01—Abstract
Summary
Summary of the 10-Q filed March 21, 2025. Cited figures are marked; the original filing is the authoritative source.
AutoZone Inc. reported its second-quarter results for the fiscal year ending February 15, 2025.
Net sales saw a modest increase of 2.4% to $4.0 billiona, driven by same-store sales growth and new store openings, although this was partially offset by unfavorable foreign currency exchange rates. Despite the sales increase, profitability metrics showed a decline. Operating profit decreased by 4.9% to $706.8 million, and net income fell by 5.3% to $487.9 million.
Diluted earnings per share also decreased by 2.1% to $28.29b. The company attributed some of the profit decline to unfavorable foreign currency exchange rates and a non-cash LIFO adjustment in the prior year. The company continues to invest in growth initiatives, including new stores and distribution centers, which contributed to an increase in operating expenses as a percentage of sales.
02—Key points
Key Highlights
- Net sales increased by 2.4% to $4.0 billion for the twelve weeks ended February 15, 2025, compared to the prior year period.
- Operating profit decreased by 4.9% to $706.8 million, and net income decreased by 5.3% to $487.9 million.
- Diluted earnings per share declined by 2.1% to $28.29 for the quarter.
- The company's domestic commercial sales showed a healthy increase of 7.3% ($71.6 million).
- Operating expenses as a percentage of sales increased to 36.0% from 34.6% in the prior year period due to investments in growth initiatives.
- The company repurchased $834.6 million of its common stock during the first twenty-four weeks of fiscal 2025.
- Total assets grew to $18.1 billion, with merchandise inventories increasing to $6.6 billion.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2025, AutoZone Inc kept $0.12.
- Revenue$3.95B100.0%
- Cost of revenue−$1.82B46.1%
- Gross profit$2.13B53.9%
- Operating costs−$1.42B36.0%
- Operating income$706.8M17.9%
- Interest, other & tax−$218.8M5.5%
- Net income$487.9M12.3%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2025filed March 21, 2025Financial Statements
Q2 FY2025 against Q2 FY2024
| Line item | Q2 FY2025Q2 FY2024 | Change |
|---|---|---|
| Revenue | $3.95B$3.86B | +2.4% |
| Cost of Revenue | $1.82B$1.78B | +2.5% |
| Gross Profit | $2.13B$2.08B | +2.3% |
| SG&A Expenses | $1.42B$1.34B | +6.4% |
| Operating Income | $706.77M$743.24M | −4.9% |
| Net Income | $487.92M$515.03M | −5.3% |
| EPS (Basic) | $29.06$29.74 | −2.3% |
| EPS (Diluted) | $28.29$28.89 | −2.1% |
| Shares Outstanding (Basic) | 16.79M17.32M | −3.1% |
| Shares Outstanding (Diluted) | 17.25M17.83M | −3.3% |
05—Questions
Frequently Asked Questions
What was the primary driver of the sales increase in the quarter?
The primary drivers of the sales increase were a 2.9% increase in total company same-store sales on a constant currency basis and net sales of $71.8 million from new domestic and international stores. Domestic commercial sales also contributed positively with a 7.3% increase.
Why did net income and earnings per share decrease despite higher sales?
The decrease in net income and earnings per share was primarily due to unfavorable foreign currency exchange rates, which had a significant impact on sales and operating profit. Additionally, operating expenses increased as a percentage of sales due to investments in growth initiatives, and the prior year's comparable period benefited from a favorable non-cash LIFO adjustment.
How is AutoZone managing its liquidity and capital resources?
AutoZone has strong liquidity, with $300.9 million in cash and cash equivalents and $2.2 billion in undrawn capacity on its Revolving Credit Agreement as of February 15, 2025. The company expects its operating cash flows, credit facilities, and long-term borrowings to fund operations, strategic investments, and share repurchases. They are also increasing capital expenditures for growth initiatives like new stores and distribution centers.
What is the company's outlook on macroeconomic factors?
AutoZone acknowledges that its business is impacted by various economic factors such as inflation, interest rates, consumer debt, fuel costs, and supply chain disruptions. While they cannot predict the exact impact, they highlight miles driven and the average age of vehicles on the road as long-term indicators of market growth.
06—Continue