AutoZone, Inc. (NYSE:AZO) today reported net sales of $3.3 billion
for its fourth quarter (16 weeks) ended August 29, 2015, an
increase of 7.9% from the fourth quarter of fiscal 2014 (16 weeks).
Domestic same store sales, or sales for stores open at least one
year, increased 4.5% for the quarter.
Net income for the quarter increased 7.4% over the same period
last year to $401.1 million, while diluted earnings per share
increased 13.0% to $12.75 per share from $11.28 per share in the
year-ago quarter.
For the quarter, gross profit, as a percentage of sales, was
52.5% (versus 52.3% for the same period last year). The improvement
in gross margin was attributable to higher merchandise margins,
partially offset by higher supply chain costs associated with
current year inventory initiatives (-24 bps), and the impact of the
Interamerican Motor Corporation (IMC) acquisition finalized during
September, 2014 (-24 bps). Operating expenses, as a percentage of
sales, were 32.2% (versus 31.6% the same period last year). The
increase in operating expenses, as a percentage of sales, was
primarily due to higher legal costs (-26 bps) and the impact of IMC
(-16 bps).
For the fiscal year ended August 29, 2015, sales were $10.2
billion, an increase of 7.5% from the prior year, while domestic
same store sales were up 3.8% for the year. Operating profit
increased 6.7% on an operating margin of 19.2%. For fiscal 2015,
net income increased 8.5% to $1.2 billion, while diluted earnings
per share for the period increased 14.1% to $36.03 from $31.57.
Return on invested capital was 31.2%, while full year cash flow
before share repurchases and changes in debt was $1.018
billion.
Under its share repurchase program, AutoZone repurchased 633
thousand shares of its common stock for $430 million during the
fourth quarter, at an average price of $680 per share. For the
fiscal year, the Company repurchased 2.0 million shares of its
common stock for $1.3 billion, at an average price of $632 per
share. At year end, the Company had $348 million remaining under
its current share repurchase authorization.
The Company's inventory increased 9.0% over the same period last
year, driven by increased product placement, new stores during the
fiscal year, and the acquisition of IMC. Inventory per location was
$610 thousand versus $582 thousand last year and $629 thousand last
quarter. The IMC acquisition increased inventory per location by
$15 thousand this quarter. Net inventory, defined as merchandise
inventories less accounts payable, on a per location basis was a
negative $79 thousand versus negative $87 thousand last year and
negative $68 thousand last quarter.
"I would like to thank our entire organization for the strong
performance delivered this past fiscal year. We are pleased to
report our thirty-sixth consecutive quarter of double digit
earnings per share growth. Since our inception, we've been
committed to providing exceptional customer service and trustworthy
advice; our key point of differentiation. This commitment to our
customers leads us to deliver exceptional financial performance.
For the year, we reached many milestones which included generating
over $10 billion in sales and completing the IMC acquisition. Our
testing of our inventory availability initiatives, including
expanding our multi-deliveries per week to stores and opening mega
hub locations has concluded. We have determined that these tests
were successful and we will begin implementing our new supply chain
strategy now and complete it in a few years. Additionally, as we
have routinely stated, we will remain committed to our disciplined
approach to growing operating earnings and utilizing our capital
effectively," said Bill Rhodes, Chairman, President and Chief
Executive Officer.
During the quarter ended August 29, 2015, AutoZone opened 72 new
stores and relocated two stores in the U.S., opened 23 new stores
in Mexico, and opened two new IMC branches. As of August 29, 2015,
the Company had 5,141 stores in 49 states in the U.S., the District
of Columbia and Puerto Rico, 441 stores in Mexico, 20 IMC branches,
and seven stores in Brazil for a total count of 5,609.
AutoZone is the leading retailer and a leading distributor of
automotive replacement parts and accessories in the United States.
Each AutoZone store carries an extensive product line for cars,
sport utility vehicles, vans and light trucks, including new and
remanufactured automotive hard parts, maintenance items,
accessories, and non-automotive products. Many stores also have a
commercial sales program that provides commercial credit and prompt
delivery of parts and other products to local, regional and
national repair garages, dealers, service stations, and public
sector accounts. IMC branches carry an extensive line of original
equipment quality import replacement parts. AutoZone also sells the
ALLDATA brand diagnostic and repair software through
www.alldata.com. Additionally, we sell automotive hard parts,
maintenance items, accessories, and non-automotive products through
www.autozone.com, and accessories and performance parts through
www.autoanything.com, and our commercial customers can make
purchases through www.autozonepro.com and www.imcparts.net.
AutoZone does not derive revenue from automotive repair or
installation.
AutoZone will host a conference call this morning, Tuesday,
September 22, 2015, beginning at 10:00 a.m. (EDT) to discuss its
fourth quarter results. Investors may listen to the conference call
live and review supporting slides on the AutoZone corporate
website, www.autozoneinc.com by clicking "Investor Relations,"
"Conference Calls." The call will also be available by dialing
(210) 839-8923. A replay of the call and slides will be available
on AutoZone's website. In addition, a replay of the call will be
available by dialing (203) 369-1211 through Tuesday, September 29,
2015, at 11:59 p.m. (EDT).
This release includes certain financial information not derived
in accordance with generally accepted accounting principles
("GAAP"). These non-GAAP measures include adjustments to reflect
return on invested capital, adjusted debt, adjusted debt to
EBITDAR, and cash flow before share repurchases. The Company
believes that the presentation of these non-GAAP measures provides
information that is useful to investors as it indicates more
clearly the Company's comparative year-to-year operating results,
but this information should not be considered a substitute for any
measures derived in accordance with GAAP. Management targets the
Company's capital structure in order to maintain its investment
grade credit ratings and manages cash flows available for share
repurchase by monitoring cash flows before share repurchases, as
shown on the attached tables. The Company believes this is
important information for the management of its debt levels and
share repurchases. We have included a reconciliation of this
additional information to the most comparable GAAP measures in the
accompanying reconciliation tables.
Certain statements contained in this press release are
forward-looking statements. Forward-looking statements typically
use words such as "believe," "anticipate," "should," "intend,"
"plan," "will," "expect," "estimate," "project," "positioned,"
"strategy" and similar expressions. These are based on assumptions
and assessments made by our management in light of experience and
perception of historical trends, current conditions, expected
future developments and other factors that we believe to be
appropriate. These forward-looking statements are subject to a
number of risks and uncertainties, including without limitation:
credit market conditions; the impact of recessionary conditions;
competition; product demand; the ability to hire and retain
qualified employees; consumer debt levels; inflation; weather; raw
material costs of our suppliers; energy prices; war and the
prospect of war, including terrorist activity; construction delays;
access to available and feasible financing; and changes in laws or
regulations. Certain of these risks are discussed in more detail in
the "Risk Factors" section contained in Item 1A under Part 1 of our
Annual Report on Form 10-K for the year ended August 30, 2014, and
these Risk Factors should be read carefully. Forward-looking
statements are not guarantees of future performance and actual
results; developments and business decisions may differ from those
contemplated by such forward-looking statements, and events
described above and in the "Risk Factors" could materially and
adversely affect our business. Forward-looking statements speak
only as of the date made. Except as required by applicable law, we
undertake no obligation to update publicly any forward-looking
statements, whether as a result of new information, future events
or otherwise. Actual results may materially differ from anticipated
results.
AutoZone's 4th Quarter
Highlights - Fiscal 2015 |
|
|
|
|
|
Condensed Consolidated
Statements of Operations |
|
|
4th Quarter, FY2015 |
|
|
|
(in thousands, except per share data) |
|
|
|
|
GAAP
Results |
|
|
16 Weeks Ended |
16 Weeks Ended |
|
|
August 29, 2015 |
August 30, 2014 |
|
|
|
|
|
Net sales |
$ 3,290,404 |
$ 3,049,696 |
|
Cost of sales |
1,562,856 |
1,454,480 |
|
Gross profit |
1,727,548 |
1,595,216 |
|
Operating, SG&A expenses |
1,058,276 |
965,015 |
|
Operating profit (EBIT) |
669,272 |
630,201 |
|
Interest expense, net |
47,065 |
49,426 |
|
Income before taxes |
622,207 |
580,775 |
|
Income taxes |
221,070 |
207,104 |
|
Net income |
$ 401,137 |
$ 373,671 |
|
Net income per share: |
|
|
|
Basic |
$ 13.02 |
$ 11.50 |
|
Diluted |
$ 12.75 |
$ 11.28 |
|
Weighted average shares outstanding: |
|
|
|
Basic |
30,813 |
32,495 |
|
Diluted |
31,469 |
33,129 |
|
|
|
|
|
|
|
|
|
Year-To-Date 4th Quarter,
FY2015 |
|
|
|
(in thousands, except per share data) |
GAAP
Results |
|
|
52 Weeks Ended |
52 Weeks Ended |
|
|
August 29, 2015 |
August 30, 2014 |
|
|
|
|
|
Net sales |
$ 10,187,340 |
$ 9,475,313 |
|
Cost of sales |
4,860,309 |
4,540,406 |
|
Gross profit |
5,327,031 |
4,934,907 |
|
Operating, SG&A expenses |
3,373,980 |
3,104,684 |
|
Operating profit (EBIT) |
1,953,051 |
1,830,223 |
|
Interest expense, net |
150,439 |
167,509 |
|
Income before taxes |
1,802,612 |
1,662,714 |
|
Income taxes |
642,371 |
592,970 |
|
Net income |
$ 1,160,241 |
$ 1,069,744 |
|
Net income per share: |
|
|
|
Basic |
$ 36.76 |
$ 32.16 |
|
Diluted |
$ 36.03 |
$ 31.57 |
|
Weighted average shares outstanding: |
|
|
|
Basic |
31,560 |
33,267 |
|
Diluted |
32,206 |
33,882 |
|
|
|
|
|
Selected Balance Sheet
Information |
|
|
|
(in thousands) |
|
|
|
|
August 29, 2015 |
August 30, 2014 |
|
|
|
|
|
Cash and cash equivalents |
$ 175,309 |
$ 124,485 |
|
Merchandise inventories |
3,421,635 |
3,140,100 |
|
Current assets |
3,970,294 |
3,580,612 |
|
Property and equipment, net |
3,510,455 |
3,310,475 |
|
Total assets (1) |
8,107,172 |
7,497,163 |
|
Accounts payable |
3,864,168 |
3,609,199 |
|
Current liabilities (2) |
4,713,892 |
4,541,094 |
|
Total debt (1) |
4,624,876 |
4,323,106 |
|
Stockholders' (deficit) |
(1,701,390) |
(1,621,857) |
|
Working capital |
(743,598) |
(960,482) |
|
|
|
|
|
(1) Certain balance sheet
reclassifications have been made to the prior periods' financial
information in order to conform to the current period's
presentation due to the adoption of a new accounting standard. |
(2) Current liabilities and total
debt both include short-term borrowings of $0 at August 29, 2015
and $180,910 at August 30, 2014. These amounts represent current
debt maturities that are in excess of our revolving credit facility
available capacity. |
|
|
|
|
|
Adjusted Debt / EBITDAR
(Trailing 4 Qtrs) |
|
|
|
|
(in thousands, except adjusted
debt to EBITDAR ratio) |
|
|
|
|
Condensed Consolidated Statements
of Operations |
August 29, 2015 |
August 30, 2014 |
|
|
Net income |
$ 1,160,241 |
$ 1,069,744 |
|
|
Add: |
Interest |
150,439 |
167,509 |
|
|
|
Taxes |
642,371 |
592,970 |
|
|
EBIT |
|
1,953,051 |
1,830,223 |
|
|
|
|
|
|
|
|
Add: |
Depreciation and amortization |
269,919 |
251,267 |
|
|
|
Rent expense |
269,458 |
253,813 |
|
|
|
Share-based expense |
40,995 |
39,390 |
|
|
EBITDAR |
$ 2,533,423 |
$ 2,374,693 |
|
|
|
|
|
|
|
Debt (1) |
$ 4,624,876 |
$ 4,323,106 |
|
|
Capital lease obligations |
132,990 |
119,603 |
|
|
Add: rent x 6 |
1,616,748 |
1,522,878 |
|
|
Adjusted debt |
$ 6,374,614 |
$ 5,965,587 |
|
|
|
|
|
|
|
Adjusted debt to EBITDAR |
2.5 |
2.5 |
|
|
|
|
|
|
|
|
Selected Cash Flow
Information |
|
|
|
|
(in thousands) |
|
|
|
|
|
16 Weeks Ended |
16 Weeks Ended |
52 Weeks Ended |
52 Weeks Ended |
|
August 29, 2015 |
August 30, 2014 |
August 29, 2015 |
August 30, 2014 |
|
|
|
|
|
Depreciation and
amortization |
$ 86,708 |
$ 78,981 |
$ 269,919 |
$ 251,267 |
Capital spending |
$ 187,834 |
$ 176,392 |
$ 480,579 |
$ 438,116 |
|
|
|
|
|
Cash flow before share
repurchases: |
|
|
|
|
Increase/(decrease) in cash and
cash equivalents |
$ 22,021 |
$ (20,864) |
$ 50,824 |
$ (17,706) |
Subtract increase/(decrease) in
debt, excluding deferred financing costs |
113,100 |
(34,600) |
303,800 |
156,800 |
Add back share repurchases |
430,498 |
187,675 |
1,271,416 |
1,099,212 |
Cash flow before share
repurchases and changes in debt |
$ 339,419 |
$ 201,411 |
$ 1,018,440 |
$ 924,706 |
|
|
|
|
|
|
|
|
|
|
Other Selected Financial
Information |
|
|
|
|
(in thousands, except ROIC) |
|
|
|
|
|
August 29, 2015 |
August 30, 2014 |
|
|
|
|
|
|
|
|
|
|
|
|
Cumulative share repurchases ($
since fiscal 1998) |
$ 15,302,186 |
$ 14,030,770 |
|
|
Remaining share repurchase
authorization ($) |
$ 347,814 |
$ 869,230 |
|
|
|
|
|
|
|
Cumulative share repurchases
(shares since fiscal 1998) |
138,891 |
136,881 |
|
|
|
|
|
|
|
Shares outstanding, end of
quarter |
30,659 |
32,304 |
|
|
|
|
|
|
|
|
Trailing 4
Quarters |
|
|
|
August 29, 2015 |
August 30, 2014 |
|
|
Net income |
$ 1,160,241 |
$ 1,069,744 |
|
|
Adjustments: |
|
|
|
|
Interest expense |
150,439 |
167,509 |
|
|
Rent expense |
269,458 |
253,813 |
|
|
Tax effect* |
(149,483) |
(150,412) |
|
|
After-tax return |
1,430,655 |
1,340,654 |
|
|
|
|
|
|
|
Average debt** (1) |
4,458,114 |
4,258,796 |
|
|
Average stockholders'
deficit** |
(1,619,596) |
(1,709,778) |
|
|
Add: Rent x 6 |
1,616,748 |
1,522,878 |
|
|
Average capital lease
obligations** |
127,060 |
108,475 |
|
|
Pre-tax invested capital |
$ 4,582,326 |
$ 4,180,371 |
|
|
|
|
|
|
|
Return on Invested
Capital (ROIC) |
31.2% |
32.1% |
|
|
|
|
|
|
|
|
(1) Certain balance
sheet reclassifications have been made to the prior periods'
financial information in order to conform to the current period's
presentation due to the adoption of a new accounting standard. |
|
|
* Effective tax rate over
trailing four quarters ended August 29, 2015 is 35.6% and August
30, 2014 is 35.7%. |
|
|
** All averages are computed
based on trailing 5 quarter balances. |
|
|
|
|
|
|
|
AutoZone's 4th Quarter Fiscal
2015 |
|
|
|
|
Selected Operating
Highlights |
|
|
|
|
Condensed Consolidated Statements of
Operations |
|
|
|
|
Location Count & Square
Footage |
|
|
|
|
|
|
|
|
|
|
16 Weeks Ended |
16 Weeks Ended |
52 Weeks Ended |
52 Weeks Ended |
|
August 29, 2015 |
August 30, 2014 |
August 29, 2015 |
August 30, 2014 |
AutoZone Domestic stores
(Domestic): |
|
|
|
|
Store
count |
|
|
|
|
Beginning domestic stores |
5,069 |
4,901 |
4,984 |
4,836 |
Stores opened |
72 |
83 |
158 |
148 |
Stores closed |
-- |
-- |
1 |
-- |
Ending domestic stores |
5,141 |
4,984 |
5,141 |
4,984 |
|
|
|
|
|
Relocated stores |
2 |
1 |
5 |
8 |
|
|
|
|
|
Stores with commercial
programs |
4,141 |
3,845 |
4,141 |
3,845 |
|
|
|
|
|
Square footage (in
thousands) |
33,515 |
32,443 |
33,515 |
32,443 |
|
|
|
|
|
AutoZone Mexico stores: |
|
|
|
|
Stores opened |
23 |
28 |
39 |
40 |
Total stores in Mexico |
441 |
402 |
441 |
402 |
|
|
|
|
|
AutoZone Brazil stores: |
|
|
|
|
Stores opened |
-- |
1 |
2 |
2 |
Total stores in Brazil |
7 |
5 |
7 |
5 |
|
|
|
|
|
Total AutoZone stores |
5,589 |
5,391 |
5,589 |
5,391 |
Square footage (in
thousands) |
36,815 |
35,424 |
36,815 |
35,424 |
Square footage per store |
6,587 |
6,571 |
6,587 |
6,571 |
|
|
|
|
|
IMC branches: |
|
|
|
|
Branches opened |
2 |
-- |
3 |
-- |
Branches acquired |
-- |
-- |
17 |
-- |
Total IMC branches |
20 |
-- |
20 |
-- |
|
|
|
|
|
Total locations
chainwide |
5,609 |
5,391 |
5,609 |
5,391 |
|
|
|
|
|
Sales Statistics |
|
|
|
|
($ in thousands, except sales per average
square foot) |
|
|
|
|
|
16 Weeks Ended |
16 Weeks Ended |
52 Weeks Ended |
52 Weeks Ended |
Total AutoZone stores (Domestic,
Mexico and Brazil) |
August 29, 2015 |
August 30, 2014 |
August 29, 2015 |
August 30, 2014 |
Sales per average store |
$ 564 |
$ 551 |
$ 1,761 |
$ 1,724 |
Sales per average square
foot |
$ 86 |
$ 84 |
$ 268 |
$ 263 |
|
|
|
|
|
Total Auto Parts (Domestic, Mexico,
Brazil, and IMC) |
|
|
|
|
Total auto parts sales |
$ 3,179,164 |
$ 2,940,595 |
$ 9,824,876 |
$ 9,132,169 |
% Increase vs.
LY |
8.1% |
(1.5%) |
7.6% |
3.1% |
|
|
|
|
|
Domestic Commercial (Excludes
IMC) |
|
|
|
|
Total domestic commercial
sales |
$ 603,647 |
$ 533,789 |
$ 1,822,069 |
$ 1,613,690 |
% Increase vs. LY |
13.1% |
5.3% |
12.9% |
10.6% |
|
|
|
|
|
All Other (ALLDATA, E-Commerce, and
AutoAnything) |
|
|
|
|
All other sales |
$ 111,239 |
$ 109,102 |
$ 362,463 |
$ 343,144 |
% Increase vs.
LY |
2.0% |
(0.6%) |
5.6% |
18.8% |
|
|
|
|
|
|
16 Weeks Ended |
16 Weeks Ended |
52 Weeks Ended |
52 Weeks Ended |
|
August 29, 2015 |
August 30, 2014 |
August 29, 2015 |
August 30, 2014 |
Domestic same store
sales |
4.5% |
2.1% |
3.8% |
2.8% |
|
|
|
|
|
Inventory Statistics (Total
Locations) |
|
|
|
|
|
as of |
as of |
|
|
|
August 29, 2015 |
August 30, 2014 |
|
|
Accounts
payable/inventory |
112.9% |
114.9% |
|
|
|
|
|
|
|
($ in thousands) |
|
|
|
|
Inventory |
$ 3,421,635 |
$ 3,140,100 |
|
|
Inventory per location |
$ 610 |
$ 582 |
|
|
Net inventory (net of
payables) |
$ (442,533) |
$ (469,099) |
|
|
Net inventory / per
location |
$ (79) |
$ (87) |
|
|
|
|
|
|
|
|
Trailing 5
Quarters |
|
|
|
August 29, 2015 |
August 30, 2014 |
|
|
Inventory turns |
1.4 x |
1.5 x |
|
|
CONTACT: Financial: Brian Campbell at (901) 495-7005, brian.campbell@autozone.com
Media: Ray Pohlman at (866) 966-3017, ray.pohlman@autozone.com
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