VOL. 127 | NO. 41 | Wednesday, February 29, 2012
AutoZone Reports Profit Up 12.7 Percent
By Andy Meek
Whenever Memphis-based auto parts retailer AutoZone Inc. has reported quarterly results in recent memory, the headline hasn’t really changed much. Just the numbers do.
And the company’s latest earnings show it’s still comfortably in the fast lane, with AutoZone posting its 22nd straight quarter of double-digit growth. For its just-ended second quarter through Feb. 11, AutoZone also posted its 13th straight quarter of more than 20 percent growth in earnings per share.
“We are optimistic and excited about the remainder of the year,” AutoZone chairman, CEO and president Bill Rhodes said during an earnings call with investors.
The company, which is the leading auto-parts retailer in the U.S., reported profit of $166.9 million Tuesday, Feb. 28, up $18.9 million or 12.7 percent over the same period last year. That’s basically the same growth rate the company’s profit experienced in its prior quarter, when it reported a $19 million increase.
Diluted earnings per share increased 24.4 percent to $4.15 per share from $3.34 per share in the year-ago quarter.
Domestic same-store sales – a key retail metric that measures growth at stores open at least one year and sets aside the growth coming from new store additions – increased 5.9 percent during the quarter. During the quarter, AutoZone opened 29 new stores in the U.S. and six new stores in Mexico.
As of Feb. 11, the company had 4,580 stores in 48 states, the District of Columbia and Puerto Rico in the U.S. and 287 stores in Mexico for a total store count of 4,867.
“We continued our focus on improving parts coverage; hiring, retaining and training the best automotive parts professionals; and growing our commercial business,” Rhodes said in a release about the company’s accomplishments during the quarter. “The commitment of our more than 65,000 AutoZoners to providing trustworthy advice is what sets our company apart, and it is their dedication to meeting and exceeding our customers’ needs that leads to our success.”
AutoZone paid $173 million to buy back 501,000 shares of its common stock during the second quarter at an average price of $345 per share. Mid-day Tuesday, AutoZone shares were trading above $370.
At the end of the second quarter, AutoZone had $486 million remaining under its current share repurchase authorization.
AutoZone chief financial officer Bill Giles pointed to rising gas prices as a headwind to the company’s sales potential, since a boost in prices at the pump drives down total miles driven among consumers.
Bright spots for the company’s business remain the age and size of the U.S. fleet on the road today. There are about 240 million vehicles that are on average 10.6 years old being driven today, according to Rhodes.
While technology advancements are resulting in longer lasting car parts, which theoretically would be a headwind for AutoZone, Rhodes added that “today’s new cars are tomorrow’s our kind of vehicle.”