Goldman Issues Grim Outlook For AutoZone Citing "Significant Exposure" To Struggling Working-Poor Consumers

[97prizm]

The pandemic caused an all-time high profits at auto parts stores across the country from what I've read. The company that makes PB Blaster said that they had sales like crazy as people repaired what they had vs buying new. Is this the start of the see-saw effect? Many high end bike manufacturers saw the same thing. They cranked out tons of bikes, but now several have filed bankruptcy as people only need so many bikes.

 

[factorytuned2012]

So will AutoZone split?

 

[2002 Maxima SE]

GS does not report and predict stock performance....they shape it.

 

[Pew]

GS does not report and predict stock performance....they shape it.

Sounds like GS is trying to drop AZ stock so somebody can snatch it all up and drive the price back up.

 

[Snagglefoot]

I’m curious how sales break out; behind the counter parts purchases vs pick and go floor purchases.

 

[Snagglefoot]

Trivia question. Take alternators. Who is buying them? Is it mostly the repair shops or is it a combination of the shops and do it yourselfers. Our local parts store has a small delivery truck running full time to the repair shops.

 

[cptbarkey]

Trivia question. Take alternators. Who is buying them? Is it mostly the repair shops or is it a combination of the shops and do it yourselfers. Our local parts store has a small delivery truck running full time to the repair shops.

Yup, my neighbor is a back office guy at AAP and he exclusively dispatches to “accounts.” Mostly repair shops. He used to work at NAPA doing the same thing but they get much bigger accounts, construction companies, municipalities, etc.

I would like to know DOA rates on alternators and starters, or failure within 30 days. I used to track such things for computer components, and oddly the trends have held.

 

[John105]

$3153/share. Climbing like a tractor for the last 5 years.

Had no idea. It’s interesting to not split it. Human nature sees the price and thinks it’s successful. Looks like it is at a historical high, yet underperforming the market.

I bought Amazon at $175 in 1998 and people at work told me I was nuts that’s expensive

 

[SwampSurvivor]

Yup, my neighbor is a back office guy at AAP and he exclusively dispatches to “accounts.” Mostly repair shops. He used to work at NAPA doing the same thing but they get much bigger accounts, construction companies, municipalities, etc.

I would like to know DOA rates on alternators and starters, or failure within 30 days. I used to track such things for computer components, and oddly the trends have held.

I've known a few commercial account reps that worked for Advance / AZ / Napa and that's really where the money is for employees. The counter sales really aren't bringing in money compared the commercial business.

 

[D60]

Why is no one else wondering why this is allegedly just AutoZone? Why is O'Reilly not under identical pressure?

For at least the last 25 years my AutoZone has run a skeleton crew. But both of my O'Reillys are relatively well-staffed. I've always wondered how my O'Reillys get an allowance for such a large payroll.

 

[Skippy722]

Well yeah, most everyone has access to the internet now. Asked how much an alternator for my van was, all they had on hand was an almost $500 option. Their cheapest option was $300.

I picked up a BBB industries reman off rockauto for $195 including shipping and core charge.

 

[D60]

I've known a few commercial account reps that worked for Advance / AZ / Napa and that's really where the money is for employees. The counter sales really aren't bringing in money compared the commercial business.

Which is also why I question just how much B&M is really under pressure. Shops need parts TODAY or next-day at the latest.

Until someone figures out a reliable and relatively affordable way to get the RA catalog to anywhere next-day, commercial accounts at local stores will always exist.

Prior to '20 I could get many things from Amazon in 1-2 days. That simply hasn't returned here and a week is the norm. I can't even SELECT a faster option and PAY MORE any longer. Used to be I had several options and they were all relatively cheap.

 

[D60]

Well yeah, most everyone has access to the internet now. Asked how much an alternator for my van was, all they had on hand was an almost $500 option. Their cheapest option was $300.

I picked up a BBB industries reman off rockauto for $195 including shipping and core charge.

A reman 160A is $215 on the commercial side. Does not include $40 core.

 

[GON]

Goldman should fire that analyst.

The analyst is likely trying to make year end bonuses. Short the stock right before the press release, buy the stock back after the press release on AutoZone, and buy more and burn the retail shorts.

 

[D60]

Has @GMBoy closed his shop? Now that would cause AutoZone sales to tank

 

[Skippy722]

A reman 160A is $215 on the commercial side. Does not include $40 core.

Which is great, but doesn’t help me as I don’t have/can’t get a commercial account, nor know anyone who does.

 

[SammyChevelleTypeS3]

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.."

Funny. like they simply blow off the 90% of the country who live OUTSIDE NYC and drive everywhere. LoL

 

[D60]

Which is great, but doesn’t help me as I don’t have/can’t get a commercial account, nor know anyone who does.

Nope, it just illustrates how they don't much care about retail sales on some parts, AND why commercial ain't going away. If a shop can get a reman TODAY for $215 or a reman in 3-7 days for $195, there's no advantage to them, or the customer really.

Plus the shop would need to box the core, print a label and ship it back, or just hand it to the parts driver the next day when they show up with yet more parts.

For whatever reason, they've calculated they don't need your $ across the retail counter. I'm not saying it's right, but that's the way it is.

 

[4WD]

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.

Just like a convenience store making more on soft drinks than gasoline - gotta wonder what they make with car care products like leather wipes, waxes, tire dressings …
See lots of folks grab that stuff …

 

[CarlB]

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.

Unfortunately most people are on the forever car note game. They tell themselves it's cheaper than fixing existing car, alternatively these are people that don't have enough emergency fund to pay for repairs that exceed a single months note.

$1200 repair bill or $600 note? Many make the terrible decision to just trade it in.