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AutoZone (AZO) Meets Q1 Earnings Estimates; Revenues Lag
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AutoZone, Inc. (AZO - Free Report) reported a 13% year-over-year surge in earnings per share to $9.36 for the first quarter (ended Nov 19, 2016) of fiscal 2017 from $8.29 recorded in the year-ago quarter. Earnings were in line with the Zacks Consensus Estimate of $9.36. Moreover, net income climbed 7.8% to $278.1 million from $258.1 million a year ago.
Quarterly revenues improved 3.4% year over year to $2.47 billion in the reported quarter. However, the figure lagged the Zacks Consensus Estimate of $2.49 billion. Domestic same-store sales (sales for stores open at least for one year) grew 1.6% in the quarter.
Gross profit rose to $1.30 billion (or 52.7% of sales) from $1.25 billion (or 52.5% of sales) in the prior-year quarter. The improvement was backed by lower acquisition costs, partially offset by elevated supply chain costs due to current-year inventory initiatives.
Operating profit improved to $458.9 million from $438 million in the first quarter of fiscal 2016. Operating expenses, as a percentage of sales, dropped to 34.1% from 34.2% a year ago. Expenses declined due to higher domestic store payroll in the reported quarter.
AutoZone opened 16 stores in the U.S. and five stores in Mexico. Additionally, it relocated two stores in the U.S. As of Nov 19, 2016, the company had 5,313 stores across 50 states, the District of Columbia and Puerto Rico in the U.S., 488 stores in Mexico, eight stores in Brazil and 26 Interamerican Motor Corporation (“IMC”) branches. Thus, the total store count was 5,835 as of that date.
AutoZone’s inventory grew 7.3% year over year in the quarter, driven by store openings and increased product placement. Inventory per store increased to $647,000 from the year-ago level of $624,000.
Share Repurchases
In the first quarter of fiscal 2017, AutoZone repurchased 478,000 shares for $363 million, reflecting an average price of $759 per share. The company had shares worth $783 million left for repurchase at the end of the quarter.
Financial Details
AutoZone had cash and cash equivalents of $195.5 million as of Nov 19, 2016, up from $165.5 million as of Nov 21, 2015. Total debt amounted to $4.99 billion as of Nov 19, 2016, compared with $4.75 billion as of Nov 21, 2015. The company had a stockholders’ deficit of $1.89 billion as of Nov 19, 2016, up from $1.78 billion as of Nov 21, 2015.
During the first quarter of fiscal 2017, AutoZone generated net cash flow of $296.2 million before share repurchases and changes in debt, compared with $262 billion in the first quarter of fiscal 2016. Capital spending increased to $97.9 million from $86.7 million a year ago.
Price Performance
In the last three months, share price of AutoZone increased 5.31%, while the Zacks-categorized Retail/Wholesale-Auto Parts industry saw a 1.06% increase. The company benefitted from strong results in the first quarter of fiscal 2017as well as its focus on store expansion and aggressive share repurchases.
Zacks Rank & Key Picks
Currently, AutoZone carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the auto space include Allison Transmission Holdings, Inc. (ALSN - Free Report) , America's Car-Mart Inc. (CRMT - Free Report) and Rush Enterprises, Inc. (RUSHA - Free Report) .
Allison Transmission has a long-term growth rate of 11%.
America's Car-Mart has a long-term growth rate of 45.50%.
Rush Enterprises, carrying a Zacks Rank #2, has a long-term expected growth rate of 15%.
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AutoZone (AZO) Meets Q1 Earnings Estimates; Revenues Lag
AutoZone, Inc. (AZO - Free Report) reported a 13% year-over-year surge in earnings per share to $9.36 for the first quarter (ended Nov 19, 2016) of fiscal 2017 from $8.29 recorded in the year-ago quarter. Earnings were in line with the Zacks Consensus Estimate of $9.36. Moreover, net income climbed 7.8% to $278.1 million from $258.1 million a year ago.
Quarterly revenues improved 3.4% year over year to $2.47 billion in the reported quarter. However, the figure lagged the Zacks Consensus Estimate of $2.49 billion. Domestic same-store sales (sales for stores open at least for one year) grew 1.6% in the quarter.
Gross profit rose to $1.30 billion (or 52.7% of sales) from $1.25 billion (or 52.5% of sales) in the prior-year quarter. The improvement was backed by lower acquisition costs, partially offset by elevated supply chain costs due to current-year inventory initiatives.
Operating profit improved to $458.9 million from $438 million in the first quarter of fiscal 2016. Operating expenses, as a percentage of sales, dropped to 34.1% from 34.2% a year ago. Expenses declined due to higher domestic store payroll in the reported quarter.
AUTOZONE INC Price, Consensus and EPS Surprise
AUTOZONE INC Price, Consensus and EPS Surprise | AUTOZONE INC Quote
Store Opening & Inventory
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AutoZone opened 16 stores in the U.S. and five stores in Mexico. Additionally, it relocated two stores in the U.S. As of Nov 19, 2016, the company had 5,313 stores across 50 states, the District of Columbia and Puerto Rico in the U.S., 488 stores in Mexico, eight stores in Brazil and 26 Interamerican Motor Corporation (“IMC”) branches. Thus, the total store count was 5,835 as of that date.
AutoZone’s inventory grew 7.3% year over year in the quarter, driven by store openings and increased product placement. Inventory per store increased to $647,000 from the year-ago level of $624,000.
Share Repurchases
In the first quarter of fiscal 2017, AutoZone repurchased 478,000 shares for $363 million, reflecting an average price of $759 per share. The company had shares worth $783 million left for repurchase at the end of the quarter.
Financial Details
AutoZone had cash and cash equivalents of $195.5 million as of Nov 19, 2016, up from $165.5 million as of Nov 21, 2015. Total debt amounted to $4.99 billion as of Nov 19, 2016, compared with $4.75 billion as of Nov 21, 2015. The company had a stockholders’ deficit of $1.89 billion as of Nov 19, 2016, up from $1.78 billion as of Nov 21, 2015.
During the first quarter of fiscal 2017, AutoZone generated net cash flow of $296.2 million before share repurchases and changes in debt, compared with $262 billion in the first quarter of fiscal 2016. Capital spending increased to $97.9 million from $86.7 million a year ago.
Price Performance
In the last three months, share price of AutoZone increased 5.31%, while the Zacks-categorized Retail/Wholesale-Auto Parts industry saw a 1.06% increase. The company benefitted from strong results in the first quarter of fiscal 2017as well as its focus on store expansion and aggressive share repurchases.
Zacks Rank & Key Picks
Currently, AutoZone carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the auto space include Allison Transmission Holdings, Inc. (ALSN - Free Report) , America's Car-Mart Inc. (CRMT - Free Report) and Rush Enterprises, Inc. (RUSHA - Free Report) .
Both Allison Transmission and America's Car-Mart sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Allison Transmission has a long-term growth rate of 11%.
America's Car-Mart has a long-term growth rate of 45.50%.
Rush Enterprises, carrying a Zacks Rank #2, has a long-term expected growth rate of 15%.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>