AutoZone Inc. (AZO)

I. Investment Highlights

AutoZone’s Pledge
AutoZoners always put customers first!
We know our parts and products.
Our stores look great!
We've got the best merchandise at the right price.

Company Profile
AutoZone, Inc. and its wholly owned subsidiaries operate as a specialty retailer of automotive parts and accessories in the United States. As of August 28, 2004, the company operated 3,420 auto parts stores in 48 states and the District of Columbia; and 63 auto parts stores in Mexico. Each store carries a product line for cars; sport utility vehicles; vans; and light trucks, including new and remanufactured automotive hard parts, maintenance items, accessories, and non-automotive products. Besides, AutoZone has a commercial sales program in the United States (AZ Commercial) that provides commercial credit, and delivery of parts and other products to local, regional, and national repair garages, dealers, and service stations. The company also sells its auto and light truck parts through www.autozone.com, and ALLDATA automotive diagnostic and repair software primarily to do-it-yourself customers. AutoZone is based in Memphis, Tennessee.

Growth Dynamics
AutoZone has experienced a three year revenue growth rate of 2.44% which is a decrease from their five year revenue growth rate of 5.0%. Earnings growth over the last five years is 37.02% compared to the industry growth of 15.47%. AutoZone reported a Net Income of $566,202,000 in 2004 which has continually risen over the last three years from $428,148,000.

AutoZone is growing mainly through new store openings. With 3,505 stores open in the United States and Mexico, AutoZone is the leading auto parts retailer, followed by Advance Auto Parts which has 2,708 stores in the United States, Virgin Islands, and Puerto Rico.

Although AutoZone’s growth has been slowing down, this