10-QPeriod: Q2 FY2021

AUTOZONE INC Quarterly Report for Q2 Ended Feb 13, 2021

Filed March 19, 2021For Securities:AZO

Summary

AutoZone, Inc. reported strong financial performance for the twelve weeks ended February 13, 2021, with net sales increasing by 15.8% year-over-year to $2.91 billion. This growth was driven by a robust 15.2% increase in domestic same-store sales and a 14.7% rise in domestic commercial sales, which now represent approximately 22% of total sales. The company's operating profit saw a significant increase of 18.1% to $481.8 million, leading to a 15.6% rise in net income to $345.9 million. Diluted earnings per share (EPS) grew by an impressive 20.5% to $14.93, reflecting the strong top-line performance and effective cost management. The company also highlighted the resilience of its business model, with failure and maintenance-related categories comprising about 84% of sales. Despite a slight increase in discretionary sales mix, likely influenced by customers spending more time and money on projects due to the pandemic, AutoZone continues to benefit from the aging vehicle fleet in the U.S., with the average age exceeding 11 years.

Financial Highlights

45 data points
Beta

Revenue

$2.91B

53.6% Gross Margin

Net Income

$345.95M

11.9% Net Margin

EPS (Diluted)

$14.93

Total Assets

$14.16B

Cash & Equivalents

$1.03B

Free Cash Flow

$230.75M

Financial Statements
Beta
Revenue$2.91B
Cost of Revenue$1.35B
Gross Profit$1.56B
SG&A Expenses$1.08B
Operating Income$481.77M
Net Income$345.95M
EPS (Basic)$15.27
EPS (Diluted)$14.93
Shares Outstanding (Basic)22.65M
Shares Outstanding (Diluted)23.17M

Key Highlights

  • 1Net sales for the twelve-week period increased 15.8% to $2.91 billion.
  • 2Domestic same-store sales grew by 15.2%, indicating strong underlying demand.
  • 3Operating profit rose 18.1% to $481.8 million.
  • 4Net income increased 15.6% to $345.9 million.
  • 5Diluted earnings per share (EPS) grew by 20.5% to $14.93.
  • 6The company continued its aggressive share repurchase program, buying back $1.578 billion worth of stock in the 24-week period.
  • 7Despite a decrease in miles driven due to COVID-19, AutoZone's sales remain strong, supported by an aging vehicle fleet.

Frequently Asked Questions

AutoZone reported a strong increase in net sales, up 15.8% to $2.91 billion for the twelve weeks ended February 13, 2021, compared to the same period last year. This growth was primarily driven by a 15.2% increase in domestic same-store sales and a 14.7% increase in domestic commercial sales.

The company's operating profit increased by 18.1% to $481.8 million, and net income rose by 15.6% to $345.9 million. Diluted earnings per share (EPS) saw a significant increase of 20.5%, reaching $14.93 compared to $12.39 in the prior year period.

AutoZone continues to actively repurchase its common stock. For the twenty-four week period ended February 13, 2021, the company repurchased $1.578 billion worth of shares, and it has $717.6 million remaining under its authorized repurchase program. This reflects a strong commitment to returning capital to shareholders.

Sales performance is positively influenced by the aging U.S. vehicle fleet (average age over 11 years) and the continued demand for failure and maintenance-related auto parts, which represent approximately 84% of sales. While miles driven decreased due to COVID-19, the company is seeing strong results, partly attributed to customers undertaking more vehicle projects as they spend more time at home. The company also anticipates continued positive impacts from government stimulus measures.