MEMPHIS, Tenn. – AutoZone has reported net sales of $1.5 billion for its third quarter (12 weeks) ended May 3, an increase of 3 percent from fiscal third quarter 2007. Domestic same store sales, or sales for stores open at least one year, decreased 0.3 percent for the quarter.
Net income for the quarter increased 4.6 percent over the same period last year to $158.6 million, while diluted earnings per share increased 14.7 percent to $2.49 per share from $2.17 per share in the year-ago quarter.
For the quarter, gross profit, as a percentage of sales, was 50.2 percent (versus 49.9 percent last year). The improvement in gross margin was primarily due to ongoing category management efforts and supply chain efficiencies, which were partially offset by higher shrink expense. Additionally, operating expenses, as a percentage of sales, were 32.2 percent (versus 31.9 percent last year). Higher occupancy costs versus last year were the primary contributor to the increase in comparable operating expenses.
The company’s GAAP inventory increased 6.4 percent over the same period last year. However, adjusted inventory per store, which includes supplier owned pay-on-scan inventory, as of May 3, was $508 thousand versus $504 thousand last year, an increase of 0.8 percent . Net inventory, defined as merchandise inventories less accounts payable, decreased on a per store basis to $56 thousand from $73 thousand last year.
AutoZone did not repurchase any shares of its common stock during the third quarter. The company has $108 million remaining under its current share repurchase authorization. For the fiscal year-to-date, the company has repurchased 2.9 million shares of its common stock for $350 million.
"I would like to thank all our AutoZoners across North America for their ongoing commitment to delivering exceptional customer service. Through their efforts, we were able to deliver our seventh consecutive quarter of double digit earnings per share growth, despite a challenging macro environment that included record high gas prices. We continue to refine our retail offering as evidenced by our improved customer satisfaction survey results, and our efforts to enhance our commercial offerings were rewarded by the highest quarterly commercial sales growth since our third quarter of fiscal 2004. As our operating model remains strong, we will maintain our disciplined approach to growing operating earnings and utilizing our capital effectively," said Bill Rhodes, Chairman, President and Chief Executive Officer.
During the quarter ended May 3, 2008, AutoZone opened 32 new stores and replaced three stores in the U.S. and opened two stores in Mexico. As of May 3, 2008, the Company had 4,032 stores in 48 states, the District of Columbia and Puerto Rico in the U.S. and 130 stores in Mexico.
