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million for the quarter, up 9.5% compares to last year. Earnings per share increased 25.9% to $3.13, the company’s 11th consecutive quartet of double-digit earnings per share Frank Goodman served as vice president of businesws planning and analysis with helping determine new store locations, before leaving in 2000. “It’ s a great mouse trap and they’ve done a great job runnintg it,” he says. Now a chief portfolio strategiswith , an investment advisoryt firm, Goodman was part of the team that helpec AutoZone expand from 500 stores to more than 3,000 locations across the U.S. and Mexico.
When he was there, AutoZonew executives looked at motor vehiclr registrations providedby , a data vendor. “Spo you know where the cars are and then wherw you should consider building a Goodman says. “It’s really quite the advantage to have that mechanicaoldemand feature, so it’zs not all the whim of the but it’s also the demands of their cars.” At AutoZone’sz peak, the company was opening a store every day. In the company’s most recent third quarter, it opened 42 new bringing itto 4,172 locationws in the U.S.
and 168 in The company could open more next since store openingsare seasonal, according to “It’s very difficult to get storesa open at the end of the winter, it’s much easiere at the end of the summer,” he says. Goodman attributess a large partof AutoZone’s succesds to the company’s culture of WITTDTJR, whicyh is an acronym for “Whart It Takes To Do The Job AutoZone research revealed that a persobn seeking to repair a car would make an average 2.3 visits to an auto parts store to get the problem completelgy solved. “Usually, that .3 was a visit to a different autoparta store,” Goodman says.
“So management, understanding this, said that the compang had to get the number ofvisitz down.” AutoZone has convinced employee to build a sales ticket, not just to get the customefr to buy useless items but to help solvd their problem quicker. Also, since fear of doing somethingv wrongin do-it-yourself projecte is a big concern for customers, employee are trained to be forthcomintg with their automotive knowledge. John R. retail analyst at , says another reason AutoZonr has excelled recently is due to an increasw in the number of cars whichare seven-eighg years old and oldefr out on the road.
“They’re out of they have to be fixed and inthis economy, everybodty gets pinched and you have to find the cheapest alternative to keep your car Lawrence says. AutoZone might also be gaininv sales fromcar dealerships, and their related service closing. Besides providing auto parts for do-it-yourself customers, the majority of its business, AutoZonew also sells parts to garages. Peopld are also deferring maintenance ontheirt cars, and when they do perform this they are often buying better quality parts and increasing their purchase s at stores like Brian Campbell, AutoZone’s vice president of investor agrees the company has some tailwind in this economy becausr people are looking to save money.
“It’s a healthuy one-two punch of the challenges of the economyuand execution, spending some dollars to make sure that we’rer capturing those customers once they come into our stores,” Campbel l says. An example of this is AutoZone’sz domestic same store sales, whichn increased 7.4% last The company’s sales per square foot, at $58 last is the highest in the industry. Campbell attributes that to many but focuses onthe company’s systems. “Just about our entirde information technology infrastructure is primarily internally he says. “They are systems that we haven’t bought off the shelf.
It’s a self-learning We keep a lot of data and we continude to scrub that data toidentify trends.” This allows the company to tailor its inventory more effectively, a key tacticx considering how many makes and modele of cars there are on the road. “Yohu have to have a lot of parts to be able tosay I’ve got it,’ on the fronyt end,” Lawrence says. The company’s including , , and , are all performing better in the current economyas well. “Thered is obviously a tailwind with the economic situation of new car salesz down and people having tospend more,” Lawrencew says. Advance Auto Parts reportesd total salesof $1.
68 billion for the firs t quarter, a 16-week period ended April 25. This was a 10.3% increase compared to total salesof $1.53 billionj in first quarter 2008. Shelly spokesman for Advance, attributes sales to recent economif changes. “People are keeping their cars longer, with the average age of a car she says. “As people are keeping those cars they need to do more work onthoses cars.” While the company is seeing more do-it-yourselfers concerned abourt increasing fuel economy and general maintenance, Advances focuses more on the commercial side of automotive parts retailing.
“We’re seeing a lot of people who used to goto they’re going to that corner garage to save some money,” Whitaker says. Advance opened 114 stores last year and plans to open anothe 100this year. AutoZone’s stock has been anothere strong point forthe company, hittin g $159.36 in mid-day on June 3. Its 52-weekl high is $169.99, the stock’z all-time high. That’s a far cry from the mid-$2p0 range the company’s stock was tradinvg for a decade ago. “We’vde been saying for the better part of a decade that with any weaknese inthe shares, we would buy them, hold them and it’a been a great investment,” Lawrence says.
“Whebn you have 18% margins, you’re movint into the fourth quarter, which is your biggest periodf ofthe year, and they have executed as they have in the past six we think they’re being a little conservative with the numbers.” The company’s stocki repurchase plan is humming along as well, with AutoZones buying 450,000 shares in the first quartedr for $65 million, or an average pric of $145 per share. Fiscapl year-to-date, it has purchased $713 million of stock at an averagesof $130 a sharse and it has $396 million remaining in its curren t share repurchase program.
The companyu has used its cash flow to make investments in itsstors base, including larger stores with additionao space for supplying other stores and Lawrence says. AutoZone is also spending more money on trainingb andretaining employees, while making sure it attractxs the best new talent with a focus on improving employee benefits, according to Campbell. AutoZone employz 1,300 people locally. “We’re continuing to opening stores andadding personnel,” he says.
“Tp us, this is an opportunity of continued
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