MEMPHIS, Tenn. (GLOBE NEWSWIRE) -- AutoZone, Inc. (stock ticker AZO) reported net sales of $2.6 billion for its first quarter (12 weeks) ended Nov. 17, an increase of 2.0 percent from the first quarter of fiscal 2018 (12 weeks). Domestic same store sales, or sales for stores open at least one year, increased 2.7 percent for the quarter.
Net income for the quarter increased 25.1 percent over the same period last year to $351.4 million, while diluted earnings per share increased 34.7 percent to $13.47 per share from $10 per share in the year-ago quarter. Net income and diluted earnings per share benefitted from a lower effective income tax rate, primarily due to tax reform.
For the quarter, gross profit, as a percentage of sales, was 53.7 percent (versus 52.8 percent for the same period last year). The increase in gross margin was primarily attributable to the impact of the sale of two businesses completed in the prior year (65 bps) and higher merchandise margins. Operating expenses, as a percentage of sales, were 35.2 percent (versus 34.6 percent the same period last year), with deleverage primarily driven by domestic store payroll (56 bps).
Under its share repurchase program, AutoZone repurchased 654 thousand shares of its common stock for $497.1 million during the first quarter, at an average price of $760 per share. At the end of the first quarter, the company had $985 million remaining under its current share repurchase authorization.
AutoZone’s inventory increased 2.0 percent over the same period last year, driven by new stores and increased product placement, partially offset by the impact of the sale of two businesses completed in the prior year. Inventory per location was $658,000 versus $663,000 last year and $636,000 last quarter. Net inventory, defined as merchandise inventories less accounts payable, on a per location basis, was a negative $59,000 versus negative $52,000 last year and negative $75,000 last quarter.
“I want to thank all AutoZoners across the company for their tremendous efforts during our first fiscal quarter," said Bill Rhodes, Chairman, President and Chief Executive Officer. "Their dedication and commitment to superior service resulted in a strong start to our new year. As we entered the quarter, we knew we had difficult comparisons to last year’s first quarter due to the prior year’s sales benefit from three major hurricanes. Our team delivered very solid performance in DIY and our commercial growth accelerated again reaching our highest growth since 2015. Our industry fundamentals remain strong and we continue to be excited about the initiatives we have underway to further enhance our inventory availability, to continue to accelerate commercial and to meet our customers how, when and where they want to be met with our omni-channel initiatives.”
During the quarter, AutoZone opened 13 new stores and relocated one store in the U.S. and opened three new stores in Mexico. As of Nov. 17, the company had 5,631 stores in 50 states in the U.S., the District of Columbia and Puerto Rico, 567 stores in Mexico, and 20 stores in Brazil for a total store count of 6,218.
AutoZone is the leading retailer and a leading distributor of automotive replacement parts and accessories in the United States. Each store carries an extensive product line for cars, sport utility vehicles, vans and light trucks, including new and remanufactured automotive hard parts, maintenance items, accessories, and non-automotive products. Many stores also have a commercial sales program that provides commercial credit and prompt delivery of parts and other products to local, regional and national repair garages, dealers, service stations, and public sector accounts. AutoZone also sells the ALLDATA brand diagnostic and repair software through www.alldata.com and www.alldatadiy.com. Additionally, we sell automotive hard parts, maintenance items, accessories, and non-automotive products through www.autozone.com and our commercial customers can make purchases through www.autozonepro.com. AutoZone does not derive revenue from automotive repair or installation.
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