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AutoZone 2nd Quarter Total Company Same Store Sales Increase 2.9%; Domestic Same Store Sales Increase 1.9%; EPS of $28.29

1. AutoZone reported Q2 sales of $4 billion, a 2.4% increase. 2. Operating profit decreased 4.9%, net income fell 5.3% year-over-year. 3. International same store sales grew 9.5% in constant currency. 4. The company repurchased $329.4 million in shares, with $1.3 billion remaining. 5. AutoZone opened 45 new stores across the U.S., Mexico, and Brazil.

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Why Bullish?

Despite profit declines, sales growth and share buybacks indicate strong future potential. Historically, sustained growth in sales volumes fosters stock price appreciation, as seen in prior quarters of AutoZone.

How important is it?

The reported financial performance and strategies like share repurchase create significant investor interest, influencing AZO’s stock price in the short term.

Why Short Term?

Q2 results suggest immediate revenue and investment activity that affects stocks swiftly, with growth prospects likely impacting stock performance in the near term.

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NAPAORLY
March 04, 2025 06:55 ET  | Source: AutoZone, Inc. MEMPHIS, Tenn., March 04, 2025 (GLOBE NEWSWIRE) -- AutoZone, Inc. (NYSE: AZO) today reported net sales of $4.0 billion for its second quarter (12 weeks) ended February 15, 2025, an increase of 2.4% from the second quarter of fiscal 2024 (12 weeks). Same store sales, or sales for our domestic and international stores open at least one year, are as follows:    Constant Currency   Constant Currency 12 Weeks 12 Weeks* 24 Weeks 24 Weeks*        Domestic1.9% 1.9% 1.0% 1.0%International(8.2%) 9.5% (3.9%) 11.5%Total Company0.5% 2.9% 0.4% 2.4%* Excludes impacts from fluctuations of foreign exchange rates.            For the quarter, gross profit, as a percentage of sales, was flat to last year at 53.9%. Current year gross margin benefited from higher merchandise margins offset by last year benefiting 36 basis points from a non-cash LIFO adjustment. Operating expenses, as a percentage of sales, were 36.0% versus last year at 34.6%. Deleverage was primarily driven by investments to support our growth initiatives. Operating profit decreased 4.9% to $706.8 million. Net income for the quarter decreased 5.3% over the same period last year to $487.9 million, while diluted earnings per share decreased 2.1% to $28.29. Under its share repurchase program, AutoZone repurchased 100 thousand shares of its common stock at an average price per share of $3,291, for a total investment of $329.4 million. At the end of the second quarter, the Company had $1.3 billion remaining under its current share repurchase authorization. The Company’s inventory increased 10.4% over the same period last year. Net inventory, defined as merchandise inventories less accounts payable, on a per store basis, was negative $161 thousand versus negative $164 thousand last year and negative $166 thousand last quarter. “I want to thank our AutoZoners for delivering solid results this quarter. We continue to be pleased with our strategy to grow our domestic DIY and Commercial sales. Domestically, both DIY and Commercial continued to perform well and sales accelerated from the previous quarter. Our international business also continued to deliver strong results and same store sales grew 9.5% on a constant currency basis. While currency rate moves pressured reported sales and earnings, our international performance remains encouraging as we continue to focus on opening more stores in these markets. We are excited about our momentum heading into the back half of the fiscal year and we are well prepared for our spring and summer selling season. As we continue to invest in our business, we remain committed to our disciplined approach of increasing earnings and cash flow, all while delivering strong shareholder value,” said Phil Daniele, President and Chief Executive Officer. During the quarter ended February 15, 2025, AutoZone opened 28 new stores in the U.S., 13 new stores in Mexico and four in Brazil for a total of 45 net new stores. As of February 15, 2025, the Company had 6,483 stores in the U.S., 813 in Mexico and 136 in Brazil for a total store count of 7,432. AutoZone is the leading retailer and distributor of automotive replacement parts and accessories in the Americas. Each store carries an extensive product line for cars, sport utility vehicles, vans and light duty trucks, including new and remanufactured automotive hard parts, maintenance items, accessories, and non-automotive products. The majority of stores have a commercial sales program that provides prompt delivery of parts and other products and commercial credit to local, regional and national repair garages, dealers, service stations, fleet owners and other accounts. AutoZone also sells automotive hard parts, maintenance items, accessories and non-automotive products through www.autozone.com, and our commercial customers can make purchases through www.autozonepro.com. Additionally, we sell the ALLDATA brand of automotive diagnostic, repair, collision and shop management software through www.alldata.com. We also provide product information on our Duralast branded products through www.duralastparts.com. AutoZone does not derive revenue from automotive repair or installation services. AutoZone will host a conference call this morning, Tuesday, March 4, 2025, beginning at 10:00 a.m. (ET) to discuss its second quarter results. This call is being web cast and can be accessed, along with supporting slides, at AutoZone’s website at www.autozone.com by clicking on Investor Relations. Investors may also listen to the call by dialing (888) 506-0062, passcode AUTOZONE. In addition, a telephone replay will be available by dialing (877) 481-4010, replay passcode 51956 through March 18, 2025. This release includes certain financial information not derived in accordance with generally accepted accounting principles (“GAAP”). These non-GAAP measures include adjustments to reflect return on invested capital, adjusted debt and adjusted debt to earnings before interest, taxes, depreciation, amortization, rent and share-based expense (“EBITDAR”). The Company believes that the presentation of these non-GAAP measures provides information that is useful to investors as it indicates more clearly the Company’s comparative year-to-year operating results, but this information should not be considered a substitute for any measures derived in accordance with GAAP. Management targets the Company’s capital structure in order to maintain its investment grade credit ratings. The Company believes this is important information for the management of its debt levels and share repurchases. We have included a reconciliation of this additional information to the most comparable GAAP measures in the accompanying reconciliation tables. Certain statements herein constitute forward-looking statements that are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and typically use words such as “believe,” “anticipate,” “should,” “intend,” “plan,” “will,” “expect,” “estimate,” “project,” “positioned,” “strategy,” “seek,” “may,” “could” and similar expressions. These statements are based on assumptions and assessments made by our management in light of experience, historical trends, current conditions, expected future developments and other factors that we believe appropriate. These forward-looking statements are subject to a number of risks and uncertainties, including without limitation: product demand, due to changes in fuel prices, miles driven or otherwise; energy prices; weather, including extreme temperatures and natural disasters; competition; credit market conditions; cash flows; access to financing on favorable terms; future stock repurchases; the impact of recessionary conditions; consumer debt levels; changes in laws or regulations; risks associated with self-insurance; war and the prospect of war, including terrorist activity; public health issues; inflation, including wage inflation; exchange rates; the ability to hire, train and retain qualified employees, including members of management; construction delays; failure or interruption of our information technology systems; issues relating to the confidentiality, integrity or availability of information, including due to cyber-attacks; historic growth rate sustainability; downgrade of our credit ratings; damage to our reputation; challenges associated with doing business in and expanding into international markets; origin and raw material costs of suppliers; inventory availability; disruption in our supply chain; tariffs, trade policies and other geopolitical factors; new accounting standards; our ability to execute our growth initiatives; and other business interruptions. These and other risks and uncertainties are discussed in more detail in the “Risk Factors” section in Item 1A under Part 1 of our Annual Report on Form 10-K for the year ended August 31, 2024. Forward-looking statements are not guarantees of future performance and actual results may differ materially from those contemplated by such forward-looking statements. Events described above and in the “Risk Factors” could materially and adversely affect our business. However, it is not possible to identify or predict all such risks and other factors that could affect these forward-looking statements. Forward-looking statements speak only as of the date made. Except as required by applicable law, we undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Contact Information:Financial: Brian Campbell at (901) 495-7005, brian.campbell@autozone.comMedia: Jennifer Hughes at (901) 495-6022, jennifer.hughes@autozone.com AutoZone's 2nd Quarter Highlights - Fiscal 2025             Condensed Consolidated Statements of Operations     2nd Quarter, FY2025       (in thousands, except per share data)           GAAP Results       12 Weeks Ended 12 Weeks Ended       February 15, 2025 February 10, 2024             Net sales $3,952,012  $3,859,126    Cost of sales  1,823,611   1,779,474    Gross profit  2,128,401   2,079,652    Operating, SG&A expenses  1,421,634   1,336,410    Operating profit (EBIT)  706,767   743,242    Interest expense, net  108,822   102,619    Income before taxes  597,945   640,623    Income tax expense  110,022   125,593    Net income $487,923  $515,030    Net income per share:       Basic $29.06  $29.74    Diluted $28.29  $28.89    Weighted average shares outstanding:       Basic  16,788   17,319    Diluted  17,245   17,828                                  Year-To-Date 2nd Quarter, FY2025       (in thousands, except per share data)           GAAP Results       24 Weeks Ended 24 Weeks Ended       February 15, 2025 February 10, 2024             Net sales $8,231,652  $8,049,403    Cost of sales  3,835,194   3,755,735    Gross profit  4,396,458   4,293,668    Operating, SG&A expenses  2,848,542   2,701,822    Operating profit (EBIT)  1,547,916   1,591,846    Interest expense, net  216,451   194,004    Income before taxes  1,331,465   1,397,842    Income tax expense  278,609   289,349    Net income $1,052,856  $1,108,493    Net income per share:       Basic $62.48  $63.29    Diluted $60.83  $61.48    Weighted average shares outstanding:       Basic  16,850   17,514    Diluted  17,307   18,031                                  Selected Balance Sheet Information       (in thousands)           February 15, 2025 February 10, 2024 August 31, 2024           Cash and cash equivalents $300,905  $304,096  $298,172  Merchandise inventories  6,588,586   5,970,175   6,155,218  Current assets  7,802,598   7,157,056   7,306,759  Property and equipment, net  6,449,129   5,907,484   6,183,539  Operating lease right-of-use assets  3,120,826   2,999,294   3,057,780  Total assets  18,116,279   16,717,654   17,176,538  Accounts payable  7,784,717   7,149,882   7,355,701  Current liabilities  9,267,357   8,772,609   8,714,243  Operating lease liabilities, less current portion  3,007,455   2,901,636   2,960,174  Total debt  9,052,099   8,630,553   9,024,381  Stockholders' deficit  (4,457,773)  (4,837,321)  (4,749,614) Working capital  (1,464,759)  (1,615,553)  (1,407,484)            AutoZone's 2nd Quarter Highlights - Fiscal 2025               Condensed Consolidated Statements of Operations                  Adjusted Debt / EBITDAR        (in thousands, except adjusted debt to EBITDAR ratio)         Trailing 4 Quarters      February 15, 2025 February 10, 2024     Net income$2,606,790  $2,621,057      Add: Interest expense 474,025   377,044      Income tax expense 663,963   674,721      EBIT 3,744,778   3,672,822               Add: Depreciation and amortization 575,654   519,805      Rent expense(1) 459,840   417,864      Share-based expense 116,848   96,669      EBITDAR$4,897,120  $4,707,160               Debt$9,052,099  $8,630,553      Financing lease liabilities 385,899   328,955      Add: Rent x 6(1) 2,759,040   2,507,184      Adjusted debt$12,197,038  $11,466,692               Adjusted debt to EBITDAR 2.5   2.4               Adjusted Return on Invested Capital (ROIC)        (in thousands, except ROIC)         Trailing 4 Quarters      February 15, 2025 February 10, 2024     Net income$2,606,790  $2,621,057      Adjustments:        Interest expense 474,025   377,044      Rent expense(1) 459,840   417,864      Tax effect(2) (189,575)  (162,956)     Adjusted after-tax return$3,351,080  $3,253,009               Average debt(3)$8,943,172  $7,853,082      Average stockholders' deficit(3) (4,711,173)  (4,577,327)     Add: Rent x 6(1) 2,759,040   2,507,184      Average financing lease liabilities(3) 369,622   295,494      Invested capital$7,360,661  $6,078,433               Adjusted After-Tax ROIC 45.5%  53.5%              (1) The table below outlines the calculation of rent expense and reconciles rent expense to total lease cost, per ASC 842, the most directly comparable GAAP financial measure, for the trailing four quarters ended February 15, 2025 and February 10, 2024.                  Trailing 4 Quarters     (in thousands)February 15, 2025 February 10, 2024     Total lease cost, per ASC 842$614,312  $546,195      Less: Financing lease interest and amortization (113,698)  (93,591)     Less: Variable operating lease components, related to insurance and common area maintenance (40,774)  (34,740)         Rent expense$459,840  $417,864               (2) Effective tax rate over the trailing four quarters ended February 15, 2025 and February 10, 2024 was 20.3% and 20.5%, respectively.      (3)All averages are computed based on trailing five quarter balances.              Other Selected Financial Information        (in thousands)         February 15, 2025 February 10, 2024     Cumulative share repurchases ($ since fiscal 1998)$37,820,600  $35,540,758      Remaining share repurchase authorization ($) 1,329,400   2,109,242               Cumulative share repurchases (shares since fiscal 1998) 155,442   154,696               Shares outstanding, end of quarter 16,747   17,312                12 Weeks Ended 12 Weeks Ended 24 Weeks Ended 24 Weeks Ended  February 15, 2025 February 10, 2024 February 15, 2025 February 10, 2024          Depreciation and amortization$137,918  $124,968  $271,091 $245,192          Cash flow from operations 583,749   434,127   1,395,552  1,264,386          Capital spending 292,702   255,379   539,737  490,807           AutoZone's 2nd Quarter Highlights - Fiscal 2025       Condensed Consolidated Statements of Operations          Selected Operating Highlights                         Store Count & Square Footage                           12 Weeks Ended  12 Weeks Ended  24 Weeks Ended  24 Weeks Ended   February 15, 2025  February 10, 2024  February 15, 2025  February 10, 2024 Domestic:            Beginning stores  6,455    6,316    6,432    6,300  Stores opened  28    19    51    36  Stores closed  -    (3)   -    (4) Ending domestic stores  6,483    6,332    6,483    6,332               Relocated stores  1    3    3    3               Stores with commercial programs  5,962    5,823    5,962    5,823               Square footage (in thousands)  43,049    41,853    43,049    41,853               Mexico:            Beginning stores  800    745    794    740  Stores opened  13    6    19    11  Ending Mexico stores  813    751    813    751               Brazil:            Beginning stores  132    104    127    100  Stores opened  4    4    9    8  Ending Brazil stores  136    108    136    108               Total   7,432    7,191    7,432    7,191               Total Company stores opened, net  45    26    79    51               Square footage (in thousands)  50,118    48,240    50,118    48,240  Square footage per store  6,744    6,708    6,744    6,708               Sales Statistics            ($ in thousands, except sales per average square foot)              12 Weeks Ended  12 Weeks Ended  Trailing 4 Quarters  Trailing 4 Quarters Total AutoZone Stores (Domestic, Mexico and Brazil)February 15, 2025  February 10, 2024  February 15, 2025 (1)  February 10, 2024 Sales per average store $523   $527   $2,506   $2,465  Sales per average square foot $78   $79   $373   $368               Auto Parts (Domestic, Mexico and Brazil)             Total auto parts sales $3,874,366   $3,786,339   $18,323,341   $17,508,154  % Increase vs. LY  2.3%   4.5%   4.7%   5.5%              Domestic Commercial             Total domestic commercial sales $1,051,765   $980,134   $4,989,711   $4,682,570  % Increase vs. LY  7.3%   2.7%   6.6%   4.6%              Average sales per program per week $14.7   $14.1   $16.0   $15.9  % Increase vs. LY  4.3%   (2.8%)   0.6%   (0.6%)              All Other, including ALLDATA            All other sales $77,646   $72,787   $349,176   $322,408  % Increase vs. LY  6.7%   7.2%   8.3%   7.8%          (1) Fiscal 2024 results include an additional week of sales of approximately $359.1 million for Total Auto Parts, $95.7 million for Domestic Commercial and $6.7 million for All Other. Sales per average store and sales per square foot benefited from the additional week by $49K and $7K, respectively.                   12 Weeks Ended  12 Weeks Ended  24 Weeks Ended  24 Weeks Ended Same store sales (2)  February 15, 2025  February 10, 2024  February 15, 2025  February 10, 2024 Domestic  1.9%   0.3%   1.0%   0.8% International  (8.2%)   23.9%   (3.9%)   24.5% Total Company  0.5%   3.0%   0.4%   3.2%              International - Constant Currency  9.5%   10.6%   11.5%   10.7% Total Company - Constant Currency  2.9%   1.5%   2.4%   1.8%              (2) Same store sales are based on sales for all stores open at least one year. Constant Currency same store sales exclude the impact of fluctutations of foreign currency exchange rates by converting both the current year and prior year international results at the prior year foreign currency exchange rate.                                 Inventory Statistics (Total Stores)              as of  as of         February 15, 2025  February 10, 2024       Accounts payable/inventory  118.2%   119.8%                    ($ in thousands)            Inventory $6,588,586   $5,970,175        Inventory per store  887    830        Net inventory (net of payables)  (1,196,131)   (1,179,707)       Net inventory/per store  (161)   (164)                      Trailing 5 Quarters         February 15, 2025  February 10, 2024       Inventory turns  1.4    1.4                     

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