AutoZone reported net sales of $3.3 billion for its fourth quarter ended August 29, 2015, an increase of 7.9% from Q4 2014.
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Domestic same store sales, or sales for stores open at least one year, increased 4.5% for the quarter.
Net income for the quarter increased 7.4% over the same period last year to $401.1 million, while diluted earnings per share increased 13.0% to $12.75 per share from $11.28 per share in the year-ago quarter.
For the quarter, gross profit, as a percentage of sales, was 52.5% (versus 52.3% for the same period last year).
The improvement in gross margin was attributable to higher merchandise margins, partially offset by higher supply chain costs associated with current year inventory initiatives (-24 bps), and the impact of the Interamerican Motor Corporation (IMC) acquisition finalized during September, 2014 (-24 bps).
Operating expenses, as a percentage of sales, were 32.2% (versus 31.6% the same period last year). The increase in operating expenses, as a percentage of sales, was primarily due to higher legal costs (-26 bps) and the impact of IMC (-16 bps).
For the fiscal year ended August 29, 2015, sales were $10.2 billion, an increase of 7.5% from the prior year, while domestic same store sales were up 3.8% for the year.
Operating profit increased 6.7% on an operating margin of 19.2%.
For fiscal 2015, net income increased 8.5% to $1.2 billion, while diluted earnings per share for the period increased 14.1% to $36.03 from $31.57. Return on invested capital was 31.2%, while full year cash flow before share repurchases and changes in debt was $1.018 billion.
Under its share repurchase program, AutoZone repurchased 633 thousand shares of its common stock for $430 million during the fourth quarter, at an average price of $680 per share.
For the fiscal year, the company repurchased 2 million shares of its common stock for $1.3 billion, at an average price of $632 per share. At year end, the company had $348 million remaining under its current share repurchase authorization.
The company's inventory increased 9% over the same period last year, driven by increased product placement, new stores during the fiscal year, and the acquisition of IMC. Inventory per location was $610 thousand versus $582 thousand last year and $629 thousand last quarter.
The IMC acquisition increased inventory per location by $15 thousand this quarter. Net inventory, defined as merchandise inventories less accounts payable, on a per location basis was a negative $79 thousand versus negative $87 thousand last year and negative $68 thousand last quarter. ■