Autozone (AZO) Surges 10% as Weakening Consumers Stick to Fixing What they Have

• AutoZone Inc. reported a second-quarter profit increase of 8.6 percent Tuesday, as car owners and mechanics increased spending on automotive parts and supplies for used vehicles. Memphis, Tenn.-based AutoZone earned $115.9 million, or $2.03 per share, compared with $106.7 million, or $1.67 per share, in the same quarter a year ago. The results beat analyst expectations. Analysts surveyed by Thomson Reuters expected a profit of $1.85 per share on $1.38 billion in sales.

• Sales rose 8.1 percent to $1.45 billion, while domestic same-store sales -- or sales for stores open at least one year -- jumped 6 percent.

• The continued steep drop off in U.S. demand for new vehicles has helped auto parts retailers during the quarter, with more drivers choosing to keep their cars longer and spend more on the parts needed to maintain them. Companies like AutoZone also got a boost from lower gas prices, which result in more people driving more miles, prompting more spending on maintenance and repairs.

• As part of its ongoing stock buyback plan, AutoZone repurchased 2.8 million of its common stock during the quarter for a total of $375 million.

• At the end of the quarter ending Feb. 14, AutoZone had 4,141 stores in the U.S and Puerto Rico and 158 stores in Mexico.

• Two weeks ago, AutoZone's key rival, Advanced Auto Parts Inc., (AAP) reported a 30% drop in net income on an inventory write-down, but projected double-digit commercial same-store sales growth in 2009.

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