01—Abstract
Summary
Summary of the 10-Q filed March 15, 2024. Cited figures are marked; the original filing is the authoritative source.
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 billiona, 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 $28.89b, 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.
02—Key points
Key Highlights
- Net sales increased by 4.6% to $3.9 billion for the twelve weeks ended February 10, 2024.
- Same store sales increased by 1.5% on a constant currency basis.
- Operating profit rose 10.9% to $743.2 million.
- Net income grew 8.1% to $515.0 million.
- Diluted Earnings Per Share (EPS) increased by 17.2% to $28.89.
- Gross profit margin improved to 53.9% from 52.3% in the prior year period, driven by higher merchandise margins and LIFO favorability.
- The 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.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2024, AutoZone Inc kept $0.13.
- Revenue$3.86B100.0%
- Cost of revenue−$1.78B46.1%
- Gross profit$2.08B53.9%
- Operating costs−$1.34B34.6%
- Operating income$743.2M19.3%
- Interest, other & tax−$228.2M5.9%
- Net income$515.0M13.3%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2024filed March 15, 2024Financial Statements
Q2 FY2024 against Q2 FY2023
| Line item | Q2 FY2024Q2 FY2023 | Change |
|---|---|---|
| Revenue | $3.86B$3.69B | +4.6% |
| Cost of Revenue | $1.78B$1.76B | +1.1% |
| Gross Profit | $2.08B$1.93B | +7.8% |
| SG&A Expenses | $1.34B$1.26B | +6.1% |
| Operating Income | $743.24M$669.98M | +10.9% |
| Net Income | $515.03M$476.54M | +8.1% |
| EPS (Basic) | $29.74$25.48 | +16.7% |
| EPS (Diluted) | $28.89$24.64 | +17.2% |
| Shares Outstanding (Basic) | 17.32M18.70M | −7.4% |
| Shares Outstanding (Diluted) | 17.83M19.34M | −7.8% |
05—Questions
Frequently Asked Questions
What is AutoZone's key growth driver for the reported period?
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.
How did AutoZone improve its profitability?
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.
What is the company's capital allocation strategy?
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.
What is the company's debt position and outlook?
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.
06—Continue