AutoZone Inc (AZO, Financial), a leading retailer of aftermarket automotive parts in the United States, reported its fourth-quarter earnings for fiscal 2024. The company operates over 6,300 stores domestically and has a significant international presence with over 750 stores in Mexico and more than 100 in Brazil.
Performance Overview
AutoZone Inc (AZO, Financial) reported net sales of $6.2 billion for the fourth quarter, marking a 9.0% increase from the same period last year. Excluding the additional week in this year's quarter, adjusted sales were up 2.6%. Same-store sales for the quarter increased by 1.3% on a constant currency basis, with domestic same-store sales rising by 0.2% and international same-store sales increasing by 9.9%.
Despite the revenue growth, the company's gross profit margin decreased by 21 basis points to 52.5%, primarily due to a 53 basis point non-cash LIFO impact. Operating expenses as a percentage of sales increased to 31.6%, driven by higher store payroll costs. Operating profit for the quarter rose by 6.1% to $1.3 billion, while net income increased to $902.2 million from $864.8 million in the same period last year. Diluted earnings per share (EPS) grew by 11.0% to $51.58, falling short of the analyst estimate of $54.03.
Annual Financial Achievements
For the fiscal year ended August 31, 2024, AutoZone Inc (AZO, Financial) reported net sales of $18.5 billion, a 5.9% increase from the previous year. The company's gross profit margin improved to 53.1%, influenced by a 47 basis point non-cash net LIFO favorability. Operating profit for the year increased by 9.1% to $3.8 billion, and net income rose by 5.3% to $2.7 billion. Diluted EPS for the fiscal year was $149.55, up 13.0% from $132.36 last year, but slightly below the annual estimate of $151.58.
Key Financial Metrics
| Metric | Q4 FY2024 | Q4 FY2023 | FY2024 | FY2023 |
|---|---|---|---|---|
| Net Sales | $6.2 billion | $5.7 billion | $18.5 billion | $17.5 billion |
| Gross Profit Margin | 52.5% | 52.7% | 53.1% | 52.0% |
| Operating Profit | $1.3 billion | $1.2 billion | $3.8 billion | $3.5 billion |
| Net Income | $902.2 million | $864.8 million | $2.7 billion | $2.5 billion |
| Diluted EPS | $51.58 | $46.46 | $149.55 | $132.36 |
Operational Highlights
During the fourth quarter, AutoZone Inc (AZO, Financial) opened 68 new stores in the U.S., 31 in Mexico, and 18 in Brazil, bringing the total store count to 7,353. The company repurchased 244 thousand shares of its common stock during the quarter, at an average price of $2,915 per share, totaling $710.6 million. For the fiscal year, AutoZone repurchased 1.1 million shares, totaling $3.2 billion.
Commentary and Analysis
"I want to thank our AutoZoners for their contributions during fiscal 2024 that resulted in our solid performance. We delivered total sales growth of 5.9% for the fiscal year while earnings per share increased 13.0%. Our AutoZoners’ commitment to providing Wow! Customer Service continues to allow us to deliver these impressive results," said Phil Daniele, President and Chief Executive Officer.
AutoZone Inc (AZO, Financial) continues to face challenges in its domestic market, particularly with deferrals in discretionary merchandise categories. However, the company has seen positive momentum in its commercial sales and international operations. The firm's focus on improving inventory availability and accelerating its domestic commercial business is expected to drive future growth.
Conclusion
AutoZone Inc (AZO, Financial) has demonstrated robust financial performance in fiscal 2024, with significant growth in net sales and earnings per share. Despite some challenges in the domestic market, the company's international operations and commercial sales have shown strong performance. Investors will be keen to see how AutoZone navigates these challenges and leverages its strengths in the coming quarters.
Explore the complete 8-K earnings release (here) from AutoZone Inc for further details.
