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UPDATE: AutoZone Shares Rally As Pep Boys Turns South
12/09 11:39 am (DJN)
By Shawn Langlois
SAN FRANCISCO (Dow Jones) -- AutoZone Inc. shares jumped more than 6% Tuesday, bucking broader market selling, after the auto-parts retailer managed to grow first-quarter sales and top Wall Street targets despite the gloomy economic climate.
The Pep Boys - Manny, Moe & Jack (PBY), however, saw their shares fall hard after the parts-selling competitor reported another quarterly loss while Wall Street had been looking for breakeven results.
AutoZone (AZO) stock was last up $7.50 at $124 and has gained 3.4% since the beginning of the year while major indexes lost about 40%.
The Memphis, Tenn.-based company reported first-quarter earnings of $131 million, or $2.23 a share, compared with $133 million, or $2.02 a share, in the same period a year ago.
Revenue rose to $1.48 billion from $1.46 billion. Sales for stores open at least one year decreased 1.5% for the quarter.
Analysts polled by FactSet Research were looking for a profit, on average, of $2.20 a share and sales of $1.49 billion.
"We were disappointed with our sales performance early in the quarter, as we were impacted by the disruption caused by hurricanes Gustav and Ike," Chairman Bill Rhodes said, adding that sales rebounded starting in October.
Separately, Pep Boys shares dropped more than 27% to $3.63 after the company reported a third-quarter loss of $7.3 million, or 14 cents a share, compared with a loss of $28 million, or 54 cents a share, a year ago. The stock is down almost 70% so far this year.
Revenue fell to $464.2 million from $528.8 million.
Analysts polled by FactSet Research, on average, had expected the company to break even for the quarter on sales of $488.5 million.
"Our sales and operating results have been impacted by the decrease in miles driven and the general reduction in consumer spending," said CEO Mike Odell. He added that Pep Boys will look to offset these trends by focusing on tighter spending controls and promoting its relative bargain level prices to attract beleaguered consumers.
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