AutoZone Reports 17 Week 4th Quarter Sales of $3.1 Billion;

MEMPHIS, Tenn., Sept. 25, 2013 (GLOBE NEWSWIRE) -- AutoZone, Inc. (NYSE: AZO ) today reported net sales of $3.1 billion for its fourth quarter (17 weeks) ended August 31, 2013, an increase of 12.0% from the fourth quarter of fiscal 2012 (16 weeks). Excluding sales from the additional week included in this year's quarter, sales were up 5.6%. Domestic same store sales, or sales for stores open at least one year, increased 1.0% for the quarter.

Net income for the quarter increased $47.5 million, or 14.7%, over the same period last year to $371.2 million, while diluted earnings per share increased 23.2% to $10.42 per share from $8.46 per share in the year-ago quarter. Excluding the additional week, net income for the quarter increased 7.4% over the previous year's quarter to $347.8 million, while diluted earnings per share increased 15.4% to $9.76 per share.

For the quarter, gross profit, as a percentage of sales, was 51.8% (versus 51.8% for last year's quarter). While flat for the quarter, lower acquisition costs led to gross margin enhancements which were offset in part by the inclusion of the recent acquisition of AutoAnything (40 bps). Operating expenses, as a percentage of sales, were 31.3% (versus 31.6% last year). The decrease in operating expenses, as a percentage of sales, was due to leverage gained on the 17 ^th week of sales. 

For the fiscal year ended August 31, 2013, sales were $9.1 billion, an increase of 6.3% from the prior year, while domestic same store sales were flat for the year. Operating profit increased 8.9% on an operating margin of 19.4%. For fiscal 2013, net income increased 9.3% to $1.0 billion, while diluted earnings per share for the period increased 18.3% to $27.79 from $23.48. Excluding results from the additional week, sales increased 4.3% from the prior year, and operating profit increased 6.4% on an operating margin of 19.3%. Net income, excluding the extra week, increased 6.7% to $993.1 million, and diluted earnings per share increased 15.6% to $27.15. Return on invested capital was 32.7%, while full year cash flow before share repurchases and changes in debt was $1.0 billion.

Under its share repurchase program, AutoZone repurchased 1.3 million shares of its common stock for $560 million during the fourth quarter, at an average price of $428 per share. For the fiscal year, the Company repurchased 3.5 million shares of its common stock for $1.39 billion, at an average price of $395 per share. At fiscal year end, the Company had $468 million remaining under its current share repurchase authorization.

The Company's inventory increased 8.9% over the same period last year, driven primarily by strategic hard parts additions along with new store openings. Inventory per store was $550 thousand versus $525 thousand last year and $547 thousand last quarter. Net inventory, defined as merchandise inventories less accounts payable, decreased, relative to last year, on a per store basis, to negative $86 thousand per store.

"I would like to thank our entire organization for the solid performance delivered this past quarter. We are pleased to report our twenty-eighth consecutive quarter of double digit growth in earnings per share. Our customer service and trustworthy advice are what differentiate us across our industry, and our AutoZoners' passion to deliver superior service has allowed us to consistently deliver exceptional financial results. For the year, we reached many new milestones which included surpassing $9 billion in total sales, opening 368 additional Commercial programs, acquiring AutoAnything, and opening three stores in Brazil. We also improved our return on invested capital from the third quarter, achieving 32.7% at year end. While our same store sales performance was below our expectations for the quarter, we believe the initiatives we have in place will lead to improved sales in both Retail and Commercial in 2014. We remain committed to delivering exceptional customer service while growing our Retail, Commercial, International, and digital commerce businesses. We will maintain our disciplined approach to growing operating earnings and utilizing our capital effectively," said Bill Rhodes, Chairman, President and Chief Executive Officer.

During the quarter ended August 31, 2013, AutoZone opened 69 stores in the U.S., 21 stores in Mexico, and two stores in Brazil. As of August 31, 2013, the Company had 4,836 stores in 49 states, the District of Columbia and Puerto Rico in the U.S., 362 stores in Mexico, and three stores in Brazil for a total store count of 5,201.

AutoZone is the leading retailer and a leading distributor of automotive replacement parts and accessories in the United States. Each store carries an extensive product line for cars, sport utility vehicles, vans and light trucks, including new and remanufactured automotive hard parts, maintenance items, accessories, and non-automotive products.  Many stores also have a commercial sales program that provides commercial credit and prompt delivery of parts and other products to local, regional and national repair garages, dealers, service stations, and public sector accounts.  AutoZone also sells the ALLDATA brand diagnostic and repair software through www.alldata.com . Additionally, we sell automotive hard parts, maintenance items, accessories, and non-automotive products through www.autozone.com , and accessories and performance parts through www.autoanything.com , and our commercial customers can make purchases through www.autozonepro.com . AutoZone does not derive revenue from automotive repair or installation.

AutoZone will host a conference call this morning, Wednesday, September 25, 2013, beginning at 10:00 a.m. (EDT) to discuss its fourth quarter results. Investors may listen to the conference call live and review supporting slides on the AutoZone corporate website, www.autozoneinc.com by clicking "Investor Relations," "Conference Calls." The call will also be available by dialing (210) 839-8923. A replay of the call and slides will be available on AutoZone's website. In addition, a replay of the call will be available by dialing (203) 369-1211 through Wednesday, October 2, 2013 at 11:59 p.m. (EDT).

This release includes certain financial information not derived in accordance with generally accepted accounting principles ("GAAP"). These non-GAAP measures include adjustments to reflect 16 and 52 week financial presentations, return on invested capital, adjusted debt, adjusted debt to EBITDAR, and cash flow before share repurchases. 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 and manages cash flows available for share repurchase by monitoring cash flows before share repurchases, as shown on the attached tables. 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 contained in this press release are forward-looking statements. Forward-looking statements typically use words such as "believe," "anticipate," "should," "intend," "plan," "will," "expect," "estimate," "project," "positioned," "strategy" and similar expressions. These are based on assumptions and assessments made by our management in light of experience and perception of historical trends, current conditions, expected future developments and other factors that we believe to be appropriate. These forward-looking statements are subject to a number of risks and uncertainties, including without limitation: credit market conditions; the impact of recessionary conditions; competition; product demand; the ability to hire and retain qualified employees; consumer debt levels; inflation; weather; raw material costs of our suppliers; energy prices; war and the prospect of war, including terrorist activity; construction delays; access to available and feasible financing; and changes in laws or regulations. Certain of these risks are discussed in more detail in the "Risk Factors" section contained in Item 1A under Part 1 of our Annual Report on Form 10-K for the year ended August 25, 2012, and these Risk Factors should be read carefully. Forward-looking statements are not guarantees of future performance and actual results; developments and business decisions may differ from those contemplated by such forward-looking statements, and events described above and in the "Risk Factors" could materially and adversely affect our business. 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. Actual results may materially differ from anticipated results.

Financial: Brian Campbell at (901) 495-7005 Media: Ray Pohlman at (866) 966-3017