updated 12/7/2010 7:16:32 AM ET 2010-12-07T12:16:32

MEMPHIS, Tenn., Dec. 7, 2010 (GLOBE NEWSWIRE) -- AutoZone, Inc. (NYSE:AZO) today reported net sales of $1.8 billion for its first quarter (12 weeks) ended November 20, 2010, an increase of 12.7% from the first quarter of fiscal 2010 (12 weeks). Domestic same store sales, or sales for stores open at least one year, increased 9.5% for the quarter.

Net income for the quarter increased $28.8 million, or 20.1%, over the same period last year to $172.1 million, while diluted earnings per share increased 33.7% to $3.77 per share from $2.82 per share in the year-ago quarter.

For the quarter, gross profit, as a percentage of sales, was 50.7% (versus 50.3% for last year's quarter). The improvement in gross margin was primarily attributable to increased penetration of Duralast product offerings and lower product acquisition costs. Operating expenses, as a percentage of sales, were 33.6% (versus 33.9% last year).  The reduction in operating expenses, as a percentage of sales, reflected leverage of store operating expenses due to higher sales, partially offset by increased incentive compensation costs (35 basis points), higher legal expenses (27 bps), and continued investments in our hub store initiative (18 basis points).

Under its share repurchase program, AutoZone repurchased 1.3 million shares of its common stock for $300 million during the first quarter, at an average price of $231 per share. At quarter end, the Company had $386 million remaining under its current share repurchase authorization.

The Company's inventory increased 4.4% over the same period last year, driven by new store openings. Inventory per store was $508 thousand consistent with last year.  

"We are pleased to announce another quarter of strong performance.  This marks the eighth consecutive quarter of 20% plus growth in earnings per share and our seventeenth consecutive quarter of double digit growth.  While the macro environment for our industry remains favorable, our results are a direct result of the strong commitment to excellence of our 60,000+ AutoZoners across North America.  Their commitment to our culture and to our customers is our key point of differentiation.  Additionally, our return on invested capital on a trailing four-quarter basis reached another new all-time high at 28.6%.  We remain committed to our disciplined approach of growing operating earnings while utilizing our capital appropriately," said Bill Rhodes, Chairman, President and Chief Executive Officer. 

During the quarter ended November 20, 2010, AutoZone opened 15 new stores and replaced four stores in the U.S. and opened 3 new stores in Mexico. As of November 20, 2010, the Company had 4,404 stores in 48 states, the District of Columbia and Puerto Rico in the U.S. and 241 stores in Mexico.

AutoZone is the leading retailer and a leading distributor of automotive replacement parts and accessories in the United States. Each store carries an extensive product line for cars, sport utility vehicles, vans and light trucks, including new and remanufactured automotive hard parts, maintenance items, accessories, and non-automotive products. Many stores also have a commercial sales program that provides commercial credit and prompt delivery of parts and other products to local, regional and national repair garages, dealers, service stations, and public sector accounts. AutoZone also sells the ALLDATA brand diagnostic and repair software. On the web, AutoZone sells diagnostic and repair information, and auto and light truck parts through www.autozone.com , and as part of our commercial sales program, through www.autozonepro.com . AutoZone does not derive revenue from automotive repair or installation.

AutoZone will host a conference call this morning, Tuesday, December 7, 2010, beginning at 10:00 a.m. (EST) to discuss its first quarter results. Investors may listen to the conference call live and review supporting slides on the AutoZone corporate website, www.autozoneinc.com by clicking "Investor Relations," "Conference Calls." The call will also be available by dialing (210) 839-8923. A replay of the call and slides will be available on AutoZone's website. In addition, a replay of the call will be available by dialing (203) 369-1211 through Tuesday, December 14, 2010 at 11:59 p.m. (EST).

This release includes certain financial information not derived in accordance with generally accepted accounting principles ("GAAP"). These non-GAAP measures include return on invested capital, adjusted debt, and adjusted debt/EBITDAR. The Company believes that the presentation of these non-GAAP measures provides information that is useful to investors as it indicates more clearly the Company's comparative year-to-year operating results, but this information should not be considered a substitute for any measures derived in accordance with GAAP. Management targets the Company's capital structure in order to maintain its investment grade credit ratings and manages cash flows available for share repurchase by monitoring cash flows before share repurchases, as shown on the attached tables. The Company believes this is important information for the management of its debt levels and share repurchases. We have included a reconciliation of this additional information to the most comparable GAAP measures in the accompanying reconciliation tables.

Certain statements contained in this press release are forward-looking statements. Forward-looking statements typically use words such as "believe," "anticipate," "should," "intend," "plan," "will," "expect," "estimate," "project," "positioned," "strategy" and similar expressions. These are based on assumptions and assessments made by our management in light of experience and perception of historical trends, current conditions, expected future developments and other factors that we believe to be appropriate. These forward-looking statements are subject to a number of risks and uncertainties, including without limitation: credit market conditions; the impact of recessionary conditions; competition; product demand; the ability to hire and retain qualified employees; consumer debt levels; inflation; weather; raw material costs of our suppliers; energy prices; war and the prospect of war, including terrorist activity; construction delays; access to available and feasible financing; and changes in laws or regulations. Certain of these risks are discussed in more detail in the "Risk Factors" section contained in Item 1A under Part 1 of our Annual Report on Form 10-K for the year ended August 28, 2010, and these Risk Factors should be read carefully. Forward-looking statements are not guarantees of future performance and actual results; developments and business decisions may differ from those contemplated by such forward-looking statements, and events described above and in the "Risk Factors" could materially and adversely affect our business. Forward-looking statements speak only as of the date made. Except as required by applicable law, we undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Actual results may materially differ from anticipated results.

AutoZone's 1st Quarter Highlights - Fiscal 2011      
       
Condensed Consolidated Statements of Operations      
1st Quarter      
(in thousands, except per share data)      
  GAAP Results  
  12 Weeks Ended

November 20, 2010
12 Weeks Ended

November 21, 2009
 
       
Net sales  $ 1,791,662  $ 1,589,244  
Cost of sales 883,914 789,320  
Gross profit  907,748  799,924  
Operating, SG&A expenses 601,627 539,496  
Operating profit (EBIT)  306,121  260,428  
Interest expense, net 37,253 36,340  
Income before taxes  268,868  224,088  
Income taxes 96,792 80,788  
Net income  $ 172,076  $ 143,300  
Net income per share:      
Basic  $ 3.85  $ 2.86  
Diluted  $ 3.77  $ 2.82  
Weighted average shares outstanding:      
Basic 44,669 50,114  
Diluted 45,634 50,824  
       
Selected Balance Sheet Information      
(in thousands)      
  November 20, 2010 November 21, 2009 August 28, 2010
       
Cash and cash equivalents  $ 98,013  $ 79,603  $ 98,280
Merchandise inventories  2,361,512  2,262,823  2,304,579
Current assets  2,660,564  2,617,941  2,611,821
Property and equipment, net  2,532,205  2,368,846  2,519,946
Total assets  5,640,489  5,385,823  5,571,594
Accounts payable  2,519,943  2,187,347  2,433,050
Current liabilities*  3,244,887  2,804,380  3,063,960
Total debt*  2,879,217  2,739,500  2,908,486
Stockholders' equity (deficit)  (817,168)  (483,965)  (738,765)
Working capital  (584,323)  (186,439)  (452,139)
       
* Current liabilities and total debt both include short-term borrowings of $33,517.      
       
Adjusted Debt / EBITDAR (Trailing 4 Qtrs)      
(in thousands, except adjusted debt to EBITDAR ratio)      
  November 20, 2010 November 21, 2009  
Net income  $ 767,087  $ 668,978  
Add: Interest  159,822  147,490  
Taxes  438,198  381,483  
EBIT  1,365,107  1,197,951  
       
Add: Depreciation  193,809  182,846  
Rent expense  198,781  185,520  
Option expense  19,940  18,930  
EBITDAR  $ 1,777,637  $ 1,585,247  
       
Debt  $ 2,879,217  $ 2,739,500  
Capital lease obligations  85,019  53,004  
Add: rent x 6   1,192,686  1,113,120  
Adjusted debt  $ 4,156,922  $ 3,905,624  
       
Adjusted debt to EBITDAR  2.3  2.5  
       
       
Selected Cash Flow Information      
(in thousands)      
  12 Weeks Ended

November 20, 2010
12 Weeks Ended

November 21, 2009
 
       
Depreciation  $ 44,291  $ 42,566  
Capital spending  $ 45,811  $ 53,439  
       
Cash flow before share repurchases:      
Net increase / (decrease) in cash and cash equivalents  $ (267)  $ (13,103)  
Subtract increase in debt  (29,269)  12,600  
Add back share repurchases  299,655  204,379  
Cash flow before share repurchases and changes in debt  $ 328,657  $ 178,676  
       
       
Other Selected Financial Information      
(in thousands, except ROIC)      
  November 20, 2010 November 21, 2009  
       
       
Cumulative share repurchases ($ since fiscal 1998)  $ 9,014,226  $ 7,795,296  
Remaining share authorization ($)  $ 385,774  $ 104,704  
       
Cumulative share repurchases (shares since fiscal 1998)  123,041  116,787  
Shares outstanding, end of quarter  44,027  49,427  
       
  Trailing 4 Quarters  
  November 20, 2010 November 21, 2009  
Net income  $ 767,087  $ 668,978  
Adjustments:      
Interest expense  159,822  147,490  
Rent expense  198,781  185,520  
 Tax effect*  (130,375)  (120,882)  
After-tax return  995,315  881,106  
       
Average debt**  2,800,081  2,566,251  
Average equity**  (584,704)  (217,893)  
Add: Rent x 6  1,192,686  1,113,120  
Average capital lease obligations**  68,271  56,690  
Pre-tax invested capital  $ 3,476,334  $ 3,518,168  
       
Return on Invested Capital (ROIC) 28.6% 25.0%  
       
* Effective tax rate over trailing four quarters ended November 20, 2010 and November 21, 2009 is 36.4%, respectively.

** All averages are computed based on trailing 5 quarter balances.
     
AutoZone's 1st Quarter Fiscal 2011        
Selected Operating Highlights        
         
Store Count & Square Footage        
         
  12 Weeks Ended

November 20, 2010
12 Weeks Ended

November 21, 2009
   
Domestic stores:        
Store count:        
Stores opened  15  38    
Stores closed   --  2    
Replacement stores  4  1    
Total domestic stores  4,404  4,265    
         
Stores with commercial programs  2,478  2,312    
         
Square footage (in thousands):  28,407  27,444    
         
Mexico stores:        
Stores opened   3  5    
Total stores in Mexico  241  193    
         
Total stores chainwide  4,645  4,458    
         
Square footage (in thousands):  30,163  28,838    
Square footage per store  6,494  6,469    
         
Sales Statistics        
($ in thousands, except sales per average square foot and percentages)        
  12 Weeks Ended 12 Weeks Ended Trailing 4 quarters Trailing 4 quarters
Total Auto Parts (Domestic and Mexico)  November 20, 2010 November 21, 2009 November 20, 2010 November 21, 2009
Total auto parts sales  $ 1,754,987  $ 1,556,261  $ 7,412,479  $ 6,782,599
% Increase vs. LY  12.8% 7.7% 9.3% 5.9%
% Increase vs. LY (excl 53rd week)       8.0%
         
Sales per average store   $ 379  $ 351  $ 1,629  $ 1,554
Sales per average square foot   $ 58  $ 54  $ 251  $ 241
         
Domestic Commercial         
Total domestic commercial sales   $ 222,440  $ 183,842  $ 918,580  $ 786,262
% Increase vs. LY 21.0% 7.7% 16.8% 3.9%
% Increase vs. LY (excl 53rd week)       5.7%
         
All Other (ALLDATA and E-Commerce)        
All other sales  $ 36,675  $ 32,983  $ 152,557  $ 145,177
% Increase vs. LY  11.2% 0.9% 5.1% 2.9%
% Increase vs. LY (excl 53rd week)       4.9%
         
  12 Weeks Ended

November 20, 2010
12 Weeks Ended

November 21, 2009
   
Domestic same store sales  9.5% 5.6%    
         
         
Inventory Statistics (Total Stores)        
  as of

November 20, 2010
as of

November 21, 2009
   
Accounts payable/inventory  106.7% 96.7%    
         
($ in thousands)        
Inventory  $ 2,361,512  $ 2,262,823    
Inventory per store  $ 508  $ 508    
Net inventory (net of payables)  $ (158,431)  $ 75,476    
Net inventory / per store  $ (34)  $ 17    
         
  Trailing 5 Points    
  November 20, 2010 November 21, 2009    
Inventory turns  1.6 x  1.6 x    
CONTACT:  AutoZone, Inc.
          Financial:
          Brian Campbell
            (901) 495-7005
            brian.campbell@autozone.com
          Media:
          Ray Pohlman
            (866) 966-3017
            ray.pohlman@autozone.com

© Copyright 2012, GlobeNewswire, Inc. All Rights Reserved

Discuss:

Discussion comments

,

Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 4.71%
$30K home equity loan FICO 5.26%
$75K home equity loan FICO 4.70%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.42%
13.42%
Cash Back Cards 17.94%
17.94%
Rewards Cards 17.14%
17.14%
Source: Bankrate.com