MEMPHIS, Tenn., Dec. 10, 2019 (GLOBE NEWSWIRE) — AutoZone, Inc. (NYSE: AZO) today reported net sales of $2.8 billion for its first quarter (12 weeks) ended November 23, 2019, an increase of 5.7% from the first quarter of fiscal 2019 (12 weeks). Domestic same store sales, or sales for stores open at least one year, increased 3.4% for the quarter.
Operating profit increased 2.5% to $500.0 million. Net income for the quarter decreased 0.3% over the same period last year to $350.3 million, while diluted earnings per share increased 6.2% to $14.30 per share from $13.47 per share in the year-ago quarter. The decrease in net income was driven by an increased effective tax rate resulting from a reduced benefit from stock options exercised during the quarter. The benefit from stock options increased EPS by $0.06 versus $0.43 last year.For the quarter, gross profit, as a percentage of sales, was relatively flat to last year at 53.7%. Operating expenses, as a percentage of sales, were 35.8% (versus 35.2% the same period last year), with deleverage primarily driven by domestic store payroll and benefits.Under its share repurchase program, AutoZone repurchased 403 thousand shares of its common stock for $450.0 million during the first quarter, at an average price of $1,116 per share. At the end of the first quarter, the Company had $1.3 billion remaining under its current share repurchase authorization.The Company’s inventory increased 9.1% over the same period last year, driven by new stores and increased product placement. Inventory per store was $694 thousand versus $658 thousand last year and $674 thousand last quarter. Net inventory, defined as merchandise inventories less accounts payable, on a per store basis, was a negative $71 thousand versus negative $59 thousand last year and negative $85 thousand last quarter.“I would like to thank and congratulate our entire organization for delivering solid sales and earnings in our first fiscal quarter. Our business strengthened during the quarter with accelerated growth in both Retail and Commercial. The hard work of our AutoZoners and their dedication to providing superior customer service, again drove our strong quarterly performance. As our industry’s fundamentals remain healthy, we are optimistic about what we can accomplish this new year, with our ongoing initiatives in place to improve inventory availability, drive DIY sales, and continue to grow Commercial substantially faster than industry growth. We believe our efforts will allow us to meet or exceed our customers’ needs across all channels. As we opportunistically invest capital in our business, we remain committed to our disciplined approach of increasing operating earnings and cash flow, and of utilizing our balance sheet and capital effectively,” said Bill Rhodes, Chairman, President and Chief Executive Officer.During the quarter ended November 23, 2019, AutoZone opened 18 new stores in the U.S., two in Mexico and two in Brazil. As of November 23, 2019, the Company had 5,790 stores in the U.S., 606 stores in Mexico, and 37 stores in Brazil for a total store count of 6,433.AutoZone is the leading retailer and a leading distributor of automotive replacement parts and accessories in the Americas. Each store carries an extensive product line for cars, sport utility vehicles, vans and light trucks, including new and remanufactured automotive hard parts, maintenance items, accessories, and non-automotive products. Many stores also have a commercial sales program that provides commercial credit and prompt delivery of parts and other products to local, regional and national repair garages, dealers, service stations, and public sector accounts. We also have commercial programs in stores in Mexico and Brazil. AutoZone also sells the ALLDATA brand automotive diagnostic and repair software through www.alldata.com and www.alldatadiy.com. Additionally, we sell automotive hard parts, maintenance items, accessories, and non-automotive products through www.autozone.com and our commercial customers can make purchases through www.autozonepro.com. Additionally, on www.duralastparts.com we provide product information on our Duralast branded product. AutoZone does not derive revenue from automotive repair or installation services.AutoZone will host a conference call this morning, Tuesday, December 10, 2019, beginning at 10:00 a.m. (EST) to discuss its first quarter results. Investors may listen to the conference call live and review supporting slides on the AutoZone corporate website, www.autozone.com by clicking “Investor Relations,” located at the bottom of the page. The call will also be available by dialing (210) 839-8923. A replay of the call and slides will be available on AutoZone’s website. In addition, a replay of the call will be available by dialing (203) 369-1211 through Thursday, January 9, at 11:59 p.m. (EST).This release includes certain financial information not derived in accordance with generally accepted accounting principles (“GAAP”). These non-GAAP financial measures include adjustments to reflect return on invested capital, adjusted debt and adjusted debt to EBITDAR. These calculations include adjustments for impairment charges, pension termination charges and deferred tax liabilities. The Company believes that the presentation of these non-GAAP measures provides information that is useful to investors as it indicates more clearly the Company’s comparative year-to-year operating results, but this information should not be considered a substitute for any measures derived in accordance with GAAP. Management targets the Company’s capital structure in order to maintain its investment grade credit ratings and manages cash flows available for share repurchase by monitoring cash flows before share repurchases, as shown on the attached tables. The Company believes this is important information for the management of its debt levels and share repurchases. We have included a reconciliation of this additional information to the most comparable GAAP measures in the accompanying reconciliation tables.Certain statements contained in this press release constitute forward-looking statements that are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements typically use words such as “believe,” “anticipate,” “should,” “intend,” “plan,” “will,” “expect,” “estimate,” “project,” “positioned,” “strategy,” “seek,” “may,” “could” and similar expressions. These are based on assumptions and assessments made by our management in light of experience and perception of historical trends, current conditions, expected future developments and other factors that we believe to be appropriate. These forward-looking statements are subject to a number of risks and uncertainties, including without limitation: product demand; energy prices; weather; competition; credit market conditions; cash flows; access to available and feasible financing; future stock repurchases; the impact of recessionary conditions; consumer debt levels; changes in laws or regulations; war and the prospect of war, including terrorist activity; inflation; the ability to hire, train and retain qualified employees; construction delays; the compromising of confidentiality, availability or integrity of information, including cyber-attacks; historic growth rate sustainability; downgrade of our credit ratings; damages to our reputation; challenges in international markets; failure or interruption of our information technology systems; origin and raw material costs of suppliers; impact of tariffs; anticipated impact of new accounting standards; and business interruptions. Certain of these risks and uncertainties are discussed in more detail in the “Risk Factors” section contained in Item 1A under Part 1 of the Annual Report on Form 10-K for the year ended August 31, 2019, and these Risk Factors should be read carefully. Forward-looking statements are not guarantees of future performance and actual results, developments and business decisions may differ from those contemplated by such forward-looking statements, and events described above and in the “Risk Factors” could materially and adversely affect our business. Forward-looking statements speak only as of the date made. Except as required by applicable law, we undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Actual results may materially differ from anticipated results.Contact Information:
Financial: Brian Campbell at (901) 495-7005, [email protected]
Media: David McKinney at (901) 495-7951, [email protected]
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