10-QPeriod: Q3 FY2013

AUTOZONE INC Quarterly Report for Q3 Ended May 4, 2013

Filed June 12, 2013For Securities:AZO

Summary

AutoZone reported solid performance for the twelve weeks ended May 4, 2013, with net sales increasing by 4.5% to $2.21 billion, driven by new store growth and expanded commercial programs, partially offset by a slight decrease in domestic same-store sales. Diluted earnings per share saw a significant increase of 15.8% to $7.27, reflecting improved operational efficiency and the impact of ongoing share repurchases. The company's financial position remains robust, with net cash provided by operating activities increasing year-over-year. AutoZone continues to strategically invest in its future through capital expenditures for new store development and enhancements, alongside the recent acquisition of AutoAnything to bolster its online presence. The company maintains strong liquidity, supported by its revolving credit facility and a consistent focus on managing its capital structure.

Financial Highlights

51 data points
Beta

Revenue

$2.21B

51.8% Gross Margin

Net Income

$265.58M

12.0% Net Margin

EPS (Diluted)

$7.27

Total Assets

$6.78B

Cash & Equivalents

$133.69M

Free Cash Flow

$295.78M

Financial Statements
Beta
Revenue$2.21B
Cost of Revenue$1.06B
Gross Profit$1.14B
SG&A Expenses$686.68M
Operating Expenses$686.68M
Operating Income$456.03M
Interest Expense$42.09M
Net Income$265.58M
EPS (Basic)$7.39
EPS (Diluted)$7.27
Shares Outstanding (Basic)35.92M
Shares Outstanding (Diluted)36.53M

Key Highlights

  • 1Net sales increased by 4.5% to $2.21 billion for the twelve weeks ended May 4, 2013, compared to the prior year period.
  • 2Diluted earnings per share rose by 15.8% to $7.27, indicating strong profitability growth.
  • 3Net cash provided by operating activities increased to $895.9 million for the thirty-six weeks ended May 4, 2013, up from $798.6 million in the prior year.
  • 4The company completed the acquisition of AutoAnything for up to $150 million, aimed at strengthening its online presence in specialized automotive products.
  • 5Capital expenditures increased to $258.9 million for the thirty-six weeks ended May 4, 2013, primarily for new store development and enhancements.
  • 6AutoZone continued its aggressive share repurchase program, spending $827.3 million in the thirty-six week period.
  • 7The company reported a domestic same-store sales decrease of 0.1% for the twelve-week period.

Frequently Asked Questions

Sales growth was primarily driven by the opening of new stores, an increase in commercial program sales, and the inclusion of sales from the recently acquired AutoAnything. However, this growth was partially offset by a minor decrease in domestic same-store sales.

AutoZone demonstrated strong profitability improvement. Diluted earnings per share increased by 15.8% to $7.27 for the twelve weeks ended May 4, 2013, compared to $6.28 in the prior year period. This was supported by an increase in gross profit margin and effective management of operating expenses.

The acquisition of AutoAnything, an online retailer of specialized automotive products, is strategic for AutoZone as it aims to bolster its online presence in the automotive accessory and performance parts markets. The acquisition was completed for up to $150 million.

AutoZone has been actively managing its debt through issuances of new senior notes and using proceeds for general corporate purposes and to repay commercial paper. The company also has significant availability under its revolving credit facility, allowing it to refinance upcoming debt maturities and maintain flexibility. Its adjusted debt to EBITDAR ratio remained stable at 2.5:1.