AutoZone (NYSE:AZO), the auto parts dealer, beat Wall Street’s expectation for profit but just missed on revenue in its fiscal fourth quarter, as it launched a fleet of new stores in the US, Mexico and Brazil.
For the three months until August 25, the Memphis, Tennessee-based company reported earnings per share on an adjusted basis of US$18.54 on revenue of US$3.56bn. Analysts had expected the retailer to earn US$17.88 per share on revenue of US$3.6bn.
Investors came away unimpressed and sent AutoZone shares down 5.7% to US$705.00 before Tuesday’s opening bell.
AutoZone’s results came as the company unveiled a new next day home delivery program whereby AutoZone will deliver up to 10,000 different auto parts and accessories to its customers’ the next day. Orders can be placed as late as 10 o’clock at night for next day delivery.
“Our industry-leading products and customer service now come with industry-leading shipping options. This is an incredibly unique offering,” said Bill Rhodes, AutoZone’s chairman and CEO in a statement.
During the quarter, AutoZone opened 78 new stores in the US as well as 28 stores in Mexico and four in Brazil. At the close of August, the company had 5, 618 stores in the US and Puerto Rico, 564 stores in Mexico and 20 stores in Brazil.
Read: AutoZone stock on back foot as sales miss expectations
Net income for the quarter dropped to $400.3 million, or $15.02 a share, from $433.9 million, or $15.27 a share, in the same period last year.
In the quarter, the company also terminated its qualified and non-qualified pension plans that had been frozen since fiscal 2003, taking a charge of US$93.7mln.
Under its share repurchase program, AutoZone repurchased 974,000 shares of its common stock for US$665mln during the fourth quarter, at an average price of US$683 per share. For the fiscal year, AutoZone repurchased 2.4mln shares of its common stock for a record US$1.592bn, at an average price of US$664 per share.
AutoZone is a retailer and distributor of automotive replacement parts and accessories.