Can Autozone Make Keys

Paul Gonzalez
• Thursday, 07 January, 2021
• 23 min read

The keys sold at your Autosome are well-suited for an array of car models. The prices for the blank keys range between $3 and $6, not including any sales tax.

(Source: www.eastcoastrapist.com)


Autosome also sells transponder as well as remote key fobs that range in price from $15 to $90. Additionally, you may still have to go to your dealership or visit your locksmith for programming of your new car key fob.

Autosome offers both an affordable and a convenient way for customers to buy quality and high security transponder keys. More than half of the vehicles on the road use transponder keys containing a computer chip accompanied by a security code.

In fact, Autosome sees customers who have lost their transponder keys on a regular basis. But at Autosome, there is no appointment needed to receive a quality and affordable transponder key.

The chain also offers keys for a variety of vehicles including Ford, GM, Toyota, Chrysler and more. Your key fob is something you shouldn’t overlook because you may not be able to enter your vehicle unless it works.

So, if you have a broken key fob in your hands, the first thing Autosome recommends, is for you to isolate the issue. The most common culprit behind the failure of an electric key fob is the battery inside.

(Source: www.autozone.com)

While this is an easy fix, you’ll have to of course get a ride to your local Autosome to get a new battery. So, maybe your vehicle is where the issue lies, causing your key fob not to work.

If you get nowhere by swapping out your battery in your key fob, there are some other steps you can take, to remedy the problem. You can also see if you can get a ride to a professional who can take a look at your fob and readjust the buttons so that they are back where they belong and work properly.

You don’t want to get angry and slam your key fob in a fit of anger. Depending on the model and make of your car, can cost as low as $50.

Many of us don’t keep an “emergency key fob replacement cash stash” in our homes. Many push-button ignition systems may also allow for you to insert the physical key to start the engine.

We took a look at the Autosome website to see what car key /key fob/remote products the chain sells. Consumers are able to buy the product as a quality replacement for modern car keys.

(Source: www.autozone.com)

The product features a key blade that is able to be cut at many car dealerships, lots of hardware stores and even by your locksmith. Then this Norman Keyless Remote Case may be the purchase you need to make.

Located on the Autosome website is this convenient and affordable solution for a broken or even a cracked key fob case. Located on the Autosome website is a quality remote transmitter replacement.

Not only do you receive a replacement for your keyless entry alarm remote control, but the item is a genuine OEM part, AND you also get free phone technical support with your purchase! Thankfully, Autosome has remote control batteries for sale.

A “FEE-FREE” junk car selling service that you’ll love, and more! Autosome and many of the other big box auto parts retailers do have car remotes and key fobs to sell.

The dealership has a huge showroom facility they must maintain, and a locksmith just has their small shop. If there are any tricks or difficulties that each car can present, they will be able to address them quicker than a dealership that doesn't come across them every day.

(Source: www.autozone.com)

The Keyless Shop in the automotive locksmith specializing in car remote and key fob programming. We have nearly every make and model car key fob in stock and can program it while you wait.

The Keyless Shop at Sears in Austin, TX specializes in programming car remote fobs. Bill Rhodes, the Company's Chairman, President and CEO, will be making a short presentation on the highlights of the quarter.

Forward-looking statements typically use words such as believe, anticipate, should, intend, plan, will, expect, estimate, project, position, strategy, seek, may, could and similar expressions. These are based on assumptions and assessments made by our management in light of experience and perception of historical trends, current conditions, expected future developments and other factors that we believe to be appropriate.

These forward-looking statements are subject to a number of risks and uncertainties, including, without limitation, product demand; energy prices; weather; competition; credit market conditions; cash flows; access to available and feasible financing; future stock repurchases; the impact of recessionary conditions; consumer debt levels; changes in laws or regulations; war and the prospect of war, including terrorist activity; inflation; the ability to hire, train and retain qualified employees; construction delays; the compromising of confidentiality, availability or integrity of information, including cyberattacks; historic rate sustainability; downgrade of our credit ratings; damages to our reputation; challenges in international markets; failure or interruption of our information technology systems; origin and raw material costs of suppliers; disruption in our supply chain due to public health epidemics or otherwise; impact of tariffs; anticipated impact of new accounting standards; and business interruptions. Forward-looking statements are not guarantees of future performance and actual results, developments and business decisions may differ from those contemplated by such forward-looking statements, and events described above and in the Risk Factors could materially and adversely affect our business.

Good morning, and thank you for joining us today for AutoZone's 2021 first quarter conference call. With me today are Bill Giles, Executive Vice President and Chief Financial Officer; Jamar Jackson, Chief Financial Officer-Elect; and Brian Campbell, Vice President, Treasurer, Investor Relations and Tax.

spiral cable repair guide fig guides centering models 1995
(Source: www.autozone.com)

If not, the press release, along with slides complementing our comments today are available on our website, WWW. Please click on Quarterly Earnings Conference Calls to see them.

Since our last earnings release in late September, much of the world's intention remains focused on COVID-19, including its current and future implications for communities, businesses and markets. From the start of the pandemic through this quarter, our team has had to deal with challenges unlike any we have seen in our Company's history.

While at the start of the pandemic our sales dipped, we performed quite well once economic stimulus was implemented in the US and Americans began to drive more. For this quarter ending in late November, we are proud to report 12.3% same-store sales, another historically strong performance.

Considering the meaningful volatility resulting from the pandemic and economic responses, we are sharing our same-store sales cadence for equal-week period of the quarter. The deceleration appears to be related to a combination of normal seasonality and how far away we work from the benefits of economic stimulus.

This quarter's traffic was far more beneficial to same-store sales than ticket growth by quite a wide margin. Our number one priority continues to be the health, safety and wellbeing of our customers and our Automakers.

Throughout the pandemic, we have continued to follow the myriad of national, state and local mandates and ordinances and have always kept close tabs of the CDC guidelines. We require mask entering our facilities, perform questionnaires of our team and take many other safeguards like enhanced cleaning protocols, providing mask, hand sanitizers and other PPE to our Automakers to ensure safe shopping and work environments.

Last quarter, we talked about the pressure our supply chain was experiencing to make sure we were in stock and replenishing the stores on a timely basis. I'm very happy to say, today we feel we've made significant progress in this area.

Our in-stocks are much improved and our supply chain in most of our vendor partners have done an exceptional job reacting to the unprecedented surge in volumes that have now lasted six-plus months. The progress has been significant, but at the end of the quarter, we had only closed about half of the gap from our depths to our normal levels of in-stock.

To provide a little more color on the drivers of our sales performance this quarter, I'll remind you that we were anxious to see what would happen as we got further away from the enhanced unemployment benefits. While our enhanced sales growth declined over the quarter to still historically high levels, we believe the noise around the election, the reemergence of COVID-19 in many areas and the beginnings of seasonal weather patterns hurt foot traffic, particularly in the last four-week period.

And I could not be more proud to say that based on the retail sales for customer segment data that we have, we continue to experience historically unprecedented share gains, historically unprecedented share gains. While we are thrilled to have these share gains today, our charge is to determine how we maintain them.

I'll remind you that typically in recessionary environments, our business is remarkably resilient. And if the economy enters a deep and protracted recessionary environment, we continue to believe our customers will focus more on maintaining their current vehicles.

These time periods have benefited our business in the past, retail in particular, as it has in the last three recessions. While I'll praise our entire organization from our stores to our distribution centers, from the US to Mexico to Brazil and all data and our store support teams, I always owe our thanks to our customers who continue to believe in our capabilities to help them with their automotive needs.

You embody everything it means to be an Automaker, and you deliver on our cultural and service promises every day. Our net income was $442 million, and our EPS was $18.61 a share, 30.1% above last year.

While average weekly sales per program decelerated from last quarter, that is normal as we change seasons. Moving forward, we expect our commercial business to show continued strength as we execute on our growth initiatives and gain additional share in this space.

While there are some geographical differences this quarter, there continue to be interesting trends across our merchandise categories, particularly in the retail business. Our sales for categories continue to be strong as we believe people have more time and many have more money.

Many parts of the economy are still operating at fractions of their normal capacity: movie theaters, vacation resorts, entertainment venues, hotels and the like. Some Americans have the luxury to, quote, work from home, eliminating their commute, and unfortunately, while vastly improved from the early days of the pandemic, unemployment is still twice the pre-pandemic rate.

At the same time, while our sales have increased in merchandise categories like brakes, rotors and even motor oil, they aren't growing as fast as the rest of the categories due to last year's mild winter and lower current miles driven. And we know from history that the muted brake and rotor growth is also still being impacted by last year's very mild winter.

However, we will continue to invest in growth initiatives in both our retail and commercial that position us well for the future. In addition, we continue to believe our products and services will be in high demand during more difficult economic times, and this resiliency gives us significant confidence about our prospects.

We remain focused on providing everyone with the support, encouragement and resources they need to live up to our pledge of always putting customers first. In particular, I would like to recognize the tremendous contributions of our store and distribution center Automakers and their leaders who have been there for our customers, external or internal, every day since the beginning of the pandemic.

I ask each of you listening to this call to stop for a moment and imagine yourself in a public environment five-plus days a week for the last nine months, helping customers while at the same time trying to keep yourself, your teammates, your customers and ultimately your own family safe from the virus. In the spring, we implemented something innovative and new for all eligible full and part-time hourly Automakers and ultimately for our store managers and DC advisors.

In essence, it amounted to two extra weeks of vacation to give them the flexibility to ensure their safety, deal with child care issues, care for a sick family member or most importantly, stay home, stay home if they were showing any symptoms. Many of them have used this benefit while a significant portion have saved it and will receive meaningful payouts should they choose next month, an $800 to $1,600 or more bonus for most of our hourly Automakers.

So two weeks ago, we announced our team that we would allow them to carry over any unused TO or be paid out in January at their election, that every single Automaker who has unused normal vacation would be allowed to carry it over six months past the normal deadline, and most importantly, that we would be extending all eligible full and part-time hourly Automakers, store managers and DC advisors in the US with another week of TO at the beginning of the new calendar year. And as I've told our Automakers on the Wednesday before Thanksgiving when I made the announcement, it's a large expense, but is more importantly a tremendous investment in them and their safety.

For the quarter, total auto parts sales, which includes our domestic, Mexico and Brazil stores, increased 13.1%. For the trailing four quarters ended, total sales for Autosome store were $1,960,000.

As you know, commercial sales is an important growth initiative for us, and we are investing in a disciplined way to create a faster growing business. Let me give a little more color on our success in commercial and the growth playbook as we move forward.

This past year, we believe we grew share and remain focused on repeating this for FY '21. Fundamentally, we believe that our share gains are underpinned by the investments we made in improving the quality of our parts offering, many in the Muralist brand, improvements in our parts coverage by model year and a commitment to providing exceptional service.

These core focus areas have enabled us to drive double-digit sales growth for the past two quarters and position us well in the marketplace. First, we continue to expand our inventory availability initiatives by adding Megalux locations.

This means a store can say, yes, we have it significantly more than when they are sourced from a hub that carries 40,000 to 50,000 SKUs. We recently implemented chain wide in the US technology that will significantly improve our delivery times and the accuracy of the commitments that we make to our customers.

Third, using our one team approach, we have further integrated our commercial business at our stores where we offer programs. This means that store management and the entire team is focused on driving sales and improving service to our commercial customers.

And fourth, we continue to invest in disciplined way in initiatives that make us more competitive in the marketplace and much easier to do business with. Now, Bill, gave a lot of color on our DIY business, which I won't repeat, but I would like to spend a moment on our integrated retail efforts.

This past quarter, we continued to see very strong growth in our buy online, pickup in store shopping channel. While our other two options, next day delivery and ship to home were also up nicely, our buy online, pickup at store offering continued its rapid growth.

Pickup at store grew faster than our ship to home option as customers continue to value interaction with our experienced in-store advisors. As a result of the devaluation, our total US dollar sales were negatively impacted.

While the macro environment has been challenging, we believe we are seeing signs of a turnaround with the Mexican economy. We remain committed to our store opening schedule in Mexico for the foreseeable future.

Like the US and Mexico, Brazil faced challenges with COVID-19, stay at home mandates and foreign exchange headwinds. We view the COVID-19 impact to be short term in nature for our Brazil stores as well.

And let me first say how delighted I am to join Autosome at this point in my career and the Company's rich history. It's been a pleasure working with you, and I'm so grateful for the opportunity to lead the world-class Finance & Store Development teams that you've built over the years.

I'm also fortunate that you're running through the tape, to use a sports analogy which has enabled me to spend valuable time in our stores and distribution centers and learn the business from the ground up. Your track record of building shareholder value as CFO of this company has been impressive.

Certainly, not many CFOs boast the kind of numbers that you put on the board during your tenure. About a third of the pressure is the result of one-time markdowns on COVID-related goods such as hand sanitizer where we saw a significant slowdown in sales velocity as we moved through the quarter.

As our transaction counts have been up materially the last two quarters, we simply have issued more $20 credits to customers. This has translated into higher sales and profits, but slightly lower margins.

Given the share gains we have seen as evidenced by the high-single-digit transaction growth that Bill Rhodes mentioned earlier, we are planning for this headwind on gross margins to remain in future quarters. The remainder of the deleverage was driven primarily by mix and some pricing investments we're making in select merchandise categories to improve our competitive positioning.

All the investments we are making suggest that we are growing our DIY and DIM businesses at roughly double the rate of the overall market or better, and we're committed to capturing our fair share and improving our competitive positioning in a disciplined way. Our primary focus will continue to be growing absolute gross profit dollars in our total auto parts segment.

We believe there will be long-lasting benefits from our decision to provide emergency time off for the heroic efforts undertaken by our Automakers during the pandemic. Our EBIT margin was 19.5%, up 160 basis points versus the prior year quarter.

The higher expenses related to the $1.25 billion bond issuance and the $750 million 364 day credit facility, both completed in last year's third quarter. Our adjusted debt level metric finished the quarter at 1.9 times EBIT DAR.

While in any given quarter we may increase or decrease our leverage metric based on debt and equity market conditions, we remain committed to both our investment grade rating and our capital allocation strategy, and long-term share repurchases are an important element of that strategy. Stock option exercises are unpredictable and as such they will affect our tax rate and ultimately our net income and EPS.

For the second quarter of fiscal year 2021, we suggest investors model us at approximately 23.5% before any assumption on credits due to stock option exercises. Because we cannot effectively predict this activity, we remain committed to reporting the stock option impact on the tax rate.

Our operating cash flow results were driven by the exceptionally strong earnings that Bill mentioned earlier and working capital. Capital expenditures for the quarter totaled $113 million and reflected the spending to open 41 net new stores this quarter, investments in existing stores, hubs and Pegasus and information technology investments.

Total inventory increased 3.7% over the same period last year, driven by new stores and improved product assortment. Now let me spend a few minutes on capital allocation and our share repurchase program.

We said that we intended to utilize our ongoing free cash flow to buy back stock and, based on our view of the future, begin methodically utilizing some excess cash we currently have on our balance sheet. As we said last quarter, if we have concerns about the near term, we will simply temporarily suspend repurchases again, but we feel comfortable with our ongoing strategy.

This past quarter, we spent $678 million on stock repurchases, representing 584,000 shares. We remain confident in our ability to drive long-term shareholder value by, first, investing in our growth initiatives, driving robust earnings and cash and returning excess cash to our shareholders.

I'll remind you that our business remains remarkably resilient through the cycles, and the investments we are making today in our products and services position us well in the near and long term. Let me give you just a few initial impressions of my short time here in the CFO chair.

We have a world-class leadership team with deep domain expertise and a passion for winning in the marketplace. I have experienced first-hand the dedication and heroic actions of our Automakers in the stores and distribution centers, and as a longtime customer, I know that they are the reason why we are delivering exceptional results.

These continue to be unique and abnormal times, and they require us to look at many things differently to manage our business day-to-day. I'm extraordinarily proud of our team across the board for their commitment to servicing our customers, the motoring public, but doing so in a very safe manner.

We are fortunate to have extraordinary people who are committed to servicing our customers and helping them get to work, go see their families or simply get back and forth to school. While it's impossible for us to know what the cadence of the new year sales will be, I want to be crystal clear.

We plan conservatively in order to manage our cost structure appropriately. While our domestic retail business continues to do very well, we understand trends will slow in the future.

While we understand these things, we also feel we are well positioned for continued future share gain opportunities across all the business segments we operate. Secondly, we must continuously challenge ourselves during these extraordinary times to position our Company for even greater future success.

Before we proceed to Q&A, I want to take the liberty to publicly thank two exceptional leaders. Over 37 years ago, Bill Hackney followed in his father's footsteps and joined this extraordinary enterprise.

And almost 15 years ago, Bill Giles traded home goods for auto parts, and boy, weren't we fortunate. How many CEOs have the privilege to host 59 consecutive earnings release calls with the same world-class CFO.

While we will miss both of them, as our Founder's father often said, quote, no individual builds a business. Both of these Automakers for life have embraced that mentality and built tremendous teams.

William C. Rhodes -- Chairman, President and Chief Executive Officer, Customer Satisfaction And I think, first, we're -- we're at the top of the heap in both the retail and commercial businesses with our public peers.

Regarding your specific question with WDS, clearly, during the worst of times back in Q3, we were in a very different position than some of our smaller competitors. Many of them closed or worked reduced hours, had less inventory and the like, and I think that that gave us a real opportunity to introduce ourselves and be there for certain customers that maybe we didn't have the same relationship before.

On the retail side of the business, again, I think we're performing at the highest level of our public peers. On the DIM, the commercial side, I guess the WDS historically had strong relationships, but might not have had inventory at a point in time.

I think we did it last quarter, but it was a nice message from Bill Rhodes. I think we've talked about investing in price a little more prominently in the last couple of quarters.

I mean, this is perhaps one of the most powerful free cash flow stories really in all industry. So we don't see a need today to do anything different in terms of leverage, and we also don't see a need today to do anything different in terms of moving off the center line that we have for this disciplined capital allocation strategy.

A lot of attention gets focused on our close-in competitors and rightfully so and they both outperform us on a sales per program basis and have for a long time. If you look back over the history of time, what our team has been able to do is really helped us, as you've noted, accelerate our growth significantly.

We've vastly improved our inventory assortments in every individual store, particularly as it relates to commercial-oriented vehicles. Now everybody else sees that as a real key part and a leverage point for us in the commercial business.

William C. Rhodes -- Chairman, President and Chief Executive Officer, Customer Satisfaction I think a lot of people thought our sales had gone down materially in September, and that wasn't true.

We also -- in this period of time, sales are driven up and down based upon weather patterns. How fast that happens, I don't know, but I do know we have an incredibly strong business that regardless will continue to outperform over the long term.

William C. Rhodes -- Chairman, President and Chief Executive Officer, Customer Satisfaction Bill Rhodes, in your prepared remarks you pointed out that during the last 30 years or so, the best -- the periods of the strongest growth for the industry have been in -- during times of recession.

William C. Rhodes -- Chairman, President and Chief Executive Officer, Customer Satisfaction There is a perception that this might be the beginning of a longer-term trend particularly if Autosome chooses to use some of the flexibility it has on the SGA side to go and reinvest that into the price or other gross margin driving initiatives.

William T. Giles -- Chief Financial Officer and Executive Vice President-Finance and Information Technology, Customer I would just jump in and say that, look, from a growth perspective, it's down two quarters in a row, but frankly, a big chunk of this one was one-time.

And the only thing I'd add is, you talked a little about operating expenses and wage pressure you saw this last quarter, and our teams did an outstanding job of really driving productivity. And we won the productivity play with intensity inside the Company, and we've been able to manage our labor costs sort of in line with volumes.

But quite frankly, we're committed to investing in our Automakers regardless of what happens in the regulatory environment. And quite frankly, that's one of the reasons why we're so good at driving productivity inside the Company.

William C. Rhodes -- Chairman, President and Chief Executive Officer, Customer Satisfaction I would also tell you that another thing that's muting the commercial business is the lack of winter that we had last year.

But again, we're having this opportunity to introduce ourselves particularly to some of these up and down the street accounts at a different level than we have in the past. I don't believe that people are, quote, returning to work, and we don't see it yet in a significant mile driven improvement.

It improved vastly in the summer, but then it's kind of been fairly steady over recent months we've seen. They're doing manual labor, they're providing service economy kind of jobs.

And so I don't think that our core customer has really seen a significant change in their driving behaviors. Just because you've made so many investments in the commercial business, and I agree that you guys are very good in DIY, right.

William C. Rhodes -- Chairman, President and Chief Executive Officer, Customer Satisfaction I'll just remind you, when we got serious about the commercial business, it was 2008, we were doing about $750 million annually at that point in time.

And as we're launching many of these new initiatives, that are only going to amplify our service advantage as we've now shored up our inventory assortments, we've built this brand, and we've got somebody up telling our story and our sales force, we feel pretty good about the future. But we've had a pretty strong trajectory over the last 12 years of growing that business much faster than the industry has grown.

William C. Rhodes -- Chairman, President and Chief Executive Officer, Customer Satisfaction All right, before we conclude the call, I want to take a moment to reiterate, we believe our industry is strong and our business model is solid.

We have an exciting plan that should help us succeed this fiscal year, but I want to stress this is a marathon and not a sprint. And we'd like to wish our Automakers and everyone on the call a very happy and most important, a healthy, holiday season and a prosperous New Year.

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