Since the dawn of the financial markets, investors have been on a mythical quest for a stock that can weather any storm, delivering solid returns in boom times and busts.
If such a stock exists, you won't find it in some high-flying tech portfolio. The ultimate recession-resistant stock might be this blue-collar overachiever that keeps grinding out strong results in good times, bad times, and every pit stop in between.
"Get in the zone"
You don't have to be a car enthusiast to hear the phrase "get in the zone" and complete it in your head. AutoZone (AZO +1.44%) -- a leading national auto parts retailer -- enjoys strong brand recognition thanks partly to its catchy, ubiquitous jingle. But among automotive repair technicians and DIYers, AutoZone is best-known as a trusted source of replacement parts and advice.
J.R. "Pitt" Hyde III founded AutoZone in 1979, and his business model was simple: Provide excellent customer service in clean, well-organized auto parts stores. From its humble beginnings as a lone "Auto Shack" outlet in Forrest City, Arkansas, AutoZone today has 6,500 locations across the United States and a growing store count in Mexico and Brazil.
The retailer's fiscal 2024 -- which ended Aug. 31, 2024 -- provided typical, steady-as-she-goes AutoZone performance: Year-over-year net sales were up nearly 6% to $18.5 billion, while earnings per share jumped 13% to $149.55.
Fast-forward to the third quarter of fiscal 2025 (which ended May 10), and AutoZone just keeps humming along. Net sales were up 5.4% to $4.5 billion, while domestic same-store sales -- a key metric for retailers -- were up 5%.
While earnings per share in the quarter dipped 3.6% from the year-ago period, the decline hasn't been due to weakening demand or some operational misstep. Instead, it reflects AutoZone's aggressive investments in growth -- expanding distribution capacity, opening new stores, and scaling its commercial and international businesses.
NYSE: AZO
Key Data Points
Much of AutoZone's investments have been aimed squarely at capturing more market share in the commercial, or DIFM (do-it-for-me), space. The company has been ramping up delivery capabilities, adding dedicated sales staff, and opening more "mega-hub" stores to support professional repair shops with faster, broader parts availability.
While these investments have put some pressure on margins, AutoZone's leadership has made it clear they're playing the long game -- and the payoff could be substantial.
A market that doesn't stall
As economic worries continue to disquiet investors, AutoZone shines as a steady leader in one of the most recession-resistant corners of the retail world: the automotive aftermarket.
Valued at more than $2.3 trillion globally, the automotive aftermarket includes all automotive goods and services purchased after you buy a vehicle. That could run the gamut from oil and a new set of spark plugs to neon ground lights, a fuzzy steering wheel cover, and headlight eyelashes that flutter in the wind (because why not?).
Fuzzy steering wheel covers aside, the automotive aftermarket benefits from a concept known as inelastic demand. That means people tend to buy certain goods and services no matter what the broader economy is doing.
Image source: Getty Images.
If your brakes are shot or your battery is dead -- and you're a do-it-yourselfer -- you're not waiting for the Fed to lower interest rates. You're headed straight to an auto parts supplier like AutoZone. While some purchases (like that 8-foot spoiler for your Toyota Camry) can be deferred, most aftermarket spending is tied to keeping vehicles safely on the road. That makes AutoZone's core business remarkably resilient, even when consumer confidence is running on fumes. And if people are more worried about the economy or suffering a job loss or high inflation, they might be keeping their cars longer, and thus requiring more maintenance that they do themselves or hire a professional to accomplish.
Key indicators for the aftermarket are trending in AutoZone's favor. New data from S&P Global Mobility shows that the average age of vehicles on U.S. roads has climbed to a record 12.8 years in 2025. With 299 million vehicles on the road -- an all-time high -- America's fleet of cars is massive and aging, which is right in the aftermarket's sweet spot.
The takeaway for investors? AutoZone is well-positioned to benefit from steady, structural demand regardless of what's happening in the broader economy.
A buyback machine
In addition to its recession-resistant business, there's another reason AutoZone merits consideration by investors: its relentless share buyback program. For decades, the company has been scooping up its own stock like it's on the closeout rack.
Since 1998, AutoZone has repurchased more than $38 billion worth of its own shares. Over the past decade, AutoZone has cut its shares outstanding nearly in half, meaning profits are divided among a smaller group, and it's been buying back shares in the best of times and the worst of times.
As of its latest quarter, the company still had $1.1 billion left in its current buyback authorization.
AZO Shares Outstanding data by YCharts
Is AutoZone stock a buy?
Trading at a forward price-to-earning ratio around 25 -- well below competitor O'Reilly Auto Parts' 31 -- AutoZone looks reasonably valued, especially considering its long runway for growth in the DIFM space. The Auto Care Association estimates that the U.S. automotive aftermarket will be a $617 billion industry by 2027, and AutoZone is laser-focused on growing its 5% DIFM market share. The company has a huge opportunity.
With a track record of consistent financial performance, a steadily shrinking share count, and the benefit of inelastic demand, AutoZone is built to last, and built to outperform in just about any environment.
