LONDON, UK / ACCESSWIRE / October 4, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on AutoZone, Inc. (NYSE: AZO), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=AZO, following the Company's reporting of its fourth quarter and fiscal 2017 financial results on September 19, 2017. The auto parts retailer outperformed top- and bottom-line expectations for the quarter and generated record sales for FY17. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:

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Earnings Reviewed

For its 16 weeks ended August 26, 2017, AutoZone reported net sales of $3.51 billion, up 3.3% from Q4 FY16 net sales of $3.40 billion. Domestic same-store sales, or sales for stores open at least one year, increased 1.0% in the reported quarter. The Company's revenue beat Wall Street's expectations of $3.49 billion.

For FY17, AutoZone's sales were $10.89 billion, up 2.4% from sales of $10.64 billion in FY16, while domestic same-store sales were up 0.5% for the year

For Q4 FY17, AutoZone's gross profit as a percentage of sales, was 52.8% down 2 basis points versus the year-ago period, attributable to higher supply chain costs associated with current year inventory initiatives, partially offset by higher merchandise margins. The Company's operating expenses, as a percentage of sales, were 32.6% for the reported quarter versus 32.1% in Q4 FY16. The increase in operating expenses as a percentage of sales, was primarily due to deleveraging on occupancy costs and domestic store payroll driven by higher wage pressure.

AutoZone's net income for Q4 FY17 increased to $433.90 million, or $15.27 per diluted share, for Q4 FY17 compared to net income of $426.77 million, or $14.30 per diluted share, in Q4 FY16. The Company adopted a new accounting standard on August 28, 2016, related to stock option exercises. Excluding the $0.09 net benefit for the reported quarter from the adoption of this new standard, adjusted EPS increased by 6.1% to $15.18 per share, and also came in ahead of analysts' estimates of $15.11 per share.

For FY17, AutoZone's net income increased 3.2% to $1.28 billion from $1.24 billion in FY16, while diluted earnings per share for the year increased 8.3% to $44.07 from $40.70. Excluding the $1.03 net benefit for the year from the adoption of this new standard, adjusted EPS increased by 5.7%.

Segment Results

For Q4 FY17, AutoZone's total commercial sales increased to 5.9%. The Company noted that Commercial represented 19% of its total sales and grew $37 million on a y-o-y basis. In the reported quarter, AutoZone opened 99 net new programs versus 116 programs opened in Q4 FY16. The Company stated that it has now its commercial program in 4,592 stores, or 84% of its domestic stores, supported by 186 hub stores. AutoZone noted that approximately 750 of its programs are three years old or younger. In FY18, the Company expects to open again approximately 150 new programs.

Store Update

During Q4 FY17, AutoZone opened 84 new stores and relocated one store in the US, and opened 25 new stores in Mexico, and 5 in Brazil. As of August 26, 2017, the Company had 5,465 stores in 50 states in the US, the District of Columbia, and Puerto Rico, 524 stores in Mexico, 26 IMC branches, and 14 stores in Brazil for a total count of 6,029.

Cash Matters

For Q4 FY17, AutoZone generated $561 million of operating cash flow, and net fixed assets were up 8% on a y-o-y basis. The Company's capital expenditures for the reported quarter totaled about $196 million. AutoZone's debt outstanding at the end of the quarter was $5.08 billion, or approximately $160 million more than last year's balance of $4.92 billion. The Company's adjusted debt level metric finished the reported quarter at 2.6 times earnings before interest, taxes, depreciation, amortization and rent/restructuring costs (EBITDAR).

Under its share repurchase program, AutoZone repurchased 366 thousand shares of its common stock for $227 million during Q4 FY17, at an average price of $622 per share. For FY17, the Company repurchased 1.5 million shares of its common stock for $1.07 billion, at an average price of $717 per share. At year-end, AutoZone had $824 million remaining under its current share repurchase authorization.

At the end of FY17, AutoZone's inventory increased 6.9% on a y-o-y basis, driven by new stores and increased product placement. Inventory per location at the end of the year was $644,000 versus $625,000. The Company's net inventory, defined as merchandise inventories less accounts payable, on a per-location basis, was a negative $48,000 at the end of FY17 versus negative $80,000 at the end of FY16.

Stock Performance

On Tuesday, October 03, 2017, the stock closed the trading session at $599.55, slightly up 0.32% from its previous closing price of $597.62. A total volume of 317.78 thousand shares have exchanged hands. AutoZone's stock price surged 11.28% in the last one month and 16.01% in the past three months. The stock is trading at a PE ratio of 13.58 and currently has a market cap of $16.77 billion.

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