) reported a 17.8% rise in earnings per share to $5.63 for the
second quarter of fiscal 2014 (ended Feb 15, 2014) from $4.78 in
the year-ago quarter. Earnings surpassed the Zacks Consensus
Estimate of $5.56. Net income went up 9.4% to $192.8 million from
$176.2 million in the year-ago quarter.
Quarterly revenues increased 7.3% year over year to $2
billion, surpassing the Zacks Consensus Estimate of $1.97
billion. Domestic same-store sales (sales for stores open at
least one year) increased 4.3% in the quarter.
Gross profit increased 7.8% to $1.04 billion, or 52.1% of
sales, from $962 million, or 51.9% of sales, in the year-ago
quarter. The year-over-year growth in margins was due to
increased merchandise margins and reduced shrink expense,
partially offset by the impact of the AutoAnything
Operating profit climbed 6.2% to $337.3 million from $317.6
million in the second quarter of fiscal 2013. Operating expenses
increased 11% to $699.7 million, or 35.2% of sales, versus $644.4
million, or 34.7% of sales, a year ago. The increase in operating
expenses, as a percentage of sales, was due to the timing of
Store Opening and Inventory
AutoZone opened 28 stores in the U.S. during the quarter. It
also opened 4 stores in Mexico. As of Feb 15, 2014, the company
had 4,871 stores in 49 states in the U.S., the District of
Columbia and Puerto Rico, 367 stores in Mexico and 4 stores in
AutoZone's inventory grew 12% in the quarter, driven by higher
store count and product placement. Inventory per store increased
8.3% to $589,000 from $544,000 in the corresponding quarter last
During the quarter, AutoZone repurchased 0.4 million shares
for $200 million, reflecting an average price of $495 per share.
The company had $727 million worth of shares remaining for
repurchase at the end of the second quarter.
AutoZone had cash and cash equivalents of $128.8 million as of
Feb 15, 2014, up from $115.5 million as of Feb 9, 2013. Total
debt amounted to $4.31 billion as of Feb 15, 2014, compared with
$4 billion as of Feb 9, 2013. The company had a stockholder
deficit of $1.71 billion as of Feb 15, 2014, up from $1.55
billion as of Feb 9, 2013.
During the first half of fiscal 2014, AutoZone generated net
cash flow of $354.4 million before share repurchases and changes
in debt compared with $285.3 million in the comparable period of
fiscal 2013. Capital spending decreased to $160 million from
$169.6 million in the first half of fiscal 2013.
AutoZone holds a Zacks Rank #2 (Buy). The company is a
prominent player in the automotive replacement parts and
accessories industry along with
Advance Auto Parts Inc.
O'Reilly Automotive Inc.
). While Advance Auto Parts holds a Zacks Rank #1 (Strong Buy),
O'Reilly Automotive and CarMax carry a Zacks Rank #2.
ADVANCE AUTO PT (AAP): Free Stock Analysis
AUTOZONE INC (AZO): Free Stock Analysis
CARMAX GP (CC) (KMX): Free Stock Analysis
O REILLY AUTO (ORLY): Free Stock Analysis
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