AutoZone same-store sales lower than expected

Domestic same-store sales at AutoZone for the fourth quarter ended Aug. 31 increased 1% — below expectations. The company did have reason to ride high, however, because it also posted its 28th consecutive quarter of double digit growth in earnings per share.

Diluted earnings per share increased 23.2% to $10.42 per share from $8.46 per share in the year-ago quarter. Moreover, net sales were $3.1 billion for the quarter, a 12% jump from the same quarter last year.

This year’s fourth quarter was made up of 17 weeks, versus last year’s fourth quarter which counted with 16. Excluding sales from the additional week in this year's quarter, diluted earnings per share increased 15.4% to $9.76 per share and sales were up 5.6%.

Net income for the quarter increased 14.7% over the same period last year to $371.2 million. Excluding the additional week, net income for the quarter increased 7.4% over the previous year's quarter to $347.8 million.

For the quarter, gross profit, as a percentage of sales, was flat at 51.8%, thanks to lower acquisition costs which led to gross margin enhancements and were offset in part by the inclusion of the recent acquisition of AutoAnything.

"I would like to thank our entire organization for the solid performance delivered this past quarter. We are pleased to report our 28th consecutive quarter of double digit growth in earnings per share,” said chairman, president and CEO Bill Rhodes. “Our customer service and trustworthy advice are what differentiate us across our industry, and our AutoZoners' passion to deliver superior service has allowed us to consistently deliver exceptional financial results. For the year, we reached many new milestones which included surpassing $9 billion in total sales, opening 368 additional commercial programs, acquiring AutoAnything, and opening three stores in Brazil. We also improved our return on invested capital from the third quarter, achieving 32.7% at year end. While our same store sales performance was below our expectations for the quarter, we believe the initiatives we have in place will lead to improved sales in both retail and commercial in 2014. We remain committed to delivering exceptional customer service while growing our retail, commercial, international and digital commerce businesses. We will maintain our disciplined approach to growing operating earnings and utilizing our capital effectively."

During the quarter, the company opened 69 stores in the U.S., 21 stores in Mexico and 2 stores in Brazil. As of Aug. 31, it operates 4,836 stores in 49 states, the District of Columbia and Puerto Rico in the U.S., 362 stores in Mexico, and 3 stores in Brazil for a total store count of 5,201.