AZO: Buybacks Boosting AutoZone
Mid Cap Watch List (Track at Marketocracy) and Large Cap Watch List (Track at Marketocracy) member AutoZone, Inc. (AZO) reported net sales of $1.474 billion for its third quarter. Net income for the quarter increased 5.0% over the same period last year to $151.6 million, while diluted earnings per share increased 15.0% to $2.17 per share from $1.89 per share reported in the year-ago quarter.
The earnings compared favorably to analyst estimates, but the revenue was a bit lighter than consensus expectations. A key reason for the disparity appears to be fewer shares:
Under its share repurchase program, AutoZone repurchased 1.9 million shares of its common stock for $244.8 million during the third quarter, at an average price of $128 per share. For the fiscal year to date, the Company has repurchased 3.8 million shares of its common stock for $464.5 million, at an average price of $123 per share.
Inventory levels were slightly higher on a per-store basis, and on the last conference call management suggested the new merchandise assortment would be fully rolled out by this time. Therefore I expect that topic (along with guidance) to be the dominant topics of discussion on today’s call.
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