AutoZone (NYSE:AZO) is about to release earnings. Ponder this Bear Case Scenario:
Rival competitors have been aggressively expanding square footage and have eroded much of AutoZones competitive advantage of scale.
Continued expansion by AutoZone and competition will create excess capacity with poor economics and cut throat pricing.
Competitors are rapidly adopting many of AutoZones best practices; eroding the competitive advantage.
George Gutowski writes from a caveat emptor perspective.