AutoZone's 4Q Net Rises 14%, Tops Street's View

Driven by higher sales, AutoZone (NYSE:AZO) grew its fiscal fourth-quarter profits by 14%, exceeding Wall Street’s expectations.

The No. 1 U.S. auto-parts retailer said it earned $268.9 million, or $5.66 a share, in the quarter ended Aug.28, compared with a profit of $236.1 million, or $4.43 a share, in the year-earlier period.

Revenue jumped 9.5% to $2.45 billion.

The results topped estimates from analysts, who forecasted EPS of $5.44 on sales of $2.4 billion.

“Our performance during the fourth quarter represents a strong conclusion to a very good year for AutoZone. For the year, we set several new all-time records for our company: EBIT margin 17.9%, accounts payable to inventory ratio of 106%, operating cash flow in excess of $1 billion, and ROIC of 27.6%,” CEO Bill Rhodes said in a statement. “While the macro environment for our industry was certainly favorable, our team's commitment to our culture, constant refinements to our offerings, and high level of execution led to our second consecutive year of strong financial performance.”

AutoZone said its same-store sales climbed 6.7% last quarter and its gross margins came in at 50.5%, up slightly from 50.3%. Inventory last quarter rose by 4.4%.

The auto-parts retailer also announced the October retirement of Jim Shea, its executive vice president of merchandising, marketing and supply chain.

AutoZone’s shares had a muted response to the fiscal fourth-quarter results, rising 0.4% to $221.00 ahead of Tuesday’s open. The stock has soared nearly 40% on the year.