Auto parts retailer AutoZone Inc. (AZO) is scheduled to release its fourth-quarter results before the market's open Wednesday. On average, 21 analysts surveyed by Thomson Reuters expect 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. Sales for the quarter are estimated to be $2.23 billion, representing a 0.7% growth from last year.
In the same period a year ago, the Memphis, Tennessee-based company had recorded net income of $243.75 million or $3.88 per share, and while excluding the additional week, net income was $227.95 million or $3.63 per share. Net sales for the quarter were $2.21 billion, or $2.08 billion, excluding the additional week. Domestic same store sales, or sales for stores open at least one year, increased 0.6% for the quarter.
For the fiscal year 2009, analysts estimate earnings of $11.73 per share, on sales of $6.81 billion. In the year 2008, the company had reported net income of $641.61 million or $10.04 per share on net sales of $6.52 billion.
The latest results are expected to reflect the impact of the economic downturn that is motivating people to defer new vehicle purchases and fix and hold on to existing vehicles, leading to higher sales of replacement parts. Delay in new car purchases is favoring 'do-it-yourself' auto parts retailers like AutoZone. According to industry experts, the median age of vehicles on the road is more than 7 years currently, compared with about 5 years in 2003. AutoZone derives about 83% of its revenue from the $40 billion U.S. do-it-yourself market, and about 11% from commercial repair shops, while the balance 6% comes largely from sales in Mexico.
While announcing the third-quarter earnings results back in May, Bill Rhodes, Chairman, President and Chief Executive Officer, had said, "While the current economic environment, combined with the reduction in fuel prices compared to last year, has clearly been beneficial to our industry's performance, we are very pleased with our organization's ability to capitalize on these favorable trends. At the end of the third quarter, our balance sheet was in excellent condition, and we remain committed to our disciplined approach of growing operating earnings while utilizing our capital effectively."
AutoZone, which operates as a specialty retailer and distributor of automotive replacement parts and accessories, opened its first store in Forrest City, Arkansas on July 4, 1979. The company currently operates more than 4,200 stores in the US, Puerto Rico, and Mexico, and each of its stores carries an extensive product line for cars, sport utility vehicles, vans and light trucks, primarily for 'do-it-yourself' customers.
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 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 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.
AZO closed Tuesday's regular trading session at $152.92, down $0.63 or 0.41%, on a volume of 870 thousand shares.
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