MEMPHIS - AutoZone Inc (NYSE:AZO). has reported a notable increase in its quarterly profit, buoyed by more efficient supply chain operations and improved merchandise margins. The automotive parts retailer saw its profit rise to $593.5 million for the quarter ending November 18, up from $539.3 million during the same period last year. Earnings per share (EPS) also exceeded expectations, coming in at $32.55, surpassing the forecasted $31.57.
The company's revenue for the quarter was in line with analyst predictions, reaching $4.19 billion. This performance was underpinned by a significant gross margin improvement of 208 basis points, which resulted in a gross margin of 52.8%. The enhancement in margins is credited to the company's refined supply chain operations and an uptick in merchandise margins.
Despite these gains, AutoZone faced increased operational costs, which were primarily driven by higher domestic store payroll expenses and investments in technological advancements. However, these costs did not hinder growth as domestic same-store sales saw a modest increase of 1.2%. The international segment of the business experienced a more robust expansion, with sales surging over 25%.
Inventory levels also saw a slight increase of 3%, which the company attributes to its growth in store count.
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