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AutoZone, Inc. Message Board

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  • reitsbyziggy reitsbyziggy Oct 17, 2005 8:22 PM Flag

    Sales Down

    Don't own the stock...never have and am certainly not short the stock. I have been asking around and am trying to get evidence as to how tough this economy is.

    I live in a city of about 100K population with a significant number of low paying jobs (minimum wage up to say $8 per hour) and a few people with old money that could never even begin to spend what they have. I just wanted to know if this type of decline would be typical of what's happening throughout the country. The low wages may be skewing the numbers...I just don't know!

    If these fuel prices stay high for any length of time along with a proposed 30% increase in electric rates I would think people will be leaving this city because they simply can't survive here.

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    • They may have just had an O'Reilly store open up next door. That would have a negative effect on the AZ sales.

    • Same-store sales for AZO were down 1% in the most recent quarter.

      With new initiatives and store improvements under way, Same-store sales should be up over the next 12 months.

      Autozone stores are far nicer than the competition and they have more helpful staff as well. That is why they produce $250 per sq ft of sales to their competitors' sub-$200 sales per sq ft.

      A bad economy would hurt AZO potentially. However, look back at the last two recessions-the company recorded double-digit gains in same-store sales. This business has the tendency to run countercyclical to the economy. AZO is the only company in the industry that can weather inflation, gas, and other negative macroeconomic forces and still continue to grow their EPS.

      They also have better management and employees that actually care. They are 3-5 years ahead of their competition at least.

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