AutoZone (NYSE:AZO) logged a stronger-than-expected 6.4% increase in fiscal first-quarter profits on Tuesday, but the auto parts retailer’s revenue narrowly trailed forecasts.
Shares of the Memphis-based company dropped about 1% in response to the mixed quarterly results.
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AutoZone said it earned $203.5 million, or $5.41 a share, last quarter, compared with a profit of $191.1 million, or $4.68 a share, a year earlier. Analysts had been calling for EPS of $5.39.
AutoZone, which is the largest U.S. auto parts retailer, said its revenue rose 3.5% to $1.99 billion, slightly missing the Street’s view of $2.03 billion. Same-store sales inched up 0.2%, while gross margins expanded to 51.8% from 51.1%.
“While this past quarter's sales results were lower than planned, they were not surprising to us,” CEO Bill Rhodes said in a statement. “Regional sales discrepancies continued to challenge our results, however we began to see improvements in our more challenged regions late in the quarter.”
AutoZone also disclosed plans on Tuesday to acquire AutoAnything, an online retailer of specialized automotive products. AutoZone didn’t disclose a price tag on the acquisition.
Shares of AutoZone eased 0.8% to $375.00 ahead of the opening bell. The stock has rallied about 16% so far this year.