AutoZone, Inc. (NYSE:AZO) stock rose 1.71% (As on May 25, 11:58:10 AM UTC-4, Source: Google Finance) after the company posted better than expected result for the third quarter of FY 22. Domestic same store sales, or sales for stores open at least one year, increased 2.6% for the quarter. For the quarter, gross profit, as a percentage of sales, was 51.91%, a decrease of 54 basis points versus the prior year. The decrease in gross margin was primarily driven by accelerated growth in our lower margin Commercial business. Operating profit decreased 2.2% to $785.7 million. Net income for the quarter decreased 0.6% over the same period last year to $592.6 million. The Company’s inventory increased 13.9% over the same period last year, primarily driven by inflation with the remaining growth driven by our growth initiatives, including megahubs, hubs and new stores. Net inventory, defined as merchandise inventories less accounts payable, on a per store basis, was negative $216 thousand versus negative $167 thousand last year and negative $198 thousand last quarter. Under its share repurchase program, AutoZone repurchased 449 thousand shares of its common stock for $900 million during the third quarter, at an average price of $2,006 per share. At the end of the third quarter, the Company had $2.058 billion remaining under its current share repurchase authorization.

AZO in the third quarter of FY 22 has reported the adjusted earnings per share of $29.03, beating the analysts’ estimates for the adjusted earnings per share of $26.05, according to figures compiled by Thomson Reuters. The company had reported the adjusted revenue growth of 6 percent to $3.87 billion in the third quarter of FY 22, beating the analysts’ estimates for revenue of $3.7 billion. Operating expenses, as a percentage of sales, were 31.58% versus 30.44% last year. The increase in operating expenses, as a percentage of sales, was driven by payroll deleverage as last year’s historic comparable store sales drove significant leverage. Both the retail and commercial sales performance exceeded the expectations this quarter. While the commercial sales growth accelerated to 26.0%, the retail sales also remained healthy considering the tough comparison from a year ago.

Under its share repurchase program, AutoZone repurchased 449 thousand shares of its common stock for $900 million during the third quarter, at an average price of $2,006 per share. At the end of the third quarter, the Company had $2.058 billion remaining under its current share repurchase authorization.