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MEMPHIS, Tenn., Feb. 26, 2013 (GLOBE NEWSWIRE) -- AutoZone, Inc. (NYSE:AZO) today reported net sales of $1.9 billion for its second quarter (12 weeks) ended February 9, 2013, an increase of 2.8% from the second quarter of fiscal 2012 (12 weeks). Domestic same store sales, or sales for stores open at least one year, decreased 1.8% for the quarter.
Net income for the quarter increased $9.3 million, or 5.6%, over the same period last year to $176.2 million, while diluted earnings increased 15.1% to $4.78 per share from $4.15 per share in the year-ago quarter.
For the quarter, gross profit, as a percentage of sales, was 51.9% (versus 51.3% for last year's quarter). The improvement in gross margin was primarily driven by lower acquisition costs. Operating expenses, as a percentage of sales, were 34.7% (versus 34.7% last year). Operating expenses, as a percentage of sales, increased slightly due to the lower sales growth rates, partially offset by lower incentive compensation (47 bps).
Under its share repurchase program, AutoZone repurchased 513 thousand shares of its common stock for $185 million during the second quarter, at an average price of $361 per share. At quarter end, the Company had $603 million remaining under its current share repurchase authorization.
The Company's inventory increased 7.0% over the same period last year, driven by an increase in store count and continued strategic investments in hard parts assortment. Net inventory, defined as merchandise inventories less accounts payable per store was a negative $54 thousand versus negative $51 thousand last year.
"While we are pleased to report our twenty-sixth consecutive quarter of double digit earnings per share growth, we were not pleased with our same store sales results for the quarter. Historically, we have seen our sales increase significantly during the final two weeks of our second quarter. However, this year our total domestic auto parts same store sales for the last two weeks declined by eight percent. 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. Our expectation is sales in the upcoming quarter should recover to more normalized sales volumes. Excluding the last two weeks, our sales were generally consistent with last quarter," said Bill Rhodes, Chairman, President and Chief Executive Officer. "I would like to thank and congratulate our entire team of 70,000+ AutoZoners for their intense dedication and hard work which delivered strong earnings per share and return on invested capital performance in the second quarter. As we enter our key spring and summer selling season, we are optimistic about our future. We believe we have the right initiatives in place to meet and exceed our customer's expectations. We remain committed to our disciplined approach of growing operating earnings while efficiently utilizing our capital."