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MEMPHIS, Tenn., May 27, 2014 (GLOBE NEWSWIRE) -- AutoZone, Inc. (NYSE:AZO) today reported net sales of $2.3 billion for its third quarter (12 weeks) ended May 10, 2014, an increase of 6.2% from the third quarter of fiscal 2013 (12 weeks). Domestic same store sales, or sales for stores open at least one year, increased 4.0% for the quarter.
Net income for the quarter increased $19.6 million, or 7.4%, over the same period last year to $285.2 million, while diluted earnings per share increased 16.4% to $8.46 per share from $7.27 per share in the year-ago quarter.
For the quarter, gross profit, as a percentage of sales, was 52.0% (versus 51.8% for last year's quarter). The improvement in gross margin was attributable to higher merchandise margins and lower shrink expense, partially offset by higher supply chain costs associated with current year inventory initiatives (25 bps). Operating expenses, as a percentage of sales, were 31.5% (versus 31.1% last year). The increase in operating expenses, as a percentage of sales, was primarily due to higher store payroll (14 bps) and annualizing the benefit recorded last year for the net gain on disposal of certain assets (18 bps).
Under its share repurchase program, AutoZone repurchased 795 thousand shares of its common stock for $420 million during the third quarter, at an average price of $529 per share. Year to date, the Company has repurchased 1.877 million shares of its common stock for $912 million, at an average price of $486 per share. At the end of the third quarter, the Company had $307 million remaining under its current share repurchase authorization.
The Company's inventory increased 12.0% over the same period last year, driven by a combination of increased product placement and new store openings. Inventory per store was $594 thousand versus $547 thousand last year and $589 thousand last quarter. Net inventory, defined as merchandise inventories less accounts payable, on a per store basis was a negative $84 thousand versus negative $63 thousand last year.