AutoZone saw its sales increase during the fiscal fourth quarter of the year, a trend the company’s chief executive attributed to the company’s supply chain initiatives.
Speaking to investors during an earnings call Monday (Sept. 19), AutoZone CEO Bill Rhodes noted the company’s expanded hub and mega-hub rollouts and its growing distribution center footprint, opening two centers in the U.S. and one in Mexico.
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These openings, Rhodes said, contribute to his company’s goal of “carrying more product closer and closer to the customer.”
AutoZone reported net sales of $5.3 billion for the quarter, up 8.9% from the fourth quarter of 2021. Domestic same-store sales rose by 6.2% for the quarter, according to a news release.
Rhodes told investors that company officials had last year targeted commercial sales of $4 billion. “That lofty goal, ultimately, wasn’t nearly lofty enough,” he said.
Rhodes said a number of factors drove sales during the quarter, including improved satellite store inventory and delivery times, the popularity of the company’s Duralast brand, and — to a lesser extent — the hot summer weather.
“Extreme weather drives parts failure and maintenance,” he said. “Heat leads to failure.”
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Earlier this year, Rhodes said the company was seeing demand for auto parts due to the rising cost of new and used vehicles, aging cars — the average car on the road is now 12 years old — and people driving more miles.
“If you look at the used car price dynamic just in general, those higher residual values are actually encouraging our customers to invest in maintaining their vehicles because they’re comfortable that the value is actually holding,” Rhodes said.
Meanwhile, the company continued to increase its store footprint. Between August 2021 and August 2022, AutoZone opened 118 new stores in the U.S., 39 new stores in Mexico, and 20 in Brazil, bringing the company’s store count to 6,943.
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