AutoZone was founded in 1979 as auto Shack by J.R. "Pitt" Hyde III - AutoZone's 1st Chairman and business executive. Once receiving his bachelor's degree in economic science from the University of North Carolina, he joined Malone & Hyde, Inc., a wholesale company founded by his grandfather. Pitt initiated and developed Malone & Hyde's specialty retailing division, starting with drug stores and expanding to include sports equipment stores and supermarkets. Pitt saw a necessity for a retail automotive component store to assist individuals with the maintenance of their vehicles therefore he created Auto Shack. He believed that the characteristics found in supermarkets - clean, well-organized store, accessible merchandise and nice client service …show more content…
The company's earnings grew 6.8% year over year. AutoZone delivered a negative average earnings surprise of 1% for the trailing four quarters. AutoZone has a long-term growth rate of 13.2%. AutoZone utilizes cash flow for opening new stores every year and they also aggressively repurchase shares. During first-quarter 2018, AutoZone opened 16 new stores, relocated one and closed another in the United States. The company also opened five new stores in Mexico. As of Nov 18, 2017, the company had 5,480 stores across 50 states in the United States, the District of Columbia and Puerto Rico; 529 in Mexico; 26 Interamerican Motor Corp. branches and 14 stores in Brazil. The total store count was 6,049 as of the same date. Domestic store openings are likely to continue in the soon to be reported quarter. This is likely to have some positive impacts on results. The company has ample liquidity to repurchase shares without compromising financial strength as well as its credit ratings. In the first quarter of fiscal 2018, AutoZone repurchased 597,000 shares for $353 million, reflecting an average price of $590 per share. The company had shares worth $471 million remaining for repurchase at the end of the fiscal. The company is focused on enhancing shareholder returns, while simultaneously maintaining adequate liquidity for its business strategies. For the …show more content…
The report will be for the fiscal period ending May 31st, 2018. The reported EPS for the same quarter last year was $8.08. The estimated EPS forecast for the next fiscal year is $55.32 and is expected to report on September 18th, 2018. Even as the economy has improved, though, AutoZone's stock remains near its highs. The recent correction has again raised the specter of a double-dip recession, which could once again resurrect the vehicle-maintenance cycle and cause new car sales to slow. AutoZone has had relatively healthy earnings over the past several years. The company's negative shareholder equity raises some concerns, although it stems largely from huge share buybacks that AutoZone uses to return cash to shareholders rather than through a dividend. Nevertheless, the company has funded those buybacks in part through increasing debt, which makes its balance sheet uglier than its peers. If the economy remains tough, then AutoZone could get another boost up from higher consumer demand. But if a true recovery takes hold, AutoZone might not look like a perfect stock for a while to come. Stocks carry a much greater risk of short-term losses than bonds or cash (the other two major asset classes). Since World War II, Wall Street has endured six bear markets (defined as a sustained decline of more than 20% in the value of the S&P 500). As a result, it's generally not a good idea to invest a big chunk of money in stocks if
The automotive industry is without a doubt an industry that has massive implications relating to the United States economy as well as affecting every American household. Shifts in the supply and demand of automobiles influence the current and future household purchases. Households must determine what amount of their hard-earned income to allocate to certain necessities. Because most households have a budget, the amount spent on transportation it limited. While most industries have an effect on the economy, the automotive industry has far-reaching implications for most Americans. Not only are the workers affected but the many spin-off jobs created as well as the consumers that must purchase the automobiles manufactured.
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).
Trinity Industries journey started in 1933 when they were known as Trinity Steel, founded by C.J Bender in Dallas. The company manufactured butane tanks, had revenues of $2.5 million, and 200 employees. Trinity steel was growing by producing large petroleum tanks, steel fabrication for refineries, and leasing trucks. However, in 1957, the company faced increasing competition and business started to decline. In 1958, there was a merger between Trinity Steel, Dallas Tank, and Bender Wallace Development Company. Trinity Industries was formed, incorporated, and went public. By 2007, Trinity Industries had 14,400 employees working in 22 business units with revenues of $3.8 billion. Bu’s were grouped into 5 line of business (2008):
In the latter part of 2008, the United States’ economy was rapidly plummeting - the stock market crashed, the housing bubble burst and gas prices skyrocketed. The majority of U.S. based firms faced the reality that they would not be able to survive during such desperate economic times. The U.S. automobile industry, in particular, began to buckle under the depressed economy. The government stepped in proposing a multi-billion dollar bailout to stimulate the economy and restore economic balance. The possibility of this unprecedented government intervention was condemned by many economists. If the government helped the ailing automotive industry, this industry would have to tighten their expenditures and plan for the future to prove to critics of the bailout that they would use the government funding to add value to the economy once again.
As the nation was introduced into the current recession, the auto industry and its labor was likely hurt more than any other industry. Few years ago it was the homebuilding industry that was troubled the most and held the first place, but it gave that position over to the auto industry the following year. Why was this industry affected more than any other is very interesting and complex situation. There are several factors why there was such a huge negative impact on this industry, its performance, and the labor involved. Some of the major reasons are very high foreign competition, higher oil prices, and certainly the recession.
Like any organization, AutoZone creates performance evaluations daily, monthly, quarterly, and the annual reporting of the organizations performances are identified in what is known as SWOT analysis. This analysis refers to the strengths and weaknesses the company can address and the opportunities and threats that exist in the given market. The strength and weaknesses are the organizations ways of analyzing internal issues and exploiting strengths while the organization tries to address the weaknesses as it relates to competitors in the industry.
The Canadian Tire company is among Canada’s top 35 publicly traded company. Its operations are based on an interrelated network of businesses that engage in retailing apparel, petroleum, and hard goods as well as financial and automotive services. The company runs its venture as a franchise with the stalls being owned or leased by the company and the merchandise in the stores being the property of the franchisees. The Canadian Tire Corporation has tried to enter the American market twice but failed in both attempts. The first one was in the 1980’s when it bought White Auto Store in Texas. However, after a period of continued loss-making, the company wound up its operations in the
Picciotto, Dan and Nishit K Madlani. "The Global Auto Industry Shifts Its Focus To OVerseas And Emerging Markets." Credit Week (2013): 26. Online. 21 May 2014. .
BMW and Audi both build cars that have a reputation for security, reliability and quality. These traits transcend into their financial statements, making both of them a good investment due to their debt status, and management effectiveness. Our recommendation as a bank loan analyst would be for BMW due to its superior liquidity and low risk. When evaluating management performance for equity investment, Audi is clearly a better investment. This is primarily due to its superior asset management, debt allocation, and inventory management.
In 2009 Toyota Motors (TM) posted a net loss of $4.6 billion ("Market watch," 2014). From 2009 to 2011 Toyota encountered a number of factors contributing to their economic downturn. It began with recalling millions of vehicles, for quality related problems, followed by natural disasters hitting northeastern Japan. These disasters wiped out Toyota’s production capabilities (Tabuchi & Vlasic, 2014). While these events were occurring, the cloud of the 2008 global financial crisis was still being felt. This crisis weakened demand in the automotive industry. This weakened demand increased the competitive landscape for all automotive manufactures. This drove down automotive prices and effectively contribution margins (i.e. sold less and made less per sale). At the end of 2011 Toyota’s stock had collapsed by approximately 70% from its peak in 2007 (Daltorio, 2012).
According to Carmax annual report (2016), used car retailing business is dependent on many economic factors and unemployment rate is one of the factors. It helps in determining consumer buying power. Gradual decrease in it from 10% to 4.9% since financial crisis, (U.S bureau of Labour Statistics, 2016), provided the boost to the automotive retail
Fueled by the 2008 recession, the automotive industry suffered a crisis that hurt the United States’ national economy.
General motors in on the of the biggest auto makers in the United States. It holds about one percent of the United States employment. The company which sold over 219,000 vehicles in November of last year only was able to sell 155,000 cars and truck to the American Public declining 41 percent compared to last year. GM car sales of 58,786 were off 44 percent and truck sales of 96,091 were down 39 percent. The steep decline in vehicle sales was largely due to a significant drop in the market’s retail demand compared with last year, and continuing economic uncertainty that has affected consumer confidence. The market shares for General Motors have always been low, but recently it has plunged to a 20 percent starting from 1980. I have included a graph which shows the decline in all of auto industry.
The automotive industry is involved in the manufacturing and distributing of cars and specific car parts such as car bodies, drivetrains, engines and transmissions. Car companies in the industry manufacture these cars in their factories often using parts purchased from specialized companies (ex: company only producing transmissions) or parts produced in their own factories. These cars are then purchased by car dealerships (independent franchises selling cars to consumers) for display, test-driving and ultimately for consumer purchase. Today several extremely large firms dominate the automotive industry, each with footprints in almost every market around the world. Each car company typically owns several other subsidiaries
Any successful business owner or investor is constantly evaluating the performance of the companies they are involved with, comparing historical figures with its industry competitors, and even with successful businesses from other industries. To complete a thorough examination of any company's effectiveness, however, more needs to be looked at than the easily attainable numbers like sales, profits, and total assets. Luckily, there are many well-tested ratios out there that make the task a bit less daunting. Financial ratio analysis helps identify and quantify a company's strengths and weaknesses, evaluate its financial position, and shows potential risks. As with any other form of analysis, financial ratios aren't definitive and their results shouldn't be viewed as the only possibilities. However, when used in conjuncture with various other business evaluation processes, financial ratios are invaluable. By examining Ford Motor Company's financial ratios, along with a few other company factors, this report will give a clear picture of how the company is doing now and should do in the future.