Summary
AutoZone Inc. reported solid financial performance for the twelve and twenty-four weeks ended February 11, 2012. Net sales saw an increase of 8.6% and 8.0% respectively, driven by a domestic same-store sales growth of 5.9% and 5.2%. This growth was attributed to both retail and commercial customers, with higher transaction values contributing significantly, partly due to product inflation and commodity price increases. Profitability also showed improvement, with diluted earnings per share increasing by 24.4% for the quarter and 24.1% year-to-date. This was supported by an improved gross margin primarily due to lower shrink expense. The company also continued its aggressive share repurchase program, returning significant capital to shareholders while managing its debt levels effectively, maintaining a healthy adjusted debt to EBITDAR ratio. Management noted that macroeconomic factors like high unemployment and consumers keeping their vehicles longer appear to be benefiting sales, while rising gas prices could pose a headwind.
Financial Highlights
47 data points| Revenue | $1.80B |
| Cost of Revenue | $877.85M |
| Gross Profit | $926.22M |
| SG&A Expenses | $625.56M |
| Operating Expenses | $625.56M |
| Operating Income | $300.65M |
| Interest Expense | $38.92M |
| Net Income | $166.93M |
| EPS (Basic) | $4.25 |
| EPS (Diluted) | $4.15 |
| Shares Outstanding (Basic) | 39.28M |
| Shares Outstanding (Diluted) | 40.24M |
Key Highlights
- 1Net sales increased by 8.6% to $1.804 billion for the twelve weeks ended February 11, 2012, compared to the prior year period.
- 2Domestic same-store sales grew by 5.9% for the twelve-week period, indicating strong performance in core markets.
- 3Diluted earnings per share rose by 24.4% to $4.15 for the twelve-week period, showcasing improved profitability.
- 4Gross profit margin improved to 51.3% from 50.9% due to lower shrink expense.
- 5Operating expenses as a percentage of net sales remained stable at 34.6% (12-week period), with higher self-insurance costs offset by leverage from sales volume.
- 6The company repurchased approximately $482.3 million of its common stock during the twenty-four week period ended February 11, 2012, demonstrating a commitment to returning capital to shareholders.
- 7Total debt increased to $3.43 billion, but the company maintained a healthy adjusted debt to EBITDAR ratio of 2.4:1, indicating effective leverage management.