A 350% return over ten years. No flashy tech breakout. No explosive revenue.
Everyone wants to get in early on the next market darling. But ignoring constant noise means knowing what to look for below the glossy media highlights. What about continuing losses? Relentless dilution?
It’s important not to overlook the reliable workhorses. That boring retailer, delivering modest sales growth every year, might just be hiding some clever financial engineering if you look a little deeper.
Take AutoZone (AZO). Merely selling car parts in a highly fragmented industry.
Beyond the Storefront
On paper? AutoZone presents a standard retail operation.
Revenue growth is decent - single to low double-digits every year. Over the last decade, total revenue has consistently risen from $10.6 billion to $18.9 billion.
Net income has also been commendable. More than doubling from $1.2 billion in 2016 to $2.5 billion in 2025.
That is solid business, but it isn't the kind of hyper-growth that usually dominates the news cycle. However, the income statement is only half the story.
Alongside that steady retail growth, AutoZone has been systematically creating outsized value for shareholders via the balance sheet.
A Shrinking Pie
When a mature retailer generates reliable cash flow, the traditional move is to return it to shareholders via a dividend.
AutoZone doesn't pay one. Instead, it funnels funds directly into buying its own stock. By reducing the total number of shares outstanding, every remaining share claims a larger piece of the company's profits.
The scale of AutoZone's buyback efforts is enormous. In the last three years, it has repurchased more than $8.4 billion in stock.
Since the inception of its repurchase program in 1998, it has spent a staggering $40.7 billion buying back its own shares.
The company isn’t stopping, either. In its latest quarterly results, it still had nearly $1.4 billion remaining under its current share repurchase authorization.
This relentless buying has dramatically shrunk the share pool. In 2016, AutoZone had 28.9 million shares outstanding. As of February 2026, that number dropped to just 16.5 million shares.
They have eliminated 40% of the company's shares in the last ten years.
AutoZone isn't shy about using leverage to accelerate this strategy. Long-term debt has steadily climbed from $4.9 billion to $8.8 billion alongside these buybacks.
But unlike a cash-burning company using debt just to keep the lights on, AutoZone has a strong core business. One that is currently generating around $3 billion in cash each year.
It’s a clever and deliberate optimization of corporate finance. Swapping the high expected returns of equity for the cheaper cost of debt.
Because the share count has plummeted, earnings per share (EPS) have skyrocketed.
In 2016, AutoZone reported a diluted EPS of $40.70. By the end of 2025, that figure had surged to $144.87.
While total net income doubled over that time frame, earnings per share more than tripled.
This is how an everyday retailer delivers a 350% return over ten years. AutoZone’s share price has swelled from $750 in 2016 to around $3,350 today.
A great business doesn’t need to disrupt an industry. It just needs to generate solid cash flow and allocate it efficiently.
While the media chases the next big disruption, AutoZone just keeps selling car parts and retiring its own stock.
For investors focused on wealth preservation, this is the kind of boring reality that pays off.
