By Sam Boughedda
Investing.com -- Shares of automotive parts and accessories retailer AutoZone Inc (NYSE:AZO) initially rose in early Tuesday trading after the company reported fiscal third-quarter earnings, topping analyst estimates.
The company posted earnings per share of $29.03 on revenue of $3.87 billion, beating forecasts of $26.07 per share on sales of $3.71 billion.
In addition, domestic same-store sales increased 2.6% for the quarter.
Gross profit, as a percentage of sales, was 51.91%, decreasing 54 basis points versus the previous year, with the company putting it down to accelerated growth in its lower margin commercial business. Autozone added that its inventory increased 13.9% during the quarter, primarily driven by inflation.
“We are very proud to report solid same store sales growth on top of last year’s remarkable 28.9%," said Bill Rhodes, Chairman, President, and Chief Executive Officer.
"Both our retail and commercial sales performance exceeded our expectations this quarter. While our commercial sales growth accelerated to 26.0%, our retail sales also remained healthy considering the tough comparison from a year ago,” Rhodes added.
Autozone stock surged in the early part of Tuesday's session. However, it has since given up most of those gains and is now up just 0.4%.