Here's Why AutoZone Stock Hit a New All-Time High Today
Shares of auto-parts retail chain AutoZone (NYSE: AZO) hit new all-time highs on Tuesday after the company reported financial results for its fiscal second quarter of 2024. As of 1:45 p.m. ET, AutoZone stock was up almost 6%.
Another good quarter for shareholders
In Q2 (which ended on Feb. 10), AutoZone generated net sales of $3.9 billion, which was up almost 5% from the same quarter of last year. The growth came from opening new stores and a modest 3% increase in same-store sales.
AutoZone's sales were basically what the market was expecting, but its profits outperformed. In Q2, the company had an operating-profit margin of 19.3%. That's up from an operating margin of 18.2% in the prior-year period.
Higher margins led to higher profits for AutoZone. And with its profits, the company did what it does best -- buy back stock. It used $224 million to repurchase shares in Q2. This continues its long-term trend of share-count reduction, which has consistently boosted its earnings per share (EPS), as the chart below shows.
What's next for AutoZone stock?
There's nothing complicated about AutoZone's approach to market-beating stock performance. It runs a tight ship, earns a strong profit, and buys back stock. As long as the company keeps this simple formula in place, it will be hard to bet against AutoZone stock -- it's up over 200% in just the last five years.
Indeed, it plans to keep the formula in place. As of the end of Q2, AutoZone still had $2.1 billion remaining in its share repurchase authorization. That's good for about 4% of outstanding shares at today's price, which can keep boosting its earnings per share in the coming year.
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Jon Quast has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Here's Why AutoZone Stock Hit a New All-Time High Today was originally published by The Motley Fool
