The country's largest automotive parts and accessories company, AutoZone Inc. (NYSE: AZO) posted record sales and earnings for 1Q FY 2008. Net sales increased 4.5% to $1.5 billion. Same store sales increased 1.3%. Net income increased 7% to $132.5 million, and gross profit margin improved slightly.
Operating expenses increased slightly, but this additional cost was offset by a much larger reduction in net inventory per store. AutoZone uses a supplier-owned pay-on-scan inventory control system in order to maximize inventory efficiency and reduce cost of goods sold.
During 1Q the company repurchased $350 million worth of stock at an average price of $121 per share, quite a bargain given that the stock recently traded at just under $130 before retreating to $124.
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