AutoZone Improves Top and Bottom Lines with More Stores, Inventory Rollouts
September 22 2016 - 8:15AM
Dow Jones News
By Anne Steele
AutoZone Inc. said profit grew 6.4% in the final quarter of its
fiscal year as the replacement-part retailer reported higher
revenue, propped up by new store openings.
Sales at domestic stores open at least a year rose 1% for the
Memphis, Tenn., company, which has been working to increase
inventory and selection in part by opening so-called mega hub
locations and making more frequent deliveries to stores.
On Thursday Chief Executive Bill Rhodes said the company's
ongoing inventory rollout "has gone very well" and will continue in
2017. Inventory per store climbed 2.5% from a year ago, while
overall inventory increased 6.1%, thanks to new store openings and
increased product placement.
In the latest period, AutoZone opened 71 new stores and
relocated two stores in the U.S., bringing its total to 5,297.
In all for the August quarter, AutoZone reported a profit of
$426.8 million, or $14.30 a share, up from $401.1 million, or
$12.75 a share, a year earlier. Revenue climbed 3.3% to $3.4
billion.
Analysts polled by Thomson Reuters had projected profit of
$14.25 a share on $3.43 billion in sales.
Gross margin edged up to 52.8% from 52.5% a year earlier, as
lower acquisition costs were partly offset by higher supply chain
costs associated with the inventory initiatives.
Shares, inactive premarket, have risen 1.3% so far this
year.
Last month, rival Advance Auto Parts Inc. posted a
worse-than-anticipated decline in profit in its latest quarter as
weak same-store sales continued to drag on the top line.
Write to Anne Steele at Anne.Steele@wsj.com
(END) Dow Jones Newswires
September 22, 2016 08:00 ET (12:00 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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