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Auto zone (New York Stock Exchange: AZO) soared after beating analyst estimates with its second-quarter earnings report.
Sales rose 4.6% year over year during the quarter to $3.9 billion. Same-store sales increased 3.0% during the quarter. While domestic same-store sales rose just 0.3%, international same-store sales rose 23.9%.
Gross profit increased 160 basis points from the previous year to 53.9% of sales. The increase in gross margin was noted to be driven by higher merchandise margins and non-cash LIFO favorability of 63 basis points ($24 million net), with the remaining leverage primarily due to favorable supply chain costs. Operating expenses represented 34.6% of sales compared to 34.1% a year ago. Deleveraging was primarily driven by domestic store payrolls and investment in technology-related initiatives. Net revenue for the quarter increased 8.1% to $515.0 million. EPS rose 17.2% to $28.89 versus consensus of $26.62.
AutoZone (AZO) ended the quarter with 6,332 stores in the US, 751 in Mexico and 108 in Brazil for a total of 7,191 stores.
CEO Update: “Although the difficult Christmas and New Year comparison negatively affected quarterly sales performance, we remain encouraged by our sales initiatives and believe we are well positioned for future growth. Additionally, we are pleased with our international business already “We achieved another quarter of double-digit growth. We remain committed to investing capital prudently in our business, and we will be steadfast in our disciplined, long-term approach to growing operating profits and cash flows while effectively utilizing our balance sheet.”
AutoZone (AZO) Stock Gained 3.59% in pre-market operations at $2,870.00.
