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IndustriFordon & Transport
AutoZone, Inc. retails and distributes automotive replacement parts and accessories. It offers various products for cars, sport utility vehicles, vans, and light trucks, including new and remanufactured automotive hard parts, maintenance items, accessories, and non-automotive products. The company also provides A/C compressors, batteries and accessories, belts and hoses, calipers, carburetors, chassis, clutches, CV axles, engines, fuel pumps, fuses, ignition and lighting products, mufflers, radiators, thermostats, starters and alternators, and water pumps. In addition, it offers maintenance products comprising antifreeze and windshield washer fluids; brake drums, rotors, shoes, and pads; brake and power steering fluids, and oil and fuel additives; oil and transmission fluids; oil, air, fuel, and transmission filters; oxygen sensors; paints and accessories; refrigerants and accessories; shock absorbers and struts; spark plugs and wires; and windshield wipers, as well as discretionary products, such as air fresheners, cell phone accessories, drinks and snacks, floor mats and seat covers, interior and exterior accessories, mirrors, performance products, protectants and cleaners, sealants and adhesives, steering wheel covers, stereos and radios, tools, and wash and wax products. Further, the company provides a sales program that offers commercial credit and delivery of parts and other products. Additionally, it sells automotive diagnostic and repair software under the ALLDATA brand through alldata.com and alldatadiy.com; automotive hard parts, maintenance items, accessories, and non-automotive products through autozone.com; and accessories, performance, and replacement parts through autoanything.com. As of February 28, 2017, the company operated 5,346 stores in the United States, including Puerto Rico; 491 stores in Mexico; 9 stores in Brazil; and 26 Interamerican Motor Corporation branches. AutoZone, Inc. was founded in 1979 and is based in Memphis, Tennessee.
2021-05-25 12:55:00

MEMPHIS, Tenn., May 25, 2021 (GLOBE NEWSWIRE) -- AutoZone, Inc. (NYSE: AZO) today reported net sales of $3.7 billion for its third quarter (12 weeks) ended May 8, 2021, an increase of 31.4% from the third quarter of fiscal 2020 (12 weeks). Domestic same store sales, or sales for stores open at least one year, increased 28.9% for the quarter.

For the quarter, gross profit, as a percentage of sales, was 52.4%, a decrease of 118 basis points versus the prior year. The decrease in gross margin was primarily driven by the accelerated growth in our Commercial business and our investment in pricing initiatives. Operating expenses, as a percentage of sales, was 30.4% versus 35.9% for last year’s quarter. The decrease in operating expenses, as a percentage of sales, was driven by strong sales growth and approximately $75 million in prior year pandemic related expenses, including Emergency Time-Off (“ETO”) for our AutoZoners.

Operating profit increased 63.4% to $803.5 million. Net income for the quarter increased 73.9% over the same period last year to $596.2 million, while diluted earnings per share increased 84.0% to $26.48 per share from $14.39 per share in the year-ago quarter. The increase in net income was driven by strong topline growth and operating expense leverage.

AutoZone repurchased 663,328 shares of its common stock for $900.0 million during the third quarter, at an average price of $1,357 per share. At the end of the third quarter, the Company had $1.3 billion remaining under its current share repurchase authorization.

The Company’s inventory increased 5.1% over the same period last year, driven by new stores and improved product assortment. Net inventory, defined as merchandise inventories less accounts payable, on a per store basis, was negative $167 thousand versus negative $56 thousand last year and negative $93 thousand last quarter.

“We are very proud to report another quarter of exceptionally strong same store sales and earnings growth. The AutoZone team has done a wonderful job of managing, and leading, throughout this pandemic. While our DIY business was again very strong this quarter, our Commercial business’ 44% sales growth stood out as exceptional. The investments we are making in Commercial pricing, service and assortment are strengthening our competitive position in this large, fragmented market. We intend to accelerate our Company’s historical Commercial growth rate as we increase our penetration in this market. While we understand sales trends will slow, we must work diligently during this fourth quarter to maintain the share gains we have achieved. As always, we cannot take anything for granted, but we remain excited about the ongoing sales opportunities in front of us. Additionally, we remain committed to investing appropriately in a safe and productive environment for our customers and AutoZoners. As we opportunistically invest capital in our business, we remain committed to our disciplined approach of increasing operating earnings and cash flow, and of utilizing our balance sheet and capital effectively,” said Bill Rhodes, Chairman, President and Chief Executive Officer.

During the quarter ended May 8, 2021, AutoZone opened 25 new stores and closed one store in the U.S. and opened seven stores in Mexico and one store in Brazil. As of May 8, 2021, the Company had 5,975 stores in the U.S., 635 in Mexico and 47 in Brazil for a total store count of 6,657.

AutoZone is the leading retailer and a leading distributor of automotive replacement parts and accessories in the Americas. Each AutoZone 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. We also have commercial programs in all stores in Mexico and Brazil. AutoZone also sells the ALLDATA brand diagnostic and repair software through www.alldata.com and www.alldatadiy.com. Additionally, we sell automotive hard parts, maintenance items, accessories and non-automotive products through www.autozone.com and our commercial customers can make purchases through www.autozonepro.com. We also provide product information on our Duralast branded products through www.duralastparts.com. AutoZone does not derive revenue from automotive repair or installation.

AutoZone will host a conference call this morning, Tuesday, May 25, 2021, beginning at 10:00 a.m. (EDT) to discuss its third quarter results. This call is being web cast and can be accessed, along with supporting slides, at AutoZone’s website at www.autozone.com and clicking on Investor Relations. Investors may also listen to the call by dialing (877) 407-8031. In addition, a telephone replay will be available by dialing (203) 369-1211 through June 25, 2021, 11:59 pm (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 return on invested capital, adjusted debt and adjusted debt to EBITDAR. 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. 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 constitute forward-looking statements that are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements typically use words such as “believe,” “anticipate,” “should,” “intend,” “plan,” “will,” “expect,” “estimate,” “project,” “positioned,” “strategy,” “seek,” “may,” “could,” 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: product demand; energy prices; weather; competition; credit market conditions; cash flows; access to available and feasible financing; future stock repurchases; the impact of recessionary conditions; consumer debt levels; changes in laws or regulations; risks associated with self-insurance; war and the prospect of war, including terrorist activity; the impact of public health issues, such as the ongoing global coronavirus pandemic; inflation; the ability to hire, train and retain qualified employees; construction delays; the compromising of confidentiality, availability or integrity of information, including cyber-attacks; historic growth rate sustainability; downgrade of our credit ratings; damages to our reputation; challenges in international markets; failure or interruption of our information technology systems; origin and raw material costs of suppliers; disruption in our supply chain; impact of tariffs; anticipated impact of new accounting standards; and business interruptions. Certain of these risks and uncertainties are discussed in more detail in the “Risk Factors” section contained in Item 1A under Part 1 of the Company’s Annual Report on Form 10-K for the year ended August 29, 2020, 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. However, it should be understood that it is not possible to identify or predict all such risks and other factors that could affect these forward-looking statements. 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.

Contact Information:
Financial: Brian Campbell at (901) 495-7005, brian.campbell@autozone.com
Media: David McKinney at (901) 495-7951, david.mckinney@autozone.com

AutoZone's 3rd Quarter Highlights - Fiscal 2021   
Condensed Consolidated Statements of Operations     
3rd Quarter, FY2021       
(in thousands, except per share data)       
    GAAP Results   
    12 Weeks Ended 12 Weeks Ended   
    May 8, 2021 May 9, 2020(2)   
Net sales $3,651,023  $2,779,299    
Cost of sales  1,736,077   1,288,651    
Gross profit  1,914,946   1,490,648    
Operating, SG&A expenses  1,111,441   998,975    
Operating profit (EBIT)  803,505   491,673    
Interest expense, net  45,026   47,450    
Income before taxes  758,479   444,223    
Income taxes(1)  162,315   101,327    
Net income $596,164  $342,896    
Net income per share:       
 Basic $27.15  $14.66    
 Diluted $26.48  $14.39    
Weighted average shares outstanding:       
 Basic  21,956   23,386    
 Diluted  22,515   23,828    
(1)The twelve weeks ended May 8, 2021 and the comparable prior year period include $16.0M and $1.1M in tax benefits from stock option exercises, respectively 
(2)The twelve weeks ended May 9, 2020 were negatively impacted by approximately $75M (pre-tax) of pandemic related expenses, including Emergency Time-Off 
Year-To-Date 3rd Quarter, FY2021       
(in thousands, except per share data)       
    GAAP Results   
    36 Weeks Ended 36 Weeks Ended   
    May 8, 2021(2) May 9, 2020(2)   
Net sales $9,716,101  $8,085,999    
Cost of sales  4,566,155   3,728,221    
Gross profit  5,149,946   4,357,778    
Operating, SG&A expenses  3,249,449   2,958,144    
Operating profit (EBIT)  1,900,497   1,399,634    
Interest expense, net  137,217   135,528    
Income before taxes  1,763,280   1,264,106    
Income taxes(1)  378,737   271,591    
Net income $1,384,543  $992,515    
Net income per share:       
 Basic $61.24  $42.04    
 Diluted $59.80  $41.08    
Weighted average shares outstanding:       
 Basic  22,609   23,610    
 Diluted  23,154   24,160    
(1)The thirty-six weeks ended May 8, 2021 and the comparable prior year period include $35.2M and $17.6M in tax benefits from stock option exercises, respectively 
(2)The thirty-six weeks ended May 8, 2021 and the comparable prior year period were negatively impacted by pandemic related expenses, including Emergency Time-Off of approximately $46M (pre-tax) and $75M (pre-tax), respectively 
Selected Balance Sheet Information       
(in thousands)       
    May 8, 2021 May 9, 2020 August 29, 2020 
Cash and cash equivalents $975,646  $509,118  $1,750,815  
Merchandise inventories  4,665,477   4,440,602   4,473,282  
Current assets  6,224,396   5,397,993   6,811,872  
Property and equipment, net  4,683,149   4,384,586   4,509,221  
Operating lease right-of-use assets  2,694,846   2,613,849   2,581,677  
Total assets  14,137,946   12,902,131   14,423,872  
Accounts payable  5,778,222   4,806,329   5,156,324  
Current liabilities  7,013,249   5,769,076   6,283,091  
Operating lease liabilities, less current portion  2,594,506   2,481,280   2,501,560  
Total debt  5,267,896   5,418,272   5,513,371  
Stockholders' deficit  (1,763,392)  (1,632,736)  (877,977) 
Working capital  (788,853)  (371,083)  528,781  

AutoZone's 3rd Quarter Highlights - Fiscal 2021            
Condensed Consolidated Statements of Operations          
Adjusted Debt / EBITDAR         
(in thousands, except adjusted debt to EBITDAR ratio) Trailing 4 Quarters     
     May 8, 2021 May 9, 2020     
Net income  $2,125,000  $1,557,744      
Add: Interest expense  202,854   196,724      
 Income tax expense  590,688   425,941      
EBIT    2,918,542   2,180,409      
Add: Depreciation and amortization  403,395   390,954      
 Rent expense(1)  339,193   335,794      
 Share-based expense  50,645   43,977      
EBITDAR  $3,711,775  $2,951,134      
Debt   $5,267,896  $5,418,272      
Financing lease liabilities  228,597   184,276      
Add: Rent x 6(1)  2,035,158   2,014,764      
Adjusted debt $7,531,651  $7,617,312      
Adjusted debt to EBITDAR  2.0   2.6      
Adjusted Return on Invested Capital (ROIC)         
(in thousands, except ROIC)         
     Trailing 4 Quarters     
     May 8, 2021 May 9, 2020     
Net income  $2,125,000  $1,557,744      
Interest expense  202,854   196,724      
Rent expense(1)  339,193   335,794      
Tax effect(2)  (118,167)  (114,492)     
Adjusted after-tax return $2,548,880  $1,975,770      
Average debt(3) $5,446,162  $5,303,066      
Average stockholders' deficit(3)  (1,364,932)  (1,684,662)     
Add: Rent x 6(1)  2,035,158   2,014,764      
Average financing lease liabilities(3)  227,061   184,286      
Invested capital $6,343,449  $5,817,454      
Adjusted After-Tax ROIC  40.2%  34.0%     
(1) The table below outlines the calculation of rent expense and reconciles rent expense to total lease cost, per ASC 842, the most directly comparable GAAP financial measure, for the trailing four quarters ended May 8, 2021 and May 9, 2020 (in thousands): 
  Total lease cost, per ASC 842, for the trailing four quarters ended May 8, 2021 $421,750      
  Less:Financing lease interest and amortization  (55,725)     
  Less:Variable operating lease components, related to insurance and common area maintenance  (26,832)     
  Rent expense for the trailing four quarters ended May 8, 2021 $339,193      
  Total lease cost, per ASC 842, for the 36 weeks ended May 9, 2020 $286,626      
  Less:Financing lease interest and amortization    (42,172)     
  Less:Variable operating lease components, related to insurance and common area maintenance  (17,127)     
  Rent expense for the 36 weeks ended May 9, 2020 $227,327      
  Add:Rent expense for the 17 weeks ended August 31, 2019 as previously reported prior to the adoption of ASC 842  108,467      
  Rent expense for the trailing four quarters ended May 9, 2020 $335,794      
(2) Effective tax rate over trailing four quarters ended May 8, 2021 and May 9, 2020 is 21.8% and 21.5%, respectively    
(3)All averages are computed based on trailing 5 quarter balances    
Other Selected Financial Information         
(in thousands)          
     May 8, 2021 May 9, 2020     
Cumulative share repurchases ($ since fiscal 1998) $24,832,432  $22,354,110      
Remaining share repurchase authorization ($)  1,317,568   795,890      
Cumulative share repurchases (shares since fiscal 1998)  149,696   147,696      
Shares outstanding, end of quarter  21,620   23,348      
     12 Weeks Ended 12 Weeks Ended 36 Weeks Ended 36 Weeks Ended 
     May 8, 2021 May 9, 2020 May 8, 2021 May 9, 2020 
Depreciation and amortization $94,017  $91,695  $278,044 $272,115 
Capital spending  137,009   83,325   375,653  273,888 

AutoZone's 3rd Quarter Highlights - Fiscal 2021               
Selected Operating Highlights            
Condensed Consolidated Statements of Operations          
Store Count & Square Footage            
     12 Weeks Ended  12 Weeks Ended  36 Weeks Ended  36 Weeks Ended 
     May 8, 2021  May 9, 2020  May 8, 2021  May 9, 2020 
 Beginning stores  5,951    5,815    5,885    5,772  
 Stores opened  25    21    91    64  
 Stores closed  (1)   -    (1)   -  
 Ending domestic stores  5,975    5,836    5,975    5,836  
 Relocated stores  6    1    11    1  
 Stores with commercial programs  5,107    4,950    5,107    4,950  
 Square footage (in thousands)  39,175    38,223    39,175    38,223  
 Beginning stores  628    608    621    604  
 Stores opened  7    2    14    6  
 Ending Mexico stores  635    610    635    610  
 Beginning stores  46    38    43    35  
 Stores opened  1    -    4    3  
 Ending Brazil stores  47    38    47    38  
Total     6,657    6,484    6,657    6,484  
 Square footage (in thousands)  44,253    43,045    44,253    43,045  
 Square footage per store  6,648    6,639    6,648    6,639  
Sales Statistics            
($ in thousands, except sales per average square foot)            
     12 Weeks Ended  12 Weeks Ended  Trailing 4 Quarters  Trailing 4 Quarters(1) 
Total AutoZone Stores (Domestic, Mexico and Brazil)May 8, 2021  May 9, 2020  May 8, 2021  May 9, 2020 
 Sales per average store $541   $421   $2,134   $1,856  
 Sales per average square foot $81   $63   $321   $280  
Total Auto Parts (Domestic, Mexico and Brazil)             
 Total auto parts sales $3,590,281   $2,724,604   $14,024,674   $11,849,892  
 % Increase vs. LY  31.8%   -0.3%   18.4%   5.5% 
Domestic Commercial             
 Total domestic commercial sales $828,569   $573,786   $3,138,398   $2,638,710  
 % Increase vs. LY  44.4%   -6.7%   18.9%   9.6% 
 Average sales per program per week $13.5   $9.7   $12.0   $10.2  
 % Increase vs. LY  39.2%   -9.3%   17.6%   5.2% 
All Other, including ALLDATA            
 All other sales $60,742   $54,695   $237,395   $224,542  
 % Increase vs. LY  11.1%   7.0%   5.7%   8.7% 
(1)Fiscal 2019 results include an additional week of sales of approximately $234.5M for Total Auto Parts, $51.3M for Domestic Commercial and $4.1M for All Other. Sales per average store and sales per average square foot benefited from the additional week by $37K and $6K, respectively
     12 Weeks Ended  12 Weeks Ended  36 Weeks Ended  36 Weeks Ended 
     May 8, 2021  May 9, 2020  May 8, 2021  May 9, 2020 
Domestic same store sales  28.9%   (1.0%)   19.0%   0.5% 
Inventory Statistics (Total Stores)            
     as of  as of       
     May 8, 2021  May 9, 2020       
 Accounts payable/inventory  123.9%   108.2%       
 ($ in thousands)             
 Inventory  $4,665,477   $4,440,602        
 Inventory per store  701    685        
 Net inventory (net of payables)  (1,112,745)   (365,727)       
 Net inventory / per store  (167)   (56)       
     Trailing 5 Quarters       
     May 8, 2021  May 9, 2020       
 Inventory turns  1.5 x  1.3 x