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NEW YORK — Auto parts retailer AutoZone Inc. said Wednesday its fiscal fourth-quarter profit fell 3.1 percent, citing tough comparisons to a prior-year period that included an extra week of sales. Its shares dropped more than 7 percent.
Bill Rhodes, AutoZone's chairman, president and chief executive, said consumers remained focused on trying to save money during the quarter by spending more on basic maintenance in order to keep their cars on the road longer.
Rhodes added that he expects the same trend to continue for the near future.
"This quarter we continued our focus on the basics," he told investors in a conference call. "And we continue to believe we're well positioned to take advantage of opportunities as we head into the new fiscal year."
For the quarter ended Aug. 29, the Memphis, Tenn.-based company earned $236.1 million, or $4.43 per share, down from $243.7 million, or $3.88 per share, a year ago. The per-share figures rose because it had fewer shares outstanding in the latest period.
Analysts polled by Thomson Reuters expected a profit of $4.45 per share for the latest quarter.
Sales rose 1 percent to $2.23 billion from $2.21 billion and matched analysts' estimates.
Excluding sales from the additional week included in the prior year's quarter, AutoZone said sales rose 7.1 percent and domestic same-store sales — or sales at stores open at least a year — increased 5.4 percent.
Raymond James' Dan Wewer said the same-store sales growth could be a positive sign for auto parts retailers as a whole.
"This marks the third consecutive quarter of sharply higher same-store sales for AutoZone and reflects the company's growing market share, as well as the overall health of the industry," Wewer wrote in a note to investors.
"As a reminder, reliable leading indicators of same-store sales such as miles driven continue to improve."
But Deutsche Bank's Mike Baker said the increase could be a sign that the industry's recovery has peaked, noting that the 5.4 percent same-store increase marks a slowdown from 7.4 percent growth in its third quarter and a 6 percent increase in its second quarter.
Auto parts retailers such as AutoZone have seen their sales soar over the last year as an increasing number of people have put off new car purchases amid a tough economy. While the overall market tumbled, shares of AutoZone rose steadily and are up 20 percent from where they were at the same time last year.
AutoZone's competitors have gotten a boost too.
Last month, Advance Auto Parts Inc. posted a second-quarter profit that beat Wall Street predictions on a 7 percent sales increase. And in July, O'Reilly Automotive Inc. posted better-than-expected quarterly results citing strong sales.
AutoZone said it got a boost during the fourth quarter from improved efficiencies in how it ships its products and lower fuel costs, but said those benefits were offset by a shift in its sales mix to lower margin products.
Rhodes said that as in recent quarters, a greater portion of the company's sales were purchases of maintenance items such as oil and filters, break pads and shocks and struts. Discretionary purchases made up less than 20 percent of the quarter's sales, he said.
The CEO added that the government's Cash for Clunkers program — which offered cash incentives to consumers who swapped older, less fuel efficient vehicles for new ones — didn't have a material impact on AutoZone's fourth-quarter sales, noting that the average age of vehicles on American roads continues to rise.
For the full fiscal year, AutoZone earned $657 million, or $11.73 per share, up from $641.6 million, or $10.04 per share, a year ago. Sales rose to $6.82 billion from $6.52 billion.
During the quarter AutoZone opened 58 new stores, closed one store, and replaced three stores in the United States. It also opened 20 stores in Mexico. As of Aug. 29, AutoZone had 4,229 stores in the U.S. and 188 stores in Mexico.
AutoZone shares fell $11.42, or 7.5 percent, to close at $141.50.
