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AutoZone's (AZO) Q1 Earnings, Revenues Drive Past Estimates

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AutoZone, Inc. (AZO - Free Report) reported 6.8% year-over-year growth in adjusted earnings per share of $9.96 for first-quarter fiscal 2018 (ended Nov 18, 2017). Earnings beat the Zacks Consensus Estimate of $9.80. Net income increased 1% to $281 million.

Quarterly revenues improved 4.9% year over year to $2.59 billion in the reported quarter. Also, the figure surpassed the Zacks Consensus Estimate of $2.54 billion. Domestic same-store sales (sales of stores open at least for one year) rose 2.3% year over year in the quarter.

Gross profit increased to $1.37 billion from $1.3 billion in the prior-year quarter. Operating profit (EBIT) rose to $468.8 million from $458.9 million registered in the first quarter of fiscal 2017.

Operating expenses, as a percentage of sales, increased to 34.6% from 34.1% a year ago.

Store Opening & Inventory

During the quarter, AutoZone opened 16 new stores, relocated one and closed another in the United States. The company also opened five new stores in Mexico. As of Nov 18, the company had 5,480 stores across 50 states in the United States, the District of Columbia and Puerto Rico, 529 in Mexico, 26 Interamerican Motor Corp. branches and 14 stores in Brazil. The total store count was 6,049 as of that date.

AutoZone’s inventory grew 6.3% year over year in the quarter, driven by store openings and increased product placement. Inventory per store decreased to $633,000 from the year-ago level of $647,000.

Share Repurchases

In the first quarter of fiscal 2017, AutoZone repurchased 597,000 shares for $353 million, reflecting an average price of $590 per share. The company had shares worth $471 million remaining for repurchase at the end of the fiscal year.

Financial Details

AutoZone had cash and cash equivalents of $257.8 million as of Nov 18, 2017, up from $195.5 million as of Nov 19, 2016. Total debt amounted to $4.98 billion as of Nov 18, 2017 compared with $5 billion as of Nov 19, 2016.

Zacks Rank & Key Picks

Currently, AutoZone carries a Zacks Rank #4 (Sell).

A few better-ranked automobile stocks are Allison Transmission Holdings, Inc. (ALSN - Free Report) , AB Volvo (VLVLY - Free Report) and Wabco Holdings Inc. . While Allison Transmission and Volvo sport a Zacks Rank #1 (Strong Buy), Wabco Holdings carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Allison Transmission has an expected long-term growth rate of 05%. Year to date, shares of the company have gained 22.3%.

Volvo has an expected long-term growth rate of 15%. Year to date, shares of the company have gained 64.7%.

Wabco Holdings has an expected long-term growth rate of 15%. Its shares have rallied 36.4%, year to date.

AutoZone, Inc. Price, Consensus and EPS Surprise

AutoZone, Inc. Price, Consensus and EPS Surprise | AutoZone, Inc. Quote

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