37th straight quarter of EPS growth for AutoZone

AutoZone says inventory efficiency improvements allowed the retailer to increase sales and profit in the first quarter.



For the period ended Nov. 21, net sales were $2.4 billion, an increase of 5.6% from the prior year quarter. Same-store sales increased 3.5% for the quarter. Net income for the quarter increased 8.3% over the same period last year to $258.1 million, while diluted earnings per share increased 14% to $8.29 per share from $7.27 per share in the year-ago quarter.



"We are pleased to report our thirty-seventh consecutive quarter of double digit earnings per share growth. Our strong culture enables us to provide exceptional customer service, which is a key point of differentiation," said CEO Bill Rhodes. "We continued implementation of our inventory availability initiatives. At the end of the quarter, we have expanded our increased frequency of distribution center deliveries initiative to just under 1,000 domestic AutoZone stores and expect by the end of the fiscal year to be servicing approximately 2,000 of our over 5,000 domestic AutoZone stores. We also plan to open approximately five additional Mega Hubs by the end of the fiscal year. Our results to date continue to meet or exceed our expectations, further confirming our new inventory deployment strategy. While we continue 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."



AutoZone's so-called Mega Hub locations offer retail up front, open 24 hours, with a distribution center in back. The hubs are part of an experiment by the Memphis retailer to boost profits by keeping more top-selling items stocked in its stores.



During the quarter AutoZone opened 22 new stores and relocated one store in the U.S., opened one new store in Mexico, opened one new store in Brazil, and opened two new IMC branches.



The company has 5,163 stores in 50 states in the U.S., the District of Columbia and Puerto Rico, 442 stores in Mexico, 22 IMC branches, and eight stores in Brazil for a total count of 5,635.