No tune-up needed at AutoZone

AutoZone just logged its 35th consecutive quarter of double digit earnings per share growth, proving again that it is like the Honda Accord of the retail industry – a reliable performer that stirs emotions among those with an appreciation for consistency.

The nation’s largest automotive retailer with more than 5,000 stores said its sales increased 6.5% to $2.5 billion and same store sales increased 2.3% during the company’s third quarter ended May 9. Net income increased 8.4% to $309 million while earnings per share increased 13.1% to $9.57 compared to $8.46 during the same quarter the prior year.

“AutoZoners across the company remain committed to providing superior service to our customers and that dedication has resulted in consistent, solid performance. We continued to diligently work on our inventory availability initiatives, including expanding our multi-deliveries per week to test stores and opening two additional mega hub store locations,” said Bill Rhodes, AutoZones chairman, president and CEO. “Also, the expanded hard parts inventory we have deployed throughout our chain over the last year continues to be a contributor to our sales success. While we have continued to strategically invest in our business in order to support our growth, we remain committed to our disciplined approach to growing operating earnings and utilizing our capital effectively.”

A major use of the company’s capital is a share repurchase program which plays a key role in ensuring the double digit earnings per share streak stays alive. AutoZone repurchased 763,000 shares of its common stock for $515 million during the third quarter, at an average price of $675 per share. Year to date, the company has repurchased nearly 1.4 million shares of its common stock for $841 million, at an average price of $611 per share.

At the end of the third quarter, the company had $778 million remaining under its current share repurchase authorization. During the quarter, AutoZone opened 27 new stores and relocated one store in the U.S., opened seven new stores in Mexico, and opened two new stores in Brazil.

The company ended the period with 5,069 stores in the U.S., 418 in Mexico and a seven stores in Brazil.