AutoZone Q4 Profit Rises Amid Sales Growth

(RTTNews) - Automotive retailer AutoZone, Inc. (AZO) Wednesday reported higher profit and sales for the fourth quarter, while its same store sales performance turned out to be below the company's expectations.

Net income increased to $371.2 million from $323.73 million. Earnings per share climbed to $10.42 from $8.46.

The quarter ended August 31, 2013 included 17 weeks while last year's quarter had 16 weeks. Excluding the additional week, net income was $347.8 million or $9.76 per share.

On average, 19 analysts polled by Thomson Reuters expected earnings of $10.34 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales increased to $3.095 billion from $2.764 billion. Wall Street expected sales of $3.09 billion. Excluding sales from the additional week included in this year's quarter, sales rose 5.6 percent to $2.918 billion. Domestic same store sales or sales for stores open at least one year, increased 1 percent for the quarter.

Bill Rhodes, chairman, president and CEO, said, ''...We are pleased to report our twenty-eighth consecutive quarter of double digit growth in earnings per share...While our same store sales performance was below our expectations for the quarter, we believe the initiatives we have in place will lead to improved sales in both Retail and Commercial in 2014.''

Gross margin was 51.8 percent, flat with last year. According to the company, lower acquisition costs led to gross margin improvements that were partly offset by the inclusion of the recent acquisition of AutoAnything.

Under its share repurchase program, during the fourth quarter, AutoZone bought back 1.3 million shares of its common stock for $560 million, at an average price of $428 per share.

The company's inventory increased 8.9 percent, driven primarily by strategic hard parts additions along with new store openings. Inventory per store was $550 thousand versus $525 thousand last year.

During the quarter, AutoZone opened 69 stores in the U.S., 21 stores in Mexico, and two stores in Brazil. As of August 31, the company had 4,836 stores in 49 states, the District of Columbia and Puerto Rico in the U.S.

The retailer's net income for the year increased to $1.016 billion from $930.37 billion in the previous year, while annual sales climbed to $9.148 billion from $8.604 billion. Domestic same store sales were flat for the year.

AZO closed at $414.31 on Tuesday.