AutoZone's stock slides 3% after earnings hit by weaker-than-expected March sales

By Ciara Linnane

The company opened 22 new stores in the U.S. during the quarter, along with six in Mexico and two in Brazil

AutoZone Inc.'s (AZO) stock slid 3% Tuesday, after the car-parts retailer beat profit estimates for its fiscal third quarter but sales fell short after a weaker-than-expected March.

Memphis, Tenn.-based AutoZone had net income of $648.7 million, or $34.12 a share, for the quarter to May 6, up from $592.6 million, or $29.03 a share, in the year-earlier period. Sales rose to $4.091 billion from $3.865 billion a year ago.

The FactSet consensus was for earnings per share of $31.50 and sales of $4.123 billion. Same-store sales rose 1.9%, while FactSet was expecting a 4.1% increase.

"While weaker than expected sales for the month of March meaningfully affected our results this quarter, we are excited about our initiatives and believe we are well positioned for future growth," CEO Bill Rhodes said in a statement.

The company repurchased 356,000 shares in the quarter at an average price of $2,551 a share, for a total of $908.2 million. The stock closed Monday at $2,532.49.

Inventory rose 7.4% from the year-earlier period, driven by inflation and growth initiatives. The company opened 22 new stores in the U.S. during the quarter, along with six in Mexico and two in Brazil. The stock has gained 6% in the year to date, while the S&P 500 has gained 9%.

-Ciara Linnane

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05-23-23 1048ET

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