S&P affirms AutoZone

Standard & Poor's said it affirmed AutoZone Inc.'s BBB+ corporate credit rating and revised the outlook to negative from stable.

The outlook change reflects the company's weaker credit metrics and more aggressive financial policy, the agency said.

The ratings reflect the company's leading position in the stable but highly competitive retail automobile parts aftermarket, consistent operating performance and strong profitability measures, according to S&P.

These strengths are somewhat tempered by management's historically aggressive share repurchases and flat same-store sales growth over the past four years, the agency said.

The company has historically identified a leverage target of a total debt-to-EBITDAR ratio of 2.1 times. At the end of the first quarter ended Nov. 17, the issuer's lease-adjusted debt-to-EBITDA ratio had grown to 2.3 times, which S&P said is beyond its comfort level.

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