By James Dowd
Memphis Commercial Appeal
Posted December 4, 2012 at 6:24 a.m., updated December 4, 2012 at 5:04 p.m.
Memphis-based AutoZone reported another quarter of strong earnings on Tuesday, but one tempered by sluggish sales growth.
The nation’s largest auto parts retailer reported net income of $203.5 million, or $5.41 per share, for its fiscal first quarter, which ended Nov. 17. That represented an increase of 6.4 percent from year-earlier net income of $191.1 million, or $4.68, per share. Earnings beat analysts’ expectations of $5.39 per share.
But a relatively mild winter earlier this year meant less wear and tear on vehicles and thus fewer trips to auto parts stores for do-it-yourselfers. Net sales were $2 billion in the quarter — up 3.5 percent over the prior year, but short of analysts’ expectations of $2.02 billion.
Domestic same-store sales, a key measure of retailer performance, were up 0.2 percent.
The sales performance was in line with expectations, said Barclays Capital analyst Alan Rifkin.
“It was a crazy winter last year and now six to nine months later we’re experiencing continued effects of that moderate weather on industry leaders like AutoZone,” Rifkin said. “Right now things are a little slow, but we’re still great admirers of AutoZone and consider it a top pick. Ultimately it will prevail.”
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