Stop and Go at AutoZone: Fool by Numbers

On Feb. 27, AutoZone (NYSE: AZO  ) released second-quarter earnings for the period ended Feb. 10.

• Net income rose by 6.2% as store improvements generated additional sales and lower inventory costs increased profits.
• On a per-store level, inventory decreased 20.2%.
• AutoZone repurchased 1 million shares of its common stock for $128.9 million during the quarter, at an average price of $123 per share.

(Figures in millions, except per-share data)

Income Statement Highlights

	Q2 2007	Q2 2006	Change
Sales	$1,300.4	$1,253.8	3.7%
Net Profit	$103.0	$97.0	6.2%
EPS	$1.45	$1.25	16.0%
Diluted Shares	71.2	77.5	(8.1%)

Get back to basics with a look at the income statement.

Margin Checkup

	Q2 2007	Q2 2006	Change*
Gross Margin	49.2%	49.2%	0.0
Operating Margin	14.5%	14.2%	0.3
Net Margin	7.9%	7.7%	0.2

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets	Q2 2007	Q2 2006	Change
Inventory	$1,910.8	$1,722.7	10.9%
Total Assets	$4,646.5	$4,401.9	5.6%

Liabilities	Q2 2007	Q2 2006	Change
Accounts Payable	$1,663.0	$1,427.7	16.5%
Debt	$1,854.3	$1,779.3	4.2%

Learn the ways of the balance sheet.

Cash Flow Highlights

	Q2 2007	Q2 2006	Change
Cash Flow*	$139.1	$128.5	8.2%
Capital Expenditures	$50.1	$57.4	(12.8%)
Structural Free Cash Flow	$80.0	$71.1	12.5%

*Net income plus depreciation.

Find out why Fools always follow the money.

Related Foolishness:

• AutoZone Bear Rebuttal
• AutoZone's Low-Gear Advance
• Dueling Fools: AutoZone Bull

AutoZone is a Motley Fool Inside Value recommendation. You can take a 30-day free trial of the newsletter to find out why.

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean. This data has been provided by Netscribes. To provide feedback on this article, please click on the "feedback" button below.