Auto parts retailer AutoZone (NYSE: AZO), which posted its first-quarter results in early December, hit the gas and posted a stellar quarter. For the 12th straight time, the retailer saw its earnings per share grow in excess of 20%. It was also the 21st consecutive time that the company witnessed a double-digit rise in EPS. That's darn impressive.
Aftermarket thoughts
Economic recession has gripped consumers, compelling them to hang on to their old cars and keep them in shape rather than purchase new ones. So in a way adverse economic conditions have worked to the advantage of aftermarket and auto parts retailers such as AutoZone.
Peers O'Reilly (Nasdaq: ORLY) and Advance Auto Parts (NYSE: AAP) also recorded decent quarters. O'Reilly saw its bottom line rise 27% to a record $148 million, and Advance Auto's EPS rose 37% from a year ago. All three companies have reduced their shares outstanding by 8%-12% over the past 12 months, thereby adding more value for shareholders.
Stellar quarter
Revenue for the largest auto parts retailer rose 7% to $1.9 billion for the quarter, helped by a sharp increase in domestic commercial sales as consumers chose to maintain their cars. AutoZone's domestic same-store sales rose a striking 4.6%. While commercial sales grew a staggering 23%, its other businesses, which include its diagnostic-software unit ALLDATA and e-commerce, rose 9.6%.
The company has also been widening its global presence. Along with expanding operations in the U.S., AutoZone has spread its wings in Mexico and Puerto Rico. These expansions have been fruitful as they have helped AutoZone drive top-line growth. During the quarter, AutoZone opened 17 stores in the U.S. and two in Mexico, taking its total global store count up to 4,832.
AutoZone will take forward its "1Team Driving our Future" operating theme into the new year. In an effort to return value to its shareholders, it bought back 954,000 shares in the quarter and still has $659 million left in its current share repurchase plan. The strong overall performance this quarter is hopefully a good sign for the new year.
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