This Tuesday morning before market open, America’s second largest retailer of aftermarket automotive parts and accessories, AutoZone (NYSE: AZO), reported Q3 earnings of $10.77 EPS, which missed consensus estimates of $10.92, and revenue of $2.59B (+4.0% Year to Year) that missed analysts’ expectations of $2.65B.
Under its share repurchase program, AutoZone repurchased 687,000 shares of its common stock for $533M during the quarter, at an average price of $775 per share. At the end of the quarter, the Company had $765M remaining under its current share repurchase authorization.
During the quarter ended May 7, 2016, AutoZone opened 33 new stores in the U.S., opened seven new stores in Mexico, and opened one new IMC branch. As of May 7, 2016, the Company had 5,226 stores in 50 states in the U.S., the District of Columbia and Puerto Rico, 458 stores in Mexico, 25 IMC branches, and eight stores in Brazil for a total count of 5,717.
“We would like to thank our entire organization for delivering another quarter of solid results: our thirty-ninth consecutive quarter of double digit earnings per share growth. AutoZoners across the company remain committed to providing superior service to our customers and that dedication has resulted in consistent, solid performance. During the quarter, we continued implementation of our inventory availability initiatives. At the end of the quarter, we have expanded our increased frequency of distribution center deliveries initiative to 1,600 domestic AutoZone stores and expect by the end of the fiscal year to be servicing approximately 2,000 of our over 5,000 domestic AutoZone stores. We also plan to open approximately four additional Mega Hubs by the end of the fiscal year to finish with a total of 11. The results of our initiatives continue to meet or exceed our expectations, further confirming our new inventory deployment strategy. Regarding the third quarter’s results, sales were below our expectations as weather negatively impacted sales primarily in Midwestern, Middle Atlantic, and Northeastern states. Additionally, the quarter was impacted by a legal charge along with a discrete tax benefit, which netted to a reduction to earnings per share of $0.11 per share. As we continue to strategically invest in our business in order to support our long term growth, remaining committed to our disciplined approach to growing operating earnings and utilizing our capital effectively, we are excited by our opportunities this summer,” said Bill Rhodes, Chairman, President and Chief Executive Officer.
Shares of AutoZone up $22.10 (+2.98%) as of early Tuesday afternoon.