By Lisa Beilfuss
AutoZone Inc. said Tuesday that profit in its latest quarter
rose 8.4%, as sales and inventory grew and as the company continued
to repurchase shares.
"We continued to diligently work on our inventory availability
initiatives," and the "expanded hard parts inventory we have
deployed throughout our chain over the last year continues to be a
contributor to our sales success," said Chief Executive Bill
Rhodes.
The Memphis-based auto-parts retailer's sales rose 6.5%, even
while new car sales remain strong as the economy improves and
still-low interest rates along with cheaper gasoline spur demand
for new vehicles.
Auto-part sales increased 6.5% to $2.4 billion. Domestic
commercial sales, meanwhile, rose 11% to $452 million.
Inventory per store rose to $629,000 from $594,000 a store,
while overall inventory grew 10.7% because of increased product
placement, new stores and last year's acquisition of parts
distributor Interamerican Motor Corporation.
Sales at stores open at least a year rose 2.3%. During the
quarter, AutoZone opened 27 new shops in the U.S., seven in Mexico
and two in Brazil, bringing its tally to about 5,500 total
stores.
In all for the May quarter, AutoZone reported a profit of $309.1
million, or $9.57 a share, up from $285.2 million, or $8.46 a
share, a year earlier.
Revenue rose to $2.5 billion from $2.3 billion.
Analysts expected $9.52 in earnings per share and revenue of
$2.5 billion, according to Thomson Reuters.
Gross margin improved to 52.3% from 52%. The company said the
margin expansion was due to higher merchandise margins, partially
offset by the impact of the IMC purchase last September.
During the quarter, AutoZone bought back 763,000 shares for $515
million, more than what the company repurchased in the first half
of its business year.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
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