As the automotive market sorts itself out, aftermarket category leader AutoZone is seeing strength in its business as consumers keep older cars on the road longer.
The category has shown strength, as competitors including O’Reilly Automotive, Advanced Auto Parts and Genuine Parts have handed in similarly strong quarterly figures.
Reporting fiscal second-quarter 2022 earnings on Tuesday (Feb. 28), the Memphis-based chain of approximately 7,000 stores said domestic same-store sales, or sales for stores open at least one year, rose 5.3% for the quarter that ended Feb. 11, 2023, representing an increase of 9.5% from the second quarter of fiscal 2022 (12 weeks).
“We are proud to report solid same store sales growth on top of last year’s 13.8%. We could not have achieved these results without phenomenal contributions from across the organization,” said AutoZone Chairman, President and CEO Bill Rhodes.
“Once again, our AutoZoners’ efforts generated double digit domestic Commercial growth and single digit domestic Retail sales growth. We continue to believe the initiatives we have in place position us well for the remainder of our fiscal year,” he said.
The company said that inventory increased 13.9% over the same period last year, “driven by inflation and its growth initiatives.” Net inventory, defined as merchandise inventories less accounts payable, on a per store basis, was negative $227 thousand versus negative $198 thousand last year and negative $249 thousand last quarter.
During the quarter, AutoZone said it opened 30 new stores in the U.S., one in Mexico, and five in Brazil. As of February 11, 2023, the Company had 6,226 stores in the U.S., 707 in Mexico, and 81 in Brazil for a total store count of 7,014.
Rhodes added in the earnings statement, “We remain committed to providing the best place for our customers to shop while being an exceptional place for our AutoZoners to build their careers. For the remainder of fiscal 2023, we will be laser focused on relentless execution, and we will continue to focus our capital on projects that meet or exceed our return on capital targets. We will take nothing for granted as we will continue to focus on our long-term approach of increasing operating earnings and free cash flows while using our balance sheet effectively.”
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