Summary
AutoZone Inc. (AZO) reported solid results for the twelve weeks ended November 17, 2012, demonstrating resilience in a challenging economic environment. The company achieved a 3.5% increase in net sales, reaching $1.99 billion, driven by the opening of new stores and growth in its commercial sales program, despite a modest 0.2% same-store sales increase domestically. This top-line growth translated into a notable 15.7% increase in diluted earnings per share, which reached $5.41, signaling effective operational management and margin expansion. Financially, AutoZone maintained a strong gross margin of 51.8%, up from 51.1% in the prior year, attributed to improved merchandise margins and lower shrink. While operating expenses as a percentage of sales saw a slight increase, primarily due to higher store payroll, the company continued to manage its capital effectively. Significant cash flow was generated from operations ($318.3 million), supporting investments in new store development and a substantial $317.3 million in share repurchases during the quarter. The company also strategically managed its debt, issuing $300 million in new senior notes and repaying existing debt, while maintaining a healthy debt-to-EBITDAR ratio.
Financial Highlights
49 data points| Revenue | $1.99B |
| Cost of Revenue | $959.17M |
| Gross Profit | $1.03B |
| SG&A Expenses | $668.59M |
| Operating Expenses | $668.59M |
| Operating Income | $363.28M |
| Interest Expense | $41.10M |
| Net Income | $203.45M |
| EPS (Basic) | $5.52 |
| EPS (Diluted) | $5.41 |
| Shares Outstanding (Basic) | 36.84M |
| Shares Outstanding (Diluted) | 37.59M |
Key Highlights
- 1Net sales increased by 3.5% to $1.99 billion, supported by new store growth and an expanding commercial sales program.
- 2Diluted Earnings Per Share (EPS) rose by a strong 15.7% to $5.41, indicating improved profitability.
- 3Gross margin expanded to 51.8% from 51.1% year-over-year, driven by better merchandise margins and reduced shrink.
- 4The company continued its aggressive share repurchase program, buying back $317.3 million worth of stock during the quarter.
- 5Operating cash flow remained robust, providing $318.3 million, which supported investments and financing activities.
- 6AutoZone strategically managed its debt, issuing $300 million in new senior notes and repaying $300 million in existing debt.
- 7The average age of vehicles on the road continues to be a positive factor, supporting demand for replacement parts and maintenance.