AutoZone sees profits grow after adding stores

Vehicle parts retailer AutoZone reported better-than-expected earnings for its fourth quarter on Thursday, on the back of new store openings across the United States.

Profits grew by 6.4% in Q4 due to the revenue generated by the new openings, with the latter up 3.3% to $3.4bn, the company said.

Like-for-like sales grew 1%, well below the 2.0% estimated by the analyst consensus from Factset.

On 5 August, ratings agency Fitch said it believed AutoZone could sustain low single digit comps supported by 1% - 2% comps on the retail side of the business and relatively faster growth in the commercial business. Overall sales growth should be in the mid-single digits due to the addition of around 200 units annually.

The Tennessee-based firm reported net income of $14.30 a share.

For fiscal 2016, AutoZone reported profits of $1.24bn, or $40.70 per share. Revenue was reported at $10.64bn.

CEO Bill Rhodes said he expected AutoZone's inventory roll-out would continue in 2017, as the company continued with its stated aim of increasing its offering through the opening of so-called mega hub locations and making more frequent deliveries to stores.

"In order to continue to meet our customers' needs across all selling channels, we continue to invest capital in our product availability initiatives across our businesses," Rhodes said in a statement.

"While investing to grow, we will remain committed to our disciplined approach to increasing operating earnings and utilizing our capital effectively," he added.

Separately, the company announced it has received authorisation from its Board to repurchase a further $750m in shares.

As of 1419 BST shares in Autozone were up by 0.99% to $751.45.