MEMPHIS, Tenn., Dec 7, 2010 (GlobeNewswire via COMTEX) --
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 12 Weeks
Ended Ended
November 20, November 21,
2010 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, November 21, August 28,
2010 2009 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, November 21,
2010 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 12 Weeks
Ended Ended
November 20, November 21,
2010 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, November 21,
2010 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, November 21,
2010 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 12 Weeks
Ended Ended
November 20, November 21,
2010 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 12 Weeks Trailing 4 Trailing 4
Ended Ended quarters quarters
Total Auto Parts (Domestic November 20, November 21, November 20, November 21,
and Mexico) 2010 2009 2010 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 12 Weeks
Ended Ended
November 20, November 21,
2010 2009
------------ ------------
Domestic same store sales 9.5% 5.6%
Inventory Statistics (Total
Stores)
-----------------------------
as of as of
November 20, November 21,
2010 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, November 21,
2010 2009
------------ ------------
Inventory turns 1.6 x 1.6 x
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SOURCE: AutoZone, Inc.
CONTACT: AutoZone, Inc.
Financial:
Brian Campbell
(901) 495-7005
brian.campbell@autozone.com
Media:
Ray Pohlman
(866) 966-3017
ray.pohlman@autozone.com