Autozone (AZO 750.00, +40.23) has spiked 5.7% after beating first quarter expectations. Today's gain puts the stock within 9.0% of its all-time record high that was notched in the middle of 2016.
The auto parts retailer reported above-consensus first quarter earnings of $10.00 per share on a 4.9% year-over-year increase in revenue to $2.59 billion, which also exceeded expectations.
Domestic sales at stores that have been open for at least one year increased 2.3% after growing 1.6% one year ago. Gross margin improved marginally, increasing to 52.8% from 52.7% one year ago. Operating expenses made up 34.6% of sales, up from last year's 34.1%. The increase took place due to hurricane-related expenses and deleverage on occupancy costs.
The company opened 16 new stores during the quarter, relocated one store, and closed one store in the U.S. Five new stores were opened in Mexico. Autozone ended the quarter with 5,480 stores across 50 states, D.C., and Puerto Rico. The company has 529 stores in Mexico, 26 IMC branches, and 14 stores in Brazil. Inventory increased 6.3% year-over-year due to new store openings and increased product placement.
Inventory per location increased to $663,000 from $647,000 one year ago. Inventory per location stood at $644,000 at the end of the previous quarter. Net inventory ended the quarter at -$52,000, up from -$67,000 one year ago.
Return on Invested Capital declined to 29.6% from 31.3% one year ago.