FINANCE

AutoZone motors ahead, comps soften

BY Mike Troy

The nation’s leading auto parts retailer produced modest sales and profit growth during its third quarter but managed to achieve double digit earnings per share growth thanks to stock buyback activity.

AutoZone sales increased 4% to $2.6 billion during the quarter ended May 7, thanks to the addition of new stores and a 2% same-store sales increase. Net income increased 6% to $327.5 million, while earning per share increased 12.6% to $10.77 as the company spent $533 million to repurchase 687,000 shares.

The share repurchase activity kept alive AutZone’s streak of 39 consecutive quarters of double digit earnings per share growth.

“AutoZoners across the company remain committed to providing superior service to our customers and that dedication has resulted in consistent, solid performance,” said AutoZone chairman, president and CEO Bill Rhodes. “During the quarter, we continued implementation of our inventory availability initiatives. At the end of the quarter, we have expanded our increased frequency of distribution center deliveries initiative to 1,600 domestic AutoZone stores and expect by the end of the fiscal year to be servicing approximately 2,000 of our over 5,000 domestic AutoZone stores.”

The company also plans to open approximately four additional distribution facilities it calls “Mega Hubs” by the end of the fiscal year to finish with a total of 11.

“The results of our initiatives continue to meet or exceed our expectations, further confirming our new inventory deployment strategy,” Rhodes said. “Regarding the third quarter’s results, sales were below our expectations as weather negatively impacted sales primarily in Midwestern, Middle Atlantic, and Northeastern states.”

During the quarter, AutoZone opened 33 new stores in the U.S. and seven new stores in Mexico. The company now operates a total of 5,226 stores in 50 states in the U.S., the District of Columbia and Puerto Rico, 458 stores in Mexico, 25 IMC branches, and eight stores in Brazil for a total count of 5,717.

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REAL ESTATE

CASTO takes flight with LeasePilot

BY Mike Troy

Doing deals with real estate development and services firm CASTO just got easier thanks to the roll out of a new Web-based software platform called LeasePilot.

LeasePilot was developed by Gadfly Legal Technologies to streamline the lease documentation process and helps owners manage valuable lease information. CASTO is currently using LeasePilot to create the first drafts of leases.

"We are thrilled to be partnering with the CASTO team given their commitment to innovation and reputation within the real estate community,” said Jonathan Eskow, co-founder of Gadfly Legal Technologies. “Creating leases using LeasePilot delivers standalone value, and together with additional features designed to complete lease transactions faster, LeasePilot is changing the way lawyers and real estate professionals interact with leases.”

LeasePilot is Gadfly’s first product and the firm bills the software solution as the only end-to-end lease documentation and lease information management platform designed for the commercial real estate industry. LeasePilot helps owners and law firms get deals done quicker, minimize risk, and provide visibility into lease terms and documents, according to Gadfly.

"We have been focused on leveraging technology to improve the legal function at CASTO for several years. When I met Jonathan and Gabriel of Gadfly, it was clear that they have the same focus but have taken the technology to the next level,” said C.H. Waterman, VP and director of legal at CASTO. "We have already experienced a dramatic decrease in lease preparation timeframes and anticipate realizing a number of additional efficiencies as the software continues to evolve.”

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REAL ESTATE

Olshan shares insights on portfolio performance

BY Mike Troy

Photo: Andrea Olshan, CEO of Olshan Properties

Retail transactions in the first half of the year are surging at Olshan Properties following a flurry of deal activity in late 2015, the private owner, developer and manager of mixed-used real estate reported.

Olshan said leasing momentum remained strong throughout its national commercial portfolio during the past six months and that its core retail portfolio continues to exhibit resilience despite the increasingly uncertain economic outlook that characterized the start of the year.

“Compared to the first quarter of 2015, our total leasing volume based on the number of retail transactions increased by approximately 24% during the first quarter of 2016 and much of that activity was generated by a flurry of late 2015 deals,” said Andrea Olshan, CEO of Olshan Properties.

Highlights from Olshan Properties’ retail portfolio over the past six months include the following transactions:

· At Bayshore Town Center in Glendale, Wisconsin, a new 17,000-sq.-ft. Old Navy store was constructed and officially opened in late 2015.

· At Kansas City’s Zona Rosa Town Center, Unite Private Networks (UPN), a provider of high-bandwidth, fiber-based communications networks and services, relocated its Kansas City headquarters office to Zona Rosa. The center also announced two new retail tenants to include Pure Barre and Google Fiber Store.

· The Shoppes at Webb Gin, located near Atlanta, GA, welcomed several new tenants, including Cigar Bar, Fuzzy’s Taco Shop and Orangetheory Fitness.

· The Greene Town Center, in Dayton, Ohio, announced new tenants, Ulta Beauty, J. Crew Mercantile, World of Beer, and Mattress Firm; in addition, Lululemon opened its doors for business in late 2015.

· At Mercury Plaza Shopping Center in Hampton, VA a new, 22,000-sq.-ft. Marshall’s opened in late 2015.

· In Midtown Manhattan’s Third Avenue at 60th Street, cutting edge fitness chain Flywheel recently opened a 4,500-sq.-ft. studio.

· At Siegen Lane Marketplace in Baton Rouge, La., bowling anchored entertainment chain Main Event Entertainment signed a 49,810-sq.-ft. lease for its first Louisiana location with plans to open for business in 2017.

· At Akers Mill Square, located in Atlanta, two new tenants signed leases – Bonefish Grill and Sport Clips.

“Our portfolio incorporates the strongest elements of each individual asset class into the properties that we own and operate, and, as a result, more than half of our retail properties are located in mixed-use environments,” Olshan said. “It is abundantly clear that this strategy resonates with our consumers and our tenants, both of whom see mixed-use environments as holding far greater growth potential than any single-use development could offer.”

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