AutoZone

In nineteen ninety-eight, AutoZone faced a puzzle. The stock stalled despite solid performance. Wall Street couldn't see forward. The business was mature and steady. Management asked: shareholders could deploy capital elsewhere more productively. Why not return it. AutoZone looked at its balance sheet and saw not a problem, but an opportunity waiting to be discovered. The company began massive buybacks funded by steady cash flows from auto parts retail with gross margins above forty percent. Over two decades, AutoZone repurchased more than sixty percent of shares. Fewer shares existed, yet total earnings barely grew. But earnings per share climbed relentlessly. Same profit divided by far fewer shares produced spectacular gains.