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AutoZone (AZO) Earnings, Revenues Miss Estimates in Q2
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AutoZone, Inc. (AZO - Free Report) reported 8.8% year-over-year growth in earnings per share to $8.08 for the second quarter of fiscal 2017 (ended Feb 11, 2017) from $7.43 recorded in the year-ago quarter. Earnings missed the Zacks Consensus Estimate of $8.20. Moreover, net income climbed 3.7% to $237.1 million from $228.6 million a year ago.
Quarterly revenues improved 1.4% year over year to $2.29 billion in the reported quarter. However, the figure lagged the Zacks Consensus Estimate of $2.35 billion. Domestic same-store sales (sales for stores open at least for one year) were flat in the quarter.
Gross profit rose to $1.21 billion (or 52.7% of sales) from $1.19 billion in the prior-year quarter. The decline was due to higher shrink expense and supply chain costs, partly offset by lower acquisition costs.
Operating profit improved to $384 million from $382.7 million recorded in the second quarter of fiscal 2016. Operating expenses, as a percentage of sales, rose to 35.9% from 35.8% a year ago. Operating expenses margin rose due to higher domestic store payroll in the reported quarter, partly offset by lower incentive compensation.
AutoZone opened 33 stores in the U.S., three stores in Mexico and one in Brazil. As of Feb 11, the company had 5,346 stores across 50 states, the District of Columbia and Puerto Rico in the U.S., 491 stores in Mexico, nine stores in Brazil and 26 Interamerican Motor Corp. (IMC) branches. Thus, the total store count was 5,872 as of that date.
AutoZone’s inventory grew 8.7% year over year in the quarter, driven by store openings and increased product placement. Inventory per store increased to $665,000 from the year-ago level of $633,000.
Share Repurchases
In the second quarter of fiscal 2017, AutoZone repurchased 256,000 shares for $198 million, reflecting an average price of $773 per share. The company had shares worth $585 million remaining for repurchase at the end of the quarter.
Financial Details
AutoZone had cash and cash equivalents of $210.6 million as of Feb 11, 2017, up from $208 million as of Feb 13, 2016. Total debt amounted to $5.15 billion as of Feb 11, 2017, compared with $4.85 billion as of Feb 13, 2016. The company had a stockholders’ deficit of $1.83 billion as of Feb 11, 2017, up from $1.74 billion as of Feb 13, 2016.
During the first half of fiscal 2017, AutoZone generated net cash flow of $355.9 million before share repurchases and changes in debt, compared with $364.2 billion in the first half of fiscal 2016. Capital spending increased to $216.1 million from $186.6 million a year ago.
Price Performance
Autozone underperformed the Zacks-categorized Retail/Wholesale-Auto Parts industry over the last three months. The share price of AutoZone decreased 6.7%, while the industry saw a 2.2% decline.
Zacks Rank & Key Picks
Currently, AutoZone carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the auto space include Allison Transmission Holdings, Inc. (ALSN - Free Report) , Continental AG (CTTAY - Free Report) and PEUGEOT SA .
Allison Transmission has long-term growth rate of 11%.
Continental AG has long-term growth rate of 7.91%.
PEUGEOT SA, carrying a Zacks Rank #2 (Buy), has long-term expected growth rate of 7.19%.
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AutoZone (AZO) Earnings, Revenues Miss Estimates in Q2
AutoZone, Inc. (AZO - Free Report) reported 8.8% year-over-year growth in earnings per share to $8.08 for the second quarter of fiscal 2017 (ended Feb 11, 2017) from $7.43 recorded in the year-ago quarter. Earnings missed the Zacks Consensus Estimate of $8.20. Moreover, net income climbed 3.7% to $237.1 million from $228.6 million a year ago.
Quarterly revenues improved 1.4% year over year to $2.29 billion in the reported quarter. However, the figure lagged the Zacks Consensus Estimate of $2.35 billion. Domestic same-store sales (sales for stores open at least for one year) were flat in the quarter.
Gross profit rose to $1.21 billion (or 52.7% of sales) from $1.19 billion in the prior-year quarter. The decline was due to higher shrink expense and supply chain costs, partly offset by lower acquisition costs.
Operating profit improved to $384 million from $382.7 million recorded in the second quarter of fiscal 2016. Operating expenses, as a percentage of sales, rose to 35.9% from 35.8% a year ago. Operating expenses margin rose due to higher domestic store payroll in the reported quarter, partly offset by lower incentive compensation.
AutoZone, Inc. Price, Consensus and EPS Surprise
AutoZone, Inc. Price, Consensus and EPS Surprise | AutoZone, Inc. Quote
Store Opening & Inventory
AutoZone opened 33 stores in the U.S., three stores in Mexico and one in Brazil. As of Feb 11, the company had 5,346 stores across 50 states, the District of Columbia and Puerto Rico in the U.S., 491 stores in Mexico, nine stores in Brazil and 26 Interamerican Motor Corp. (IMC) branches. Thus, the total store count was 5,872 as of that date.
AutoZone’s inventory grew 8.7% year over year in the quarter, driven by store openings and increased product placement. Inventory per store increased to $665,000 from the year-ago level of $633,000.
Share Repurchases
In the second quarter of fiscal 2017, AutoZone repurchased 256,000 shares for $198 million, reflecting an average price of $773 per share. The company had shares worth $585 million remaining for repurchase at the end of the quarter.
Financial Details
AutoZone had cash and cash equivalents of $210.6 million as of Feb 11, 2017, up from $208 million as of Feb 13, 2016. Total debt amounted to $5.15 billion as of Feb 11, 2017, compared with $4.85 billion as of Feb 13, 2016. The company had a stockholders’ deficit of $1.83 billion as of Feb 11, 2017, up from $1.74 billion as of Feb 13, 2016.
During the first half of fiscal 2017, AutoZone generated net cash flow of $355.9 million before share repurchases and changes in debt, compared with $364.2 billion in the first half of fiscal 2016. Capital spending increased to $216.1 million from $186.6 million a year ago.
Price Performance
Autozone underperformed the Zacks-categorized Retail/Wholesale-Auto Parts industry over the last three months. The share price of AutoZone decreased 6.7%, while the industry saw a 2.2% decline.
Zacks Rank & Key Picks
Currently, AutoZone carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the auto space include Allison Transmission Holdings, Inc. (ALSN - Free Report) , Continental AG (CTTAY - Free Report) and PEUGEOT SA .
Both Allison Transmission and Continental AG sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Allison Transmission has long-term growth rate of 11%.
Continental AG has long-term growth rate of 7.91%.
PEUGEOT SA, carrying a Zacks Rank #2 (Buy), has long-term expected growth rate of 7.19%.
A Full-Blown Technological Breakthrough in the Making
Zacks’ Aggressive Growth Strategist Brian Bolan explores autonomous cars in our latest Special Report, Driverless Cars: Your Roadmap to Mega-Profits Today. In addition to who will be selling them and how the auto industry will be impacted, Brian reveals 8 stocks with tremendous gain potential to feed off this phenomenon. Click to see the stocks right now >>