AUTOZONE INC Quarterly Report for Q1 Ended Nov 19, 2022

Summary

AutoZone, Inc. reported a 8.6% increase in net sales for the quarter ended November 19, 2022, reaching $4.0 billion, driven by a 5.6% increase in domestic same-store sales and a strong 14.9% growth in domestic commercial sales. Despite the top-line growth, operating profit saw a slight decrease of 4.2% to $723.0 million, and net income declined by 2.9% to $539.3 million compared to the prior year. This was largely attributed to a significant $81.0 million non-cash LIFO charge recognized in the current quarter, primarily due to increased freight costs. Excluding the LIFO charge, adjusted operating profit increased by 6.6% and adjusted net income grew by 8.3%. Diluted earnings per share (EPS) increased by 6.9% to $27.45, or a notable 19.2% increase to $30.62 on an adjusted basis. The company continues to prioritize returning capital to shareholders, repurchasing $900.0 million in stock during the quarter and having $2.7 billion remaining under its authorized share repurchase program.

Key Highlights

• 1Net sales increased by 8.6% year-over-year to $4.0 billion, primarily driven by domestic same-store sales growth of 5.6% and strong commercial sales growth of 14.9%.
• 2Operating profit decreased by 4.2% to $723.0 million due to a significant $81.0 million non-cash LIFO charge, mainly from increased freight costs.
• 3Net income declined by 2.9% to $539.3 million, but adjusted net income (excluding the LIFO charge) increased by 8.3%.
• 4Diluted EPS rose 6.9% to $27.45, with adjusted diluted EPS showing a substantial 19.2% increase to $30.62.
• 5Inventory levels saw a slight decrease to $5.608 billion from $5.638 billion in the prior quarter.
• 6The company repurchased $900.0 million of its common stock during the quarter, underscoring its commitment to capital return.
• 7Total assets slightly increased to $15.316 billion from $15.275 billion in the prior quarter, while total liabilities also saw a slight increase.

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