Summary
AutoZone Inc. (AZO) reported solid performance for the third quarter of fiscal year 2022, ending May 7, 2022. Net sales increased by 5.9% to $3.9 billion, driven by a 2.6% rise in domestic same-store sales and a significant 26.0% increase in domestic commercial sales, which now constitute approximately 30% of domestic auto parts sales. This growth underscores the company's expanding reach within the professional repair market. Despite the sales increase, operating profit saw a slight decrease of 2.2% to $785.7 million, largely due to accelerated growth in the lower-margin commercial business and payroll deleverage compared to the prior year's strong performance. However, net income remained robust at $592.6 million, a marginal 0.6% decrease. Diluted earnings per share (EPS) demonstrated strong growth, increasing by 9.6% to $29.03, indicating effective capital allocation and share repurchases. The company maintains a strong liquidity position with $263.0 million in cash and equivalents and substantial undrawn capacity on its revolving credit facility, supporting its strategy of reinvesting in growth initiatives and returning capital to shareholders.
Financial Highlights
45 data points| Revenue | $3.87B |
| Cost of Revenue | $1.86B |
| Gross Profit | $2.01B |
| SG&A Expenses | $1.22B |
| Operating Income | $785.67M |
| Net Income | $592.57M |
| EPS (Basic) | $29.93 |
| EPS (Diluted) | $29.03 |
| Shares Outstanding (Basic) | 19.80M |
| Shares Outstanding (Diluted) | 20.41M |
Key Highlights
- 1Net sales increased by 5.9% to $3.9 billion for the twelve weeks ended May 7, 2022.
- 2Domestic same-store sales grew by 2.6%, while domestic commercial sales surged by 26.0%.
- 3Gross profit margin slightly decreased to 51.9% from 52.4% due to a higher mix of lower-margin commercial sales.
- 4Operating expenses as a percentage of sales increased to 31.6% from 30.4%, attributed to payroll deleverage.
- 5Diluted earnings per share (EPS) increased by 9.6% to $29.03, benefiting from share repurchases.
- 6The company repaid $500 million in senior notes and managed its debt structure, ending the period with $2.2 billion in availability under its revolving credit facility.
- 7AutoZone repurchased $3.4 billion of its common stock during the first thirty-six weeks of fiscal 2022, with $2.1 billion remaining authorization.