AutoZone Profit Grows 8%
March 01 2016 - 8:50AM
Dow Jones News
AutoZone Inc. reported its profit grew 8% and easily topped
expectations in its latest quarter as sales climbed and the company
continued to rework its distribution process.
Shares in the company, flat over the past three months, added
1.6% to $787.05 in light premarket trading.
Sales at domestic stores open at least a year rose 3.6% for the
Memphis, Tenn., replacement-part retailer. The company has worked
on increasing its inventory levels and selection, and efforts have
included the opening of mega hub locations and more frequent
deliveries to stores.
At the end of the quarter, Chief Executive Bill Rhodes said, the
company expanded its increased frequency of distribution center
deliveries to 1,300 domestic AutoZone stores and expects by the end
of the fiscal year to be servicing about 2,000 of its more than
5,000 domestic AutoZone stores. The company continues to plan to
open five additional mega hubs by the end of the fiscal year.
Inventory per store edged up 0.3% from a year earlier, while
overall inventory rose 3.9% primarily because of new store
openings. In the latest period, AutoZone opened 30 new stores in
the U.S. to bring its tally to 5,193.
In all, the company reported a profit of $228.6 million, or
$7.43 a share, up from $211.7 million, or $6.51 a share, a year
earlier. Revenue grew 5.3% to $2.26 billion.
Analysts had projected profit at $7.28 a share on $2.26 billion
in sales, according to Thomson Reuters.
Gross margin edged up to 52.7% from 52.2% a year earlier,
because of higher merchandise margins partially offset by higher
supply chain costs.
Last month, parts-seller Advance Auto Parts Inc. reported its
profit plunged in the final quarter of the year, hurt by weaker
sales and fewer selling days in the quarter, though the company
trimmed expenses and results beat Wall Street expectations.
Write to Anne Steele at Anne.Steele@wsj.com
(END) Dow Jones Newswires
March 01, 2016 08:35 ET (13:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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