AutoZone buying back $500M in common stock

AutoZone Inc. is buying back $500 million of its common stock, the company announced Sept. 24.

The repurchase is part of an aggressive repurchase program by the Memphis-based auto parts retailer that now totals $6.9 billion in share repurchases since 1998.

Repurchasing stock is a common strategy for well-capitalized companies and is a way to boost the company’s earnings per share by reducing the number of outstanding shares.

The company also announced the election of Luis P. Nieto to the company’s board of directors. Nieto is president of consumer foods for ConAgra Foods Inc., one of the largest packaged foods companies in North America.

Also, board members N. Gerry House and Charles M. Elson have said they will not stand for re-election at the company's annual stockholders meeting on Dec. 17.

Source: Aftermarket Business

S&P cuts AutoZone corporate credit rating

Standard & Poor's lowers AutoZone corporate credit rating to "BBB" CHICAGO (AP) -- Standard & Poor's Ratings Services on Thursday cut its investment grade corporate credit rating for AutoZone Inc. to "BBB" from "BBB+," following the auto parts retailer's announcement that it boosted its share buyback program.

The ratings service also affirmed the company's "A-2" short-term and commercial paper ratings. The outlook is stable.

"The rating reflects AutoZone's leading position in the stable but highly competitive retail automobile parts aftermarket along with its consistent operating performance and strong profitability measures," Jerry Phelan, an S&P credit analyst, said in a statement.

But the rating also reflects AutoZone's tendency toward aggressive share repurchase activity and expectations for continued flat-to-negative same-store sales resulting from a weak economy, S&P said.

Same-store sales, or sales in stores open at least a year, is an important measure of retail health because it measures growth at existing stores, rather than growth from expansion.

Source: Yahoo News