AutoZone (AZO 728.64, -18.88, -2.53%) shares opened 5% lower after the company reported
mixed quarterly results.
The auto parts retailer reported above-consensus fourth quarter earnings of $18.54/share on a 1.3% year/year increase in revenue to $3.56 bln, which was a bit shy of expectations.
In addition to reporting earnings, AutoZone announced the start of a next day delivery service that will allow customers in 83 markets to place next-day delivery orders from local inventories of up to 100,000 different automotive parts and accessories until as late as 10 PM.
Domestic same store sales grew 2.2% year/year while gross margin improved to 53.6% from 52.8% one year ago. Gross margin expanded due to the sale of two business units and higher merchandise margins. These factors were partially offset by higher supply chain costs.
Operating expenses made up 37.0% of revenue, up from 32.6% one year ago due to changes in the company's compensation structure.
Inventory grew 1.6% year/year due to new store openings and increased product placement. Inventory per location stood at $636K at the end of the quarter, down from $644K one year ago and $658K one quarter ago. Net inventory stood at -$75K at the end of the quarter, down from -$48K one year and one quarter ago.
The company opened 78 new stores and relocated four stores in the United States. AutoZone opened 28 new stores in Mexico and four stores in Brazil. The company ended the quarter with 5,618 operational stores across 50 states, D.C., and Puerto Rico; 564 stores in Mexico; and 20 stores in Brazil.
AutoZone repurchased $665 mln worth of shares during the quarter, bringing the fiscal year total to $1.59 bln. The company has $232 mln remaining under its current repurchase authorization.
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