AutoZone, Inc. (AZO) , the biggest auto parts retailer in the United States (for now), on Dec. 10 reported a larger-than-expected profit during the first quarter of fiscal 2013 as margins edged ahead and sales picked-up.
For the quarter ended November 23, the Memphis-based company said that revenue rose by 3.6 percent to $2.1 billion from $1.99 billion in last year’s quarter. Net income for the quarter totaled $218.09 million, or $6.29 per share, versus $203.45 million, or $5.41 per share, in the year prior quarter. The company has reported 29 straight quarter of double-digit earnings per share growth.
Wall Street was expecting earnings of $6.28 per share on revenue of $2.1 billion.
Gross profit as a percentage of sales was 51.9 percent, compared to 51.8 percent in Q1 fiscal 2012. At the same time, operating expenses were down by 10 basis points to 33.5 percent of sales, as the company shifted the timing of advertising expenditures.
Sales at stores open more than one year rose by 0.9 percent. An unseasonably cold October and storms in November help drive sales at places like AutoZone, as do-it-yourselfers cope with wear and tear brought on by bad weather. The storms that are blasting a wide swath of the eastern half of the U.S. in December could also provide a boon for sales in the current quarter.
AutoZone opened seven new domestic locations, one in Mexico and one in Brazil, the fourth largest auto market in the world and a country of strategic growth focus for AutoZone. All accounted for, AutoZone has more than 5,200 locations. The opening of new stores helped drive inventory higher by 9.1 percent in the quarter.
“Additionally, rolled out an exciting, new version of our electronic parts catalog, and we grew sales across our digital commerce businesses,” said Bill Rhodes, chairman, president and chief executive at AutoZone, in a statement this morning.
AutoZone will be bumped down to the number two position in the list of biggest U.S. auto parts retailers early in 2014 when Advance Auto Parts (AAP) completes its $2-billion acquisition of General Parts International Inc. That merger will create a retail giant with $9.2 billion in annual sales.
During the quarter, AutoZone repurchased 678,000 common shares for an aggregate amount of $292 million. The company still has $177 million left in a current buy-back plan.
Shares have cruised ahead by nearly 4 percent in Tuesday morning trading to $474.71. Shares have grown by about 33 percent so far in 2013 to all-time highs.