There are many factors behind the continuous growth of AutoZone (AZO), an automotive aftermarket retailer, which is showing no signs of stopping anytime soon. Over the last year, the stock has returned 35.67% compared to 58.68% and 44.20%, respectively, for Advance Auto Parts (AAP) and O’Reilly Automotive (ORLY). Clearly AutoZone is an industry-laggard, however, below are a few reasons to remain optimistic on the stock. 30th-straight quarter of double digit EPS growth In the fiscal-second quarter that ended Feb. 14, the Memphis, Tennessee-based auto parts retailer reported net sales of $2 billion, an increase of 7.3% from the same period a year ago. Accordingly, domestic same-store sales increase 4.3% for the quarter. Net income for the quarter increased by as much as 9.4% - to $192.8 million – over the same period last year, while diluted earnings per share grew 18.8% to $5.63 per share, marking the thirtieth consecutive quarter of double digit earnings per share growth. These are remarkable figures by any means and reflect the company’s ability to sustain growth. http://nocache-phx.corporate-ir.net/phoenix.zhtml?c=76792&p=irol-newsArticle&ID=1905705&highlight= Average age of vehicles continues to rise According to a recent study by Polk, a global automotive market intelligence firm, the average age of all light vehicles on US roads is at an all-time high of 11.4 years. That compares to an average age of 8.4 and 9.6 years, respectively, in 1995 and 2002. In addition, Polk expects the trend to continue through 2016, while prices of vehicles in operation (VIO) decline providing greater incentive for customers to purchase used rather than new. The shift gives way to significant opportunities for certain automotive aftermarket se... ... middle of paper ... ... the fiscal-second quarter. Year to date, the auto parts retailer has bought back 1.082 million shares and had $727 million remaining under its current share repurchase authorization. Outlook for 2014 The company is expected to report a year-over-year revenue growth of 5.78% to $2.33 billion in the quarter ending May 14, according to consensus analysts’ estimates on Reuters. It is expected to grow per-share earnings by 16.23% to $8.45 in the quarter. For the full year 2014, the company is forecasted to report revenues of $9.49 billion and earnings of $11.28/share. Bottom line AutoZone has performed exceptionally well of the last several years and the industry trends indicate that the company will continue to perform well. Figuratively speaking, the company’s rearview mirror shows enormous past success, while windshield shows several opportunities down the road.
This paper will focus on the future of the U.S. Automobile industry as the United States recovers from the worst recession we have experienced in the past 75 years. I will provide information on the following topics pertaining to the U.S. automobile industry:
Auto Zone is immune to threats associated with economic downturns. According to AutoZone Incorporation, it has already overcome intense competitions from other auto part businesses. And the company also goes through goods that has a recall that will drop revenues (AutoZone Incorporation, p. 1).
The Dupont analysis shows that every dollar of assets generates 2.44 in sales which is great considering it was already good in 2014 and 2015 and keeps improving each year, the equity multiplier is 2.516 indicating that ROE is generated through efficient use of equity and leverage of 60% that can be increased slightly to surge ROE.
Hertz operates its car rental business through various brands in 145 different countries. Hertz was named, for the thirteenth time, by Travel + Leisure readers as the Best Car Rental Agency (Hertz Annual Report, 2013). Hertz is one of the top companies in the car rental industry by obtaining 18.6% of the market share (IBISWorld, 2014). In addition to the leading position that Hertz has built within its industry, the focus was to add more value offerings while recreating the experience in car rentals across the globe. Hertz employs both growth and competitive strategies to sustain competitiveness.
AutoZone industry is an insignificant market for the automotive industry, however, it is also an automotive aftermarket industry. The industry supply parts and services for customer automobiles to keep them operating for the roads. The business in the automotive aftermarket encompasses all products and services bought for light, medium, and enormous vehicles after the original sale in conjunction with collision repairs, tires, display products, lubricants, accessories, and replacement parts. This also includes the significant tools and equipment to make the repairs to the vehicles (Aftermarket.org, 2012). The automotive replacement parts and accessories in the United States leading distributor is AutoZone. The other components of the industry
Used cars require more maintenance; hence AutoZone’s business gets better. Based on the jump in new vehicle sales, the economy is slowly, but surely recovering. For that reason, I do not see AutoZone’s current growth rate to continue for much longer. AutoZone’s new stores are bound to be in more inferior locations and will be less profitable than before. Hard times typically benefit auto parts retailers like AutoZone. When money gets tight, consumers often steer clear of car dealerships and keep their old cars on the road longer. Drivers who are handy with a wrench tend to fix and maintain their own cars rather take them in for service. These do-it-yourself customers are AutoZone’s core market. AutoZone was one of the top seven stocks during the financial crisis. However, as the economy has started to pick up, more drivers have been lured back to dealer’s show rooms. Rising new car sales are part of the reason why, despite AutoZone’s strong rise the stock has been stuck in
The stock opened on 02/01/2018 at $74.3, and closed on 15/05/2018 at $112.55, packaging a wholesome rise in price of $38.25 (approximately 51.5% increase). Little wonders this growth in price was consistent during the period. Very impressive I must confuse.
AutoZone is the leading auto parts company in the United States. With locations all throughout the United States and some in Mexico, AutoZone has made a significant impact on the auto part industry. However, like many companies, they have experienced environmental changes that have impacted their strategy. The most recent factor that has affected AutoZone’s strategy is a recent plunge of their stock price per share. AutoZone experienced below expectation revenues which caused their stock to fall drastically. The reason for these lower than expectations is merely a change in consumer behavior and the rise of competition. AutoZone’ strategy has to become more focused on in-store customer service and professional services offered by the company.
Autozone, inc provides strategic planning that may result in economic downturns. FoR this reason it is important that management is strategically flexible and reviews of strategic plan is required. Situational changes for weather conditions and other issues that occur out of the firm's control, once adjustments are made and normalcy occurs, sales would once again increase.
The automotive industry is dominated by a few key players. Kallstrom explains, “The top five players have a significant 49% share of the global automobile market. This share decreased by 5.1% in the 15-year period from 1998 to 2013. Smaller companies slowly took the major automotive companies’ share away. In terms of vehicles produced, General Motors (GM), Ford (F), Volkswagen, and Toyota (TM) are still featured on the top five list.” It is important to note that Hyundai comes in at number five.
My first impression of Autozone is that Autozone holds high standard on how their company is ran. Autozone work ethics are always on point when it comes down to their reputation. Autozone believes in hard and work and making sure that their customers are always satisfied with great quality products and wonderful customer service. However, Autozone main focus is their customer service, but also their biggest organizational skills is ranking high on their financial achievements. Autozone is well known to provide well known products, and great quality information among all it’s auto retailer competitors. Not only AutoZone have to compete with other retailers such as, Pep Boys and O’Reily. Autozone biggest competition are car dealerships and auto
There are many different automobile companies providing buyers with many styles of cars, trucks, SUVs, and motorcycles. Toronto Star January 14, 2005 present ways to approach the automotive buying process. There are many different surveys, crash reports, and rating systems comparing different companies and their vehicles. Things you should look for when reading these published articles are who conducted the study? Who paid for it? Who gains from it? Who loses? These are all things to keep eye on as some automotive companies will run their own surveys making their products seem overpowering against the competition. Some prove their products are safer then the competition where the competition has been proven time and time again to make that survey seem inaccurate.
(Albright, 2008, pp. 1) carried out a case study on the Mercedes Benz’s All Activity Vehicle (AAV) that the company developed as one of the new vehicle models it introduced into the market to counter the negative performance results it posted in the wake of the early 1990s recession that led to a dip in its sales and consequent losses.
The American Automotive Industry, popularly known as the U.S. Automotive Industry is one of the most rapidly evolving industries in North America. It is generally oligopolistic with a few players who in the past have been known to avoid price competition among themselves. The industry consists of industries manufacturing vehicles, car parts, replaceable parts and those engaged in assembling parts into complete models. However, the most dominant players in this industry are the vehicle manufacturers. The players design various models, produce the various parts that each model needs and assemble them into a finished product before availing them to the market. General Motors, Chlysler and Ford motors, dominate the U.S. Automotive mobile. They are popularly referred to as “The Big Three”.
Apple today announced financial results for its fiscal 2015 fourth quarter ended September 26, 2015. The Company posted quarterly revenue of $51.5 billion and quarterly net profit of $11.1 billion, or $1.96 per diluted share. These results compare to revenue of $42.1 billion and net profit of $8.5 billion, or $1.42 per diluted share, in the year-ago quarter. Gross margin was 39.9 percent compared to 38 percent in the year-ago quarter. International sales accounted for 62 percent of the quarter’s