Equity17SeptemberReadingBetweentheEquity17SeptemberReadingBetweentheAugust:AutoPartLatestmacroeconomicdatapoints:InJune,U.S.VehicleMilesofTravelincreased0.3%y/yto281.4millionmiles.TheBureauofEconomicAnalysisstatedthatinAugust,salesdecreased(0.3)%comparedtoJuly.U.S.RetailSalesbyU.S.CensusNAICScodeshowsthatonanunadjustedbasis,June2018automotiveparts,accessories,andtirestoresalesdecreased(0.23)%to$7.83billion.Newsworthyhighlights:WewantedtohighlightfromBarclaysUSAuto&AutoPartsresearchonanOutlineofUS–Mexico(9/6/2018),asthetradedealmayappearforAZO.AsurveybyAftermarketNews(RepairShopMarketingSurvey9/12/18)showstheimportanceofusingonlinechannels,with48%ofshopownerssayingonlineprovideshighestROI.Lastly,wewantedtohighlightcommentaryfromvariousaftermarketautopartretailsuppliersregardingplanstomitigatetariffimpacts.INDUSTRYU.S.RetailU.S.RetailBroadlines/HardlinesMatthewMcClintock,CPA,+1212526BCI,USJordana+1212526BCI,US+1212526BCI,USWeatherupdates:InAugust,mostregionswerewarmerthanlastyear,withtheNortheast,Central,EastNorthCentralallmorethan5%warmer,withmixedprecipitationthroughoutthecountry.Northeast:45.4%moreprecipitationand7.5%warmertemperatures;Southeast:5.3%moreprecipitationand0.8%coolertemperatures;Central:37.5%moreprecipitationand5.0%warmertemperatures;EastNorthCentral:9.8%moreprecipitationand6.1%warmertemperatures;WestNorthCentral:20.9%lessprecipitationand1.2%warmertemperatures;South:47.8%lessprecipitationand2.8%warmertemperatures;West:68.3%lessprecipitationand1.1%coolertemperatures;Northwest:70.8%moreprecipitationand3.7%coldertemperatures;Southwest:14.3%lessprecipitationand2.2%warmertemperatures.Promos(12/14/17),wehavetrackedthenumberofpromotionsspecificallyinAugust.Usingadigitallibraryofinternetsites,wehavebeenabletotrackeachuniquewebsite.Mostnotably,basedonourchecks,AZOstoppeddiscountingonitswebsiteinFebruary,butreinstatedpromotionsinlateAugust,suchas20%off$100+shiptohomeorders.WealsonotefromORLY’sinvestordaythatORLYmaybegintestingvariouspromotionalcadenceonitswebsiteinthefuture.Trading:TheautopartretailershaveoutperformedtheS&Pthismonth,gaininganaverageof12.2%MTDandtheS&Pup3.6%inAugust.AAPwasthebiggestgainerinJuly,withthestockup17.0%MTD.ShortinterestoverthemonthofAugusthasdecreasedfortheentireautopartretailgroup,withshortinterestinAAPdecliningthemost.ConsensusFY18numbersforAAPhaschangedthegreatest,ascompstoresalesestimatesincreased110bpsto1.2%.ORLY’sFY18EPSconsensusestimatesincreased2.4%to$15.91.BarclaysCapitalInc.and/oroneofitsaffiliatesdoesandseekstodobusinesswithfirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.PLEASESEEANALYSTCERTIFICATION(S)ANDIMPORTANTDISCLOSURESBEGINNINGONPAGE每日免每日免費獲（增值服務關注公回復：研究報加入“起點財經”微信Barclays|Barclays|ReadingBetweentheCalendarofUpcomingAutoPartRelatedEvents–August MostRecentMacroEconomic Miles LightVehicleRetailSales CensusSalesbyNAICS Gas CPI-U:Motor&OilFuel InsightsonAutoParts HighlightsfromBarclays LateralsfromRelated Weather Trading Stock Short Appendix:LessFrequentlyUpdatedData CarsinSweetSpot(VehicleSales/Total LicensedDriversinthe 17September2Barclays|ReadingBetweenthetoOctober‘18Source:BarclaysResearch,CompanyReports,USEconomicIndicator17September3 Barclays|ReadingBetweenthetoOctober‘18Source:BarclaysResearch,CompanyReports,USEconomicIndicator17September3 PPIatCPI2pmUSTENatMorgan8:30amRetail10amU/MConsumerat10amAZO4Q18at10amFOMCMeetingConsumerConfidenceat10amat2pmGDPat8:30am3rdat8:30amPersonalincome&OCTOBER2345PMVehiclereportatEmploymentreportat89BondMarketPPIatCPIatUSbudgetatU/MConsumerBarclays|ReadingBetweentheMostRecentMacroEconomicMilesInJune,U.S.VehicleMilesofBarclays|ReadingBetweentheMostRecentMacroEconomicMilesInJune,U.S.VehicleMilesofTravelincreased0.3%y/yto281.4millionmiles.Incomparison,milesdrivenwasup0.8%y/yinMay.Sequentially,milesdrivendecreased(1.7)%.Dataarepublishedonatwo-monthlagfromtheU.S.FIGUREY/Y%-Source:U.S.DepartmentofTransportation,FederalReserveEconomicData,HaverAnalytics,BarclaysFIGURETrailing12-MonthTotalVehiclesMilesTraveled,MillionsofSource:U.S.DepartmentofTransportation,FederalReserveEconomicData,Barclays17September4Feb-Dec-Feb-Barclays|ReadingBetweentheLightVehicleRetailSalesInAugust,vehicleretailsalesincreased0.8%y/yBarclays|ReadingBetweentheLightVehicleRetailSalesInAugust,vehicleretailsalesincreased0.8%y/yto16.7billion.Sequentially,vehicleretailsalesdecreased(0.3)%comparedtoJuly.TheBureauofEconomicAnalysispublishesseasonallyadjustedlightvehicleretailsalesatthebeginningofeachnewmonth.FIGUREUnits8642016.7Source:BureauofEconomicAnalysis,HaverAnalytics,BarclaysFIGUREY/Y%Source:BureauofEconomicAnalysis,HaverAnalytics,Barclays17September5Apr-Dec-Apr-Dec-Barclays|ReadingBetweentheCensusSalesbyNAICSTheU.S.CensusbreaksdownmonthlyretailsalesBarclays|ReadingBetweentheCensusSalesbyNAICSTheU.S.CensusbreaksdownmonthlyretailsalesbyspecificNAICScodes;wespecificallylookatcode4413,whichisautomotiveparts,accessoriesandtirestores.Onanunadjustedbasis,June2018automotiveparts,accessories,andtirestoresalesdecreased(0.23)%to2018automotiveparts,accessories,andtirestoresalesincreased1.5%to$7.52billioncomparedto$7.41billionduringJunetheprioryear.WenotethattheU.S.CensusBureaudoesnotgiveadvanceretailsalesdataforthespecificNAICScode4413.FIGUREUnadjustedU.S.CensusRetailSales–Autoparts,accessoriesstores(MillionsMillionsSource:U.S.CensusBureau,BarclaysFIGUREUnadjustedU.S.CensusRetailSalesAutoparts,accessoriesstores–Y/YPercentY/Y%Source:U.S.CensusBureau,Barclays17September6Barclays|ReadingBetweentheFIGUREAdjustedU.S.CensusRetailSales-Autoparts,Barclays|ReadingBetweentheFIGUREAdjustedU.S.CensusRetailSales-Autoparts,accessoriesstores(MillionsMillionsSource:U.S.CensusBureau,BarclaysFIGUREAdjustedU.S.CensusRetailSalesAutoparts,accessoriesstores-Y/YPercentSource:U.S.CensusBureau,Barclays17September7Barclays|ReadingBetweentheGasAveragepriceofregulargasforthesecondweekofSeptember(9/10)was$2.84,comparedto$2.66lastyear.Mid-grade,PremiumandDieselgaspriceshavealsorisensinceBarclays|ReadingBetweentheGasAveragepriceofregulargasforthesecondweekofSeptember(9/10)was$2.84,comparedto$2.66lastyear.Mid-grade,PremiumandDieselgaspriceshavealsorisensincethesameoftrendasallregular,mid,premiumanddieselgaspricesareupY/Y;wenoteinSeptember2017hurricaneHarveyresultedinashorttermspikeingasprices,soY/YpercentageincreasesarenotassevereinSeptember2018asithasbeeninothermonthsthroughoutlastyear.AAAupdatesthisdatadailyandtheU.S.EnergyInformationAdministrationupdatesthisdataweekly;thenextreleasedatewillbeonSeptember17.FIGUREAAAGasPriceTracker–Y/YPercentChangeinPricey/y%Source:AAA,BarclaysFIGUREGasPriceTracker5Years–RegularSource:U.S.EnergyInformationAdministration,Barclays17September8Barclays|ReadingBetweentheCPI-U:Motor&OilFuelBarclays|ReadingBetweentheCPI-U:Motor&OilFuelmotorfuelindexisacomponentoftheprivatetransportationindex.FIGURECPI-U:MotorFuel(y/ypercentageSource:BureauofLaborStatistics,HaverAnalytics,BarclaysAccordingtothesecondestimatereleasedbytheBureauofEconomicAnalysis,realGDPincreased4.2%in2Q18.Thegrowthratewas0.1%morethantheadvanceestimatereleaseinJuly.TheincreaseinGDPreflectspositivecontributionsfrompersonalconsumptionexpenditures,exports,nonresidentialfixedinvestment,federalandgovernmentspending,partiallyoffsetbyprivateinventoryinvestmentandresidentialfixedinvestments.Importsincreasedin2Q18aswell.Inthefirstquarter,realGDPincreased2.2%.Thenextestimatefor2Q18GDPwillbereleasedonSeptember27,2018.FIGURE%ChangeinGDPRealSource:HaverAnalytics,BureauofEconomic17September9JulOctJanAprJulJanAprJulJanAprJulJanAprJulJanAprJulBarclays|ReadingBetweenBarclays|ReadingBetweentheFIGUREUnitedStatesEconomic17SeptemberBarclays|ReadingBetweentheInAugust,~201,000newjobswerecreated,andtheunemploymentrateremainedunchangedat3.9%.TheBureauofLaborStatisticsreportsthisBarclays|ReadingBetweentheInAugust,~201,000newjobswerecreated,andtheunemploymentrateremainedunchangedat3.9%.TheBureauofLaborStatisticsreportsthisstatisticatthebeginningofeverymonthandSeptemberunemploymentfigureswillbereleasedonOctober5,2018.FIGUREUnemploymentRate(%)Source:BureauofLaborStatistics,BarclaysInAugust,ADPnonfarmprivatepayrollincreasedby163,000jobs.InJuly,ADPnonfarmprivatepayrollincreasedby219,000jobs.FIGUREADPNonfarmPrivatePayrollEmploymentMonthlyChange(m/m%Source:BureauofLaborStatistics,HaverAnalytics,Barclays17SeptemberBarclays|ReadingBetweentheNewsInsightsonBarclays|ReadingBetweentheNewsInsightsonAutoPartsSeptember10,2018–WherewillPerformanceShopsbein2038-Studyshowshowevolvingtechnologywillimpactperformanceshopsoverthenext20years.September12,2018-AMN2018NationalIndependentAutoRepairShopMarketingSurveystudyshowsthegrowingimportanceofusingonlinechannelswith48%ofshopownerssayingonline(website,reviewsandonlinemarketing)providethebestROIforattractingnewcustomers.Theincreasedimportanceofonlinechannelsisseenbyshopownersspendingmostoftheirmarketingbudgetsononlinesearch.Tobringbacktheseacquiredcustomers24%ofshopownersutilizeloyaltyandreferralprogramsaswellas22%usingonlinesearch.HighlightsfromBarclaysSeptember12,2018–USRetailBroadlines/Hardlines:4Q18AZOSeptember6,2018–USAutos&AutoParts:OutlineofUS–Mexico:tradedealappearsAugust22,2018-USAutos&AutoParts:Rentals:BeyondtheDataAugust6,2018–USAutos&AutoParts:AmericanAxle&Mfg:FinePrint,lookingforwardtothenextcatalystLateralsfromRelatedSeptember11,2018-GenuinePartsCompany(GPC)willnolongermergewithEssendant.OnApril12,thecompanyannounceditwouldcombineSPRichardsandEssendant.However,thecompanynoteditbelievesnowSPRichardsremainsstrongandthereissignificantopportunityforthatbusinesstogrowthroughotherchannels.17SeptemberBarclays|ReadingBetweentheBarclays|ReadingBetweentheWeatherNowthatthesummermonthsareuponus,itisimportantthatwecontinuetotrackextremetemperaturesaswellastotalprecipitation.Asimportantasfreezingcoldandsnowywinterwastothefirsthalfoftheyear,hotanddrysummermonthsareequallyasimportant.HotsummersshouldresultinstrengthinmaintenanceandACrelatedcategories.InAugust,mostregionswerewarmerthanlastyear,withtheNortheast,Central,EastNorthCentralallmorethan5%warmer.TheWestandNorthwestweretheonlyregionsthatdidnotexperienceanincreaseinaveragetemperaturesforthemonthofAugust.Precipitationwasmixedthroughoutthecountry,withtheNortheast,CentralandNorthwestexperiencingsubstantiallymoreprecipitation,buttheWest,SouthandWestNorthCentralallexperiencedsubstantiallylessprecipitation.Northeast:45.4%moreprecipitationand7.5%warmertemperatures;Southeast:5.3%moreprecipitationand0.8%coolertemperatures;Central:37.5%moreprecipitationand5.0%warmertemperatures;EastNorthCentral:9.8%moreprecipitationand6.1%warmertemperatures;WestNorthCentral:20.9%lessprecipitationand1.2%warmertemperatures;South:47.8%lessprecipitationand2.8%warmertemperatures;West:68.3%lessprecipitationand1.1%coolertemperatures;Northwest:70.8%moreprecipitationand3.7%coldertemperatures;Southwest:14.3%lessprecipitationand2.2%warmertemperatures.Thedelayofspringandprolongedcoldandwetweatherdidhaveanegativeimpactonseasonalproducts,ascalledoutbyAAPandAZOonrecentearningscallsthispastmonth.AAPnotedthatwhilethefirst11weeksofthequarterwerepositive,thelastfiveweekswerenegativelyimpactedbythedelayofspringweatherintheNorthernmarkets.Fromacategoryperspective,batteriesandlightingshowedstrength,butchemicalsandaccessoriesweredownMSDduetotheweather.Thecompanynotedastrongfirstweekof2Qwhenspring-likeweatherdidarrive,andremainsbullishontop-linegrowth.Similarly,AZOnotedaverycoldandwetspringinMarchandApril,andamoreseasonallynormaldryandwarmlasttwoweeksofthequarter.Duetothepredominatelywetandcoldweather,wiperbladeandantifreezecategoriesledwhilemaintenancecategoriesdidnotperformasanticipated.ColdweathersensitivemarketssuchastheNortheastern,mid-Atlantic,andMidwesternmarketsdidnotperformasexpected,butasdryandhotweatherapproachedtheregions,categoriesimprovedmaterially.SimilartoAAP,AZOcontinuestobeoptimisticabouttheremainderoftheseasonasitbelievesthereisasignificantamountofdeferredmaintenance17SeptemberBarclays|ReadingBetweentheFIGURESource:NationalClimaticDataCenter,HaverAnalytics,BarclaysFIGUREAugustWeatherPercentSource:NationalClimaticDataCenter,HaverAnalytics,Barclays17September12YR3YREastNorthWestNorthBarclays|ReadingBetweentheFIGURESource:NationalClimaticDataCenter,HaverAnalytics,BarclaysFIGUREAugustWeatherPercentSource:NationalClimaticDataCenter,HaverAnalytics,Barclays17September12YR3YREastNorthWestNorthBarclays|ReadingBetweentheFIGURERetailerbyLocation(Northeast,Mid-Atlantic,Rhode3New20North36Source:CompanyReports,Barclays17SeptemberBarclays|ReadingBetweentheFIGURERetailerbyLocation(Northeast,Mid-Atlantic,Rhode3New20North36Source:CompanyReports,Barclays17SeptemberPercentof South PercentofTotal West Washington, Percentof New New Barclays|ReadingBetweentheFIGURENorth30Source:CompanyReports,Barclays17SeptemberBarclays|ReadingBetweentheFIGURENorth30Source:CompanyReports,Barclays17September PercentofTotal New PercentofTotal South Barclays|ReadingBetweentheBarclays|ReadingBetweentheE-CommercePromotionalInacontinuationofournoteDeepDive:AutoPartsE-comPromos(12/14/17),wetrackedthenumberofpromotionsspecificallyinAugust.Usingadigitallibraryofinternetsites,wehavebeenabletotrackeachuniquepromotioncodeonthefrontpageofthesitethroughORLY,AAP,andAZO’smainwebsite.Ingeneral,promotionslastedthethreedayssurroundingaholidayorevent,onetotwoweeks,orforafullmonth,andwhenonepromotionendedthenextonestartedalmostimmediately.Inthepast,therehavebeennoJulypromotionsatORLY,threetozeropromotionsatAAP,andzerotofourpromotionsatAZO.ThisAugust,AAPhadatotaloftwopromotions,downfromthreepromotionsinAugust2017.AZOhadnoonepromotioncodeontheirwebsite,comparedtofourpromotionsinAugust2017.ORLY,whichhashistoricallybeentheleastpromotionalofthethreeautopartretailerswecover,hadthreepromotionsthisAugustcomparedtozeropromotionsinAugust2017.Morerecently,AZOcalledoutithasbeentestingonlinepromotionsonline.In2Q18,AZOnotedthatitwouldbediscontinuingaggressiveonlinediscountinginanefforttostandardizepricinginstoresandonline.However,thefollowingquarternotedceasingdiscountinghadanegativeimpactonitsshiptohomebusiness,whichalsonegativelyimpacteditsoverallsame-storesales.Basedonourchecks,AZOstoppeddiscountingonitswebsiteinFebruary,buthasreinstatedpromotionsinlateAugustsuchas20%off$100+shiptohomeorders.17SeptemberBarclays|ReadingBetweentheFIGUREE-commercePromotionTracker–AugustSource:CompanyWebsites,Barclays17September20%off+ 15%Off+$25Gift Barclays|ReadingBetweentheFIGUREE-commercePromotionTracker–AugustSource:CompanyWebsites,Barclays17September20%off+ 15%Off+$25Gift GiftCard 20%off 15%Off $25Gift 144041 15%off+$25Gift 20%off 15%off 10%off $25Gift $10023021 21$20$100,$25 $15 20% off $10 $4032001 21Barclays|ReadingBetweentheTradingStockFIGURE-Source:ThomsonReuters,BarclaysWetrackedthechangeinconsensusnumbersthismonthbylookingatconsensusnumbersfromtheendofthismonthcomparedtoconsensusnumbersfromthebeginningoflastmonth.Barclays|ReadingBetweentheTradingStockFIGURE-Source:ThomsonReuters,BarclaysWetrackedthechangeinconsensusnumbersthismonthbylookingatconsensusnumbersfromtheendofthismonthcomparedtoconsensusnumbersfromthebeginningoflastmonth.ConsensusnumbersforAdvanceAutoParts’revenueincreased1.2%,whileEBITDAandEBITincreasedbothincreasedaswell.Compstoresalesincreased110bpsforAAP.ConsensusnumbersforAutoZone’srevenuewasflataswasEBITandEBITDA.Compstoresalesestimatesremainedflat.O’Reilly’sconsensusrevenueincreased0.5%,EBITDAincreased0.7%andEBITincreased1.1%.Compstoresalesestimatesincreased50bpsto3.8%andFY18EPSestimatesincreased2.4%to$15.91.FIGURE11010000050010Source:ThomsonReuters,Barclays17SeptemberAugust EPS EBIT Barclays|ReadingBetweentheShortWetrackedthechangesinshortinterestthismonthbyrecordingthepercentageofshortinterestthroughoutthelasttwoBarclays|ReadingBetweentheShortWetrackedthechangesinshortinterestthismonthbyrecordingthepercentageofshortinterestthroughoutthelasttwomonths.ShortinterestoverthemonthofAugustdecreasedfortheentireautopartretailgroup.ShortinterestforORLYdecreasedfrom2.96%to2.82%;shortinterestforAZOdecreasedfrom2.64%to2.46%;shortinterestforAAPdecreasedfrom4.44%to4.18%.FIGURE%ofShortInterestSource:ThomsonReuters,Barclays17September8-22-24-Barclays|ReadingBetweentheAppendix:LessFrequentlyUpdatedDataCarsinSweetSpot(VehicleSales/TotalThesweetspotforvehiclesisametricusedtoBarclays|ReadingBetweentheAppendix:LessFrequentlyUpdatedDataCarsinSweetSpot(VehicleSales/TotalThesweetspotforvehiclesisametricusedtodeterminethepercentageofvehiclesontheroadthatareintheprimerepairage(eighttonineyearsold).WedeterminethesweetspotforvehiclesasthetotalSAARLightVehicleSalesfromeightandnineyearspriordividedbynewvehicleregistrationsthatyear.VehicleregistrationsaredeterminedbytheFederalHighwayAdministrationandtheOfficeofHighwayInformationManagementattheendofeveryyear,andSAARlightvehiclesalesareprovidedmonthlybytheBureauofEconomicFIGUREPercentageofCarsin“SweetSpot”(VehicleSales/Total%ofCarsinSweetSource:FederalReserveEconomicData,Barclay’sU.S.Autos&AutoPartsMeanAgeofLightVehiclesinOperationinAccordingtotheBureauofTransportationStatistics,asof2016theaverageageofalllightvehiclesinoperationintheUnitedStateswas11.6years.ThedataforaverageageofvehiclesareasofJuly1eachyear,exceptin2009,whichisasofOctober1.FIGUREMeanAgeofAllLightVehiclesinOperationinU.S.Age9Jan-Jan-Jan-Jan-Jan-Jan-Jan-Jan-Jan-Jan-Source:BureauofTransportationStatistics,HaverAnalytics,Barclays17SeptemberBarclays|ReadingBetweentheMotorVehicleRegistrationsinAccordingtotheFederalHighwayAdministrationandtheOfficeofHighwayInformationManagement,in2016thetotalnumberofmotorvehicleregistrationsintheUnitedStatesincreased5.19millionto268.8millionvehicleregistrations.ThemotorBarclays|ReadingBetweentheMotorVehicleRegistrationsinAccordingtotheFederalHighwayAdministrationandtheOfficeofHighwayInformationManagement,in2016thetotalnumberofmotorvehicleregistrationsintheUnitedStatesincreased5.19millionto268.8millionvehicleregistrations.ThemotorvehicleregistrationdataconsistsofvehiclesregisteredfromJanuary1toDecember31ofacalendaryearandincludesprivateandpubliclyownedautos,busesandtrucks.FIGUREMotorVehicleRegistrations#ofRegistrationsJan-07Jan-08Jan-09Jan-10Jan-11Jan-12Jan-13Jan-14Jan-15Jan-Source:Wards,FederalReserveEconomicData,HaverAnalytics,BarclaysLicensedDriversintheTheFederalHighwayAdministrationandOfficeofHighwayPolicyInformationpublishahighwaystatisticsseries,whichisanannualreportcontaininganalyzedstatisticalinformationofvarioushighwaydata.In2016,thetotalnumberoflicenseddriversintheUnitedStatesincreased1.7%to221.7millionpeople.FIGUREPercentageIncreaseofU.S.Licensed-Source:OfficeofHighwayPolicyInformation,FederalHighwayAdministration,USDepartmentof17SeptemberBarclays|ReadingBarclays|ReadingBetweentheANALYST(S)I,MatthewMcClintock,CPA,CFA,herebycertify(1)thattheviewsexpressedinthisresearchreportaccuratelyreflectmypersonalviewsaboutanyorallofthesubjectsecuritiesorissuersreferredtointhisresearchreportand(2)nopartofmycompensationwas,isorwillbedirectlyorindirectlyrelatedtothespecificrecommendationsorviewsexpressedinthisresearchreport.IMPORTANTDISCLOSURESBarclaysResearchisproducedbytheInvestmentBankofBarclaysBankPLCanditsaffiliates(collectivelyandeachindividually,"Barclays").AllauthorscontributingtothisresearchreportareResearchAnalystsunlessotherwiseindicated.ThepublicationdateatthetopofthereportreflectsthelocaltimewherethereportwasproducedandmaydifferfromthereleasedateprovidedinGMT.AvailabilityofWhereanycompaniesarethesubjectofthisresearchreport,forcurrentimportantdisclosuresregardingthosecompaniespleaserefertop:/picrserc.brlas.coralternativelysendawrittenrequestto:BarclaysResearchCompliance,745SeventhAvenue,13thFloor,NewYork,NY10019orcall+1-212-526-1072.Theanalystsresponsibleforpreparingthisresearchreporthavereceivedcompensationbaseduponvariousfactorsincludingthefirm'stotalrevenues,aportionofwhichisgeneratedbyinvestmentbankingactivities,theprofitabilityandrevenuesoftheMarketsbusinessandthepotentialinterestofthefirm'sinvestingclientsinresearchwithrespecttotheassetclasscoveredbytheanalyst.Analystsregularlyconductsitevisitstoviewthematerialoperationsofcoveredcompanies,butBarclayspolicyprohibitsthemfromacceptingpaymentorreimbursementbyanycoveredcompanyoftheirtravelexpensesforsuchvisits.BarclaysResearchDepartmentproducesvarioustypesofresearchincluding,butnotlimitedto,fundamentalanalysis,equity-linkedanalysis,quantitativeanalysis,andtradeideas.RecommendationscontainedinonetypeofBarclaysResearchmaydifferfromthosecontainedinothertypesofBarclaysResearch,whetherasaresultofdifferingtimehorizons,methodologies,orotherwise.InordertoaccessBarclaysStatementregardingResearchDisseminationPoliciesandProcedures,pleaserefertot:/uieercbrca.cSRDtInordertoaccessBarclaysResearchConflictManagementPolicyStatement,pleasereferto:s/uirsc.aca./ChMateriallyMentionedStocks(Ticker,Date,AdvanceAutoPartsInc.(AAP,14-Sep-2018,USD165.45),EqualWeight/Positive,C/C/AutoZoneInc.(AZO,14-Sep-2018,USD749.20),Overweight/Positive,CD/CE/D/J/K/L/MO'ReillyAutomotiveInc.(ORLY,14-Sep-2018,USD338.73),Overweight/Positive,C/C/JPricesaresourcedfromThomsonReutersasofthelastavailableclosingpriceintherelevanttradingmarket,unlessanothertimeandsourceisDisclosureA:BarclaysBankPLCand/oranaffiliatehasbeenleadmanagerorco-leadmanagerofapubliclydisclosedofferofsecuritiesoftheissuerintheprevious12months.CD:BarclaysBankPLCand/oranaffiliateisamarket-makerindebtsecuritiesissuedbythisCE:BarclaysBankPLCand/oranaffiliateisamarket-makerinequitysecuritiesissuedbythisE:BarclaysBankPLCand/oranaffiliateexpectstoreceiveorintendstoseekcompensationforinvestmentbankingservicesfromthisissuerwithinthenext3months.FA:BarclaysBankPLCand/oranaffiliatebeneficiallyowns1%ormoreofaclassofequitysecuritiesofthisissuer,ascalculatedinaccordancewithUSregulations.FB:BarclaysBankPLCand/oranaffiliatebeneficiallyownsalongpositionofmorethan0.5%ofaclassofequitysecuritiesofthisissuer,ascalculatedinaccordancewithEUregulations.FC:BarclaysBankPLCand/oranaffiliatebeneficiallyownsashortpositionofmorethan0.5%ofaclassofequitysecuritiesofthisissuer,ascalculatedinaccordancewithEUregulations.GD:Oneoftheanalystsonthefundamentalcreditcoverageteam(oramemberofhisorherhousehold)hasafinancialinterestinthedebtorequitysecuritiesofthisissuer.GE:Oneoftheanalystsonthefundamentalequitycoverageteam(oramemberofhisorherhousehold)hasafinancialinterestinthedebtorequitysecuritiesofthisissuer.I:BarclaysBankPLCand/oranaffiliateispartytoanagreementwiththisissuerfortheprovisionoffinancialservicestoBarclaysBankPLCand/oranaffiliate.J:BarclaysBankPLCand/oranaffiliateisaliquidityproviderand/ortradesregularlyinthesecuritiesofthisissuerand/orinanyrelated17SeptemberBarclays|ReadingBetweentheBarclays|ReadingBetweentheIMPORTANTDISCLOSURESK:BarclaysBankPLCand/oranaffiliatehasreceivednon-investmentbankingrelatedcompensation(includingcompensationforbrokerageservices,ifapplicable)fromthisissuerwithinthepast12months.M:Thisissueris,orduringthepast12monthshasbeen,anon-investmentbankingclient(securitiesrelatedservices)ofBarclaysBankPLCand/oranaffiliate.N:Thisissueris,orduringthepast12monthshasbeen,anon-investmentbankingclient(non-securitiesrelatedservices)ofBarclaysBankPLCand/oranaffiliate.O:NotinP:Apartner,directororofficerofBarclaysCapitalCanadaInc.has,duringthepreceding12months,providedservicestothesubjectcompanyforremuneration,otherthannormalcourseinvestmentadvisoryortradeexecutionservices.Q:BarclaysBankPLCand/oranaffiliateisaCorporateBrokertothisR:BarclaysCapitalCanadaInc.and/oranaffiliatehasreceivedcompensationforinvestmentbankingservicesfromthisissuerinthepast12S:ThisissuerisaCorporateBrokertoBarclaysT:BarclaysBankPLCand/oranaffiliateisprovidingequityadvisoryservicestothisissuer.V:TheequitysecuritiesofthisCanadianissuerincludenon-votingrestrictedshares.RiskMasterlimitedpartnerships(MLPs)arepass-throughentitiesstructuredaspubliclylistedpartnerships.Fortaxpurposes,distributionstoMLPunitholdersmaybetreatedasareturnofprincipal.InvestorsshouldconsulttheirowntaxadvisorsbeforeinvestinginMLPunits.GuidetotheBarclaysFundamentalEquityResearchRatingOurcoverageanalystsusearelativeratingsysteminwhichtheyratestocksasOverweight,EqualWeightorUnderweight(seedefinitionsbelow)relativetoothercompaniescoveredbytheanalystorateamofanalyststhataredeemedtobeinthesameindustry(the"industrycoverageInadditiontothestockrating,weprovideindustryviewswhichratetheoutlookfortheindustrycoverageuniverseasPositive,NeutralorNegative(seedefinitionsbelow).Aratingsystemusingtermssuchasbuy,holdandsellisnottheequivalentofourratingsystem.Investorsshouldcarefullyreadtheentireresearchreportincludingthedefinitionsofallratingsandnotinferitscontentsfromratingsalone.