AZO - AutoZone stock accelerates after stronger-than-expected earnings results

AutoZone ( NYSE: AZO ) shares gained in premarket trading on Monday after its earnings results rose above the bar set by Wall Street.

For the fiscal fourth quarter , GAAP EPS of $40.51 came in $2.04 above estimates while a 9.2% jump in revenue to $5.36B came in $200M above expectations. Additionally, domestic same store sales increased 6.2% from the prior year quarter. For the August-ended fiscal year, sales rose to $16.3B, about $240M above estimates while $117.19 in earnings per share came in above the $115.27 expectation.

“Our retail business performed well this quarter ending with positive same store sales on top of last year’s strong performance. And, our commercial business growth continued to be exceptionally strong at 22%,” CEO Bill Rhodes said. “The investments we have made in both inventory availability and technology are enhancing our competitive positioning. We are optimistic about our growth prospects heading into our new fiscal year.”

He added that investments in the commercial business, gross margins decreased 70 basis points during the 2022 fiscal year.

Elsewhere, the company repurchased $1B worth of stock in the fourth quarter, bringing total buybacks to $4.4B for the year. About $1.06B remains available for use under the current repurchase authorization.

Additionally, inventory increased 21.5% from the prior year due to “growth initiatives and inflation.” Net inventory, on a per store basis, was negative $240K in 2022 as compared to negative $203K in the year prior, the company said.

“ We believe our initiatives will drive growth in the new fiscal year,” Rhodes concluded. “As we continue to prudently invest capital in our business, we remain steadfast in our long-term, disciplined approach to increasing operating earnings and cash flows while utilizing our balance sheet effectively.”

Shares of the Memphis-based auto parts retailer rose 2.32% in premarket action on light volume.

Read more on the details of  the quarter .

For further details see: