* First-quarter revenue $1.9 bln vs est $2.02 bln
* Earnings of $5.41/share in line with estimates
* Same store sales rise 0.2 pct
* Shares fall 4 pct
By Mridhula Raghavan
Dec 4
(Reuters) - AutoZone Inc, the largest U.S.
auto
parts retailer, missed analysts' revenue estimates for the
third time in a row as customers spent less on repairs.
auto
parts retailer, missed analysts' revenue estimates for thethird time in a row as customers spent less on repairs.
Auto parts retailers have faced weak demand in the past year
as a warmer-than-usual winter resulted in less wear and tear to
vehicles, reducing the need for replacement parts.
as a warmer-than-usual winter resulted in less wear and tear to
vehicles
, reducing the need for replacement parts.
"If the winter was warm last year, this year doesn't appear
to be better," Morningstar Inc analyst Liang Feng said.
to be better," Morningstar Inc analyst Liang Feng said.
Memphis, Tennessee-based AutoZone's shares were down 4
percent at $363.93 on the New York Stock Exchange on Tuesday
afternoon.
were down 4percent at $363.93 on the New York Stock Exchange
on Tuesdayafternoon.
"We're still looking for winter to hit," AutoZone Chief
Executive William Rhodes said on a post-earnings conference
call.
Executive William Rhodes said on a post-earnings conference
call.
Sanford Bernstein analyst Colin McGranahan said that the
longer the sales are weak, the less likely the weather is the
biggest factor.
longer the sales are weak, the less likely the weather is the
biggest factor.
"Part of the issue is that you had pretty extreme weather
conditions in 2010 and 2011 and you replaced auto parts. Even if
you have a cold winter, you are not going to need to replace the
parts again," he said.
conditions in 2010 and 2011 and you replaced auto parts. Even if
you have a cold winter, you are not going to need to replace the
parts again," he said.
Demand is likely to be pretty sluggish for a while, he
added.
added.
AutoZone's revenue rose 3.5 percent to $1.9 billion in the
first quarter. Analysts were expecting revenue of $2.02 billion,
according to Thomson Reuters I/B/E/S.
first quarter. Analysts were expecting revenue of $2.02 billion,
according to Thomson Reuters I/B/E/S.
Same store sales, or sales at stores open for at least a
year, rose just 0.2 percent in the period.
year, rose just 0.2 percent in the period.
MARGIN EXPANSION
Net income rose 6.4 percent to $203.5 million, or $5.41 per
share, in line with analysts' expectations as gross margins rose
70 basis points to 51.8 percent.
share, in line with analysts' expectations as gross margins rose
70 basis points to 51.8 percent.
The improved margins were helped by better pricing from
vendors and lesser price inflation during the quarter.
vendors and lesser price inflation during the quarter.
AutoZone sells to both home mechanics and commercial repair
shops.
shops.
Smaller rival Pep Boys-Manny, Moe & Jack also
reported a third-quarter loss on Monday on weak sales.
reported a third-quarter loss on Monday on weak sales.
AutoZone also said that it will buy the assets and select
liabilities of AutoAnything.com, an online retailer of
specialized automotive products. Terms of the deal were not
disclosed.
and selectliabilities of AutoAnything.com, an online retailer of
specialized automotive products. Terms of the deal were not
disclosed.
"AutoAnything (allows) us to reach into a customer segment
that we really don't participate in very much, even in our
stores, much less over the Internet today," CEO Rhodes said.
that we really don't participate in very much, even in our
stores, much less over the Internet today," CEO Rhodes said.
AutoAnything.com expects calendar 2012 sales of about $125
million, AutoZone said, adding that the deal would add to the
company's earnings from 2014.
million, AutoZone said, adding that the deal would add to the
company's earnings from 2014.
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