Thematic Exposure -- 7/10

US automotive aftermarket parts retail -- structurally durable, recession-resilient, driven by aging US vehicle fleet (avg ~12.8 yrs). AZO is #1 DIY auto-parts retailer (~32% of visits) in a 3-player chain oligopoly (AZO, O'Reilly, Advance). Oligopoly gate PASS on DIY. Held from 8-10 because theme grows only mid-single-digit and AZO is #2 in commercial/DIFM (its fastest-growing segment) in a fragmented market. Weight: 35%

DIY Retail -- #1 (~32% Share)

Clear Leader -- 3-Player Chain Oligopoly -- Store Density Moat

AutoZone captures ~32% of US auto-parts retail visits, the clear #1 ahead of O'Reilly (~18%). The chain-retail channel is effectively a 3-player oligopoly. Moat is local store density (~6,800 domestic stores), parts availability, and same-day delivery capability that online-only players cannot match.

DIY Share

~32%

#1 by foot traffic

Domestic Stores

6,766

Store density moat

Theme TAM

~$100B+

DIY slice of ~$230B aftermarket

Total SSS

+5.5%

FY26 Q3

Commercial/DIFM -- #2, The Growth Engine

Low-Double-Digit Growth -- But Fragmented Market -- #2 Behind O'Reilly

Commercial/DIFM (~29% of revenue) growing +10.4% YoY -- the growth engine. AZO has only ~5% of a fragmented $130B DIFM market. The mega-hub strategy (156 today, target ~300) is the vehicle for share gains. But O'Reilly is #1, and the market has NAPA/GPC plus many independents -- this is not an oligopoly.

Metric	Value	YoY Growth	Detail
Q3 FY26 Domestic Commercial	$1,403M	+10.4%	~29% of total revenue
Commercial Program Stores	6,356	vs. 6,011 a year ago	Penetration accelerating

Data sourced from Daloopa.

International (Mexico + Brazil)

~10% of revenue. Leading branded chain in Mexico; emerging in Brazil. Fastest unit growth (~365 store openings FY26 vs 305 FY25). Long runway but soft recent comps on macro.

Segment Mix (FY26 Q3)

Segment	Mix	Share / Position	Growth
DIY Domestic	~61%	~32% share (#1)	Low-single-digit
Commercial/DIFM	~29%	~5% share (#2)	+10.4% YoY
International	~10%	Leading chain in Mexico	Emerging

Competitive Moat

Scale-driven cost/availability, ~6,800-store density, mega-hub model. Non-discretionary demand tied to aging fleet. Price-setter (passes through tariff inflation). Fleet replacement by EVs is a 20+ year risk.

Oligopoly Gate: PASS

PASS. >30% in DIY (largest segment). 3-player chain oligopoly.

Data sourced from Daloopa, GMInsights, Mordor Intelligence.