MEMPHIS, Tenn. – AutoZone today reported net sales of $1.7 billion for its third quarter (12 weeks) ended May 9, an increase of 9.3 percent from fiscal third quarter 2008 (12 weeks). Domestic same-store sales, or sales for stores open at least one year, increased 7.4 percent for the quarter.
Net income for the quarter increased $15.1 million, or 9.5 percent, over the same period last year to $173.7 million, while diluted earnings per share increased 25.9 percent to $3.13 per share from $2.49 per share in the year-ago quarter.
For the quarter, gross profit, as a percentage of sales, was 50.2 percent (versus 50.2 percent last year). Gross margin benefited by approximately 15 basis points through leverage of distribution costs due to improved efficiencies and lower fuel costs, but was offset by the impact of promotional activities. Operating expenses, as a percentage of sales, were 31.8 percent (versus 32.2 percent last year). The lower operating expense ratio reflected leverage of store operating expenses due to higher sales volumes, offset in part by approximately 50 basis points from higher incentive compensation and investments to enhance our hub stores.
Under its share repurchase program, AutoZone repurchased 450,000 shares of its common stock for $65 million during the third quarter, at an average price of $145 per share. Year-to-date the company has purchased $713 million of stock, at an average price of $130 per share. The company has $396 million remaining under its current share repurchase authorization.
The company’s GAAP inventory increased 6.4 percent over the same period last year. Inventory per store was $516,000 versus $506,000 last year, an increase of 2 percent. Net inventory, defined as merchandise inventories less accounts payable, decreased on a per store basis to $33,000 from $56,000 last year.
"We are pleased to report our 11th consecutive quarter of double-digit earnings per share growth,” said Bill Rhodes, chairman, president and chief executive officer. “I would like to thank our AutoZoners across the organization for their commitment to excellence and for their diligence to ensure we meet or exceed our customers’ expectations. While the current economic environment, combined with the reduction in fuel prices compared to last year, has clearly been beneficial to our industry’s performance, we are very pleased with our organization’s ability to capitalize on these favorable trends. At the end of the third quarter, our balance sheet was in excellent condition, and we remain committed to our disciplined approach of growing operating earnings while utilizing our capital effectively."
During the quarter, AutoZone opened 32 new stores, closed one store and relocated four stores in the U.S. and opened 10 stores in Mexico. As of May 9, the company had 4,172 stores in 48 states, the District of Columbia and Puerto Rico in the U.S. and 168 stores in Mexico.
