Summary
AutoZone reported strong results for the twelve weeks ended November 22, 2014, demonstrating robust top-line growth and improved profitability. Net sales increased by 8.0% year-over-year, driven by a solid 4.5% same-store sales growth in the domestic market, contributions from new store openings, and the recent acquisition of Interamerican Motor Corporation (IMC). This growth, coupled with a strategic focus on commercial programs, signals continued market penetration and demand for AutoZone's offerings. Profitability saw a significant uplift, with diluted earnings per share (EPS) increasing by 15.6%. This improvement was supported by a higher gross profit margin, attributed to better merchandise margins and lower shrink, partially offset by the integration costs of IMC. Despite an increase in operating expenses as a percentage of sales due to legal and self-insured medical costs, the company managed to deliver strong net income growth. The company also continues its aggressive share repurchase program, signaling confidence in its financial health and commitment to returning value to shareholders.
Financial Highlights
49 data points| Revenue | $2.26B |
| Cost of Revenue | $1.08B |
| Gross Profit | $1.18B |
| SG&A Expenses | $768.10M |
| Operating Income | $408.56M |
| Net Income | $238.31M |
| EPS (Basic) | $7.42 |
| EPS (Diluted) | $7.27 |
| Shares Outstanding (Basic) | 32.13M |
| Shares Outstanding (Diluted) | 32.76M |
Key Highlights
- 1Net sales increased by 8.0% to $2.26 billion, driven by domestic same-store sales growth of 4.5% and the acquisition of IMC.
- 2Diluted Earnings Per Share (EPS) rose by 15.6% to $7.27, indicating improved profitability.
- 3Gross profit margin improved to 52.1% from 51.9% in the prior year period, benefiting from higher merchandise margins and lower shrink.
- 4The company completed the acquisition of Interamerican Motor Corporation (IMC) for $75.7 million, strengthening its position in the import replacement parts market.
- 5Operating expenses as a percentage of sales increased slightly to 34.0% from 33.5% due to higher legal and self-insured medical costs.
- 6Net interest expense decreased due to lower borrowing rates, despite higher overall borrowing levels.
- 7AutoZone continued its substantial share repurchase program, buying back $299.6 million worth of stock during the quarter, with $569.6 million remaining under authorization.