AutoZone Says Same Store Sales Up 8% In Fourth Quarter

Autoparts Report, Oct 8, 2001

AutoZone, Inc. said its fourth quarter earnings per share reached of $1.07, before non-recurring charges, a 27 percent increase from earnings per share of $0.84 in the fourth quarter of fiscal 2000. Sales for the fourth fiscal quarter ended August 25, 2001, increased 10 percent to $1.64 billion from $1.49 billion reported for the year ago quarter.

Same store sales, or sales for domestic auto parts stores open at least one year, increased 8 percent during the quarter. AutoZone recorded total non-recurring charges in the fourth quarter of $92.6 million, after tax, or $0.83 per share. These charges include $68.4 million relating to asset write-downs (including the anticipated loss on the sale of TruckPro) and the accrual of lease obligations, primarily related to store closings and projects under development that do not meet AutoZone's financial return criteria. An additional $5.8 million includes the accrual of severance agreements and costs related to the termination of various contracts.

Cost of goods sold includes non-recurring charges of $18.4 million, net of tax, relating to excess or discontinued merchandise. For the year, AutoZone reported diluted earnings per share of $2.38, before non-recurring charges, an increase of 19 percent from $2.00 in fiscal 2000. For the year, total non-recurring charges were $95.8 million, or $0.84 per share.

Annual sales rose 7 percent to $4.82 billion from $4.48 billion in the prior year, while same store sales increased 4 percent. "We are very pleased with the progress we made in the second half of our fiscal year," said Steve Odland, chairman, president, and chief executive officer. "But this is just the beginning of what we can do. We intend to continue to build shareholder value over time through same store sales growth, tight expense controls, and effective capital management."

For the year, AutoZone opened 107 new auto parts stores in the U.S., replaced 16 and closed three. In addition, eight new auto parts stores were opened in Mexico.

The fourth quarter non-recurring charge includes an adjustment related to 35 stores the company has closed in the first quarter of fiscal 2002. In addition, AutoZone's board of directors authorized the repurchase of an additional $250 million of the company's common stock.