AutoZone Beats, Profits Rise - Analyst Blog
04 Dezembro 2012 - 10:57AM
Zacks
AutoZone Inc. (AZO) reported a 15.6% rise in
earnings per share to $5.41 in the fiscal first quarter ended
November 17, 2012 from $4.68 in the year-ago quarter. Net income
went up 6.4% to $203.5 million from $191.1 million in the year-ago
quarter. With this, profits in the quarter surpassed the Zacks
Consensus Estimate by a penny.
The company’s revenues for the quarter increased 3.5% to $1.99
billion, marginally missing the Zacks Consensus Estimate of $2.03
billion. Domestic same-store sales (sales for stores open at least
one year) increased 0.2% during the quarter compared with 4.6% a
year ago.
Gross profit increased 4.9% to $1.03 billion or 51.8% of sales from
$983.6 million or 51.1% in the year-ago quarter. The year-over-year
growth in margins was attributable to higher merchandise margins
(53 basis points) due to reduction in acquisition costs and shrink
expense.
Operating income climbed 6.6% to $363.3 million from $340.9 million
recorded in the first quarter of fiscal 2012. Operating expenses
increased 4% to $668.6 million or 33.6% of sales versus $642.7
million or 33.4% a year ago. The higher operating expenses were
attributable to higher store payroll, partially offset by lower
advertising expenses.
Store Opening and Inventory
AutoZone opened 19 new stores in the U.S, 4 new stores in Mexico
and expanded its footprint in Brazil with its first store. The
company also closed one of the stores in the U.S. As of November
17, 2012, the company had 4,703 stores in 49 states, the District
of Columbia and Puerto Rico in the U.S., 325 stores in Mexico and
one store in Brazil.
The company’s inventory grew 6.8% in the quarter, driven by new
store openings. Inventory per store increased marginally by 2.5% to
$537.0 thousand from $524.0 thousand in the corresponding quarter
of last year.
Share Repurchase
During the quarter, AutoZone repurchased 855 thousand shares for
$317.0 million, reflecting an average price of $371.0. The company
had $788.0 million worth of shares remaining for repurchase at the
end of the first quarter of fiscal year 2013.
Financial Details
AutoZone had cash and cash equivalents of $99.9 million as of
November 17, 2012, up from $96.7 million as of November 19, 2011.
Total debt amounted to $3.8 billion as of November 17, 2012
compared with $3.4 billion as of November 19, 2011. The company had
a stockholder deficit of $1.6 billion as of November 17, 2012, up
from $1.3 billion as of November 19, 2011.
During first quarter of fiscal year 2013, the company generated net
cash flow of $279.7 million before share repurchases and changes in
debt compared with $303.0 million in the first quarter of fiscal
2012. Capital spending increased to $80.4 million from $61.9
million in the first quarter of fiscal 2012.
Our Take
AutoZone is a leading retailer and distributor of automotive
replacement parts & accessories with stores located in the U.S.
and Mexico. The company is focused on aggressive share repurchase
program along with expansion of hub stores. However, rising gas
prices poses a threat to the company.
AutoZone, which competes with O’Reilly Automotive
Inc. (ORLY) and Advance Auto Parts Inc.
(AAP), maintains a Zacks #3 Rank, which translates into a
short-term (1 to 3 months) Hold rating. Currently, we have a
long-term (more than 6 months) Neutral recommendation on its
shares.
ADVANCE AUTO PT (AAP): Free Stock Analysis Report
AUTOZONE INC (AZO): Free Stock Analysis Report
O REILLY AUTO (ORLY): Free Stock Analysis Report
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