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AutoZone (NYSE:AZO) shot higher after sailing past analyst estimates with its FQ2 earnings report.
Sales were up 4.6% year-over-year during the quarter to $3.9B. Same-store sales were up 3.0% during the quarter. While domestic same-store sales were only up 0.3%, international same-store sales flew 23.9% higher.
Gross profit was up 160 basis points from a year ago to 53.9% of sales. The increase in gross margin was noted to be driven by higher merchandise margins and a 63 basis point ($24M net) non-cash LIFO favorability, with the remaining leverage primarily from favorable supply chain costs. Operating expenses were 34.6% of sales vs. 34.1% a year ago. Deleverage was primarily driven by domestic store payroll and investment in technology related initiatives. Net income for the quarter increased 8.1% to $515.0M. EPS increased 17.2% to $28.89 vs. $26.62 consensus.
AutoZone (AZO) ended the quarter with 6,332 stores in the U.S., 751 in Mexico and 108 in Brazil for a total store count of 7,191.
CEO update: “While a difficult holiday comparison for both Christmas and New Year’s negatively impacted quarterly sales performance, we continue to be encouraged with our sales initiatives, and believe we are well positioned for future growth. Additionally, we are pleased with our international business as we delivered another quarter of double-digit growth. We remain committed to prudently investing capital in our business, and we will be steadfast in our long-term, disciplined approach to increasing operating earnings and cash flows while utilizing our balance sheet effectively.”
Shares of AutoZone (AZO) gained 3.59% in premarket trading to $2,870.00.