AutoZone Profit Rises 7%, Topping Estimates

AutoZone Tuesday posted a better-than-expected 7 percent increase in first-quarter profit, helped by the sale of higher-profit products, sending shares of the largest U.S. auto parts retail chain up about 12 percent.

Net income at the company , whose largest shareholder is hedge fund manager Edward Lampert, was $132.5 million, or $2.02 per share, in its fiscal quarter ended Nov. 17, up from $123.9 million, or $1.73 per share, a year earlier. Analysts polled by Reuters Estimates had expected $1.91 a share.

Kevin Dann analyst Cid Wilson, who has a "buy" rating on the stock, called the results "impressive."

"AutoZone is no longer losing market share to archrival Advance Auto Parts, which is allowing AutoZone to focus on profitability," he said in a research note.

Net sales at the Memphis, Tennessee-based company rose 4.5 percent to $1.46 billion, above the $1.44 billion analysts had expected. Total retail sales rose 3.6 percent while commercial sales increased 4.3 percent.

Sales at U.S. stores open at least one year, a key retail measure known as same-store sales, increased 1.3 percent. Wilson had expected a same-store sales result in the range of a decline of 1 percent to an increase of 1 percent. He said the results were impressive "given the maturity of AutoZone stores as well as the current economic environment that is negatively impacting nondiscretionary accessory sales."

AutoZone had 4,096 stores in the United States, Mexico and Puerto Rico as of Nov. 17, up from 3,912 at the same point last year.

AutoZone shares were up $12.10, or 11.2 percent, at $119.97 in early trading on the New York Stock Exchange after climbing as high as $121.20.