With nearly 4,700 stores spread throughout the U.S. and Mexico, AutoZone (AZO - Get Report) weighs in as the largest auto parts retailer in the world. That means that the firm is able to capture a meaningful chunk of the $200 billion auto parts market -- a chunk that's been growing over the past five years. That growth has come in spite of (or maybe because of) the recessionary headwinds that have challenged other retail peers over the same period.
AutoZone's business is primed to do well in a recessionary environment, however. When consumers don't have the cash to make new car purchases, they opt to hold onto their current vehicles longer, and the added maintenance costs go to retailers such as AutoZone.The firm's customer base isn't relegated to consumers -- AutoZone also has a commercial parts business, which means that the company generates revenues whether owners of the aging North American auto fleet are do-it-yourselfers or opt to visit the local garage. Not surprisingly, then, AutoZone has done better than most stocks in 2011. Shares are up nearly 6% on the year, besting the S&P 500 by double digits. With expansion into higher-growth markets (such as Mexico) well underway, this firm should continue to see positive growth in 2011. AutoZone's edge over the S&P could have a lot further to go this year.