AutoZone, Inc. (NYSE: AZO) today reported net sales of $4.3 billion for its first quarter (12 weeks) ended November 23, 2024, an increase of 2.1% from the first quarter of fiscal 2024 (12 weeks). Same store sales, or sales for our domestic and international stores open at least one year, are as follows:
      Constant Currency
  12 Weeks   12 Weeks*
       
Domestic 0.3 %   0.3 %
International 1.0 %   13.7 %
Total Company 0.4 %   1.8 %
* Excludes impacts from fluctuations of foreign exchange rates.      
       

For the quarter, gross profit, as a percentage of sales, was 53.0%, an increase of 16 basis points versus the prior year driven by higher merchandise margins. Operating expenses, as a percentage of sales, were 33.3% versus last year at 32.6%.

Operating profit decreased 0.9% to $841.1 million. Net income for the quarter was $564.9 million compared to $593.5 million in the same period last year, while diluted earnings per share were $32.52 compared to last year at $32.55.

Under its share repurchase program, AutoZone repurchased 160 thousand shares of its common stock during the first quarter, at an average price per share of $3,156, for a total investment of $505.2 million. Since the inception of the share repurchase program, the Company has repurchased a total of 155 million shares of its common stock, at an average price of $241, for a total investment of $37.5 billion. At the end of the first quarter, the Company had $1.7 billion remaining under its current share repurchase authorization.

The Company’s inventory increased 8.7% over the same period last year and net inventory, defined as merchandise inventories less accounts payable, on a per store basis, was negative $166 thousand versus negative $197 thousand last year and negative $163 thousand last quarter.

“I would like to thank all our AutoZoners across the globe for their efforts in helping us deliver solid first quarter results.  We were pleased with the progress in our DIY same store sales result from the prior quarter as average ticket and traffic trends improved.  Our domestic Commercial sales were up 3.2% and we were encouraged by the improving trends seen at the end of the quarter.  Our international businesses continued to perform well with same store sales up just under 14% on a constant currency basis.  While currency rate moves depressed reported sales and earnings growth, our international performance remains encouraging as we continue to focus on opening more stores in these markets.  We feel we are well positioned for growth heading into the remainder of the fiscal year, as we believe the initiatives we have in place to improve customer service and grow market share are on track.  As we continue to invest in our business, we remain committed to our disciplined approach of a focus on increasing earnings and operating cash flow, all while delivering strong shareholder value,” said Phil Daniele, President and Chief Executive Officer.

During the quarter ended November 23, 2024, AutoZone opened 23 new stores in the U.S., six in Mexico and five in Brazil for a total of 34 new stores. As of November 23, 2024, the Company had 6,455 stores in the U.S., 800 in Mexico and 132 in Brazil for a total store count of 7,387.

AutoZone is the leading retailer and distributor of automotive replacement parts and accessories in the Americas. Each store carries an extensive product line for cars, sport utility vehicles, vans and light duty trucks, including new and remanufactured automotive hard parts, maintenance items, accessories, and non-automotive products. The majority of stores have a commercial sales program that provides prompt delivery of parts and other products and commercial credit to local, regional and national repair garages, dealers, service stations, fleet owners and other accounts. AutoZone also sells automotive hard parts, maintenance items, accessories and non-automotive products through www.autozone.com, and our commercial customers can make purchases through www.autozonepro.com. Additionally, we sell the ALLDATA brand of automotive diagnostic, repair, collision and shop management software through www.alldata.com. We also provide product information on our Duralast branded products through www.duralastparts.com. AutoZone does not derive revenue from automotive repair or installation services.

AutoZone will host a conference call this morning, Tuesday, December 10, 2024, beginning at 10:00 a.m. (ET) to discuss its first quarter results. This call is being web cast and can be accessed, along with supporting slides, at AutoZone’s website at www.autozone.com by clicking on Investor Relations. Investors may also listen to the call by dialing (888) 506-0062, passcode 205511. In addition, a telephone replay will be available by dialing (877) 481-4010, replay passcode 51442 through December 24, 2024.

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 and adjusted debt to earnings before interest, taxes, depreciation, amortization, rent and share-based expense (“EBITDAR”). 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. 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 herein constitute forward-looking statements that are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and typically use words such as “believe,” “anticipate,” “should,” “intend,” “plan,” “will,” “expect,” “estimate,” “project,” “positioned,” “strategy,” “seek,” “may,” “could” and similar expressions, although not all forward-looking statements contain such identifying words. These statements are based on assumptions and assessments made by our management in light of experience, historical trends, current conditions, expected future developments and other factors that we believe appropriate. These forward-looking statements are subject to a number of risks and uncertainties, including without limitation: product demand, due to changes in fuel prices, miles driven or otherwise; energy prices; weather, including extreme temperatures and natural disasters; competition; credit market conditions; cash flows; access to financing on favorable terms; future stock repurchases; the impact of recessionary conditions; consumer debt levels; changes in laws or regulations; risks associated with self-insurance; war and the prospect of war, including terrorist activity; public health issues; inflation, including wage inflation; exchange rates; the ability to hire, train and retain qualified employees, including members of management; construction delays; failure or interruption of our information technology systems; issues relating to the confidentiality, integrity or availability of information, including due to cyber-attacks; historic growth rate sustainability; downgrade of our credit ratings; damage to our reputation; challenges associated with doing business in and expanding into international markets; origin and raw material costs of suppliers; inventory availability; disruption in our supply chain; tariffs; new accounting standards; our ability to execute our growth initiatives; and other business interruptions. These and other risks and uncertainties could materially and adversely affect our business and are discussed in more detail in the “Risk Factors” section in Item 1A under Part 1 of our Annual Report on Form 10-K for the year ended August 31, 2024. Forward-looking statements are not guarantees of future performance and actual results may differ materially from those contemplated by such forward-looking statements. However, it is not possible to identify or predict all such risks and other factors that could affect these forward-looking statements. 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.

Contact Information:Financial: Brian Campbell at (901) 495-7005, brian.campbell@autozone.comMedia: Jennifer Hughes at (901) 495-6022, jennifer.hughes@autozone.com

                           
AutoZone's 1st Quarter Highlights - Fiscal 2025
 
Condensed Consolidated Statements of Operations
1st Quarter, FY2025
(in thousands, except per share data)
      GAAP Results    
      12 Weeks Ended   12 Weeks Ended    
      November 23, 2024   November 18, 2023    
               
Net sales   $ 4,279,641     $ 4,190,277      
Cost of sales     2,011,584       1,976,261      
Gross profit     2,268,057       2,214,016      
Operating, SG&A expenses     1,426,908       1,365,412      
Operating profit (EBIT)     841,149       848,604      
Interest expense, net     107,629       91,384      
Income before taxes     733,520       757,220      
Income tax expense     168,587       163,757      
Net income   $ 564,933     $ 593,463      
Net income per share:            
  Basic   $ 33.40     $ 33.51      
  Diluted   $ 32.52     $ 32.55      
Weighted average shares outstanding:            
  Basic     16,913       17,709      
  Diluted     17,370       18,234      
               
Selected Balance Sheet Information
(in thousands)
      November 23, 2024   November 18, 2023   August 31, 2024
               
Cash and cash equivalents   $ 304,018     $ 282,981     $ 298,172  
Merchandise inventories     6,274,070       5,774,467       6,155,218  
Current assets     7,420,550       6,956,801       7,306,759  
Property and equipment, net     6,281,103       5,713,157       6,183,539  
Operating lease right-of-use assets     3,086,857       2,998,672       3,057,780  
Total assets     17,465,762       16,292,570       17,176,538  
Accounts payable     7,498,696       7,182,948       7,355,701  
Current liabilities     8,888,570       8,785,622       8,714,243  
Operating lease liabilities, less current portion     2,982,977       2,910,727       2,960,174  
Total Debt     9,012,539       8,583,523       9,024,381  
Stockholders' deficit     (4,672,921 )     (5,213,671 )     (4,749,614 )
Working capital     (1,468,020 )     (1,828,821 )     (1,407,484 )
               
AutoZone's 1st Quarter Highlights - Fiscal 2025
                 
Condensed Consolidated Statements of Operations
                 
Adjusted Debt / EBITDAR
(in thousands, except adjusted debt to EBITDAR ratio)
    Trailing 4 Quarters        
    November 23, 2024   November 18, 2023        
Net income $ 2,633,897     $ 2,582,571          
Add: Interest expense   467,823       340,033          
  Income tax expense   679,533       676,953          
EBIT   3,781,253       3,599,557          
                 
Add: Depreciation and amortization   562,704       508,548          
  Rent expense(1)   454,189       412,210          
  Share-based expense   109,450       96,995          
EBITDAR $ 4,907,596     $ 4,617,310          
                 
Debt $ 9,012,539     $ 8,583,523          
Financing lease liabilities   388,847       285,145          
Add: Rent x 6(1)   2,725,134       2,473,260          
Adjusted debt $ 12,126,520     $ 11,341,928          
                 
Adjusted debt to EBITDAR   2.5       2.5          
                 
Adjusted Return on Invested Capital (ROIC)
(in thousands, except ROIC)
    Trailing 4 Quarters        
    November 23, 2024   November 18, 2023        
Net income $ 2,633,897     $ 2,582,571          
Adjustments:              
  Interest expense   467,823       340,033          
  Rent expense(1)   454,189       412,210          
  Tax effect(2)   (189,013 )     (156,466 )        
Adjusted after-tax return $ 3,366,896     $ 3,178,348          
                 
Average debt(3) $ 8,849,457     $ 7,392,640          
Average stockholders' deficit(3)   (4,862,353 )     (4,377,447 )        
Add: Rent x 6(1)   2,725,134       2,473,260          
Average financing lease liabilities(3)   349,471       291,567          
Invested capital $ 7,061,709     $ 5,780,020          
                 
Adjusted After-Tax ROIC   47.7 %     55.0 %        
                 
(1)The table below outlines the calculation of rent expense and reconciles rent expense to total lease cost, per ASC 842, the most directly comparable GAAP financial measure, for the trailing four quarters ended November 23, 2024 and November 18, 2023.
                         
                 
    Trailing 4 Quarters        
(in thousands) November 23, 2024   November 18, 2023        
Total lease cost, per ASC 842 $ 602,034     $ 536,217          
Less: Financing lease interest and amortization   (108,665 )     (90,864 )        
Less: Variable operating lease components, related to insurance and common area maintenance   (39,180 )     (33,143 )        
Rent expense $ 454,189     $ 412,210          
                     
(2)Effective tax rate over the trailing four quarters ended November 23, 2024 and November 18, 2023 was 20.5and 20.8%, respectively.
(3)All averages are computed based on trailing five quarter balances.
                 
Other Selected Financial Information
(in thousands)
    November 23, 2024   November 18, 2023        
Cumulative share repurchases ($ since fiscal 1998) $ 37,491,245     $ 35,316,947          
Remaining share repurchase authorization ($)   1,658,755       333,053          
                 
Cumulative share repurchases (shares since fiscal 1998)   155,341       154,612          
                 
Shares outstanding, end of quarter   16,810       17,326          
                 
    12 Weeks Ended   12 Weeks Ended        
    November 23, 2024   November 18, 2023        
                 
Depreciation and amortization $ 133,173     $ 120,224                  
                 
Cash flow from operations   811,803       830,259                  
                 
Capital spending   247,035       235,428                  
                 
                                       
AutoZone's 1st Quarter Highlights - Fiscal 2025
Condensed Consolidated Statements of Operations
Selected Operating Highlights
                       
Store Count & Square Footage
                       
    12 Weeks Ended     12 Weeks Ended            
    November 23, 2024     November 18, 2023            
Domestic:                    
  Beginning stores   6,432         6,300              
  Stores opened   23         17              
  Stores closed   -         (1 )            
  Ending domestic stores   6,455         6,316              
                       
  Relocated stores   2         -              
                       
  Stores with commercial programs   5,935         5,803              
                       
  Square footage (in thousands)   42,844         41,749              
                       
Mexico:                    
  Beginning stores   794         740              
  Stores opened   6         5              
  Ending Mexico stores   800         745              
                       
Brazil:                    
  Beginning stores   127         100              
  Stores opened   5         4              
  Ending Brazil stores   132         104              
                       
Total   7,387         7,165              
                       
Total Company stores opened, net   34         25              
                       
  Square footage (in thousands)   49,781         48,062              
  Square footage per store   6,739         6,708              
                       
Sales Statistics
($ in thousands, except sales per average square foot)
Total AutoZone Stores (Domestic, Mexico and Brazil) 12 Weeks Ended     12 Weeks Ended     Trailing 4 Quarters     Trailing 4 Quarters
November 23, 2024     November 18, 2023     November 23, 2024(1)     November 18, 2023
  Sales per average store $ 570       $ 575       $ 2,506       $ 2,453  
  Sales per average square foot $ 85       $ 86       $ 373       $ 366  
                       
Auto Parts (Domestic, Mexico and Brazil)                    
  Total auto parts sales $ 4,199,732       $ 4,115,694       $ 18,235,314       $ 17,344,925  
  % Increase vs. LY   2.0 %       5.1 %       5.1 %       6.6 %
                       
Domestic Commercial                    
  Total domestic commercial sales $ 1,128,237       $ 1,092,920       $ 4,918,080       $ 4,657,020  
  % Increase vs. LY   3.2 %       5.7 %       5.6 %       6.7 %
                       
  Average sales per program per week $ 15.9       $ 15.9       $ 15.8       $ 15.9  
  % Increase vs. LY   0.0 %       (0.6 %)       (0.6 %)       1.3 %
                       
All Other, including ALLDATA                    
  All other sales $ 79,909       $ 74,583       $ 344,318       $ 317,493  
  % Increase vs. LY   7.1 %       7.8 %       8.4 %       7.7 %
               
(1)Fiscal 2024 results include an additional week of sales of approximately $359.1 million for Total Auto Parts, $95.7 million for Domestic Commercial and $6.7 million for All Other. Sales per average store and sales per square foot benefited from the additional week by $49K and $7K, respectively.
                       
    12 Weeks Ended     12 Weeks Ended            
Same store sales(2) November 23, 2024     November 18, 2023            
  Domestic   0.3 %       1.2 %            
  International   1.0 %       25.1 %            
  Total Company   0.4 %       3.4 %            
                       
  International - Constant Currency   13.7 %       10.9 %            
  Total Company - Constant Currency   1.8 %       2.1 %            
                       
(2)Same store sales are based on sales for all stores open at least one year. Constant Currency same store sales exclude the impact of fluctuations of foreign currency exchange rates by converting both the current year and prior year international results at the prior year foreign currency exchange rate.
                                   
                       
                       
Inventory Statistics (Total Stores)                    
    as of     as of            
    November 23, 2024     November 18, 2023            
  Accounts payable/inventory   119.5 %       124.4 %            
                       
  ($ in thousands)                    
  Inventory $ 6,274,070       $ 5,774,467              
  Inventory per store   849         806              
  Net inventory (net of payables)   (1,224,626 )       (1,408,481 )            
  Net inventory/per store   (166 )       (197 )            
                       
    Trailing 5 Quarters            
    November 23, 2024     November 18, 2023            
  Inventory turns   1.4   x     1.5   x          
                       
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