Auto Service World
News   May 23, 2012   by Auto Service World

U.S. News: AutoZone Third Quarter Same Store Sales Increase 3.9%

AutoZone, Inc. reported net sales of $2.1 billion for its third quarter ended May 5, 2012, an increase of 6.7% from the third quarter of fiscal 2011. Domestic U.S. same store sales, or sales for stores open at least one year, increased 3.9% for the quarter.

All figures in U.S. dollars.

Net income for the quarter increased $21.2 million, or 9.3%, over the same period last year to $248.6 million, while diluted earnings increased 18.6% to $6.28 per share from $5.29 per share in the year-ago quarter.

For the quarter, gross profit, as a percentage of sales, was 51.6% (versus 51.2% for last year’s quarter). The improvement in gross margin was primarily attributable to leveraging distribution costs due to higher sales (25 bps) and lower shrink expense. Operating expenses, as a percentage of sales, were flat to last year at 31.4%. During the quarter, operating expenses, as a percentage of sales, were favorably impacted by lower incentive compensation (31 bps), which was partially offset by higher self insurance costs (23 bps).

Under its share repurchase program, AutoZone repurchased 1.1 million shares of its common stock for $400 million during the third quarter, at an average price of $380 per share. At quarter end, the Company had $836 million remaining under its current share repurchase authorization.

The company’s inventory increased 5.5% over the same period last year, driven by an increase in store count and continued strategic investments in hard parts assortment. However, inventory per store was $536 thousand versus $527 thousand last year, an increase of 1.6%.

“We are pleased to announce another quarter of strong performance. This quarter marks our twenty third consecutive quarter of double digit growth in earnings per share. We remain committed to executing our 2012 operating theme of “1TEAM; Driving our Future.” We continued our focus on improving parts coverage; hiring, retaining, and training the best automotive parts professionals; and growing our Commercial business. This quarter we opened 121 new Commercial programs. I would like to thank all AutoZoners for their commitment to delivering superior customer service, which we believe remains a competitive advantage. Additionally, our return on invested capital on a trailing four-quarter basis reached another new all-time high at 32.7%. We remain committed to our disciplined approach of growing operating earnings while efficiently utilizing our capital,” said Bill Rhodes, chairman, president and chief executive officer.

During the quarter ended May 5, 2012, AutoZone opened 33 new stores and relocated three stores in the U.S. and opened 10 new stores in Mexico.

As of May 5, 2012, the company had 4,613 stores in 48 states, the District of Columbia and Puerto Rico in the U.S. and 297 stores in Mexico for a total store count of 4,910.

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