AutoZone Blames 2Q Sales Miss on Delayed Tax Returns
AutoZone (NYSE:AZO) narrowly beat the Street on Tuesday with a 5.6% increase in fiscal second-quarter profits, but the company blamed weaker-than-expected sales on delayed income tax returns.
Shares of the largest U.S. auto-parts retailer ticked lower following the mixed results.
AutoZone said it earned $176.2 million, or $4.78 a share, last quarter, compared with a profit of $166.9 million, or $4.15 a share, a year earlier. Analysts had called for EPS of $4.76.
Revenue ticked up 2.8% to $1.86 billion, narrowly trailing the Street’s view of $1.88 billion. Gross margins grew to 51.9% from 51.3% thanks to lower acquisition costs.
AutoZone said its domestic same-store sales slumped 1.8% year-over-year.
The company said normally its sales “increase significantly” during the final two weeks of its second quarter, but this year they tumbled 8%.
“Our belief is the approximate two week delay in processing of income tax returns this year was the key contributor to this decline in sales,” CEO Bill Rhodes said in a statement. He added management expects sales to “recover to more normalized volumes” in the current quarter.
AutoZone said it repurchased 513,000 shares of its common stock during the fiscal second quarter for $185 million. The company had $603 million left on its buyback authorization as of the end of the quarter.
Shares of Memphis-based AutoZone fell 0.94% to $375.00 early Tuesday.