AutoZone Inc. has reported net sales of $4.9 billion for its fourth quarter (16 weeks) ended August 28, 2021, an increase of 8.1% from the fourth quarter of fiscal 2020 (16 weeks). Domestic same store sales, or sales for stores open at least one year, increased 4.3% for the quarter.
“Our strong sales and earnings this quarter are a testament to our AutoZoners’ ongoing commitment to going the extra mile for our customers. Our retail business performed very well this quarter ending with virtually flat same store sales on top of last year’s historic growth of over 20%. And, our commercial business growth continues to be exceptionally strong at 21.2%. The investments we are making continue to strengthen our competitive positioning in all the sectors and markets we compete. We are optimistic about our growth prospects heading into our new fiscal year,” said Bill Rhodes, chairman, president and CEO.
For the quarter, gross profit, as a percentage of sales, was 52.3%, a decrease of 82 basis points versus the prior year. The decrease in gross margin was primarily driven by the initiatives to accelerate growth in our commercial business. Operating expenses, as a percentage of sales, was 31.0% versus 30.7% last year. Expense growth was primarily driven by higher payroll to support our sales and customer service initiatives, partially offset by a decrease in pandemic related expenses. In addition, AutoZone is investing in technology to underpin growth initiatives and are seeing higher wage costs in stores and distribution centers.
Operating profit increased 2.6% to $1.0 billion. Net income for the quarter increased 6.1% over the same period last year to $785.8 million, while diluted earnings per share increased 15.5% to $35.72 from $30.93 in the year-ago quarter.
For the fiscal year ended August 28, 2021, sales were $14.6 billion, an increase of 15.8% from the prior year, while domestic same store sales were up 13.6%. Gross profit, as a percentage of sales, was 52.8% versus 53.6%. The decrease in gross margin was primarily attributable to the initiatives to accelerate growth in our Commercial business. Operating expenses, as a percentage of sales, were 32.6% versus 34.5%. The reduction in operating expenses as a percent of sales was driven by strong sales growth and a decrease in pandemic related expenses. For fiscal 2021, net income increased 25.2% to $2.2 billion and diluted earnings per share increased 32.3% to $95.19 from $71.93. Return on invested capital finished at 41.0%.
Under its share repurchase program, AutoZone repurchased 592 thousand shares of its common stock for $900 million during the fourth quarter, at an average price of $1,519 per share. For the fiscal year, the Company repurchased 2.6 million shares of its common stock for $3.4 billion, at an average price of $1,303 per share. At year end, the Company had $417.6 million remaining under its current share repurchase authorization.
The company’s inventory increased 3.7% over the same period last year, driven by new stores and improved product assortment. Inventory per store was $686 thousand versus $683 thousand last year and $701 thousand last quarter. Net inventory, defined as merchandise inventories less accounts payable, on a per store basis, was negative $203 thousand versus negative $104 thousand last year and negative $167 thousand last quarter.
“While the COVID-19 pandemic continues to impact our customers’ and AutoZoners’ lives, our primary focus remains everyone’s health and well-being. We will continue to help wherever we can to make our stores the best and safest place to shop for everyone’s automotive needs. We remain committed to helping our AutoZoners during these difficult times. As always, we will take nothing for granted while striving for continued sales growth in fiscal 2022. 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 August 28, 2021, AutoZone opened 76 new stores in the U.S., 29 stores in Mexico and five stores in Brazil. At our fiscal year end, the Company had 6,051 stores in the U.S., 664 in Mexico and 52 in Brazil for a total store count of 6,767.