AutoZone Inc. (NYSE: AZO) reported its financial results for the fiscal third quarter on Tuesday that beat Wall Street estimates on the back of commercial business that showed resilience in recent months.
1. Financial performance
AutoZone said that its net income printed at $596.2 million (£422.02 million) in the quarter that concluded on 8th May versus the year-ago figure of $342.9 million. On a per-share basis, the automotive retailer earned $26.48 per share in the third quarter, compared to last year’s $14.39 per share. In the prior quarter (Q2), the retail firm had posted $345.9 million of net income.
AutoZone generated $3.65 billion of net sales in Q3 that represents an annualised growth of 31.4%. According to FactSet, experts had forecast the company to post $3.27 billion of sales in the recent quarter. Their estimate for per-share earnings was capped at a lower $20.13.
2. Other notable figures
According to AutoZone, commercial sales in the third quarter posted a year over year increase of 44.4%. Comparable sales, it added, jumped 28.9% in Q3 to beat FactSet consensus of 17.1% growth.
At 52.4%, gross profit as a percentage of sales saw a decline of 118 basis points in the recent quarter. The company attributed the decline to investment in pricing initiatives and accelerated growth of its commercial business.
In separate news from the United States, Petco announced a secondary stock offering of 22 million shares on Monday.
3. Share repurchase and CEO’s remarks
AutoZone repurchased $900 million worth of its shares in the third quarter. The Memphis-based firm said its inventory noted a year over year increase of 5.1% in Q3. Commenting on the earnings report on Tuesday, CEO Bill Rhodes said:
“We intend to accelerate our company’s historical Commercial growth rate as we increase our penetration in this market. While we understand sales trends will slow, we must work diligently during this fourth quarter to maintain the share gains we have achieved.”
Impact on the share price
AutoZone opened at $1,453 per share in the stock market on Tuesday and is currently exchanging hands at a per-share price of a lower $1,424. In comparison, it had started the year at $1,180 per share.
AutoZone remained almost flat on average in the stock market last year. At the time of writing, the American retailer of aftermarket automotive parts and accessories is valued at $31.32 billion and has a price to earnings ratio of 18.01.
The post Here’s what AutoZone’s Q3 financial report tells us appeared first on Invezz.
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