AutoZone Gains on Topping Estimates as Spare Parts Business Grows
By Dhirendra Tripathi
Investing.com – AutoZone stock (NYSE:AZO) traded 1.8% higher Tuesday as the company reported strong sales and earnings in the first quarter, driven by growth in both retail and commercial segments.
Net sales at the auto parts distributor rose more than 16%, to $3.7 billion in the 12 weeks ended November 20, and beat estimates. Domestic same-store sales increased about 14%.
Pressure and rewards for the company’s business have come from different directions. A shortage of semiconductors globally has crippled production of new cars, extending waiting lines and forcing people to opt for second-hand vehicles or stick with their current vehicles longer.
The older vehicles need higher maintenance and repairs, for which spare parts are needed, and those have been in short supply, too, as factories have been shut for long. Deliveries are also delayed as ships have been stuck at ports due to congestion and labor shortages.
The company closed the period with 3% more inventory, driven by new stores. During the quarter, AutoZone opened 15 new stores in the U.S., two in Mexico and one in Brazil.
Operating expenses, as a percentage of sales, was about 32%, an improvement of 170 basis points driven by strong sales growth. One basis point is one-hundredth of a percent.
Beating estimates, adjusted profit per share rose 38%, to $25.69, led by strong topline growth and operating expense leverage.
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AutoZone Gains on Topping Estimates as Spare Parts Business Grows
