AutoZone, Inc. (NYSE: AZO) stock fell 1.97% on September 18^th, 2018 after the company posted mixed results for the fourth quarter 2018. Net income for the quarter decreased 7.7% over the same period last year to $400.3 million. During the fourth quarter AVO has terminated the qualified and non-qualified pension plans that had been frozen since fiscal 2003. For the quarter, gross profit, as a percentage of sales, was 53.6% (versus 52.8% the same period last year).  The increase in gross margin was attributable to the impact of the sale of two business units completed during the year (+72 bps) and higher merchandise margins, partially offset by higher supply chain costs. Operating expenses, as a percentage of sales, were 37.0% (versus 32.6% the same period last year).

AZO in the fourth quarter of FY 18 has reported the adjusted earnings per share of $18.54, beating the analysts’ estimates for the adjusted earnings per share of $17.92, as per Thomson Reuters. The company adjusted its earnings for charges related to the termination of its pension plans of $93.7 million, net of tax benefit, during the quarter. The pension plans had been frozen since fiscal 2003. The company had reported the adjusted revenue growth of 1.3 percent to $3.6 billion in the fourth quarter of FY 18, missing the FactSet consensus forecast for revenue of $3.6 billion. Domestic same-store sales grew 2.2%, missing the FactSet estimate of a 2.5% increase. The company’s sales rose in the latest quarter as the distributor of automotive replacement parts and accessories sold more goods this summer in the Rust Belt and increased its commercial sales. Sales picked up during the summer months as warmer weather lifted demand for car maintenance. AutoZone also managed healthy profitability despite rising costs. Its rebound was a bit less robust than what peers have seen lately, though. The company has executed a significant amount of changes in the second half of fiscal 2018 including product category changeovers, supply chain changes and the company has stopped the digital ship-to-home promotions.

Under its share repurchase program, AutoZone repurchased 974,000 shares of its common stock for $665 million during the fourth quarter, at an average price of $683 per share. For the fiscal year, the Company repurchased 2.4 million shares of its common stock for a record $1.592 billion, at an average price of $664 per share.