VOL. 133 | NO. 42 | Tuesday, February 27, 2018
AutoZone Selling 2 Businesses; Earnings Miss Street Forecasts
Daily News staff
Memphis-based AutoZone Inc. is selling two of its business segments: Interamerican Motor Corp., a distributor of replacement parts for imported vehicles, and AutoAnything, an online-only retailer that specializes in accessories, performance and replacement parts.
AutoZone is selling Interamerican Parts Corp. to New York-based Parts Authority. The Memphis-based auto parts retailer reported adjusted earnings of $4.23 per share. (Daily News File/Lance Murphey)
The two deals were announced Tuesday, Feb. 27, the same day the auto parts retailer reported quarterly earnings that came in significantly lower than Wall Street forecasts.
IMC is being sold to Lake Success, New York-based Parts Authority, one of the nation’s largest distributors of automotive and truck parts to the aftermarket auto parts industry. That transaction is expected to close in the coming weeks.
Los Angeles-based private equity firm Kingswood Capital Management LLC, meanwhile, acquired AutoAnything in an acquisition that has been completed.
Terms of the two sales were not disclosed.
In an earnings call Tuesday, AutoZone chairman, president and CEO Bill Rhodes said the two segments were "very small businesses overall" and weren't profitable, and that the sales would allow AutoZone to focus on its core business segments.
AutoZone closed on its acquisition of AutoAnything in 2013, making an initial cash payment of $115 million. Under the terms of the deal, AutoZone offered an additional $30 million in contingency payments if the online retailer met operating income targets, but the income missed those goals.
The following year, AutoZone purchased IMC from Wulf Gaertner Autoparts AG, Germany, for $75.7 million. At the time, IMC operated 17 locations. The company has since grown to 26 locations across nine states and is the second-largest distributor of original equipment import replacement parts in the United States.
AutoZone, which released its earnings before the start of trading Tuesday, reported fiscal second-quarter net income of $289.5 million, or $10.38 per share. Earnings, adjusted for pretax gains, were $4.23 per share.
The average estimate of eight analysts surveyed by Zacks Investment Research had been for earnings of $8.81 per share.
AutoZone posted revenue of $2.41 billion in the period, surpassing Street forecasts. Nine analysts surveyed by Zacks expected $2.39 billion.
AutoZone shares closed down 11 percent at $654.47. Shares had increased slightly more than 3 percent since the beginning of the year.
The Associated Press contributed to this article.