AutoZone's (AZO) Q4 Earnings Beat on Solid Comps Growth

AutoZone, Inc. AZO reported earnings of $30.93 per share for the fourth quarter of fiscal 2020 (ended Aug 29, 2020), up from the prior-year figure of $22.59. The bottom line also surpassed the Zacks Consensus Estimate of $24.74. Higher-than-expected comparable sales growth led to the outperformance. Net income rose 31% year over year to $740.5 million. Net sales also increased 14% year over year to $4,545.9 million. The top line also surpassed the Zacks Consensus Estimate of $4,047 million.

Domestic commercial sales totaled $975.6 million, up from $886.5 million recorded in the year-ago quarter. The metric also topped the consensus mark of $906 million. Domestic same-store sales (sales at stores open at least for a year) grew 21.8% year over year, comfortably surpassing the Zacks Consensus Estimate of 1.8%.

Gross profit increased to $2,412.9 million from the prior-year quarter’s $2,130 million on the back of higher sales. Operating profit also surged to $1,018 million from $780.7 million registered in the year-ago period.

AutoZone, Inc. Price, Consensus and EPS Surprise

AutoZone, Inc. Price, Consensus and EPS Surprise

AutoZone, Inc. price-consensus-eps-surprise-chart | AutoZone, Inc. Quote

Store Opening & Inventory

During the fiscal fourth quarter, AutoZone opened 49 stores in the United States, 11 in Mexico and five in Brazil. It exited the quarter with 5,885 stores in the United States, 621 in Mexico and 43 in Brazil. Total store count was 6,549 as of Aug 29, 2020.

AutoZone’s inventory improved 3.6% year over year for the reported quarter on store openings and increased product placement. At quarter-end, inventory per location was $683,000, up from the year-ago figure of $674,000.

Financials and Share Repurchases

AutoZone had cash and cash equivalents of $1,750.8 million as of May 9, 2020, up from $176.3 million on Aug 31, 2019. Total debt amounted to $5,513.4 million as of Aug 29, 2020, marking an increase from $5,206.3 million on Aug 31, 2019.

During the quarter, the company tapped brakes on the share buyback program amid the coronavirus crisis. For the fiscal 2020, AutoZone repurchased 826,000 shares for $930.9 million at an average price of $1,127 per share. The company has shares worth $796 million remaining in the current repurchase authorization.

AutoZone — whose peers include Advance Auto Parts AAP, CarMax KMX and O’Reilly Automotive Inc ORLY — currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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