First Quarter Results
The Memphis, Tennessee-based company's net income for the first quarter increased 7% to $132.52 million from $123.89 million in the previous-year period, while earnings per share climbed 17.4% to $2.02 from $1.73 in the year-ago quarter. On average, seventeen analysts polled by First Call/Thomson Financial expected the company to earn $1.91 per share for the quarter.
Net sales for the quarter increased 4.5% to $1.46 billion from $1.39 billion in the prior-year period. Analysts expected revenues of $1.44 billion for the quarter.
Commenting on the results, Bill Rhodes, Chairman and CEO of AutoZone said, "We were pleased to report record sales and earnings performance for this quarter, as we continued to build momentum with our ongoing efforts to improve the customer shopping experience. With the support of all our AutoZoners, we were able to drive sales increases across each of our strategic priorities: Domestic Retail, Domestic Commercial, Mexico and ALLDATA."
Rhodes added, "As our operating model continues to be strong, we will maintain our disciplined approach to growing operating earnings and utilizing our capital effectively."
Gross profit for the quarter rose to $726.49 million from $685.30 million in the previous-year quarter. As a percentage of sales, gross profit for the quarter improved to 49.9% from 49.2% in the similar period of last year, due to ongoing category management efforts and a shift in sales mix to higher margin categories.
Operating, SG&A expenses for the quarter increased to $489.07 million from $462.30 million in the similar period of last year. As a percentage of sales, operating expenses for the quarter were 33.6% compared to 33.2% in the previous-year period, reflecting higher occupancy costs compared to the prior-year period.
Operating profit improved to $237.38 million from $223.00 million a year ago.
The company repurchased 2.9 million shares of its common stock in the quarter for $350.0 million at an average price of $121 per share. The company has $108 million remaining under its current share repurchase program.
AutoZone's GAAP merchandise inventories increased 8.9% to $2.05 billion from $1.88 billion a year ago. Adjusted inventory per store, which includes supplier owned-pay-on-scan inventory, was $507 thousand as of November 17, 2007, compared to $503 thousand last year. Net inventory decreased on a per store basis to $50 thousand from $60 thousand in the previous-year quarter.
During the first quarter, AutoZone opened 40 new stores, replaced three stores, and closed one store in the U.S. and opened one store in Mexico. As of November 17, 2007, the Company had 3,972 stores in 48 states, the District of Columbia and Puerto Rico in the U.S. as well as 124 stores in Mexico.
Prior Quarter Results
For the fourth quarter, the company reported a 1.7% increase in net income to $217.18 million from $213.45 million in the prior-year quarter, aided by a 3.3% increase in net sales. Earnings per share climbed 10.6% to $3.23 from $2.92 a year ago. Net sales for the quarter increased to $2.00 billion from $1.94 billion in the prior-year period. However, domestic same store sales for the quarter declined 0.2%.
Peer Performance
Among the company's peers, Atlanta, Georgia-based Genuine Parts Co. (GPC | charts | news | PowerRating) reported a 6% increase in its net income for the third quarter to $128.6 million or from $121.3 million in the same period last year. Earnings per share for the quarter increased 7% to $0.76 from $0.71 a year ago. Wall Street analysts expected the company to report earnings of $0.77 per share for the quarter. Quarterly sales increased 4% to $2.787 billion from $2.699 billion in the previous-year quarter.
Philadelphia, Pennsylvania-based Pep Boys - Manny, Moe & Jack (PBY | charts | news | PowerRating) reported a third quarter net loss from continuing operations before cumulative effect of change in accounting principle that widened to $21.65 million or $0.42 per share from $10.71 million or $0.20 per share in the prior-year quarter. Sales for the quarter were $535.38 million, down from $550.85 million in the same quarter last year. Comparable Sales for the quarter decreased 2.9%, including a 4.1% decrease in comparable merchandise sales and a 2.6% increase in comparable service revenue. Stock Movements
AZO closed Monday's regular trading session at $107.87, down $3.76 on a volume of 910,900 shares. In Tuesday's pre-market trading, the stock is trading at $112.25, up $4.38 or 4.06%. In the 52-week period, the stock has been trading in a range of $103.40-$140.29.
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