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AutoZone, Inc. reported a robust performance for the fourth quarter of fiscal 2024, which ended on August 31. The company achieved net sales of $6.2 billion, marking a 9.0% increase from the previous year. When adjusted to exclude the additional week in this year’s quarter, sales were up by 2.6%. Same store sales for the total company increased by 1.3%, with domestic same store sales showing a modest growth of 0.2%. International same store sales surged by 9.9% in constant currency terms, reflecting strong performance outside the U.S.
The gross profit for the quarter stood at $3.26 billion, with a gross margin of 52.5%, a slight decrease of 21 basis points compared to the previous year. This decline was primarily due to a 53 basis point non-cash LIFO impact. Operating expenses as a percentage of sales increased to 31.6% from 31.2% last year, mainly driven by higher store payroll costs. Despite these challenges, operating profit saw a 6.1% increase, reaching $1.3 billion. Net income for the quarter was $902.2 million, up from $864.8 million in the same period last year, while diluted earnings per share (EPS) rose by 11.0% to $51.58.
AutoZone Fails to Meet Expectations in Q4 Fiscal 2024
When comparing AutoZone’s performance against market expectations, the company fell slightly short. Analysts had projected an EPS of $53.61 and revenue of $6.23 billion. The actual EPS was $51.58, which, while showing a substantial year-over-year increase, did not meet the anticipated figure. Similarly, the reported revenue of $6.2 billion was just shy of the expected $6.23 billion, despite being a significant improvement from the previous year’s $5.69 billion.
The discrepancy between expectations and actual performance can be attributed to several factors. The gross margin decrease due to the non-cash LIFO impact and higher operating expenses played a role in the lower-than-expected EPS. Additionally, while the sales growth was strong, the modest increase in domestic same store sales at 0.2% might have tempered overall revenue growth. Nonetheless, the company’s international segment showed impressive growth, which helped offset some of the domestic challenges.
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AutoZone Plans to Continue Aggressive Store Expansion Strategy
Looking ahead, AutoZone remains optimistic about its growth prospects. The company plans to continue its aggressive store expansion strategy, having opened 117 new stores in the fourth quarter alone. For the fiscal year, a total of 213 net new stores were added, bringing the company’s total store count to 7,353. This expansion is expected to drive future sales growth, especially in international markets where the company has been performing well.
AutoZone is also focusing on several strategic initiatives to enhance its operational efficiency and customer service. The company aims to improve inventory availability and accelerate its domestic commercial business.
Disclaimer: The author does not hold or have a position in any securities discussed in the article.
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