AutoZone's 3rd Quarter Sales Up 30%
28 May 1999
AutoZone's 3rd Quarter Sales Up 30%
MEMPHIS, Tenn., May 26 -- AutoZone, Inc. , today
reported net income for the 12 weeks ended May 8, 1999, of $58.7 million, an
increase of 9% from $53.9 million for the fiscal third quarter of 1998.
Diluted earnings per share increased 11% to 39 cents from 35 cents. Sales for
the quarter rose 30% to $970 million from $744 million a year earlier.
Comparable store sales, or sales at stores opened prior to the start of fiscal
1998, rose 3%, compared to 2% in the prior year.
On a year-to-date basis, AutoZone reported net income for the 36 weeks
ended May 8, 1999, of $146.1 million, an increase of 8% from $135.8 million
for the year earlier period. Diluted earnings per share increased 10% to
97 cents from 88 cents. Sales for the 36-week period rose 34% to $2.72
billion from $2.03 billion a year earlier. Comparable store sales rose 5% for
the year-to-date period compared to 4% in the prior year.
"We've had a very busy and challenging quarter. At the end of the quarter
we'd opened 96 of the former Express locations acquired in October from Pep
Boys and were on track with our accelerated Chief remodel schedule, with
78 remodels completed," said John C. Adams, chairman and chief executive
officer. "We're very pleased with the strong sales at the former Express and
Auto Palace locations. We're also excited about the increases in sales we're
seeing in the remodeled Chief stores. If we continue to see the strong
results we've had so far from these remodels we should be well on our way to
meeting our goal of earning $2 per share in fiscal 2000. We incurred expenses
in excess of $6 million in the quarter for remodeling and remerchandising the
acquired stores and we will incur more than $10 million in one-time conversion
expenses in the fourth quarter. This will limit our EPS growth in the fourth
quarter to 12-15%.
"During the quarter, we decided to close some of our underperforming
stores and also decided not to complete the development of certain sites in
process, resulting in a pre-tax charge of approximately $2 million. In our
twenty-year history, we've only closed about 1% of our internally developed
stores, and we expect future closings to be rare. We've also made some
changes in our site selection criteria and procedures, which we believe should
improve our new store productivity."
During the quarter, AutoZone opened 74 new and replaced 19 auto parts
stores in the U.S and opened 3 stores in Mexico. Also, 65 Chief stores were
closed along with 14 AutoZone stores, including 5 former Auto Palace
locations. For the 36-week period, AutoZone has opened 219 new auto parts
stores in the U.S. and 4 in Mexico, replaced 44 stores, and closed 14 AutoZone
stores and 167 Chief stores. In addition, AutoZone relocated 1 TruckPro store
during the quarter for a year-to-date total of 5.
Also during the quarter, the company repurchased 1.76 million shares of
its common stock for $53.5 million, bringing the cumulative shares repurchased
to 5.67 million for $159.8 million.
AutoZone sells auto and light truck parts, chemicals and accessories
through 2,695 AutoZone and Chief stores in 39 states in the U.S. and
4 AutoZone stores in Mexico. Chief stores are being converted to AutoZone
stores. AutoZone also sells heavy-duty truck parts through 43 TruckPro stores
in 14 states, and automotive diagnostic and repair software through ALLDATA.
Certain statements contained in this press release are forward-looking
statements. These statements discuss, among other things, expected growth,
domestic and international development and expansion strategy, business
strategies and future performance. These forward-looking statements are
subject to risks, uncertainties and assumptions, including without limitation,
competition, product demand, domestic and international economies, government
approvals, inflation, the ability to hire and retain qualified employees, the
ability to convert acquired stores in a timely and profitable manner, consumer
debt levels and the weather. Actual results may materially differ from
anticipated results. Please refer to the Risk Factors section of Form 10-K
for the year ended August 29, 1998 for more details.
AUTOZONE FISCAL 3rd QUARTER FINANCIAL HIGHLIGHTS
(In Thousands, Except Per-Share Data)
12 Weeks Ended 12 Weeks Ended
May 8, 1999 May 9, 1998
Net Sales $970,236 $743,661
Gross profit $408,933 $311,080
Operating profit $104,312 $ 90,457
Income before income
taxes $ 93,135 $ 86,240
Net income $ 58,735 $ 53,940
Net income per share:
Basic $ 0.39 $ 0.35
Diluted $ 0.39 $ 0.35
Weighted average shares:
Basic 149,132 152,366
Diluted 150,729 154,324
36 Weeks Ended 36 Weeks Ended
May 8, 1999 May 9, 1998
Net Sales $2,723,723 $2,026,032
Gross profit $1,138,908 $ 845,202
Operating profit $ 261,400 $ 227,187
Income before income
taxes $ 231,474 $ 217,440
Net income $ 146,074 $ 135,840
Net income per share:
Basic $ 0.97 $ 0.89
Diluted $ 0.97 $ 0.88
Weighted average shares:
Basic 149,941 152,042
Diluted 151,322 153,949