Sales Growth Drives AutoZone’s 3Q Net Higher

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AutoZone (NYSE:AZO) said Tuesday its third-quarter earnings were up 6.8% amid stronger auto-parts and commercial sales, beating Wall Street earnings expectations.

The nation’s largest auto-parts retailer has continued to expand with new stores in the U.S. and Mexico, while a stronger commercial business has helped boost performance. AutoZone last year announced plans to open as many as 15 stores in Brazil, the fourth-largest car market in the world.

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The company’s third quarter came during a period of extended cold weather that has put a damper on sales at many retailers, although AutoZone’s sales picked up in the final four weeks.

“While sales results for the quarter finished below our expectations, we were pleased to see noticeable improvements in our performance during the final four weeks of the quarter, specifically in our more recently challenged Northeastern and Midwestern markets,” Chairman and CEO Bill Rhodes said in a statement.

Memphis-based AutoZone’s profit in the latest period was $265.6 million, or $7.27 a share, surpassing analysts’ expectations for $7.21 a share. The company reported a $248.6 million profit, or $6.28 a share, in the year-ago period.

Revenue climbed 4.5% to $2.21 billion, meeting estimates. Same-stores sales edged down 0.1%.

Gross margin widened to 51.8% from 51.6%.

Total auto-parts sales rose 2.9% to $2.13 billion. Domestic commercial sales climbed 9.7% to $356.3 million.

Shares were trading 3% higher at $421.63. The stock is now up more than 18% on the year.