AutoZone Inc. said Tuesday that strong sales of automotive replacement parts and several new store openings helped drive net income up 17 percent in its fiscal third quarter.
The results breezed past analyst projections, sending shares up $9.01, or 4.9 percent, to $193.26 in morning trading even as the broader markets tumbled.
Replacement auto parts makers like AutoZone have thrived during the recession as penny-pinching drivers opt to repair their existing cars on their own instead of buying new ones. The company said the third-quarter results mark its 15th straight quarter of double-digit growth in earnings per share.
While new vehicle sales have begun to recover in recent months, they remain below pre-recession levels and consumers are still taking a do-it-yourself approach to many of their repairs.
"Customers continue to shop our stores in some cases out of economic necessity, or simply to save money," CEO Bill Rhodes said during a conference call. "This represents an opportunity for our industry overall."
"As long as cars continue to get older and need ongoing maintenance our industry will be in a strong position," he said.
AutoZone, which is about 40 percent owned by billionaire investor and Sears chairman Edward S. Lampert, said it opened 21 new stores in the U.S. and 10 in Mexico during the quarter, bringing its total store count to 4,309 stores the U.S. and 212 in Mexico.
Revenue at stores open at least a year, a key metric of retail performance, rose 7.1 percent. The company posted higher merchandise margins, citing a shift to more profitable products and lower product purchase costs.
Inventory rose 2.1 percent due to new store openings, the company said.
The company said its net income rose to $202.7 million, or $4.12 per share, in the three months ended May 8 from $173.7 million, or $3.13 per share, a year ago.
Revenue climbed 10 percent to $1.82 billion from $1.66 billion a year ago.
Analysts surveyed by Thomson Reuters had expected earnings of $3.59 per share on $1.71 billion in sales, on average.
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