Shares of AutoZone Inc. AZO, -0.81% were indicated up nearly 2% in premarket trading Tuesday, after the auto parts retailer reported fiscal third-quarter profit and sales that rose well above expectations, with the commercial business standing out as “exceptional.” Net income for the quarter to May 8 rose to $596.2 million, or $26.48 a share, from $342.9 million, or $14.39 a share, in the year-ago period. That beat the FactSet consensus for earnings per share of $20.13. Net sales grew 31.4% to $3.65 billion, above the FactSet consensus of $3.27 billion, with commercial sales climbing 44.4% and same-store sales increasing 28.9% to beat expectations of 17.1% growth. Gross profit as a percentage of sales fell 118 basis points to 52.4%, due primarily to the accelerated growth in the commercial business and investment in pricing initiatives. “We intend to accelerate our company’s historical Commercial growth rate as we increase our penetration in this market,” said Chief Executive Bill Rhodes. “While we understand sales trends will slow, we must work diligently during this fourth quarter to maintain the share gains we have achieved.” The stock has rallied 22.2% year to date through Monday, while the S&P 500 SPX, +0.99% has gained 11.7%.
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