported strong international sales growth, with a 9.5% increase in same-store sales on a constant currency basis. This growth in international markets can contribute to higher EPS by increasing total revenue and potentially improving profitability. 3. **Gross Margin Improvement**: AutoZone has seen an improvement in gross profit margin, reaching 53.9% of sales in the latest quarter. This improvement, driven by higher merchandise margins and favorable supply chain costs, can lead to better EPS as a result of increased profitability. 4. **Operating Efficiency and Cost Management**: The company has been focusing on operational efficiency and effective cost management. This focus on managing expenses while maintaining revenue growth can lead to higher EPS by ensuring that the cost of operations does not erode profitability as much as it could. In conclusion, AutoZone's strategic expansion, strong international sales, improved gross margins, and effective cost management are likely contributing to the company's persistent EPS surprises. These factors, combined with robust revenue growth, have positioned AutoZone for future growth and profitability.