UPDATE 2-AutoZone profit rises due to cold weather, delayed repairs

Tuesday, 10 Dec 2013 | 9:46 AM ET

* First-quarter revenue $2.09 bln vs est $2.10 bln

* Earnings $6.29/share vs est $6.28

* Same-store sales rise 0.9 pct

* Shares rise 2 percent

Dec 10 (Reuters) - AutoZone Inc, the largest U.S. auto parts retailer, reported a better-than-expected quarterly profit as cold weather and delayed repairs drove demand for vehicle parts.

U.S. auto parts retailers are benefiting as cold weather increases wear and tear. The United States experienced a cold October, followed by storms in the U.S. Midwest in November.

Demand is also picking up after a warmer-than-usual winter in 2012 that meant cars needed less maintenance.

Stifel, Nicolaus & Co analyst David Schick said recent cold weather across much of the country would likely result in demand for parts for the next six months.

AutoZone's performance has been weaker than some of its rivals due to its dependence on the do-it-yourself market, which has not recovered as fast as the commercial repair business.

Sales at stores open for at least a year rose 0.9 percent in the first-quarter ended Nov. 23. Rival O'Reilly Automotive Inc reported a 4.6 percent rise in third-quarter same-store sales in October.

While AutoZone does not get any revenue from auto repair services, its rivals are increasingly focusing on that business.

AutoZone will slip to the No.2 position in parts retailing when Advance Auto Parts Inc completes its acquisition of General Parts International Inc early next year.

However, analysts have said AutoZone's recent investments in inventory and store renovations should help sales.

The company said inventory increased 9.1 percent in the quarter, partly driven by store openings. Memphis, Tennessee-based AutoZone had more than 4,800 stores in the United States as of Aug. 31.

AutoZone has also been investing in its commercial business, which sells to repair garages, dealers and service stations, as sales to individual customers remain weak.

The company's net income rose to $218.1 million, or $6.29 per share, in the first quarter from $203.5 million, or $5.41 per share, a year earlier. Revenue rose 5 percent to $2.09 billion.

Analysts on average expected first-quarter earnings of $6.28 per share on revenue of $2.10 billion, according to Thomson Reuters I/B/E/S.

AutoZone's shares were up 3 percent at $471.93 in early trading on Monday on the New York Stock Exchange. They have risen almost a third in the past 12 months, outperforming the S&P 500 index.

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