AutoZone, Inc. (AZO) has reported 7.75 percent rise in profit for the quarter ended Nov. 19, 2016. The company has earned $278.12 million, or $9.36 a share in the quarter, compared with $258.11 million, or $8.29 a share for the same period last year.
Revenue during the quarter grew 3.43 percent to $2,467.84 million from $2,386.04 million in the previous year period. Gross margin for the quarter expanded 23 basis points over the previous year period to 52.74 percent. Total expenses were 81.40 percent of quarterly revenues, down from 81.64 percent for the same period last year. This has led to an improvement of 24 basis points in operating margin to 18.60 percent.
Operating income for the quarter was $458.90 million, compared with $438 million in the previous year period.
"I would like to thank our entire organization for delivering another quarter of very solid results. We are pleased to report our forty-first consecutive quarter of double digit earnings per share growth. We remain committed to providing superior customer service and trustworthy advice. For the quarter, we reached record first quarter sales and earnings per share while opening 21 new locations and 35 Commercial programs. We also continued with the rollout of our inventory availability initiatives, including expanding our multi-deliveries per week to 161 net additional stores. We will continue with our deliberately-paced multiple delivery rollouts in 2017, and we will continue to open more Mega Hub locations. We have opened our second distribution center in Mexico, and we are in the process of building two new domestic distribution centers. We believe these initiatives will allow us to continue to meet our customers' needs across all selling channels. As we continue to invest capital in all our businesses, we remain committed to our disciplined approach of increasing operating earnings and utilizing our capital effectively," said Bill Rhodes, chairman, president and chief executive officer.
Working capital remains negative
Working capital of AutoZone, Inc. was negative $481.53 million on Nov. 19, 2016 compared with negative $721.37 million on Nov. 21, 2015. Current ratio was at 0.90 as on Nov. 19, 2016, up from 0.85 on Nov. 21, 2015.
Cash conversion cycle (CCC) has increased to 149 days for the quarter from 22 days for the last year period. Days sales outstanding went down to 4 days for the quarter compared with 9 days for the same period last year.
Days inventory outstanding has decreased to 136 days for the quarter compared with 257 days for the previous year period. At the same time, days payable outstanding went up to 289 days for the quarter from 287 for the same period last year.
Debt moves up
AutoZone, Inc. has witnessed an increase in total debt over the last one year. It stood at $4,997.45 million as on Nov. 19, 2016, up 5.12 percent or $243.35 million from $4,754.10 million on Nov. 21, 2015. Autozone has witnessed an increase in long-term debt over the last one year. It stood at $4,997.45 million as on Nov. 19, 2016, up 5.12 percent or $243.35 million from $4,754.10 million on Nov. 21, 2015. Total debt was 57.16 percent of total assets as on Nov. 19, 2016, compared with 57.85 percent on Nov. 21, 2015.
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