AutoZone, Inc. reported a 5.1% increase in net sales, reaching $4.2 billion for its first quarter (12 weeks) ending Nov. 18. This rise is compared to the first quarter of fiscal 2023. The company’s same store sales, which include domestic and international stores open for at least one year, showed a 1.2% increase domestically and a significant 25.1% jump internationally. The total company sales rose by 3.4%, the company reported in its Q1 earnings.
The company’s gross profit as a percentage of sales was 52.8%, marking an increase of 279 basis points from the previous year. This improvement was attributed to a 208 basis point non-cash LIFO favorability, along with favorable supply chain costs and higher merchandise margins. However, operating expenses as a percentage of sales rose to 32.6% from 31.9% last year, primarily due to increases in domestic store payroll and investment in technology-related initiatives.
AutoZone’s operating profit saw a 17.4% increase, reaching $848.6 million. The company’s net income for the quarter also rose by 10% compared to the same period last year, amounting to $593.5 million. Diluted earnings per share increased by 18.6% to $32.55.
Under its share repurchase program, AutoZone bought back 580 thousand shares of its common stock at an average price of $2,590 per share, amounting to a total investment of $1.5 billion. The excise tax on these repurchased shares was $14.4 million for the first quarter. Since the inception of the share repurchase program, AutoZone has bought back a total of 155 million shares at an average price of $228, totaling $35.3 billion. As of the end of the first quarter, the company had $333.1 million remaining under its current share repurchase authorization.
The company’s inventory increased by 3% from the previous year, driven by new store growth. Net inventory per store was negative $197 thousand compared to negative $249 thousand last year and negative $201 thousand in the last quarter.
Bill Rhodes, chairman, president and chief executive officer of AutoZone, thanked the company’s employees for their efforts, attributing the strong financial results to their commitment to superior service. He noted solid domestic sales and exceptionally strong international sales growth. Rhodes reaffirmed the company’s commitment to driving sales and earnings growth throughout fiscal 2024 and returning cash to shareholders.
During the quarter, AutoZone opened 17 new stores and closed one in the U.S., in addition to opening five new stores in Mexico and four in Brazil, totaling 25 net new stores. As of Nov. 18, AutoZone operated 6,316 stores in the U.S., 745 in Mexico and 104 in Brazil, bringing the total store count to 7,165.
