AutoZone says 4th-qtr profit rose almost 14 pct as do-it-yourself buyer boom continues

Tuesday, September 21, 2010

AutoZone parts retailer’s 4Q profit rises 14 pct

NEW YORK — Brisk sales of do-it-yourself repair parts lifted AutoZone Inc.’s profit almost 14 percent in its fiscal fourth quarter.

AutoZone and other auto parts chains have thrived during the economic downturn as penny-pinching consumers keep their cars longer, boosting sales of maintenance parts. It was the fourth straight year of double-digit growth in AutoZone’s earnings per share.

The Memphis, Tenn., company said it opened 80 new stores during the quarter, bringing its store count to 4,627. Revenue at stores open at least a year — a key measure of performance among retailers — rose 6.7 percent.

Unusually warm summer weather was a key factor in the improved results, said Alan Rifkin, analyst with Bank of America Merrill Lynch. Harsh weather often increases demand for replacement parts.

Rifkin reiterated his “Buy” rating on the company’s shares.

AutoZone also announced Jim Shea, executive vice president for marketing, merchandising and supply chain, will retire at the end of October. No replacement was named.

The stock fell $3.12, or 1.4 percent, to $217.02 Tuesday.

AutoZone said net income rose to $268.9 million, or $5.66 per share, for the 16 weeks ended Aug. 28, up from $236.1 million, or $4.43 per share, a year ago.

The increase in earnings per share reflected not only improved financial performance but a sizable reduction in the number of shares outstanding versus a year ago. The company said it bought back 2.8 million shares during the quarter for $565 million. It said it still has $185 million allotted to repurchase additional shares.

Revenue rose nearly 10 percent to $2.45 billion from $2.32 billion a year earlier.

The results beat Wall Street estimates. Analysts surveyed by Thomson Reuters expected earnings of $5.44 per share on $2.4 billion in revenue.

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