Autozone Inc (NYSE:AZO) stock fell 0.082% (As on December 11, 11:20:51 AM UTC-4, Source: Google Finance) after the company posted lower than expected results for the first quarter of FY 25. For the quarter, gross profit, as a percentage of sales, was 53.0%, an increase of 16 basis points versus the prior year driven by higher merchandise margins. Operating expenses, as a percentage of sales, were 33.3% versus last year at 32.6%. Operating profit decreased 0.9% to $841.1 million. Net income for the quarter was $564.9 million compared to $593.5 million in the same period last year. AZO remains a strong cash flow generator, with $565 million in free cash flow for the quarter.

Moreover, the company is pleased with the progress in the DIY same store sales result from the prior quarter as average ticket and traffic trends improved.  The domestic Commercial sales were up 3.2% and we were encouraged by the improving trends seen at the end of the quarter.  The international businesses continued to perform well with same store sales up just under 14% on a constant currency basis. During the quarter ended November 23, 2024, AutoZone opened 23 new stores in the U.S., six in Mexico and five in Brazil for a total of 34 new stores. As of November 23, 2024, the Company had 6,455 stores in the U.S., 800 in Mexico and 132 in Brazil for a total store count of 7,387. The company continues to invest in growth initiatives, including hubs and mega hubs, which are expected to drive future sales growth.

AZO in the first quarter of FY 25 has reported the adjusted earnings per share of $32.52, missing the analysts’ estimates for the adjusted earnings per share of $33.54, according to Zacks Investment Research. The company had reported the adjusted revenue growth of 2.1 percent to $4.28 billion in the first quarter of FY 25, missing the analysts’ estimates for revenue of $4.29 billion.

Additionally, under its share repurchase program, AutoZone repurchased 160 thousand shares of its common stock during the first quarter, at an average price per share of $3,156, for a total investment of $505.2 million. At the end of the first quarter, the Company had $1.7 billion remaining under its current share repurchase authorization. The Company’s inventory increased 8.7% over the same period last year and net inventory, defined as merchandise inventories less accounts payable, on a per store basis, was negative $166 thousand versus negative $197 thousand last year and negative $163 thousand last quarter.