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AutoZone Q3 Net Profit Edges Down, EPS Tops Estimates On Higher Same Store Sales - Update

AutoZone Inc. (AZO), a retailer of automotive replacement parts and accessories, reported Tuesday a slight decline in third-quarter net profit, while earnings per share increased and beat the Street estimates on higher revenue and same store sales.

In pre-market activity on the NYSE, AutoZone shares were gaining around 1.4 percent to trade at $1,831.

The company said its net income for the quarter edged down 0.6 percent to $592.27 million from $596.16 million last year. However, earnings per share grew 9.6 percent to $29.03 from prior year's $26.48 on weak share count.

Analysts on average had expected the company to earn $26.05 per share, according to figures compiled by Thomson Reuters. Analysts' estimates typically exclude special items.

The company's revenue for the quarter rose 6 percent to $3.87 billion from $3.65 billion last year. Analysts expected sales of $3.71 billion.

Domestic same store sales, or sales for stores open at least one year, increased 2.6 percent for the quarter, on top of last year's growth of 28.9 percent.

Commercial sales growth accelerated to 26 percent.

The company's inventory increased 13.9 percent, primarily driven by inflation with the remaining growth driven by our growth initiatives, including megahubs, hubs and new stores.

During the quarter, AutoZone opened 24 new stores in the U.S., four stores in Mexico and three stores in Brazil. As of May 7, the company had 6,115 stores in the U.S., 673 in Mexico and 58 in Brazil for a total store count of 6,846.

Bill Rhodes, Chairman, President and Chief Executive Officer, "We continue to believe the initiatives we have in place position us well for our upcoming fourth quarter."

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