AutoZone beats Street as harsh winter boosts car parts sales
(Reuters) - AutoZone Inc (AZO.N), the second-largest U.S. auto parts retailer, reported quarterly results that beat analysts' estimates as a severe winter led to more wear and tear on vehicles.
AutoZone shares rose more than 3 percent in premarket trading.
Temperatures fell to as low as minus 37 Fahrenheit (minus 38.3 Celsius) in the first week of January as a deep freeze, described as "polar vortex," gripped vast parts of the United States.
Extreme cold weakens car batteries and thickens engine oil, affecting the engine that in turn leads to greater wear and tear in other parts. Tires and brakes also wear out more due to snow.
AutoZone, which competes with Advance Auto Parts Inc (AAP.N) and O'Reilly Automotive Inc (ORLY.O), reported a 4.3 percent jump in domestic same-store sales — sales at stores open at least a year — in the second quarter ended February 15.
Revenue rose 7.3 percent to $2.0 billion.
Total auto parts sales rose to $1.91 billion from $1.80 billion a year earlier. Sales to commercial repair chains rose 12.2 percent.
"(The) weather patterns accelerated our growth in certain failure-related hard part categories," Chief Executive Bill Rhodes said in a statement.
Inventory rose 12 percent, driven by an increase in product placement and new store openings.
Net income rose to $192.8 million, or $5.63 per share, from $176.3 million, or $4.78 per share, a year earlier.
Analysts on average had expected earnings of $5.55 per share on revenue of $1.97 billion, according to Thomson Reuters
(Reporting by Rohit T. K. in Bangalore; Editing by Joyjeet Das)
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