1 "Safe Stock" That Will Thrive No Matter What Happens With Tariffs

Core Viewpoint - The current market environment is highly uncertain due to President Trump's tariff policies, making it difficult for investors to predict short-term market movements [1][2]. Company Overview: AutoZone - AutoZone is identified as a strong investment option due to its historical outperformance in various market conditions, particularly during bear markets [3][4]. - The company operates over 7,000 stores, primarily in the U.S., with a significant portion of sales (80%) coming from walk-in customers [6]. Business Model and Advantages - AutoZone benefits from a countercyclical business model, as demand for aftermarket auto parts typically increases during economic downturns when consumers delay purchasing new vehicles [5]. - The company has a wide product range, with most stores carrying 20,000 to 25,000 SKUs, and larger hub stores carrying up to 110,000 SKUs, enhancing its operational efficiency [7]. Financial Performance and Strategy - AutoZone has reduced its shares outstanding by about 50% over the last decade through consistent share buybacks, contributing to its stock outperformance [8]. - The company is confident in maintaining its margin profile despite potential tariff impacts, as most of its products are necessary and not discretionary [10]. Tariff Exposure and Management - While AutoZone is exposed to tariffs, management believes it can pass on costs to consumers due to the inelastic nature of its product offerings [9][10]. - The company's operational success and countercyclical nature position it well for growth, regardless of tariff developments [10].