First, full disclosure. I'm currently long AZO for over a year, but I halved my position last week. 1. AZO at 20 times this year's projected earnings looks pretty pricey. 2. Ed Lampert has a great track record and he is selling. 3. The DIY market has to be hurt by the increasing electronics in cars. 4. AZO has been buying back lots of shares which makes all price to book comparisons irrelevant. 5. The current recession probably helped AZO more than hurt them. The recession seems to be ending. 6. The company is doing a great job as the industry leader ( generating lots of cash) and if the market as a whole at 25x earnings is faily valued then AZO isn't out of line. (more disclosure.. I think the market is overvalued by about 30%). 7. You have to figure AZO has at least another quarter or two of easy comparisons versus last year. 8. There is no point in demeaning other posters. I'd rather hear from people who disagree with me so that I can measure my point of view against theirs. Better to address their ideas, facts and opinions than to make ad hominum attacks.
I wonder how can the same store sale continue to increase by 12% and more. I went to my local AZO (northeast US) to get a pair of wiper blades. being a DIY person, I wanted the refill and not the medal parts. They told me the kind I wanted was out of stock (W28R, very large size, I have to admit). But I happened to have to go to the bathroom and the clark kindly pointed me the direction (in the back of the large store). By the time I finished and got out of the bathroom, I saw an organized shelf full of those "uncommon" re-fills" including mine, neatly organized but not accessable to the public customers. I wondered whether those re-fills they kept in the back were for a reason. After looking for the price of the blades, it APPEARED (no statistical proof) that the un-common re-fills are associated with higher priced blades (although those re-fill themselves were no more expensive than the commonly sized re-fills). I felt "lucky" that I ended up buying the re-fill and not the metal part but can't help thinking that, had I accrpted tha "fact" of their out of stock of re-fill, I would have willingly paid for the whole blade. Now you Zonners, I do not blame you for keeping the odd sized stocks hidden to sell more higher margined goods. That is good business sense. However, this is like "cost cutting", it will only work for one or two quarter. If you know for sure that the growth comes from organic selling, i.e. more customers coming to you Q after Q, then there's your true growth. On the other hand, if it is shifting of stocks to sell more higher margined items, sonner or later the growth will not be sustainable, as you will become the high price carrier. How do you hide the re-fill blades from the shelves of your competiters?
Never worked in Retail, Huh? Did it EVER enter your gray matter that maybe they had sold the Refills PRIOR to your visit? - OR maybe you thought of that, and just assumed that the Store would come to a screeching halt, lock the doors, and Run without mercy to the backroom to retrieve the stock and refill the hook!-Oh, by the way, 28" Wipers-something tell's me that you own a CHRYSLER!!, vehicle. I Will pray for you.