AutoZone, Inc. AZO announced that its board of directors has increased the share repurchase authorization by $750 million. Including this new authorization, the company has authorized a total of $15.7 billion for buying back shares since 1988.
AutoZone remains focused on enhancing shareholder returns, while simultaneously maintaining adequate liquidity for its business strategies. The company has enough liquidity to repurchase shares without compromising on financial strength and therefore, the credit ratings.
The strong cash flows help AutoZone to aggressively repurchase shares. In Jun 2014, the company increased its share repurchase authorization by $750 million, driven by its strong financial position. In fiscal 2014, the company bought back 2.23 million shares for $1.1 billion, at an average price of $492 per share.
In the first-half of fiscal 2015, AutoZone repurchased 614,099 shares for $325.7 million. Subsequent to Feb 14, 2015, the company has repurchased 268,371 shares for $174.1 million. After the cumulative repurchases and the increase in authorization, the company has shares worth $1.119 billion remaining for repurchase.
AutoZone reported strong year-over-year increase in both earnings and revenues in second-quarter fiscal 2015 (ended Feb 14, 2015), which managed to surpass expectations. The company reported a 15.6% rise in earnings per share to $6.51 the quarter from $5.63 recorded in the year-ago quarter. Earnings also surpassed the Zacks Consensus Estimate of $6.37.
Quarterly revenues increased 7.7% year over year to $2.14 billion, marginally surpassing the Zacks Consensus Estimate of $2.12 billion. Domestic same-store sales (sales for stores open at least for one year) increased 3.6% in the reported quarter.
Currently, AutoZone carries a Zacks Rank #3 (Hold). Better-ranked auto stocks include Allison Transmission Holdings, Inc. ALSN, Gentherm Inc. THRM and American Axle & Manufacturing Holdings Inc. AXL. While Allison Transmission Holdings sport a Zacks Rank #1 (Strong Buy), American Axle and Gentherm carries a Zacks Rank #2 (Buy).
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