AutoZone Results Top Expectations
September 22 2015 - 8:20AM
Dow Jones News
AutoZone Inc. said profit in its latest quarter rose a
better-than-expected 7.4% as sales grew and the company made
strides to improve inventory.
For the Memphis, Tenn., replacement-part retailer, sales at
stores open at least a year rose 4.5%. During the period, AutoZone
opened 72 new stores, bringing its tally to 5,141 shops.
The company has worked on inventory availability initiatives,
including the opening of mega hub locations, and on Tuesday Chief
Executive Bill Rhodes said the testing of those initiatives has
concluded. AutoZone will begin implementing its new supply chain
strategy and complete it in a few years, Mr. Rhodes said.
In the latest period, inventory per store increased 4.8% from a
year earlier, while overall inventory jumped 9% because of
increased product placement, new stores and last year's acquisition
of import-parts distributor Interamerican Motor Corporation.
Despite higher costs stemming from infrastructure investments,
AutoZone's gross margin edged up modestly to 52.5% from 52.3% a
year earlier. Deutsche Bank analyst Mike Baker noted this week that
the company's margins had been down in four of the last six
quarters leading up to the most recent period, as the company has
invested in needed infrastructure improvements around delivery
frequency and parts coverage.
In all, the company reported a profit of $401.1 million, or
$12.75 a share, up from $373.7 million, or $11.28 a share, a year
earlier. Revenue grew 7.9% to $3.29 billion.
Analysts projected $12.69 in per-share profit of $3.25 billion
in sales, according to Thomson Reuters.
Shares in the company, up about 18% this year, were inactive
premarket.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
September 22, 2015 08:05 ET (12:05 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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