The ratings on Memphis, Tenn.-based AutoZone Inc. reflect the company's leading position in the generally stable but highly competitive retail automobile parts aftermarket, consistent operating performance, and strong profitability measures. These strengths are somewhat tempered by management's historically aggressive share repurchase activity and expectations for continued flat-to-negative same-store sales performance resulting from difficult macroeconomic conditions. AutoZone is the largest retailer of automotive parts in the U.S., with about 4,122 stores domestically and in Puerto Rico, as well as 150 stores in Mexico. Consolidation in the industry has resulted in the top five players controlling about 30% market share. AutoZone's large size and geographic diversity have enabled it to take advantage of economies of scale in purchasing and advertising. The company
