AutoZone Q3 Profit Rises, Beats Estimates

(RTTNews) - Automotive parts retailer AutoZone, Inc. (AZO) Tuesday reported a higher third-quarter profit, as net sales rose about 6 percent, with 4 percent increase in same store sales. Earnings per share beat analysts' expectations, while revenues matched view.

For the 12 weeks ended May 10, 2014, the company posted net income of $285.16 million or $8.46 per share, up from $265.58 million or $7.27 per share in the same quarter last year.

On average, 21 analysts polled by Thomson Reuters expected the company to report earnings of $8.45 per share for the quarter. Analysts' estimates typically exclude special items.

The specialty retailer and distributor of automotive replacement parts said its quarterly net sales rose 6.2 percent to $2.34 billion from $2.21 billion in the prior-year quarter. Seventeen analysts had consensus revenue estimate of $2.34 billion for the quarter.

The company noted that its third-quarter sales performance was generally consistent with the second quarter. Domestic same store sales, or sales for stores open at least one year, increased 4 percent for the recent quarter.

Gross profit, as a percentage of sales, was 52 percent, compared to 51.8 percent a year ago. The improvement in gross margin was attributable to higher merchandise margins and lower shrink expense, partially offset by higher supply chain costs related to current year inventory initiatives, the firm said.

AutoZone repurchased 795 thousand shares of its common stock for $420 million during the third quarter, at an average price of $529 per share. At the end of the quarter, the company had $307 million remaining under its current share repurchase authorization.

During the quarter, AutoZone opened 30 new stores in the U.S., and seven new stores in Mexico.

At the end of the period, the company had 4,901 stores in 49 states, the District of Columbia and Puerto Rico in the U.S., 374 stores in Mexico, and four stores in Brazil for a total count of 5,279.

AZO closed on Friday at $540.90.