AutoZone Inc.

Overview Key strengths Key risks Leading auto aftermarket parts retailer generating nearly $19 billion in sales. Stiff competition from other auto parts retailers. Bargaining power over suppliers enabled by its large scale. Margin pressure from DIFM segment growth. Track record of significant free operating cash flow generation. Weakening consumer spending leading to an uptick in maintenance deferral and lower discretionary category sales. AutoZone's domestic DIFM sales grew 6.2% to $4.9 billion in the fiscal year ended Aug. 31, 2024, offsetting weakness in the do-it-yourself (DIY) segment. Better execution and customer service have enabled AutoZone to rapidly grow its DIFM business, which now represents 27% of total auto parts sales, up from around 20% prior to the pandemic. We believe the

...AutoZone's do-it-for-me (DIFM) initiatives and store expansion will drive topline growth despite near-term economic headwinds. AutoZone's domestic DIFM sales grew 6.2% to $4.9 billion in the fiscal year ended Aug. 31, 2024, offsetting weakness in the do-it-yourself (DIY) segment. Better execution and customer service have enabled AutoZone to rapidly grow its DIFM business, which now represents 27% of total auto parts sales, up from around 20% prior to the pandemic. We believe the company's strategic pricing and customer-centric approach have underpinned its market share gains, with commercial programs in 92% of its domestic stores. Additionally, the expansion of AutoZone's store network, including hubs and mega-hubs,...

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