10-QPeriod: Q2 FY2024

AUTOZONE INC Quarterly Report for Q2 Ended Feb 10, 2024

Filed March 15, 2024For Securities:AZO

Summary

AutoZone Inc. (AZO) reported solid financial results for the twelve weeks ended February 10, 2024. Net sales increased by 4.6% year-over-year to $3.9 billion, driven by new store openings and a 1.5% increase in same-store sales on a constant currency basis. The company also saw a healthy rise in profitability, with operating profit up 10.9% to $743.2 million and net income increasing by 8.1% to $515.0 million. Diluted earnings per share (EPS) saw a significant increase of 17.2% to $28.89, benefiting from sales growth, improved gross margins (up 1.6 percentage points to 53.9%) due to higher merchandise margins and LIFO favorability, and disciplined expense management. The company continues to execute on its growth initiatives, including expanding its store base and investing in technology, while also returning capital to shareholders through its robust share repurchase program.

Financial Highlights

44 data points
Beta

Revenue

$3.86B

53.9% Gross Margin

Net Income

$515.03M

13.3% Net Margin

EPS (Diluted)

$28.89

Total Assets

$16.72B

Cash & Equivalents

$304.10M

Free Cash Flow

$178.75M

Financial Statements
Beta
Revenue$3.86B
Cost of Revenue$1.78B
Gross Profit$2.08B
SG&A Expenses$1.34B
Operating Income$743.24M
Net Income$515.03M
EPS (Basic)$29.74
EPS (Diluted)$28.89
Shares Outstanding (Basic)17.32M
Shares Outstanding (Diluted)17.83M

Key Highlights

  • 1Net sales increased by 4.6% to $3.9 billion for the twelve weeks ended February 10, 2024.
  • 2Same store sales increased by 1.5% on a constant currency basis.
  • 3Operating profit rose 10.9% to $743.2 million.
  • 4Net income grew 8.1% to $515.0 million.
  • 5Diluted Earnings Per Share (EPS) increased by 17.2% to $28.89.
  • 6Gross profit margin improved to 53.9% from 52.3% in the prior year period, driven by higher merchandise margins and LIFO favorability.
  • 7The company repurchased approximately $1.7 billion of common stock during the first twenty-four weeks of fiscal 2024 and has $2.1 billion remaining under its authorized share repurchase program.

Frequently Asked Questions

AutoZone's key growth drivers include net sales increases from new domestic and international stores and an increase in total company same-store sales on a constant currency basis. The company also benefits from strong performance in failure and maintenance-related automotive parts categories.

Profitability improved due to a combination of factors including higher merchandise margins, a non-cash LIFO (Last-In, First-Out) favorability of $24.0 million, and favorable supply chain costs, which collectively led to a 1.6 percentage point increase in gross profit margin. Expense control, particularly in operating, selling, general, and administrative costs, also contributed.

AutoZone continues to prioritize returning capital to shareholders through its share repurchase program. The company repurchased approximately $1.7 billion of its common stock during the first twenty-four weeks of fiscal 2024 and has $2.1 billion remaining under its authorized program. The company also continues to invest in growth initiatives, including new stores and supply chain enhancements.

As of February 10, 2024, AutoZone reported total debt of $8.6 billion. The company had $2.2 billion in undrawn capacity on its Revolving Credit Agreement, indicating strong liquidity. While the company issues debt and commercial paper, it aims to maintain its investment grade credit rating and expects to remain in compliance with all debt covenants.