AutoZone reported weaker-than-expected fiscal first-quarter results as the auto parts retailer's domestic same-store sales lagged Wall Street's estimates. Net income edged down to $32.52 a share for the quarter ended Nov. 23 from $32.55 the year before, below the FactSet-polled consensus that indicated a rise to $33.63.
Sales rose 2.1% to $4.28 billion, but missed Wall Street's view for $4.3 billion. "While currency rate moves depressed reported sales and earnings growth, our international performance remains encouraging as we continue to focus on opening more stores in these markets," Chief Executive Phil Daniele said in a statement.
"We feel we are well positioned for growth heading into the remainder of the fiscal year, as we believe the initiatives we have in place to improve customer service and grow market share are on track." Domestic same-store sales grew 0.3%, below the 0.7% increase modeled by analysts in a Visible Alpha poll.
A year earlier, the metric rose 1.2%. International comparable sales ticked up 1% in the first quarter, while overall same-store sales moved 0.4% higher. The company saw do-it-yourself same-store sales progress from the previous three-month period as "average ticket and traffic trends improved," according to Daniele.
Domestic commercial sales saw improving trends at the end of the first quarter, while the international business "continued to perform well," Daniele said. Gross margin advanced by 16 basis points to 53%. Operating and selling, general and administrative expenses rose to $1.43 billion from $1.37 billion year-on-year. The retailer opened 23 stores in the US, six in Mexico and five in Brazil, bringing its total count to 7,387 as of Nov.
23. "As we continue to invest in our business, we remain committed to our disciplined approach of a focus on increasing earnings and operating cash flow, all while delivering strong shareholder value," Daniele said. Price: 3357.91, Change: +33.90, Percent Change: +1.02 $AZO.