AutoZone Q4 Profit Rises Amid Revenue Growth

(RTTNews) - Automotive parts retailer AutoZone, Inc. (AZO) Tuesday reported increased fourth-quarter profit, as revenues advanced nearly 8 percent with a 4.5 percent rise in domestic same store sales. Both earnings and revenues came ahead of Wall Street expectations.

Net income grew to $401.1 million from $373.7 million reported a year ago. Earnings per share rose to $12.75 from $11.28.

On average, 21 analysts polled by Thomson Reuters expected the company to report profit per share of $12.69 for the quarter. Analysts' estimates typically exclude special items.

Net sales rose 7.9 percent to $3.29 billion from last year's $3.05 billion. Analysts expected revenue of $3.25 billion for the quarter.

Domestic same store sales, or sales for stores open at least one year, increased 4.5 percent for the quarter.

Gross margin improved to 52.5 percent from 52.3 percent, attributable to higher merchandise margins. However, this was partially offset by higher supply chain costs associated with current year inventory initiatives, and the impact of the Interamerican Motor Corp. or IMC acquisition finalized during September 2014.

Operating expenses increased as a result of higher legal costs and the impact of IMC.

The company's inventory increased 9 percent from last year, driven by increased product placement, new stores during the fiscal year, and the acquisition of IMC.

Under its share repurchase program, AutoZone bought back 633 thousand shares of its common stock for $430 million during the quarter, at an average price of $680 per share.

During the quarter, AutoZone opened 72 new stores and relocated two stores in the U.S. The company opened 23 new stores in Mexico, and opened two new IMC branches.

As of August 29, the company had 5,141 stores in 49 states in the U.S., the District of Columbia and Puerto Rico, 441 stores in Mexico, 20 IMC branches, and seven stores in Brazil for a total count of 5,609.

AZO closed up 0.5 percent on Monday at $728.40.