AutoZone Revenue Grows as It Opens More Stores

Replacement-part retailer AutoZone Inc. said profit grew 7.8% in its latest quarter amid higher revenue, helped by new store openings, as same-store sales grew slightly less than expected.

Sales at domestic stores open at least a year rose 1.6% for the Memphis, Tenn., company, which has been working to increase inventory and selection in part by opening so-called mega hub locations and making more frequent deliveries to stores. Analysts, polled by Consensus Metrix, expected a 1.9% increase.

Chief Executive Bill Rhodes said the company is pleased with its strategy and will continue with its multiple delivery rollouts and will continue to open more mega hubs.

Overall inventory increased 7.3%, thanks to new store openings and increased product placement.

In all for the November quarter, AutoZone reported a profit of $278.1 million, or $9.36 a share, up from $258.1 million, or $8.29 a share, a year earlier. Net sales climbed 3.4% to $2.47 billion.

Analysts polled by Thomson Reuters projected profit of $9.31 a share on $2.49 billion in sales.

Gross margin edged up to 52.7% from 52.5% a year earlier.

During the quarter, the company opened 16 new stores and relocated two stores in the U.S., bringing its total to 5,313.

Last month, rival Advance Auto Parts Inc. posted better-than-anticipated results in its latest quarter as same-store sales fell less than expected.

AutoZone stock, inactive in premarket trading, has risen 5.3% in the past three months.

Write to Joshua Jamerson at joshua.jamerson@wsj.com

(END) Dow Jones Newswires

December 06, 2016 08:25 ET (13:25 GMT)

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