10-QPeriod: Q3 FY2023

AUTOZONE INC Quarterly Report for Q3 Ended May 6, 2023

Filed June 9, 2023For Securities:AZO

Summary

AutoZone, Inc. reported solid financial results for the third quarter ended May 6, 2023, with a notable increase in net sales and net income compared to the prior year. Net sales rose by 5.8% year-over-year, driven by an increase in domestic same-store sales and contributions from new store openings. The company experienced a 9.3% increase in operating profit and a corresponding 9.3% rise in net income, translating to a significant 17.5% growth in diluted earnings per share, reaching $34.12. The company's performance was supported by strong domestic commercial sales, which grew by 6.3% and now represent approximately 30.7% of domestic auto parts sales. Despite inflationary pressures and increased freight costs impacting the cost of sales, AutoZone managed to improve its gross profit margin, aided by a non-cash LIFO benefit. Continued investment in new stores and supply chain initiatives underscores the company's strategy for long-term growth.

Financial Highlights

45 data points
Beta

Revenue

$4.09B

52.5% Gross Margin

Net Income

$647.72M

15.8% Net Margin

EPS (Diluted)

$34.12

Total Assets

$15.60B

Cash & Equivalents

$274.92M

Free Cash Flow

$553.51M

Financial Statements
Beta
Revenue$4.09B
Cost of Revenue$1.94B
Gross Profit$2.15B
SG&A Expenses$1.29B
Operating Income$858.48M
Net Income$647.72M
EPS (Basic)$35.22
EPS (Diluted)$34.12
Shares Outstanding (Basic)18.39M
Shares Outstanding (Diluted)18.98M

Key Highlights

  • 1Net sales increased by 5.8% to $4.09 billion for the quarter.
  • 2Domestic same store sales grew by 1.9%, indicating consistent demand.
  • 3Operating profit increased by 9.3% to $858.5 million.
  • 4Net income grew by 9.3% to $647.7 million.
  • 5Diluted earnings per share (EPS) saw a substantial increase of 17.5% to $34.12.
  • 6Domestic commercial sales increased by 6.3%, highlighting strength in the B2B segment.
  • 7The company repurchased $2.7 billion of its common stock during the first 36 weeks of the fiscal year, demonstrating a commitment to returning capital to shareholders.

Frequently Asked Questions

Net sales increased by 5.8% driven by net sales from new stores and a 1.9% increase in domestic same-store sales. Domestic commercial sales also contributed significantly, growing by 6.3%.

Gross profit margin improved due to higher merchandise margins. The company also benefited from a $17.0 million non-cash LIFO (Last-In, First-Out) benefit in the quarter, which helped offset some of the cost of sales pressures.

AutoZone is focused on long-term growth through strategic investments, including opening new stores and expanding its supply chain infrastructure with new hub and mega hub facilities, as well as new distribution centers. The company also continues to invest in its commercial sales program.

AutoZone has a significant share repurchase program. During the first 36 weeks of the fiscal year, the company repurchased $2.7 billion of its common stock. As of May 6, 2023, there was $843.6 million remaining under the Board's authorization for future repurchases.