High gas prices are a tough obstacle for most businesses, and the auto parts retail business is no exception. AutoZone (NYSE:AZO), the largest of the auto parts retailers, said this morning that pricey gas was to blame for flat first-quarter results.
For this year's first quarter relative to last's, AutoZone sales edged up 0.3% to $1.3 billion, though same-store sales fell 3%. Net income climbed marginally to $122.5 million, but the company's aggressive share repurchase program provided a nice boost to per-share earnings, which climbed 12.7% to $1.52 per share, beating the analyst estimate of $1.44 per share.
AutoZone spent $30 million to buy back 400,000 shares during the quarter, at an average of $84 per share. In its earnings release, the company also noted that it has spent $3.7 billion on share repurchases since 1998, buying back 82.6 million shares at an average of $45 each.
The company said that high gas prices took a bite out of consumers' disposable income budgeted for cars. According to CEO Steve Odland, "... customers continued to manage their expenditures closely and hold off on doing some preventative maintenance."
Also on the downside, commercial sales fell 2% to $163.6 million, despite the company's increasing the number of stores with commercial sales by 146, or 7%.
Overall, it was a pretty uninspiring quarter. But longer term, the bottom line is that the company is in decent shape as the biggest competitor against smaller players like Advanced Auto Parts (NYSE:AAP), Pep Boys (NYSE:PBY), and O'Reilly Automotive (NASDAQ:ORLY), and consumers will eventually have to come back to spend money to maintain their cars.
For more related coverage, check out:
- Help Gas Mileage for Under $100
- Look Who's Buying AutoZone
- Genuine Parts Adds up to Success
- AutoZone Needs an Oil Change
Fool contributor Jeff Hwang owns none of the companies mentioned above.
