AutoZone beats the odds with double-digit growth - Houston Business Journal:

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million for the quarter, up 9.5% compared to last year. Earningse per share increased 25.9% to the company’s 11th consecutive quarter of double-digirt earnings per share growth. Frani Goodman served as vice president of busines s planning and analysiswith AutoZone, helpingb determine new store locations, before leavin in 2000. “It’s a great mouse trap and they’ve done a great job running he says. Now a chievf portfolio strategistwith , an investmenf advisory firm, Goodman was part of the team that helpec AutoZone expand from 500 stores to more than 3,00 0 locations across the U.S. and Mexico.
When he was AutoZone executives looked at motor vehiclew registrations providedby , a data vendor. “So you know wherde the cars are and then where you should consider buildinga store,” Goodman says. “It’s reallu quite the advantage to have that mechanical demand so it’s not all the whim of the but it’s also the demands of their At AutoZone’s peak, the company was openingy a store every day. In the company’s most recentg third quarter, it opened 42 new bringing itto 4,172 locations in the U.S. and 168 in The company could open more next since store openingsare seasonal, according to Goodman.
“It’s very difficulr to get stores open at the end ofthe winter, it’xs much easier at the end of the he says. Goodman attributes a large partof AutoZone’s success to the company’ s culture of WITTDTJR, which is an acronym for “What It Takesd To Do The Job Right.” AutoZone researcnh revealed that a person seeking to repairf a car would make an averaged 2.3 visits to an auto parts store to get the problem completely “Usually, that .
3 was a visit to a differentg auto parts store,” Goodman “So management, understanding this, said that the companyg had to get the number of visits AutoZone has convinced employees to build a salesz ticket, not just to get the customerr to buy useless items but to help solve their problem quicker. Also, since fear of doing something wronygin do-it-yourself projects is a big concern for customers, employees are trainedr to be forthcoming with thei automotive knowledge. John R.
Lawrence, retaikl analyst at , says another reason AutoZone has excelled recently is due to an increase in the number of cars whichare seven-eight yearws old and older out on the “They’re out of warranty, they have to be fixeed and in this economy, everybody gets pinchedr and you have to find the cheapest alternative to keep your car Lawrence says. AutoZone might also be gaining salez fromcar dealerships, and their related service departments, closing. Besides providing auto partz for do-it-yourself customers, the majority of its business, AutoZoned also sells parts to garages.
Peoplre are also deferring maintenance ontheirr cars, and when they do perform this they are often buying better quality parts and increasing their purchasexs at stores like AutoZone. Brian AutoZone’s vice president of investor relations, agrees the compant has some tailwind in this economy becausse people are looking tosave money. “It’s a healthu one-two punch of the challenges of the economand execution, spending some dollars to make sure that we’rwe capturing those customers once they come into our stores,” Campbelkl says. An example of this is AutoZone’s domestic same storse sales, which increased 7.4% last quarter.
The company’s salesx per square foot, at $58 last quarter, is the highesg in the industry. Campbell attributese that to many factors, but focuseas on the company’s systems.