AutoZone, Inc. (NYSE: AZO) today reported net sales of $2.8 billion for its third quarter ended May 9, 2020, a decrease of 0.1% from the third quarter of fiscal 2019 (12 weeks).
The Memphis-based AutoZone reported domestic same store sales, or sales for stores open at least one year, decreased 1.0% for the quarter. The quarter can best be described in three, four-week segments. The first four weeks were strong as both Retail and Commercial performed well, up mid-single digit same store sales.
The next four weeks, the weeks COVID-19 had its first impact on the company's business, the company’s same store sales were down materially. Over the last four weeks, as federal stimulus checks began to flow through the economy, same store sales turned meaningfully positive.
For the quarter, gross profit, as a percentage of sales, was flat to last year at 53.6%. Operating expenses, as a percentage of sales, were 35.9% (versus 33.9% the same period last year), with deleverage primarily driven by the unplanned approximate $75 million of costs incurred in response to COVID-19.
Operating profit decreased 10.2% to $491.7 million compared to $547.5 million in the same period last year. Net income for the quarter decreased 15.5% to $342.9 million compared to $405.9 million in the same period last year, while diluted earnings per share decreased 10.0% to $14.39 per share from $15.99 per share in the year-ago quarter.
The benefit from stock options was less favorable this third quarter, only increasing EPS by $0.05/share versus $0.51/share last year.
CEO Bill Rhodes said, ”During the third quarter, we experienced the most extreme fluctuations in sales, both negative and positive, in the Company’s more than 40 year history. Because of this extreme volatility and uncertainty around the continued effects of the virus and government and consumer responses, it is difficult for us to forecast short-term results with any degree of confidence.
"But our team has proven yet again that we can flex our business quickly in this dynamic environment, and we significantly enhanced our liquidity as previously announced."
AutoZone shares were in gear, gaining $17.84, or 1.6%, to $1,140.78.
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