Latest News by Industry
MEMPHIS, Tenn., Dec. 07, 2021 (GLOBE NEWSWIRE) -- AutoZone, Inc. (NYSE: AZO) today reported net sales of $3.7 billion for its first quarter (12 weeks) ended November 20, 2021, an increase of 16.3% from the first quarter of fiscal 2021 (12 weeks). Domestic same store sales, or sales for stores open at least one year, increased 13.6% for the quarter.
“Our strong sales and earnings this first quarter are a continuing testament to our AutoZoners’ commitment to going the extra mile for our customers. Our retail and commercial sales performance were consistently strong all quarter. Our commercial business growth continues to be exceptionally strong at 29.4% as the investments we are making are positioning us well in the marketplace. We are optimistic about our growth prospects for the balance of the fiscal year,” said Bill Rhodes, Chairman, President and Chief Executive Officer.
For the quarter, gross profit, as a percentage of sales, was 52.5%, a decrease of 65 basis points versus the prior year. The decrease in gross margin was primarily driven by initiatives to accelerate Commercial business growth. Operating expenses, as a percentage of sales, was 31.9% versus 33.6% last year. The decrease in operating expenses, as a percentage of sales, was driven by strong sales growth.
Operating profit increased 22.6% to $754.5 million. Net income for the quarter increased 25.5% over the same period last year to $555.2 million, while diluted earnings per share increased 38.1% to $25.69 from $18.61 in the year-ago quarter. The increase in net income was driven by strong topline growth and operating expense leverage.
Under its share repurchase program, AutoZone repurchased 515 thousand shares of its common stock for $900 million during the first quarter, at an average price of $1,749 per share. At the end of the first quarter, the Company had $1.018 billion remaining under its current share repurchase authorization.
The Company’s inventory increased 3.0% over the same period last year, driven by new stores. Net inventory, defined as merchandise inventories less accounts payable, on a per store basis, was negative $207 thousand versus negative $99 thousand last year and negative $203 thousand last quarter.
“While the COVID-19 pandemic continues to impact our customers’ and AutoZoners’ lives, our primary focus remains the well-being and safety of our customers and AutoZoners. We will continue to invest to make our stores the best and safest place to shop for everyone’s automotive needs. During these unique and challenging times, we will strive to deliver the best customer service possible. As we continue to prudently invest capital in our business, we remain committed to our long-term, disciplined, approach of increasing operating earnings and cash flow while utilizing our balance sheet effectively,” said Rhodes.
During the quarter ended November 20, 2021, AutoZone opened 15 new stores in the U.S., two stores in Mexico and one store in Brazil. As of November 20, 2021, the Company had 6,066 stores in the U.S., 666 in Mexico and 53 in Brazil for a total store count of 6,785.
AutoZone is the leading retailer, and a leading distributor, of automotive replacement parts and accessories in the Americas. Each store carries an extensive product line for cars, sport utility vehicles, vans and light trucks, including new and remanufactured automotive hard parts, maintenance items, accessories, and non-automotive products. Many stores also have a commercial sales program that provides commercial credit and prompt delivery of parts and other products to local, regional and national repair garages, dealers, service stations and public sector accounts. We also have commercial programs in all stores in Mexico and Brazil. AutoZone also sells the ALLDATA brand automotive diagnostic, repair and shop management software through www.alldata.com. Additionally, we sell automotive hard parts, maintenance items, accessories and non-automotive products through www.autozone.com, and our commercial customers can make purchases through www.autozonepro.com. We also provide product information on our Duralast branded products through www.duralastparts.com. AutoZone does not derive revenue from automotive repair or installation.
AutoZone will host a conference call this morning, Tuesday, December 7, 2021, beginning at 10:00 a.m. (EST) to discuss its first quarter results. This call is being web cast and can be accessed, along with supporting slides, at AutoZone’s website at www.autozone.com and clicking on Investor Relations. Investors may also listen to the call by dialing (888) 506-0062. In addition, a telephone replay will be available by dialing (877) 481-4010, replay passcode 43768 through December 21, 2021.
This release includes certain financial information not derived in accordance with generally accepted accounting principles (“GAAP”). These non-GAAP measures include adjustments to reflect return on invested capital, adjusted debt and adjusted debt to EBITDAR. The Company believes that the presentation of these non-GAAP measures provides information that is useful to investors as it indicates more clearly the Company’s comparative year-to-year operating results, but this information should not be considered a substitute for any measures derived in accordance with GAAP. Management targets the Company’s capital structure in order to maintain its investment grade credit ratings. The Company believes this is important information for the management of its debt levels and share repurchases. We have included a reconciliation of this additional information to the most comparable GAAP measures in the accompanying reconciliation tables.