About Blue Ribbon Motoring, Llc

Imagine that you are in your garage making some weekend car repairs. The wheel cylinders are leaking ... the brake shoe adjuster nut is rusted solid ... you're about to enter ... the AutoZone. With more than 5,100 stores in the US and Puerto Rico, it's the nation's #1 auto parts chain. It also operates some 440 stores in Mexico and seven in Brazil. 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 5,100 AutoZone stores in 49 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 440 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 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 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.

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 $10.2 billion in fiscal 2015 (ended August). Profits also jumped 8% to $1.2 billion in 2015, another company milestone.

The historic growth for 2015 was fueled by a 4% boost in domestic same store sales and $185 million in sales from new stores. Improvements in domestic same store sales were driven by a higher average transaction value, partially offset by a drop in the number of transactions. During the past five years, AutoZone has grown its stores network by more than 20% (from 4,627 stores in 2010 to 5,609 stores in 2015). During the same time period, annual revenues have surged from $7.4 billion to $10.2 billion.

Cash from operations has also followed the upward trend established by revenue and net income. In 2015, the company reported operating cash flow of $1.5 billion, up 14%.

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 "hub" stores, which offer a larger product selection and deliver items to local satellite stores. In fiscal 2015 AutoZone opened 10 hub stores, bringing the total to about 175.

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, which operates 17 locations. To build its online presence, AutoZone in 2013 acquired AutoAnything, an online retailer of specialized automotive products.

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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

Major Office Locations

  • Bayamon, PR

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