Wednesday, auto parts retailer AutoZone Inc. (AZO) reported a 3.1% drop in profit for the fourth quarter, mainly reflecting higher expenses, while prior-year results benefited from an additional week. However, quarterly earnings per share grew 14.2% on lower share count, but fell shy of Wall Street analysts' consensus estimates. The Memphis, Tennessee-based company's net income and sales, excluding last year's additional week, grew 3.6% and 7.1%, respectively.
Fourth-quarter net income was $236.13 million, lower than last year's net income of $243.75 million. On a per share basis, earnings increased to $4.43 from $3.88 in the same quarter last year. Number of outstanding shares were 53.32 million as of August 29, 2009, lower than 62.86 million as of August 30, 2008.
Excluding the additional week in last year's fourth-quarter results, comparable net income for the quarter increased 3.6% from last year's net income of $227.95 million, while earnings per share grew 22% from $3.63 a year ago.
On average, 21 analysts surveyed by Thomson Reuters expected the company to post earnings of $4.45 per share for the quarter, with estimates ranging between $4.29 and $4.61 per share. Analysts' estimates typically exclude special items.
Net sales for the quarter increased 1% to $2.23 billion from $2.21 billion in the prior year quarter, that came in line with sixteen Wall Street analysts' consensus estimate. Excluding sales from the additional week included in the prior year's quarter, sales were up 7.1% from last year's $2.08 billion.
Domestic same store sales for the quarter, or sales for stores open at least one year, increased 5.4%.
For the quarter, gross profit, as a percentage of sales, was 50.3%, same as last year. The company noted that gross margin was positively impacted through continued leverage of distribution costs due to improved efficiencies and lower fuel costs, offset by a shift in merchandise sales mix to lower margin products.
Operating profit edged up to $417.60 million from $416.84 million a year earlier. In the quarter, operating expenses grew to $705.46 million from last year's $694.97 million, and interest expenses went up to $47.76 million from $34.76 million a year ago.
AutoZone, which operates as a specialty retailer and distributor of automotive replacement parts and accessories primarily for 'do-it-yourself' customers, opened 58 new stores during the quarter, closed one store, and replaced three stores in the U.S., while it opened 20 stores in Mexico. As of August 29, 2009, the company had 4,229 stores in 48 States, the District of Columbia and Puerto Rico in the U.S. and 188 stores in Mexico.
In its preceding third quarter, AutoZone had reported a 9.5% rise in its profit to $173.69 million, and earnings per share were up 25.9% to $3.13 per share, driven by higher sales of replacement parts. Net sales for the third quarter grew 9.3% to $1.66 billion, and domestic same store sales increased 7.4%. Bill Rhodes, chairman, president and chief executive officer, then stated that the third-quarter was the eleventh consecutive quarter of double digit earnings per share growth.
Among others in the industry, Advance Auto Parts Inc. (AAP) on August 12 reported a 7% rise in profit for the second quarter to $80.3 million or $0.83 per share, helped by a 4.8% same-store sales growth. The Roanoke, Virginia-based auto parts retailer's net sales for the second quarter rose 6.5% to $1.32 billion, and same-store sales growth was 4.8%.
Auto parts retailer O'Reilly Automotive, Inc. (ORLY) in July reported a 53% surge in second-quarter profit to $85.52 million or $0.62 per share, as sales jumped 78% and the company opened additional stores in the quarter. The Springfield, Missouri-based company's adjusted earnings per share rose 31% to $0.63. Sales for the quarter grew 78% to $1.25 billion.
In July, Genuine Parts Co. (GPC), an automotive and industrial replacement parts distributor, reported a 22% drop in second-quarter profit to $103.61 million or $0.65 per share, as sales declined across all segments. The Atlanta, Georgia-based company's net sales declined 4% to $2.53 billion.
For fiscal 2009, AutoZone's net income increased 2.4% to $657.05 million from $641.61 million last year, while earnings per share for the period grew 16.8% to $11.73 from $10.04 a year ago. Excluding last year's extra week, year-over-year growth in net income was 5% and in earnings per share were 19.7%.
Annual sales were $6.82 billion, up 4.5% from the prior year's $6.52 billion, while domestic same store sales rose 4.4%. Excluding the additional week, sales increased 6.6% from the last year. For the fiscal year 2009, analysts estimated earnings of $11.73 per share, on sales of $6.81 billion.
Commenting on the results, Bill Rhodes stated, "We are very pleased with our comparable performance for both the fourth quarter and fiscal year 2009. In fiscal 2009, we again expanded our parts assortment, significantly increased the number of markets supported by our enhanced Hub store model, expanded our Commercial sales force, increased formalized training, and leveraged new technologies all primarily focused on customer service improvements. As our sales performance improved, we elected to accelerate the expansion of several of these initiatives to better position us to continue to grow our sales for the future. In fiscal 2009, we experienced market share gains in each of our four businesses."
AZO closed Tuesday's regular trading session at $152.92, down $0.63 or 0.41%, on a volume of 870 thousand shares.
For comments and feedback contact: editorial@rttnews.com
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.