In this segment from MarketFoolery, host Chris Hill and analysts Ron Gross and Emily Flippen kick the tires on AutoZone (NYSE:AZO), which just turned in a reasonably good quarter. On the one hand, it delivered decent same-store sales growth and beat on profits, but on the other, overall sales growth was anemic. However, Wall Street has been unimpressed -- the stock is basically flat for the year. Do its performance and outlook deserve more optimism?

A full transcript follows the video.

This video was recorded on Sept. 18, 2018.

Chris Hill: AutoZone's fourth quarter, eh. I mean, the same-store sales looked pretty good?

Ron Gross: I don't know. Overall sales up 1%. As close to zero as you can get without being zero. I would say a little bit anemic. But this is not that big of a growth business. As you said, same-store sales a little bit better at 2.2%. Profit beat expectations. Nothing wrong with that. Margins came in pretty good as a result of them selling to business units. They did have some higher merchandise margins. But, their supply chain costs offset that a bit. Overall margins looked fine. They brought back a ton of stock this year, over $1.5 billion worth of stock, at an average price of $664. The stock is currently at $728. As we sit here today, it looks like a good capital allocation strategy, good use of capital for them there.

Hill: Yeah, it's a good thing that they're good at buying back stock, because they do that a lot.

Gross: Yeah, and so far, it seems to be paying off.

Hill: Anything stick out to you, Emily?

Emily Flippen: What sticks out to me is that this stock, despite a relatively strong earnings, there's nothing glaringly red flag about the company. It's underperformed the market all year. I think it's interesting, they're taking shareholder-friendly actions, but I think the stock's only up about 4% so far year to date.

Gross: Actually, after today's hit, we might be closer to flat, or maybe just up 1% or so.

Hill: Putting aside what has happened over the past week in the Carolinas and in Virginia, isn't the environment in North America more favorable to companies that are in this business? We just seem to be experiencing more extreme weather, whether it's winter weather or -- cars are getting beaten up, I guess, is my point. It seems like we're in a better environment for businesses like AutoZone.

Gross: Yeah, it's kind of like a steady-eddy business. They have pockets of weakness here and there. The Rust Belt had been a little bit of a problem for them, but that seems to have firmed up over the summer. They're continuing to expand, 78 new stores in the quarter alone, now at over 5,600. It's a solid business, for sure. It's just not going to knock the cover off the ball like a high-tech stock would.

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