- The lower income consumer, to which AZO has significant exposure, will likely remain under pressure into 2025.
- As cars become more affordable, we see increased risk of a lower amount of repairs.
Goldman Issues Grim Outlook For AutoZone Citing "Significant Exposure" To Struggling Working-Poor Consumers
- Thread starter SumGuy
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Structural problems with B&M parts retailers are still growing. They have to carry more parts because there are more unique models on the road, and those models are lasting longer. They have to have very clever logistics to be able to get special order parts to far flung stores/ customers same-day otherwise those customers will just mail-order the thing themselves.
They're automotive convenience stores (a term I stole from someone here.) AA brought us closer to an oligopoly by absorbing CQ and probably has better economics of scale than AZ.
They're automotive convenience stores (a term I stole from someone here.) AA brought us closer to an oligopoly by absorbing CQ and probably has better economics of scale than AZ.
$3153/share. Climbing like a tractor for the last 5 years.
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those statements make absolutely no sense. weren't even affected by covid
What does the price of vehicles have to do with auto parts?
I gotta say my outlook has been completely the opposite. New cars have not become increasingly more affordable, and used cars are still very high priced. Lower income consumer has no choice but to fix their used cars --> and buy lots of repair parts.
Not to mention lots of people make money in the gig economy using their cars.
Expensive new cars lead people to fix their existing ones.
they stated that as if cars are becoming cheaper and therefore more disposable, so people aren't as likely to keep what they have running before trading in, but I don't feel like that is grounded in reality.
But that car will still get repaired.....Unless it's a worthless POS to begin with & goes to the boneyard.
Regional markets also differ quite a bit.....I was out west all last week on vacation, The amount of cars you don't see in DFW was staggering.
Neon's, Cavaliers, Escorts, K-cars, 4500 & 4900 powered Cadillac's just to name a few.
Agree. Might be traded but not scrapped. We were short new cars for a few years - so older cars will need to be driven longer to keep the same number on the road.
Cheaper means replace in lieu of constant repair
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Cars get parked waiting for that "Hail Mary" fix-- if the owner can't get a good deal on a better car they fix the clunker. How many cars do you see rotting in driveways that are "gonna get fixed some day"... quite a few!
Or the clunker gets exported to a 3rd world country without Autozones.
“As cars become more affordable”. I can only venture a guess that they are talking about the post covid affect where more cars are arriving on the lot making new sales possible and introducing more used cars into the market.
The stats say otherwise as the median age of the U.S. fleet is 12.6 years and growing. People can’t afford new cars. Also the younger you are the less you see a car as a status symbol so new car old car - as long as it moves people don’t care.
Goldman should fire that analyst.
I do a lot of due diligence consulting for the automotive aftermarket. It boggles my mind that the bankers/private equity people I talk to start the conversation with, "I live in NYC, I don't even own a car.."
There was an AAP employee here on BITOG saying store sales across his region are trending downward.
Managers cutting employee hours at work or simply not hiring.
Lots of consumers are broke and postponing vehicle maintenance.
Sales data don’t lie…… same goes for Best Buy and other retailers.
Managers cutting employee hours at work or simply not hiring.
Lots of consumers are broke and postponing vehicle maintenance.
Sales data don’t lie…… same goes for Best Buy and other retailers.
This seems like it's fairly straightforward and most likely accurate (Although the exact timing is always questionable). Now that we have started lowering interest rates (U.S.), that will drive new car sales, & will dampen used car auto parts sales.
