AutoZone Inc. has reported net sales of $2.7 billion for its third quarter (12 weeks) ended May 5, 2018, an increase of 1.6 percent from the third quarter of fiscal 2017 (12 weeks). Domestic same store sales, or sales for stores open at least one year, increased 0.6 percent for the quarter.
Net income for the quarter increased 10.6 percent over the same period last year to $366.7 million, while diluted earnings per share increased 17.3 percent to $13.42 per share from $11.44 per share in the year-ago quarter. Net income and diluted earnings per share benefitted from a lower effective income tax rate, primarily due to the recent tax reform.
For the quarter, gross profit, as a percentage of sales, was 53.5 percent (versus 52.6 percent for the same period last year). The increase in gross margin was attributable to higher merchandise margins and the favorable comparison from the impact of the previously announced sale of two business units completed during the quarter (40 bps).
Under its share repurchase program, AutoZone repurchased 599,000 shares of its common stock for $400 million during the third quarter, at an average price of $667 per share. Year-to-date, the company had repurchased 1.4 million of its common shares for $927 million, at an average price of $651 per share. At the end of the third quarter, the company had $897 million remaining under its current share repurchase authorization.
“I would like to thank our entire organization for delivering solid financial results in spite of a softer than expected sales environment. As we entered the third quarter, we were optimistic about our sales prospects for the third quarter since we were coming off the first reasonably severe winter in the past three years. Unfortunately, we had a very cold, wet spring through March and much of April and our sales didn’t respond until spring-like weather arrived in late April. When the conditions improved, our performance improved significantly, which reinforces our optimism about the balance of the selling season. Our ongoing initiatives, which include enhanced inventory availability, further commercial acceleration and new omni-channel selling initiatives, continue to gain traction as we roll them further across our chain. As we continue to invest in our business, we remain committed to our disciplined approach of increasing operating earnings and cash flow, and utilizing our balance sheet and capital effectively,” said Bill Rhodes, chairman, president and CEO.
During the quarter ended May 5, 2018, AutoZone opened 26 new stores and relocated two stores in the U.S., opened four new stores in Mexico and opened no new stores in Brazil. As of May 5, 2018, the company had 5,540 stores in 50 states in the U.S., the District of Columbia and Puerto Rico, 536 stores in Mexico and 16 stores in Brazil for a total store count of 6,092.