AutoZone Reports 2.1% Sales Increase to $4.3 Billion, Net Income Declines by 4.8%

AutoZone, Inc. reported its financial results for the twelve weeks ended November 23, 2024, revealing a net sales increase of 2.1% to $4.3 billion, compared to $4.19 billion in the same period last year. The company's gross profit rose to $2.27 billion, representing 53.0% of sales, up from 52.8% in the prior year. However, net income decreased by 4.8% to $564.9 million, with diluted earnings per share slightly declining to $32.52 from $32.55. The decrease in net income was attributed to higher interest expenses and unfavorable exchange rates, which negatively impacted operating profit, down 0.9% to $841.1 million.

In terms of operational metrics, AutoZone's domestic commercial sales increased by 3.2% to $1.1 billion, while same-store sales for domestic locations grew by 0.3%. The company opened 34 new stores during the quarter, contributing to a total of 7,387 stores across the U.S., Mexico, and Brazil. The company’s inventory levels also saw an increase, with merchandise inventories rising to $6.27 billion from $6.16 billion at the end of the previous fiscal period.

AutoZone's strategic focus remains on growth initiatives, including the expansion of its store network and enhancements to its distribution capabilities. The company has continued to invest in its infrastructure, with capital expenditures for the quarter amounting to $247 million, up from $235 million in the same period last year. The company also repurchased $540.1 million of its common stock during the quarter, reflecting its commitment to returning value to shareholders.

The company’s liquidity position remains strong, with $304 million in cash and cash equivalents and $2.2 billion in undrawn capacity under its revolving credit agreement as of November 23, 2024. AutoZone's adjusted debt to earnings before interest, taxes, depreciation, amortization, rent, and share-based compensation expense (EBITDAR) ratio stood at 2.5:1, indicating a stable leverage position. The company expects to continue its investment in growth initiatives while maintaining adequate liquidity to support operations and shareholder returns.

Looking ahead, AutoZone anticipates continued growth driven by an increase in miles driven and the aging vehicle population, which are key indicators for the automotive parts market. However, the company acknowledges potential challenges from macroeconomic factors such as inflation, interest rates, and supply chain disruptions that could impact future performance.