Swot Analysis : Autozone 's Gross Profit Essay

950 Words 4 Pages
In 2015, fourth quarter, AutoZone’s gross profit, as a percentage of sales, was 52.5%, which was slightly greater than prior year (AutoZone, 2016). Why did they sales reflect an improvement? Primarily, the increase was due to higher merchandise margins. However, this increase was offset 37 basis points because of higher supply chain costs associated with current year inventory initiatives (AutoZone, 2016). Additionally, operating expense reflected an increase due to higher payroll of 21 basis points and the impact of their integrated marketing program of 16 basis points (AutoZone, 2016).
One area that AutoZone has been passionate about is providing their shareholders a profitable return. Therefore, under their share repurchase program, AutoZone repurchased thousands of shares of its common stock last year leaving the organization $698 million remaining under its current share repurchase authorization (AutoZone, 2016).
Earlier, AutoZone’s inventory initiative was mentioned. Thus, their inventory increased due to product placement and new locations during the last fiscal year. Net inventory, defined as merchandise inventories less accounts payable, on a per location basis was a negative $66 thousand versus negative $76 thousand last year (AutoZone, 2016). Clearly, the inventory initiative is returning favorable results.
A SWOT analysis evaluates an organization’s strengths, weaknesses, opportunities, and threats to help them decide which type of strategy they will…

Related Documents