Auto parts retailer AutoZone Inc. said Tuesday its fiscal first-quarter profit rose 9 percent, as strapped consumers spent more on repairs for their old cars rather than buying new ones.
The company also said it continued opening new stores during the quarter, while performance at established stores improved.
AutoZone earned $143.3 million, or $2.82 per share, in the three months ended Nov. 21. That's up from $131.4 million, or $2.23 per share, in the same period last year.
Revenue climbed almost 8 percent to $1.59 billion.
The results beat Wall Street's expectations, sending shares higher in afternoon trading. Analysts surveyed by Thomson Reuters expected profit of $2.66 per share on $1.59 billion in revenue.
Shares gained $4.73, or 3.1 percent, to $158.09 in morning trading. Shares have ranged from $125.80 to $169.98 over the past year.
Sales at stores open at least a year rose almost 6 percent. The metric is considered a key performance indicator for retailer because it measures growth from existing stores rather than newly opened ones.
AutoZone said it repurchased 1.4 million shares of stock during the quarter at a cost of $204 million, which helped boost per-share earnings.
Replacement parts retailers like AutoZone have benefited from the recent decline in U.S. vehicle sales, as consumers hold onto their old cars longer or opt for used cars instead. That has led to higher demand for repairs and replacement parts.
"There is no doubt the financial challenges facing our customers have driven a general sales improvement for our industry," CEO Bill Rhodes said during a conference call.
That is reflected in the quarter's sales breakdown, Rhodes added. Sales of products in AutoZone's maintenance and failure segments grew at a faster rate than sales of discretionary parts, he said.
"Discretionary purchases were at the lowest percentage of our sales mix this quarter versus any of the previous three quarters," he said.
AutoZone, based in Memphis, Tenn., opened 38 new stores in the U.S. and five in Mexico during the quarter. It had 4,265 stores in the U.S. and 193 stores in Mexico at the end of the period.