AutoZone has reported net sales of $4 billion for its first quarter (12 weeks) ended Nov. 19, 2022, an increase of 8.6% from the first quarter of fiscal 2022 (12 weeks). Domestic same store sales, or sales for stores open at least one year, increased 5.6% for the quarter.
“I would again like to thank and congratulate our AutoZoners across the company for their ongoing commitment to deliver great results and exceptional customer service. Their efforts allowed us to deliver solid same store sales results on top of last year’s very strong 13.6%. While our Commercial sales growth accelerated 15%, our retail sales also grew impressively from a year ago. We continue to believe our initiatives to grow our business position us well for the remainder of our fiscal year,” said Bill Rhodes, chairman, president and CEO.
For the quarter, gross profit, as a percentage of sales, was 50.1%, a decrease of 242 basis points versus the prior year. The company said this decrease in gross margin was driven by a 203-basis point ($81 million) non-cash LIFO charge driven primarily by rising freight costs, with the remaining deleverage primarily from accelerated growth in AutoZone’s Commercial business. Operating expenses, as a percentage of sales, were flat to last year at 31.9%.
Operating profit decreased 4.2% to $723 million. Net income for the quarter decreased 2.9% over the same period last year to $539.3 million, while diluted earnings per share increased 6.9% to $27.45 from $25.69 in the year-ago quarter.
Under the company’s share repurchase program, AutoZone repurchased 392,000 shares of its common stock for $900 million during the first quarter, at an average price of $2,295 per share. At quarter end, AutoZone had $2.7 billion remaining under our current share repurchase authorization.
The company’s inventory increased 17.6% over the same period last year, driven by inflation and our growth initiatives. Net inventory, defined as merchandise inventories less accounts payable, on a per store basis, was negative $249,000 versus negative $207,000 last year and negative $240,000 last quarter.
“We continue to strive to be the best place to shop for customers’ automotive needs while also being an exceptional place to work. We also strive to deliver exceptional customer service while focusing on our initiatives to grow sales and market share across both our retail and commercial sectors. As we understand our responsibility of being good stewards of our stockholders’ capital, we will remain steadfast in our long-term, disciplined approach to increasing operating earnings and cash flows while utilizing our balance sheet effectively,” said Rhodes.