About Blue Ribbon Motoring, Llc

With about 5,500 stores in the US and Puerto Rico, AutoZone is one of the nation's leading auto parts chains. It also has more than 500 stores in Mexico and about a dozen in Brazil and operates some two dozen Interamerican Motor Corporation (parts distribution) branches in the US. AutoZone stores sell hard parts (alternators, engines, batteries), maintenance items (oil, antifreeze), accessories (car stereos, floor mats), and non-automotive merchandise under brand names and private labels. AutoZone's commercial sales program distributes parts and other products to garages, dealerships, and other businesses.

Operations

AutoZone operates through one primary segment, Auto Parts Stores, which accounts for more than 95% of total revenue. Leveraging a consistent store format, each AutoZone store boasts between 85% and 90% of selling space -- up to 40% to 45% of which is dedicated to hard parts inventory. Stores are outfitted with Z-net, AutoZone's proprietary electronic catalog that gives employees advice and information for customers' vehicles, down to the year, make, model, and engine type.

Other revenue is generated by e-commerce operations (autozone.com and autoanything.com) and diagnostic and other software (provided through the company's ALLDATA business) used in automotive repair.

Geographic Reach

Based in Tennessee, AutoZone operates about 5,500 AutoZone stores in 50 US states, the District of Columbia, and Puerto Rico. Texas, California, Florida, Ohio, and Illinois represent the company's largest markets and together account for more than a third of locations. The company's fast-growing subsidiary in Mexico, AutoZone de México, operates more than 500 stores. AutoZone also has stores in Brazil.

AutoZone has distribution centers in the US (Arizona, California, Georgia, Illinois, Ohio, Pennsylvania, Tennessee, Texas, and Washington) and Mexico; store support centers are located in Tennessee, as well as Mexico and Brazil.

Sales and Marketing

AutoZone sells to do-it-yourself (DIY) consumers, as well as repair garages, dealers, service stations, and other commercial customers.

The company relies on targeted advertising and promotions to build its brand, offer advice about the overall importance of vehicle maintenance, and position its business as a great value. To drive traffic to its stores, the retailer advertises on broadcast and Internet media. It works to educate consumers about which products they need through use of in-store signage and circulars, as well as creative product placement and promotions.

Advertising expense for the company was $93.1 million in fiscal 2017 (ended August) and $98.3 million in fiscal 2016.

Financial Performance

New locations drive revenue growth for AutoZone, which has seen an average revenue increase of 5% per year since 2012 (similar to the 4% average location increase over the same period of time). Net income has also ticked up consistently since 2012 as the company is keeping its net profit margin between 11%-12%.

In fiscal 2017 (ended August), the company reported revenue of $10.9 billion, up nearly 2.5% from the prior year. New AutoZone locations in the US powered the growth, adding more than $170 million. Same-store sales increased by half a percent.

Net income that year rose 3% to a record $1.3 billion on the increase in revenue and tight controls over cost of sales and expenses.

Cash at the end of 2017 was $293 million, an increase of more than $100 million from the prior year. Cash from operations contributed $1.6 billion to the coffers, while investing activities used about $550 million, with increases the result of new distribution centers and additional investment in existing locations. Financing activities subtracted about $915 million as AutoZone repaid about $400 million in debt and purchased more than $1 billion in treasury stock.

Strategy

AutoZone's core strategy includes expanding its store network and store inventory to meet customer needs. It added about 215 stores in fiscal 2017 (on top of 205 in 2016 and 202 in 2015) and is focusing on new-store development while also enhancing its existing stores and infrastructure. Nearly 50 of the new stores in 2017 were opened in Mexico and Brazil. The company also opened two new distribution centers that year and has one under construction for 2018.

With an eye on expanding inventory, AutoZone is focused on hub and mega hub locations, which offer inventory two to four times broader than typical stores. In 2017 it opened four hub stores for a total of nearly 190 and five mega hub locations, bringing that total to about 15. The company plans to have a total of 40 mega hub stores in operation over the next few years.

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Blue Ribbon Motoring, Llc

Ave Laurel 206 Calle C Urb Ind Minillas
Bayamon, PR 00959-1909
Phone: 1 (858) 569-8111
Fax: 1 (858) 569-8503

Stats

  • Employer Type: Public
  • Employees: 125

Major Office Locations

  • Bayamon, PR