AutoZone (AZO) Q4 Earnings & Revenues Top Estimates, Up Y/Y

AutoZone, Inc. (NYSE:AZO) reported 6.1% year-over-year growth in adjusted earnings per share to $15.18 for the fourth quarter of fiscal 2017 (ended Aug 26, 2017). Earnings beat the Zacks Consensus Estimate of $15.11. Net income increased 1.7% to $433.9 million.

For fiscal 2017, adjusted earnings per share increased year over year from $40.70 to $43.04.

Quarterly revenues improved 3.3% year over year to $3.51 billion in the reported quarter. Also, the figure surpassed the Zacks Consensus Estimate of $3.49 billion. Domestic same-store sales (sales for stores open at least for one year) rose 1% year over year in the quarter.

Fiscal 2017 sales rose to $10.89 from $10.64 billion a year ago.

Gross profit increased to $1.85 billion from $1.79 billion in the prior-year quarter. Operating profit rose to $707.6 million from $703.4 million recorded in the fourth quarter of fiscal 2016.

Operating expenses, as a percentage of sales, increased to 32.6% from 32.1% a year ago.

Store Opening & Inventory

During the quarter, AutoZone opened 84 stores in the United States and relocated one store in the United States. The company also opened 25 new stores in Mexico and five in Brazil. As of Aug 26, the company had 5,465 stores across 50 states in the United States, the District of Columbia and Puerto Rico, 524 in Mexico, 26 Interamerican Motor Corp. branches and 14 stores in Brazil. The total store count was 6,029 as of that date.

AutoZone’s inventory grew 6.9% year over year in the quarter, driven by store openings and increased product placement. Inventory per store increased to $644,000 from the year-ago level of $625,000.

Share Repurchases

In the fourth quarter of fiscal 2017, AutoZone repurchased 366,000 shares for $227 million, reflecting an average price of $622 per share. The company had shares worth $824 million remaining tobe repurchased at the end of the fiscal year.

Financial Details

AutoZone had cash and cash equivalents of $293.3 million as of Aug 26, 2017, up from $189.7 million as of Aug 27, 2016. Total debt amounted to $5.08 billion as of Aug 26, 2017 compared with $4.92 billion as of Aug 27, 2016.

During fiscal 2017, AutoZone generated net cash flow of $1.02 billion before share repurchases and changes in debt compared with $1.17 billion in fiscal 2016. During fiscal 2017, capital spending increased to $553.8 million from $488.8 in fiscal 2016.

Zacks Rank & Key Picks

Currently, AutoZone carries a Zacks Rank #3 (Hold).

A few better-ranked automobile stocks are Toyota Motor Corporation (NYSE:TM) , Daimler AG (OTC:DDAIF) and Volkswagen (DE:VOWG_p) AG (OTC:VLKAY) . While Toyota sports a Zacks Rank #1 (Strong Buy), Daimler and Volkswagen carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Toyota has a long-term growth rate of 7%.

Daimler has an expected long-term earnings growth rate of 2.8%

Volkswagen has an expected long-term earnings growth rate of 8.9%

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