AutoZone, one of the US leading specialty retailers of automotive replacement parts and accessories, issued solid financials for its fiscal 2016 first quarter ended Nov 21. Revenues increased 5.6% y-o-y to $2.39 bn, in line with consensus estimate. Domestic same-store sales (sales for stores open at least for one year) grew 3.5%. Operating profit rose 7.2% to $438 mn, and operating margin improved 30 basis points to 18.4%. Adjusted earnings per share jumped 14% to $8.29 and surpassed analysts’ average projection of $8.20. In FQ1, AutoZone generated net cash flow of $262 mn, up 22.4% y-o-y. Capital spending decreased 6.2% to $86.7 mn. During the reported quarter, the company spent $400 mn on buying back 537,000 shares, and had $698 mn remaining under its current share repurchase authorization as of Nov 21. During FQ1, AutoZone opened 22 new stores and relocated one store in the US, opened one new store in Mexico and one in Brazil, and opened two new IMC branches. As of Nov 21, the company had 5,163 stores in 50 states in the US, the District of Columbia and Puerto Rico, 442 stores in Mexico, 22 IMC branches, and eight stores in Brazil for a total count of 5,635. My outlook for AutoZone remains optimistic. According to Bloomberg data, the average age of vehicles in the US climbed to 11.4 years, the highest ever, and at the same time, lower gas prices and higher employment have American drivers putting more miles on their cars, which creates a booming market for replacement parts. That trend may cause auto-part consumption to grow 3-4% for the next four years, experts say. These factors, we believe, will bode well for AutoZone's business going forward. Solid FQ1 results helped AutoZone’s shares to breach a 50-day moving average, as well as an upward trend line, in a bullish manner. I'd by an braking an $800 resistance level, with medium-term goal of $850.