WASHINGTON (dpa-AFX) - Automotive parts retailer AutoZone, Inc. (AZO) reported Tuesday a 9 percent increase in profit for the third quarter, reflecting improved margins, lower distribution costs, and sales growth. Earnings per share topped analysts' expectations, while quarterly revenues missed their estimates by a whisker.
'We are pleased to announce another quarter of strong performance. This quarter marks our twenty third consecutive quarter of double digit growth in earnings per share. We remain committed to executing our 2012 operating theme of '1TEAM; Driving our Future,' Chairman, President and CEO Bill Rhodes said in a statement.
The Memphis, Tennessee-based specialty retailer and distributor of automotive replacement parts reported net income of $248.59 million for the third quarter, up 9.3 percent from $227.37 million in the prior-year quarter, and earnings per share rose 18.6 percent to $6.28 from last year's $5.29.
On average, 18 analysts polled by Thomson Reuters expected the company to earn $6.25 per share in the third quarter. Analysts' estimates typically exclude special items.
The results for the third quarter were calculated on 39.59 million outstanding shares, compared to 42.6 million outstanding shares in the year-ago quarter.
Net sales for the quarter improved 6.7 percent to $2.11 billion from $1.98 billion in the same quarter last year, but missed fifteen Wall Street analysts' consensus estimate of $2.13 billion by a whisker.
Domestic same store sales, or sales at established stores, increased 3.9 percent on top of a 5.3 percent growth last year.
'We continued our focus on improving parts coverage; hiring, retaining, and training the best automotive parts professionals; and growing our Commercial business,' Rhodes noted.
Gross margin percentage expanded 40 basis points to 51.6 percent from last year's 51.2 percent, due to lower shrink expense, higher sales and lower distribution costs. Operating expenses, as a percentage of sales, were flat with last year at 31.4 percent.
Total auto parts sales for the quarter increased 6.7 percent to $2.07 billion from the year-ago quarter, with sales per average store growing to $423,000 from $412,000 a year ago, and sales per average square foot edging up to $65 from last year's $63.
Inventory for the quarter increased 5.5 percent from last year, reflecting the addition of new stores and continued strategic investments in hard parts assortment. Inventory per store was $536,000, up 1.6 percent from the prior-year quarter.
'We remain committed to our disciplined approach of growing operating earnings while efficiently utilizing our capital,' Rhodes added.
AZO closed Monday's regular trading session at $368.55, down $1.45 on a volume of 0.63 million shares. In the past 52-week period, the company's stock has been trading in a broad range of $266.25 to $399.10.
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