AutoZone keeps firing on all cylinders

The nation’s leading automotive retailer ended its most recent fiscal year the same way it has for the past nine years – with double-digit profit growth and a favorable outlook for the coming year.



AutoZone, operator of 5,609 stores in the U.S., Mexico and Brazil, grew total sales 7.9% to $3.3 billion and domestic same-store sales 4.5% during it fourth quarter ended Aug. 29. The topline growth was aided by the addition of 72 new stores during the period, leaving the company with 5,141 stores in the U.S., 441 stores in Mexico and 27 locations in Brazil.



The company did not disclose how many stores it planned to open this year or offer details on other capital expenditures such as information technology or e-commerce fulfillment.



Net income increased 7.4% to $401.1 million and earnings per share increased 13% to $12.75 from $11.28. Earnings per share growth benefited from stock buyback activity during the quarter, which enabled AutoZone to report its 36th consecutive quarter of double-digit earnings growth. The company spent $430 million to buy back 633,000 shares. For the full year, AutoZone spent $1.3 billion to buy back roughly two million shares. At year end, the company had only $348 million remaining under its current share repurchase authorization.



“Since our inception, we've been committed to providing exceptional customer service and trustworthy advice; our key point of differentiation. This commitment to our customers leads us to deliver exceptional financial performance,” said AutoZone chairman, president and CEO Bill Rhodes. “For the year, we reached many milestones, which included generating over $10 billion in sales and completing the IMC acquisition. Our testing of our inventory availability initiatives, including expanding our multi-deliveries per week to stores and opening mega hub locations has concluded. We have determined that these tests were successful and we will begin implementing our new supply chain strategy now and complete it in a few years. Additionally, as we have routinely stated, we will remain committed to our disciplined approach to growing operating earnings and utilizing our capital effectively.”



Full year sales increase 7.5% to $10.2 billion and domestic same-store sales grew 3.8%. Net income increased 8.5% to $1.2 billion, while earnings per share for the period increased 14.1% to $36.03 from $31.57.