AutoZone Earnings Soar In Second Quarter.(Brief Article)(Statistical Data Included)

Memphis-based AutoZone, Inc., said it had sales of $1.08 billion for its second fiscal quarter (12 weeks) ended February 9, 2002, an increase of 11 percent from $974 million in fiscal 2001. Excluding the sales of the TruckPro subsidiary which was sold during the quarter, total sales increased 13 percent.

Same store sales, or sales for domestic auto parts stores open at least one year, increased 12 percent during the quarter, including 11 percent for retail sales and 18 percent for commercial sales. AutoZone stores in Mexico continue to report high same store sales increases.

Net income for the quarter increased 101 percent to $64 million, while diluted earnings per share increased 107 percent to $0.58 from $0.28 reported in the year-ago quarter. For the fiscal year-to-date period (24 weeks), sales were $2.26 billion, an increase of 11 percent from the prior year, with a same store sales increase of 10 percent, including a 10 percent increase for retail sales and 16 percent for commercial sales.

Year-to-date net income increased 73 percent to $148 million, while diluted earnings per share for the period increased 81 percent to $1.34 from $0.74.

"We are very pleased with the results of our second quarter and year to date," said Steve Odland, Chairman, President, and Chief Executive Officer. "In addition to some positive external factors like more older cars on the road and more miles being driven, our marketing, merchandising, and operating initiatives continue to drive strong same store sales by reminding customers to maintain their vehicles. This is an important way to grow the business as industry studies show that $60B of annual maintenance goes undone each year."

"We continue to focus on decreasing costs, strategic pricing, and on relentless expense discipline. Our cash flow and financial returns continue to improve. The strong, stable cash flow provided by our application parts business, when combined with increased hurdle rates for new investments, should continue to drive improved return on invested capital and shareholder value," Odland added.

During the quarter, AutoZone opened 38 new and replaced 4 stores in the U.S. and opened one store in Mexico. In addition, AutoZone sold TruckPro, its 49-store heavy duty truck parts subsidiary in the quarter. Year-to-date, AutoZone has opened 53 new and replaced 10 auto parts stores in the U.S. and 2 stores in Mexico.

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