AutoZone (AZO) Gabelli Funds 48th Annual Automotive Aftermarket Symposium summary

Business overview and customer segments

• Operates nearly 7,000 stores across the U.S., Mexico, and Brazil, serving both DIY and commercial customers with a 70/30 revenue split favoring DIY.

• Commercial business has accelerated in recent years, leveraging existing infrastructure for efficient growth.

• Employs about 130,000 people across the Americas.

• Business is primarily break-fix and maintenance, with 85% of sales in non-discretionary categories.

• Uses data science to tailor inventory and store buildouts to local vehicle and customer needs.

Distribution network and inventory strategy

• Expanded hub and mega hub network to forward-deploy inventory, with mega hubs carrying over 100,000 SKUs.

• Hubs and mega hubs enable broader inventory assortment, especially for commercial customers needing long-tail parts.

• Direct fulfillment from hubs and mega hubs has increased, improving delivery speed and customer satisfaction.

• Plans to grow to over 200 mega hubs and 300+ hubs, supporting both replenishment and direct sales.

Growth opportunities and market dynamics

• Commercial business has a 4-5% market share in a $100B+ market, with ambitions to match DIY share in the future.

• Store sales per location grew 40% over five years to $2.5M, with continued opportunity for expansion in new and existing markets.

• Opened 213 stores in fiscal 2024, with a long-term goal of 500 annual openings (300 U.S., 200 international) by decade's end.

• International growth is strong, especially in Mexico (approaching 800 stores) and a disciplined approach in Brazil.

• International stores now represent 12-13% of the total base and are a growing part of the business.