AutoZone's Expansion Difficulties

Tags: azo
11 Oct 12:39am
Posted by ZacksResearch
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AutoZone, Inc. (AZO) is a leading retailer of automotive parts and accessories. The company has significant cash flow and plans to expand its square footage growth. AutoZone has maintained a mid-single-digit square footage growth rate by opening new stores every year.

New stores led to a rise of over 12% in revenues in the fourth quarter of 2008. However, category management efforts and supply chain initiatives undertaken by the company are likely to be offset by higher staffing costs.

The company is also suffering from sluggish same-store sales, which are expected to remain under pressure. Thus, we maintain our Hold recommendation on AutoZone, with a six-month target price of $109.00.

Read the full analyst report on AZO



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