About Blue Ribbon Motoring, Llc

To stay out of the no-driving zone, DIY car repairers with auto problems often enter the AutoZone. With more than 5,190 stores in the US and Puerto Rico, AutoZone is the nation's #1 auto parts chain. It also has more than 450 stores in Mexico and eight stores in Brazil. The company also operates 24 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, as well as under private labels. AutoZone's commercial sales program distributes parts and other products to garages, dealerships, and other businesses.

Operations

As part of its business, AutoZone operates through one reportable segment: Auto Parts Stores. Besides being a retailer and distributor of auto parts and accessories, AutoZone produces, sells, and maintains diagnostic and repair information software used in the auto repair industry through its ALLDATA business and sells directly to customers through its e-commerce site, autozone.com.

Geographic Reach

Based in Tennessee, AutoZone sells auto and light truck parts, chemicals, and accessories through more than 5,190 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 450 stores. AutoZone also has stores in Brazil.

AutoZone has distribution centers in more than half a dozen US states and Mexico, and has store support centers in California and Tennessee, as well as in Mexico and Brazil.

Sales and Marketing

AutoZone 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.

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.

Advertising expense for the company was $98.3 million in fiscal 2016 (ended August) and $98.0 million in fiscal 2015.

Financial Performance

AutoZone has achieved extraordinary growth over the last few years, with revenues climbing 8% from $9.5 billion in 2014 to peak at a record-setting $10.6 billion in fiscal 2016.

In fiscal 2016, net revenues increased by 4% compared to fiscal 2015, driven primarily by a US same store sales increase of 2.4% and net sales of $177 million from new domestic AutoZone stores.

In fiscal 2016 net income increased by 7% to $1.24 billion due to the increase in net revenues and a marginal decrease in interest expense.

Interest expense decreased by 2% to $147.7 million as the result of a decline in borrowing rates, partially offset by higher borrowing levels.

Net cash provided by the company was $1.6 billion, up $52.2 million on fiscal 2015.

Strategy

The company's core strategy includes expanding its stores network. It added about 200 stores in fiscal 2015 and is focusing on new-store development while also enhancing its existing stores and infrastructure. Among its focus are "Mega Hub" stores, which offer a larger product selection and deliver items to local satellite stores. Continuing its store expansion strategy, AutoZone is rolling out a plan for both more frequent weekly deliveries from its distribution centers to stores and more Mega Hub openings. The company is trying to increase multiple deliveries per week to another 1,000 US-based stores and also plans to open additional Mega Hubs. It plans to have a majority of 5,000 domestic stores on multiple distribution center deliveries and to have a total of 25 Mega Hub stores in operation over the next few years.

AutoZone has grown quickly through a series of acquisitions over the past several years but now is focused on internal growth and development. Among the factors AutoZone considers when opening new stores is how many cars in an area are OKVs or "our kind of vehicles," that is, cars older than seven years and no longer under their manufacturers' warranty.

The company is growing quickly in Mexico, where cars are even older -- and in need of more repairs -- than in the US. The auto parts retailer also loans tools and sells merchandise and diagnostic and repair advice online. In addition to parts, the stores also offer diagnostic testing for starters, alternators, and batteries. (The shops do not sell tires or perform general auto repairs.) In fiscal 2015 AutoZone continued expanding in the emerging market of Brazil, opening a handful of new stores.

Mergers and Acquisitions

In 2014 the company purchased Interamerican Motor Corporation (IMC), a large distributor of OE quality import replacement parts in the US, for approximately $80 million.

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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