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AutoZone (AZO) Q4 Earnings Top Estimates, Revenues In Line

Zacks Equity Research
Updated

AutoZone, Inc. AZO has reported adjusted earnings of $18.54 per share in the fourth quarter of fiscal 2018 (ended Aug 25, 2018), beating the Zacks Consensus Estimate of $17.88. The figure was $15.27 in fourth-quarter fiscal 2017.

For fiscal 2018, adjusted earnings per share increased year over year from $44.07 to $48.77.

Revenues improved 1.3% year over year to $3.6 billion in the reported quarter and it was almost in line with the Zacks Consensus Estimate. Domestic same-store sales (sales of stores open at least for a year) rose 2.2% year over year.

AutoZone, Inc. Price, Consensus and EPS Surprise

 

AutoZone, Inc. Price, Consensus and EPS Surprise | AutoZone, Inc. Quote

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For fiscal 2018, the company's revenues rose to $11.2 billion compared with the last fiscal’s figure of $10.8 billion.

Gross profit increased to $1.91 billion from $1.85 billion in the prior-year quarter. Operating profit (EBIT) rose to $54.3 million from $51.4 million registered in the fourth quarter of fiscal 2017.

Operating expenses, as a percentage of sales, increased to 37% from 32.6% a year ago. This rise is primarily due to charges associated with the termination of pension plans of $130.3 million and domestic store payroll.

Store Opening & Inventory

During the quarter ended Aug 25, AutoZone opened 78 stores and relocated four in the United States. The company also opened 28 stores in Mexico and four in Brazil. As of Aug 25, it had 5,618 stores across 50 states in the United States, the District of Columbia and Puerto Rico, 564 in Mexico, and 20 in Brazil. The total store count was 6,202 as of that date.

AutoZone’s inventory improved 1.6% year over year in the quarter under review, driven by store openings and increased product placement, partially offset by the sale of two business units. At the end of fiscal 2018, inventory per location increased to $636,000 from the year-ago figure of $644,000.

Share Repurchases

In the fourth quarter of fiscal 2018, AutoZone repurchased 974,000 shares for $665 million, reflecting an average price of $683 per share. The company had shares worth $232 million remaining for repurchase at the end of fiscal 2018.

Financial Details

AutoZone had cash and cash equivalents of $217.8 million as of Aug 25, 2018, down from $293.3 million as of Aug 26, 2017. Total debt amounted to $5 billion as of Aug 25, 2018, almost in line with the figure recorded on Aug 26, 2017.

Additional News

The company introduced the next day home delivery program for its customers. The program will deliver local market inventory of up to 100,000 different parts and accessories to customers’ doorstep. Customers have to place the order within 10 PM to be eligible for the next day home delivery program.

Currently, the service is available in 83 markets that cover approximately 80% of the U.S. population.

Zacks Rank & Other Key Picks

AutoZone currently carries a Zacks Rank #2 (Buy). A few other top-ranked stocks in the auto space include PACCAR Inc. PCAR, Allison Transmission Holdings, Inc. ALSN and Fox Factory Holdings, Inc. FOXF, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

PACCAR has an expected long-term growth rate of 10.8%. Over the past six months, shares of the company have gained 6.8%.

Allison Transmission has an expected long-term growth rate of 10%. Shares of the company have increased 34% in the past six months.

Fox Factory has an expected long-term growth rate of 16.8%. Over the past six months, shares of the company have gained 81.9%.

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