The ratings on AutoZone Inc. reflect the company's leading position in the stable but highly competitive retail automotive parts aftermarket, consistent operating performance, and strong profitability measures. These strengths are tempered, somewhat, by increased leverage over the past few years driven by growth in share repurchase activity. Memphis, Tenn.-based AutoZone is the largest retailer of automotive parts in the U.S., with more than 3,000 stores. Acquisitions have enabled the company to improve its overall market position by entering new markets and expanding in existing markets. However, unit economics of many of the stores are not as strong as AutoZone's organically developed store base, which resulted in lower return on permanent capital in recent years. Yet performance in these units has
