AUTOZONE INC Quarterly Report for Q2 Ended Feb 11, 2023

Summary

AutoZone Inc. reported strong net sales growth of 9.5% for the twelve weeks ended February 11, 2023, reaching $3.7 billion. This growth was primarily driven by a 5.3% increase in domestic same-store sales and a significant 13.1% rise in domestic commercial sales, which now constitute approximately 29.5% of domestic auto parts sales. Despite a 1.0% increase in net income to $476.5 million, the company experienced a slight decrease in gross profit margin to 52.3% from 53.0% in the prior year, largely due to a non-cash LIFO charge of $10.0 million and increased supply chain costs. Operationally, the company demonstrated efficiency, with operating expenses as a percentage of sales slightly decreasing. Diluted earnings per share saw a healthy increase of 10.5% to $24.64. The company continues to focus on strategic investments, including expanding its supply chain infrastructure and opening new stores, while also actively returning capital to shareholders through its share repurchase program, with $1.8 billion remaining authorization.

Key Highlights

• 1Net sales increased by 9.5% to $3.7 billion for the twelve weeks ended February 11, 2023.
• 2Domestic same-store sales grew by 5.3%, indicating continued strength in core operations.
• 3Domestic commercial sales showed robust growth, up 13.1%, highlighting the success of the B2B strategy.
• 4Diluted earnings per share increased by 10.5% to $24.64, demonstrating improved profitability on a per-share basis.
• 5The company reported a non-cash LIFO charge of $10.0 million, impacting gross margin, which decreased to 52.3%.
• 6Significant capital allocation continues, with $1.8 billion remaining under the share repurchase program authorization.
• 7Investments in growth initiatives, including supply chain expansion and new store openings, are increasing.

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