AutoZone Q1: Same-Store Sales Up 1.8%, Domestic Sales +0.3%, EPS $32.52

AutoZone, Inc. (NYSE: AZO) reported net sales of $4.3 billion for its first quarter (12 weeks) ended November 23, 2024, representing a 2.1% increase compared to the same period in fiscal 2024. This growth was supported by the company’s efforts in both domestic and international markets. In terms of same-store sales, which reflect the performance of locations open for at least one year, domestic stores grew by 0.3%, while international stores saw a more significant increase of 1.0%, or 13.7% on a constant currency basis. Overall, total company same-store sales rose by 0.4%, with a constant currency growth of 1.8%.

The company’s gross profit margin for the quarter was 53.0%, marking a 16 basis point increase over the previous year, primarily driven by higher merchandise margins. However, operating expenses also rose, from 32.6% of sales in the prior year to 33.3% in the first quarter of fiscal 2025.

Operating profit decreased by 0.9%, coming in at $841.1 million. Net income for the quarter was $564.9 million, compared to $593.5 million during the same period in the previous year. Diluted earnings per share (EPS) were $32.52, slightly lower than the $32.55 reported in the prior year.

AutoZone continued its aggressive share repurchase strategy, buying back 160,000 shares of its common stock at an average price of $3,156 per share, totaling $505.2 million. Since the beginning of its repurchase program, the company has repurchased 155 million shares for a total of $37.5 billion. At the end of the quarter, AutoZone had $1.7 billion remaining under its current share repurchase authorization.

The company’s inventory increased by 8.7% year-over-year. On a per-store basis, net inventory (defined as merchandise inventory minus accounts payable) was negative $166,000, compared to negative $197,000 for the same period in 2023 and negative $163,000 in the previous quarter.

Phil Daniele, AutoZone’s President and CEO, expressed gratitude to the company’s workforce for their contributions, noting improvements in domestic DIY same-store sales, driven by both average ticket and traffic trends. He also highlighted a 3.2% growth in domestic commercial sales, as well as positive international performance, with same-store sales increasing nearly 14% in constant currency. Despite some headwinds due to foreign currency fluctuations, Daniele emphasized the company’s strong position for future growth, citing ongoing efforts to improve customer service and expand market share.

During the first quarter, AutoZone opened 23 new stores in the U.S., six in Mexico, and five in Brazil, bringing the total number of stores to 7,387, with 6,455 in the U.S., 800 in Mexico, and 132 in Brazil. The company remains focused on expanding its footprint, particularly in international markets.

AutoZone continues to be the leading retailer and distributor of automotive replacement parts and accessories in the Americas. The company operates an extensive product line for cars, trucks, and SUVs, including both new and remanufactured automotive parts, maintenance items, and accessories. AutoZone also has a commercial sales program that supplies parts and services to repair garages, service stations, fleet owners, and other businesses.

Additionally, AutoZone’s online platform, www.autozone.com, supports both consumer and commercial sales, while www.autozonepro.com serves its commercial customers. The company also offers the ALLDATA brand of automotive diagnostic and repair software through www.alldata.com, and provides product information for its Duralast-branded products via www.duralastparts.com.

On December 10, 2024, AutoZone hosted a conference call to discuss the company’s first-quarter results, with the call being available via webcast on AutoZone’s Investor Relations website. Investors could also participate by phone and listen to a replay of the call available until December 24, 2024.

AutoZone’s financial disclosures include non-GAAP measures, such as adjusted debt and EBITDAR, which provide additional insight into the company’s financial performance. The company’s management believes these measures are helpful for investors when assessing year-over-year operating results, although they should not be considered a replacement for GAAP metrics.

In terms of future outlook, AutoZone remains optimistic, despite the risks and uncertainties inherent in its business. These include challenges related to product demand, competition, changes in fuel prices, weather conditions, supply chain disruptions, and international expansion. The company’s forward-looking statements are based on management’s assessments of current conditions and anticipated future developments. However, these statements are subject to risks that could materially affect the company’s performance, as outlined in its filings with the Securities and Exchange Commission.

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