AutoZone Inc. Reports Operating Results (10-Q)
Autozone Inc has a market cap of $14.17 billion; its shares were traded at around $360.15 with a P/E ratio of 16.3 and P/S ratio of 1.8. Autozone Inc had an annual average earning growth of 17.4% over the past 10 years. GuruFocus rated Autozone Inc the business predictability rank of 4-star.
Highlight of Business Operations:Operating results for the twelve weeks ended November 17, 2012, are not necessarily indicative of the results that may be expected for the fiscal year ending August 31, 2013. Each of the first three quarters of our fiscal year consists of 12 weeks, and the fourth quarter consists of 16 or 17 weeks. The fourth quarter for fiscal 2012 had 16 weeks and for fiscal 2013 has 17 weeks. Our business is somewhat seasonal in nature, with the highest sales generally occurring during the months of February through September and the lowest sales generally occurring in the months of December and January.
During the first quarter of fiscal 2013, failure and maintenance related categories represented the largest portion of our sales mix, at approximately 84% of total sales, with failure related categories continuing to be our strongest performers. While we have not experienced any fundamental shifts in our category sales mix as compared to previous years, we did experience a slight decline in mix of sales of the maintenance category. We believe the slowdown in maintenance related products was largely due to weather related impacts in various regions of the U.S. Because of the unusually mild winter last year across parts of the U.S., we saw a reduced benefit from sales of maintenance related products compared to the prior fiscal year. Also, Hurricane Sandy impacted several of our stores in the Northeast due to electrical outages from high winds and flooding and prevented customers from coming to the stores in this area. We believe that we will see improvement in sales once we annualize the effects of the mild winter, however, we remain focused on refining and expanding our product assortment to ensure that we have the best merchandise at the right price in each of our categories.
For the trailing four quarters ended November 17, 2012, our after-tax return on invested capital (ROIC) was 33.0% as compared to 32.1% for the comparable prior year period. ROIC is calculated as after-tax operating profit (excluding rent charges) divided by average invested capital (which includes a factor to capitalize operating leases). ROIC increased primarily due to increased after-tax operating profit. We use ROIC to evaluate whether we are effectively using our capital resources and believe it is an important indicator of our overall operating performance.
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