Shares of AutoZone Inc. (AZO, Financial) traded higher on Tuesday after the company reported financial results for the third quarter, which ended Nov. 18.
The company reported EPS of $9.96 per share on revenue of $2.59 billion, beating earnings expectations by 15 cents and revenue by $50 million.
Further, the gross profit reached 52.8% (versus 52.7% for the same quarter last year). The gross margin was flat despite higher merchandise margins, which were offset by higher inventory costs.
Chairman, President and CEO Bill Rhodes commented on the company's performance.
“Our business strengthened during the first quarter of our new year with improved same store sales results including an acceleration in our domestic Commercial sales," he said. "This quarter included unprecedented impacts to our operations from natural disasters. Our AutoZoners, in the affected areas, not only had to work hard to get their personal lives back in order but they also worked tirelessly to reopen our stores very quickly to service our customers who were in need."
During the quarter, the retailer opened 16 new stores, relocated one store and closed one store in the U.S. Moreover, it opened five new stores in Mexico.
Ascena Retail Group Inc. (ASNA, Financial) shares plummeted on quarterly results. First-quarter EPS of 11 cents were in line with expectations. Similarly, revenue of $1.59 billion met expectations, but declined 5.4% year over year. The hurricanes earlier this year negatively affected sales in the Southern U.S. and Puerto Rico by $11 million. Moreover, the gross margin declined to $965 million, or 60.7% of sales, compared to $1,014 million, or 60.4% of sales, in the year-ago quarter.
“Our first quarter adjusted earnings per share of 11 cents was in the middle of our guidance range, but represented a disappointing quarter," CEO David Jaffe said. "We were unable to capitalize on the improving macro traffic environment due to fashion missteps that we cannot afford in today's environment. We continue to deliver double-digit transaction growth in our direct channel, but must improve our overall level of merchandising execution.”
Disclosure: The author holds no positions in any stocks mentioned.
