AutoZone Gains on Topping Estimates as Spare Parts Business Grows -Breaking
By Dhirendra Tripathi
Investing.com – AutoZone stock (NYSE:) traded 1.8% higher Tuesday as the company reported strong sales and earnings in the first quarter, driven by growth in both retail and commercial segments.
Sales at the distributor of auto parts rose to $3.7billion, more than expected. About 14% of domestic same-store sales rose.
Pressure and rewards for the company’s business have come from different directions. Global shortages of semiconductors have hampered production, leading to long waiting lists and forced people into second-hand cars or staying with their existing vehicles for longer periods of time.
Older vehicles require more maintenance and repairs. Spare parts have also been difficult to find because factories were closed for so long. Due to labor shortages and congestion, ships are often stuck in ports. This causes delays.
New stores drove a 3% increase in inventory for the company as it closed out the period. AutoZone had 15 new U.S. stores, one in Brazil, and two in Mexico during the quarter.
The percentage of operating expenses was 32%. That’s an increase of 170 basis point due to high sales growth. One basis point equals one-hundredth percent.
In excess of estimates, the adjusted profit per shares rose 38% to $25.69. This was due to strong topline growth as well as operating expense leverage.
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