) 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.
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.
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.
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.
Advance Auto Parts Inc.
), 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
AUTOZONE INC (AZO): Free Stock Analysis
O REILLY AUTO (ORLY): Free Stock Analysis
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