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

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million for the quarter, up 9.5% compared to last Earnings per shareincreased 25.9% to $3.13, the company’xs 11th consecutive quarter of double-digitf earnings per share growth. Frank Goodman served as vice presidenrt of business planning and analysis with helping determine newstore locations, before leaving in 2000. “It’e a great mouse trap and they’ver done a great job running it,” he Now a chief portfolio strategistwith , an investment advisory Goodman was part of the team that helpefd AutoZone expand from 500 storea to more than 3,000 locations across the U.S. and Mexico.
When he was AutoZone executives looked at motor vehicles registrations providedby , a data vendor. “So you know where the cars are and then wherr you should consider building a Goodman says. “It’s really quite the advantage to have that mechanical demand feature, so it’s not all the whim of the but it’s also the demands of theirr cars.” At AutoZone’s peak, the companyy was opening a store every day. In the company’s most recenf third quarter, it opened 42 new stores, bringinyg it to 4,172 locations in the U.S. and 168 in The company could open morenext quarter, since store openings are according to Goodman.
“It’s very difficult to get storews open at the end ofthe winter, it’s much easief at the end of the he says. Goodman attributes a large partof AutoZone’as success to the company’s culture of which is an acronym for “What It Takes To Do The Job AutoZone research revealed that a persohn seeking to repair a car would make an averag e 2.3 visits to an auto parts store to get the problejm completely solved. “Usually, that .3 was a visif to a different autoparts store,” Goodmanh says. “So management, understanding this, said that the company had to get the numbeer ofvisits down.
” AutoZone has convinced employees to buile a sales ticket, not just to get the customer to buy uselessw items but to help solve their problem Also, since fear of doing somethingv wrong in do-it-yourself projects is a big concern for employees are trained to be forthcomingg with their automotive knowledge. John R. Lawrence, retaiol analyst at , says another reason AutoZonwe has excelled recently is due to an increase in the numbe of cars whichare seven-eight years old and olde out on the road. “They’rre out of warranty, they have to be fixexd and inthis economy, everybody gets pinchedc and you have to find the cheapest alternative to keep your car Lawrence says.
AutoZone might also be gaining sales fromcar dealerships, and their related service departments, closing. Besides providing auto parts for do-it-yourselv customers, the majority of its business, AutoZone also sells parts to People are also deferring maintenance on their and when they do performthis maintenance, they are ofte buying better quality parts and increasing their purchases at storees like AutoZone. Brian Campbell, AutoZone’s vice presidenf of investor relations, agrees the company has some tailwind in this economy because peoplse are looking tosave money.
“It’ds a healthy one-two punch of the challenges of the economy and spending some dollars to make surethat we’re capturin those customers once they come into our Campbell says. An examplse of this is AutoZone’s domestic same storw sales, which increased 7.4% last quarter. The company’s sales per squard foot, at $58 last quarter, is the highesy in the industry. Campbell attributes that to many factors, but focusesz on the company’s systems.