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What changed in AutoZone's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of AutoZone's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+242 added−269 removedSource: 10-K (2024-10-28) vs 10-K (2023-10-24)

Top changes in AutoZone's 2024 10-K

242 paragraphs added · 269 removed · 216 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

55 edited+7 added−12 removed30 unchanged
Biggest changeOur ESG Report is not, and will not be deemed to be, a part of this Annual Report on Form 10-K or incorporated by reference into this or any of our other filings with the Securities and Exchange Commission (“the SEC”). ​ 5 Table of Contents Store Operations At August 26, 2023 our stores were in the following locations: ​ ​ ​ ​ Store ​ ​ Count Alabama 123 Alaska 8 Arizona 165 Arkansas 73 California 658 Colorado 102 Connecticut 58 Delaware 20 Florida 430 Georgia 214 Hawaii 12 Idaho 33 Illinois 248 Indiana 164 Iowa 37 Kansas 55 Kentucky 105 Louisiana 132 Maine 14 Maryland 93 Massachusetts 88 Michigan 221 Minnesota 63 Mississippi 98 Missouri 122 Montana 15 Nebraska 25 Nevada 70 New Hampshire 23 New Jersey 124 New Mexico 64 New York 212 North Carolina 241 North Dakota 7 Ohio 288 Oklahoma 87 Oregon 57 Pennsylvania 228 Puerto Rico 51 Rhode Island 17 Saint Thomas 1 South Carolina 107 South Dakota 9 Tennessee 183 Texas 693 Utah 70 Vermont 2 Virginia 153 Washington 100 Washington, DC 5 West Virginia 45 Wisconsin 78 Wyoming 9 Total Domestic stores 6,300 Mexico 740 Brazil 100 Total stores 7,140 ​ 6 Table of Contents Store Formats Substantially all stores are based on standard store formats, resulting in generally consistent appearance, merchandising and product mix.
Biggest changeOur ESG Report is not, and will not be deemed to be, a part of this Annual Report on Form 10-K or incorporated by reference into this or any of our other filings with the Securities and Exchange Commission (“the SEC”). ​ 5 Table of Contents Store Operations At August 31, 2024 our stores were in the following locations: ​ ​ ​ ​ Store ​ ​ Count Alabama 124 Alaska 8 Arizona 172 Arkansas 75 California 670 Colorado 102 Connecticut 59 Delaware 22 Florida 441 Georgia 217 Hawaii 12 Idaho 33 Illinois 249 Indiana 165 Iowa 37 Kansas 56 Kentucky 107 Louisiana 134 Maine 14 Maryland 97 Massachusetts 90 Michigan 223 Minnesota 68 Mississippi 99 Missouri 123 Montana 15 Nebraska 25 Nevada 73 New Hampshire 23 New Jersey 127 New Mexico 64 New York 224 North Carolina 244 North Dakota 7 Ohio 289 Oklahoma 90 Oregon 58 Pennsylvania 241 Puerto Rico 56 Rhode Island 19 Saint Thomas 1 South Carolina 108 South Dakota 10 Tennessee 184 Texas 709 Utah 72 Vermont 2 Virginia 156 Washington 100 Washington, DC 5 West Virginia 45 Wisconsin 79 Wyoming 9 Total Domestic stores 6,432 Mexico 794 Brazil 127 Total stores 7,353 ​ 6 Table of Contents Store Formats Substantially all stores are based on standard store formats, resulting in generally consistent appearance, merchandising and product mix with approximately 90% to 99% of each store’s square footage used as selling space.
No other class of similar products accounted for 10 percent or more of our total revenues, and no individual vendor provided more than 10 percent of our total purchases. We believe alternative sources of supply exist, at similar costs, for most types of product sold.
No other class of similar products accounted for 10 percent or more of our total revenues, and no other individual vendor provided more than 10 percent of our total purchases. We believe alternative sources of supply exist, at similar costs, for most types of product sold.
Many members of our senior leadership team have held positions in multiple areas of the business. We also invest in advanced leadership training in order to deepen our bench strength and support succession planning. For additional information, see “Store Operations—Store Personnel Training and Incentives” below.
Many members of our senior leadership team have held positions in multiple areas of the business. We also invest in advanced leadership training to deepen our bench strength and support succession planning. For additional information, see “Store Operations—Store Personnel Training and Incentives” below.
A key differentiating component versus our competitors is our exclusive line of in-house brands, which includes Duralast and the family of Duralast brands, ProElite, ShopPro, SureBilt, TotalPro, TruGrade and Valucraft. We believe that our overall value compares favorably to that of our competitors.
A key differentiating component versus our competitors is our exclusive line of in-house brands, which includes Duralast and the family of Duralast brands, Econocraft, ProElite, ShopPro, SureBilt, TotalPro, TruGrade and Valucraft. We believe that our overall value compares favorably to that of our competitors.
Since March 2023, Mr. Newbern served as Executive Vice President Operations, Sales and Technology. From 2015 to March 2023, Mr. Newbern served as Executive Vice President overseeing Store Operations, Commercial, International, Information Technology, Loss Prevention and ALLDATA in different capacities. From 2007 to 2015, Mr. Newbern served as Senior Vice President overseeing Store Operations and Commercial.
Since March 2023, Mr. Newbern served as Executive Vice President – Operations, Sales and Technology. From 2015 to March 2023, Mr. Newbern served as Executive Vice President overseeing Store Operations, Commercial, International, Information Technology, Loss Prevention and ALLDATA in different capacities. From 2007 to 2015, Mr.
We utilize in-store signage, creative product placement and promotions to help educate customers about products that they may need. 9 Table of Contents Purchasing and Supply Chain Merchandise is selected and purchased for all stores through our store support centers located in Memphis, Tennessee; Monterrey, Mexico and Sao Paulo, Brazil.
We utilize in-store signage, creative product placement and promotions to help educate customers about products that they may need. 9 Table of Contents ​ Purchasing and Supply Chain Merchandise is selected and purchased for all stores through our store support centers located in Memphis, Tennessee; Monterrey, Mexico; Sao Paulo, Brazil and Gurugram, India.
In addition to our in-store offerings, we sell automotive hard parts, maintenance items, accessories and non-automotive parts through www.autozone.com, for pick-up in store or to be shipped directly to a customer’s home or business, with next day or same day delivery programs in most of our U.S. markets.
In addition to our in-store offerings, we sell our full suite of automotive hard parts, maintenance items, accessories and non-automotive parts through www.autozone.com, for pick-up in store or to be shipped directly to a customer’s home or business, with next day or same day delivery programs in most of our U.S. markets.
Jackson held a variety of leadership roles at General Electric Company, including Vice President and Chief Financial Officer of a division of General Electric Oil and Gas. Mr. Jackson serves on the Board of Directors for Eli Lilly & Co. ​ Thomas B. Newbern, 61—Chief Operating Officer, Customer Satisfaction Thomas B. Newbern was named Chief Operating Officer in September 2023.
Jackson held a variety of leadership roles at General Electric Company, including Vice President and Chief Financial Officer of a division of General Electric Oil and Gas. Mr. Jackson serves on the Board of Directors for Eli Lilly & Co. ​ Thomas B. Newbern, 62—Chief Operating Officer, Customer Satisfaction Thomas B. Newbern was named Chief Operating Officer in September 2023.
Store Support Centers All store support functions are centralized in our store support centers located in Memphis, Tennessee; Monterrey, Mexico; Chihuahua, Mexico and Sao Paulo, Brazil. We believe that this centralization enhances consistent execution of our merchandising and marketing strategies at the store level, while reducing expenses and cost of sales.
Store Support Centers All store support functions are centralized in our store support centers located in Memphis, Tennessee; Monterrey, Mexico; Chihuahua, Mexico; Sao Paulo, Brazil; and Gurugram, India. We believe that this centralization enhances consistent execution of our merchandising and marketing strategies at the store level, while reducing expenses and cost of sales.
Our websites and the information contained therein or linked thereto are not intended to be incorporated into this Annual Report on Form 10-K. Information about our Executive Officers The following list describes our executive officers, which are elected by and serve at the discretion of the Board of Directors.
Our websites and the information contained therein or linked thereto are not intended to be incorporated into this Annual Report on Form 10-K. Information about our Executive Officers The following list describes our executive officers, who are elected by and serve at the discretion of the Board of Directors.
Prior to joining AutoZone, Mr. Jackson served as Executive Vice President and Chief Financial Officer of Hertz Global Holdings, Inc., a worldwide rental company, since 2018. From 2014 to 2018, Mr. Jackson served as Chief Financial Officer of Nielsen Holdings plc, an information, data and measurement company. Prior to 2014, Mr.
Jackson served as Executive Vice President and Chief Financial Officer of Hertz Global Holdings, Inc., a worldwide rental company, since 2018. From 2014 to 2018, Mr. Jackson served as Chief Financial Officer of Nielsen Holdings plc, an information, data and measurement company. Prior to 2014, Mr.
In addition to continuing to lease or develop our own locations, we evaluate and may make strategic acquisitions. Marketing and Merchandising Strategy We are dedicated to providing customers with superior service and trustworthy advice as well as quality automotive parts and products at a great value in conveniently located, well-designed stores.
In addition to continuing to lease or develop our own locations, we evaluate and may make strategic acquisitions. Marketing and Merchandising Strategy We are dedicated to providing customers with superior service and trustworthy advice as well as quality automotive parts and products at a great value in our conveniently located, well-designed stores and through our online platforms.
We encourage the recognition of AutoZoners for a variety of accomplishments, such as going above and 4 Table of Contents beyond to deliver Trustworthy Advice and WOW! Customer Service, taking initiative to prevent incidents and injuries, making contributions to help detect or report internal or external theft or providing significant service to help others.
We encourage the recognition of AutoZoners for a variety of accomplishments, such as going above and beyond to deliver Trustworthy Advice and WOW! Customer Service, taking initiative to prevent incidents and injuries, making contributions to help detect or report internal or external theft or providing significant service to help others.
We believe these opportunities are important to attract, motivate and retain high quality AutoZoners. ​ Recognition The AutoZone Pledge and Values drive our success and foster a strong, unique culture of teamwork and customer service.
We believe these opportunities are important to attract, motivate and retain high quality AutoZoners. ​ 4 Table of Contents Recognition The AutoZone Pledge and Values drive our success and foster a strong, unique culture of teamwork and customer service.
In addition, we have offices in Shanghai, China and Haryana, India that provide sourcing, technology or other support functions. ​ Store Automation All of our stores have Z-net, our proprietary electronic catalog that enables our AutoZoners to efficiently look up the parts that our customers need and provide complete job solutions, advice and information for customer vehicles.
In addition, we have offices in Shanghai, China and Istanbul, Turkey that provide sourcing or other support functions. ​ Store Automation All of our stores have Z-net, our proprietary electronic catalog that enables our AutoZoners to efficiently look up the parts that our customers need and provide complete job solutions, advice and information for customer vehicles.
Bedsole, 52—Senior Vice President, General Counsel & Secretary, Customer Satisfaction Jenna M. Bedsole was named Senior Vice President, General Counsel & Secretary in April 2023. Prior to joining AutoZone, Ms. Bedsole was a partner with the law firm of Baker, Donelson, Bearman, Caldwell and Berkowitz P.C. since 2011, where she chaired the Labor and Employment practice group. ​ K.
Bedsole was named Senior Vice President, General Counsel & Secretary in April 2023. Prior to joining AutoZone, Ms. Bedsole was a partner with the law firm of Baker, Donelson, Bearman, Caldwell and Berkowitz P.C. since 2011, where she chaired the Labor and Employment practice group. ​ K.
We have never experienced any material labor disruption, do not have any collective bargaining agreements and believe that relations with our AutoZoners are good. ​ Training & Development We have a number of different types of jobs and career opportunities.
We have never experienced any material labor disruption, do not have any collective bargaining agreements in the U.S. and believe that relations with our AutoZoners are good. ​ Training & Development We have a number of different types of jobs and career opportunities.
Through our Loan-A-Tool program customers can borrow a specialty tool, such as a steering wheel puller, for which a do-it-yourself (“DIY”) customer or a repair shop would have little or no use other than for a single job.
Through our Loan-A-Tool program customers can borrow a specialty tool, such as a steering wheel puller, for which a do-it-yourself (“DIY”) customer or a repair shop would have little or no subsequent use beyond a single job.
As part of our program, we offer credit and delivery to our customers, as well as online ordering through www.autozonepro.com or through the AutoZone Pro smartphone application. Through our hub and mega hub stores, we offer a greater range than our satellite stores of parts and products desired by professional technicians.
As part of our program, we offer credit and delivery to our customers, as well as online ordering through www.autozonepro.com or through the AutoZone Pro mobile application. Through our hub and mega hub stores, we offer a greater range than our satellite stores of parts and products desired by 7 Table of Contents professional technicians.
We focus heavily on retention by offering competitive compensation and benefits packages, extensive training and development opportunities and leveraging our business resource groups to support AutoZoners across the organization contribute their voices, time, and talent to helping other AutoZoners succeed in their careers. ​ As of August 26, 2023, we employed approximately 119,000 AutoZoners, approximately 60 percent of whom were employed full-time and the remaining 40 percent were employed part-time.
We focus heavily on retention by offering competitive compensation and benefits packages, extensive training and development opportunities and by leveraging our business resource groups (“BRGs”) to support AutoZoners across the organization contribute their voices, time, and talent to helping other AutoZoners succeed in their careers. ​ As of August 31, 2024, we employed approximately 126,000 AutoZoners, approximately 60 percent of whom were employed full-time and the remaining 40 percent were employed part-time.
Michelle Borninkhof, 49 — Senior Vice President and Chief Information Officer, Customer Satisfaction K. Michelle Borninkhof was named Senior Vice President and Chief Information Officer in April 2021. Prior to that, Ms. Borninkhof was Chief Information Officer and Vice President for U.S. Technology at McDonald’s since 2018. Prior to joining McDonald’s, Ms.
Michelle Borninkhof, 50 — Senior Vice President and Chief Information Officer, Customer Satisfaction K. Michelle Borninkhof was named Senior Vice President and Chief Information Officer in April 2021. Prior to joining AutoZone, Ms. Borninkhof was Chief Information Officer and Vice President for U.S. Technology at McDonald’s since 2018. Prior to joining McDonald’s, Ms.
Our hub stores (including mega hubs, which carry an even broader assortment) carry a larger assortment of products that are delivered to local satellite stores. We are continuously updating the products we offer to ensure our inventory matches the products our customers need or desire.
Our hub stores (including mega hub stores, which carry an even broader assortment) carry a larger assortment of products that are available to customers of the surrounding local stores. We are continuously updating the products we offer to ensure our inventory matches the products our customers need or desire.
From 2017 to 2021, Mr. Gould served as Vice President, Supply Chain Replenishment. Prior to that, Mr. Gould held several key management 12 Table of Contents positions with the Company, including Vice President of Commercial, Commercial Support and Merchandising Pricing & Analysis. Domingo J. Hurtado, 62—Senior Vice President – International, Customer Satisfaction Domingo J.
From 2017 to 2021, Mr. Gould served as Vice President – Supply Chain Replenishment. Prior to that, Mr. Gould held several key management positions with the Company, including Vice President – Commercial, Commercial Support and Merchandising Pricing & Analysis. Domingo J. Hurtado, 63—Senior Vice President – International, Customer Satisfaction Domingo J.
At August 26, 2023, in 5,682 of our domestic stores as well as the vast majority of our stores in Mexico and Brazil, we had a commercial sales program that provided commercial credit and prompt delivery of parts and other products to local, regional and national repair garages, dealers, service stations, fleet owners and other accounts.
At August 31, 2024, in 5,898 of our domestic stores as well as the vast majority of our stores in Mexico and Brazil, we had a commercial sales program that provides prompt delivery of parts and other products and commercial credit to local, regional and national repair garages, dealers, service stations, fleet owners and other accounts.
About 91 percent of our AutoZoners were employed in stores or in direct field supervision, approximately 6 percent in distribution centers and approximately 3 percent in store support and other functions. Included in the above numbers are approximately 15,500 AutoZoners employed in our international operations.
About 90 percent of our AutoZoners were employed in stores or in direct field supervision, approximately 6 percent in distribution centers and approximately 4 percent in store support and other functions. Included in the above numbers are approximately 17,500 AutoZoners employed in our international operations.
Additionally, we offer a smartphone application that provides customers with store locations, driving directions, operating hours, product availability, the ability to purchase products and other information. We also provide specialty tools through our suite of free services.
Additionally, we offer a mobile application that provides customers with store locations, driving directions, operating hours, product availability, the ability to purchase products and other information. We also provide access to specialty tools as one of our free services.
Each store carries the same basic products, but we tailor our hard parts inventory to the makes and models of the vehicles in each store’s trade area, and our sales floor products are tailored to the local store’s demographics.
Each store carries the same basic products, but we tailor our hard parts inventory to the makes and models of the vehicles in each store’s trade area and tailor the remaining store’s assortment to the local demographics.
Item 1. Business Introduction AutoZone, Inc. (“AutoZone,” the “Company,” “we,” “our” or “us”) is the leading retailer and distributor of automotive replacement parts and accessories in the Americas. We began operations in 1979 and at August 26, 2023, operated 6,300 stores in the United States (“U.S.”), 740 stores in Mexico and 100 stores in Brazil.
Item 1. Business Introduction AutoZone, Inc. (“AutoZone,” the “Company,” “we,” “our” or “us”) is the leading retailer and distributor of automotive replacement parts and accessories in the Americas. We began operations in 1979 and at August 31, 2024, operated 6,432 stores in the United States (“U.S.”), 794 stores in Mexico and 127 stores in Brazil.
Prior to his appointment as President and Chief Executive Officer, Mr. Rhodes served in various capacities within the Company since 1994. Prior to 1994, Mr. Rhodes was a manager with Ernst & Young LLP. As previously announced, Mr.
Rhodes served as AutoZone’s President and Chief Executive Officer, and a director since 2005. Prior to his appointment as President and Chief Executive Officer, Mr. Rhodes served in various capacities within the Company since 1994. Prior to 1994, Mr. Rhodes was a manager with Ernst & Young LLP. ​ Philip B.
We do not derive revenue from automotive repair or installation services. Human Capital Resources We believe the foundation of our success is our culture, which is rooted in our Pledge and Values and defines how our employees (“AutoZoners”) take care of customers and fellow AutoZoners. Each AutoZoner works hard to Live the Pledge, share their passion for WOW!
Human Capital Resources We believe the foundation of our success is our culture, which is rooted in our Pledge and Values and defines how our employees (“AutoZoners”) take care of customers and fellow AutoZoners. Each AutoZoner works hard to Live the Pledge, share their passion for WOW!
Most of our merchandise flows through our distribution centers to our stores by our fleet of tractors and trailers or by third-party transportation firms. The distribution centers replenish our stores up to multiple times per week depending on store sales volumes.
Most of our merchandise flows through our distribution centers to our stores by our fleet of tractors and trailers or by third-party transportation firms. The distribution centers replenish our stores up to multiple times per week depending on store sales volumes. Competition The sale of automotive parts, accessories and maintenance items is highly competitive.
Daniele served as Senior Vice President – Commercial from 2015 to 2021, Vice President – Commercial Support from 2013 to 2015 and Vice President – Merchandising from 2008 to 2013. Mr. Daniele was also a Divisional Vice President – Store Operations from 2005 to 2008. Prior to 2005, Mr.
Daniele served as Executive Vice President – Merchandising, Marketing and Supply Chain from June 2021 to September 2023, Senior Vice President – Commercial from 2015 to 2021, Vice President – Commercial Support from 2013 to 2015 and Vice President – Merchandising from 2008 to 2013. Mr. Daniele was also a Divisional Vice President – Store Operations from 2005 to 2008.
Additionally, we have offices in Shanghai, China, Haryana, India and Istanbul, Turkey to support our global sourcing efforts. In fiscal 2023, one class of similar products accounted for approximately 14 percent of our total revenues.
Additionally, we have offices in Shanghai, China and Istanbul, Turkey to support our global sourcing efforts. In fiscal 2024, one class of similar products accounted for approximately 15 percent of our total revenues and one individual vendor provided 12 percent of our total purchases.
We have dedicated sales teams focused on independent repair shops as well as national, regional and fleet commercial accounts. ​ 7 Table of Contents Store Development The following table reflects our store development during the past five fiscal years: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year ​ 2023 2022 2021 2020 2019 Stores: Beginning 6,943 6,767 6,549 6,411 6,202 New 198 177 219 138 209 Closed 1 1 1 — — Net new 197 176 218 138 209 Relocated 12 13 12 5 2 Ending 7,140 6,943 6,767 6,549 6,411 ​ We believe expansion opportunities exist in markets we do not currently serve, as well as in markets where we can achieve a larger presence.
Store Development The following table reflects our store development during the past five fiscal years: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year ​ 2024 2023 2022 2021 2020 Stores: Beginning 7,140 6,943 6,767 6,549 6,411 New 217 198 177 219 138 Closed 4 1 1 1 — Net new 213 197 176 218 138 Relocated 6 12 13 12 5 Ending 7,353 7,140 6,943 6,767 6,549 ​ We believe expansion opportunities exist in markets we do not currently serve, as well as in markets where we can achieve a larger presence.
We make available, free of charge, at www.autozone.com, by clicking “Investor Relations” located at the bottom of the page, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements, registration statements and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities and Exchange Act of 1934, as amended, as soon as reasonably feasible after we electronically file such material with, or furnish it to, the SEC.
We make available on the Investor Relations section of our website, free of charge, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements, registration statements and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities and Exchange Act of 1934, as amended, as soon as reasonably feasible after filing or furnishing such documents with the SEC.
Borninkhof spent 11 years with Walmart Stores holding various leadership roles including Vice President – International Technology Delivery. Throughout her career, Ms. Borninkhof held various roles in store retail, distribution center operations and process improvement. Preston B. Frazer, 47—Senior Vice President – Finance, Store Development and Strategy, Customer Satisfaction Preston B.
Borninkhof spent 11 years with Walmart Stores holding various leadership roles including Vice President – International Technology Delivery. Throughout her career, Ms. Borninkhof held various roles in store retail, distribution center operations and process improvement. Eric S. Gould, 55—Senior Vice President – Supply Chain, Customer Satisfaction Eric S. Gould was named Senior Vice President – Supply Chain in February 2021.
Smith, 59—Senior Vice President – Human Resources, Customer Satisfaction Richard C. Smith was named Senior Vice President – Human Resources in December 2015. Mr. Smith has been an AutoZoner since 1985, previously holding the position of Divisional Vice President – Store Operations since 1997. Prior thereto, Mr.
Smith was named Senior Vice President – Human Resources in December 2015. Mr. Smith has been an AutoZoner since 1985, previously holding the position of Divisional Vice President – Store Operations since 1997. Prior to that, Mr. Smith served in various key positions within the Company. ​
These laws and regulations relate to, among other things, the marketing and sale of products; proper handling and disposal of hazardous materials, particularly in connection with our used oil, oil filter and battery recycling programs; occupational health and safety; environmental matters; labor and employment; employee wages and benefits; information security and data privacy; real property; financial reporting and disclosure; antitrust and fair competition; international trade and transportation, logistics and delivery operations. 10 Table of Contents While compliance with the numerous laws and regulations applicable to our business, including environmental regulations, has not had a material adverse effect on capital expenditures, earnings or our competitive position to date, we can make no assurances as to the future costs of compliance.
These laws and regulations relate to, among other things, the marketing and sale of products; proper handling and disposal of hazardous materials, particularly in connection with our used oil, oil filter and battery recycling programs; occupational health and safety; environmental matters; labor and employment; employee wages and benefits; information security and data privacy; real property; financial reporting and disclosure; antitrust and fair competition; international trade and transportation, logistics and delivery operations.
We also recognize AutoZoners for their years of service to the organization and our customers. ​ Diversity, Equity and Inclusion (“DEI”) “Embraces Diversity” is one of our Values, and we have made great strides in our DEI initiatives.
We also recognize AutoZoners for their years of service to the organization and our customers. ​ Diversity, Equity and Inclusion (“DEI”) “Embraces Diversity” is one of our Values, and we believe a diverse workforce has made meaningful contributions to our success.
Patent and Trademark Office as well as in certain other countries, including without limitation: “AutoZone,” “Get in the Zone,” “Duralast,” “Econocraft,” “ProElite,” “ShopPro,” “SureBilt,” “TotalPro,” “TruGrade,” “Valucraft,” and “ALLDATA,” along with variations of these trademarks. Our trademark registrations have various expiration dates; however, assuming that the trademarks are properly maintained and in use, such registrations may typically be renewed indefinitely.
Patent and Trademark Office as well as in certain other countries, including without limitation: “AutoZone,” “Get in the Zone,” “Duralast,” “Econocraft,” “ProElite,” “ShopPro,” “SureBilt,” “TotalPro,” “TruGrade,” “Valucraft,” and “ALLDATA,” along with variations of these trademarks.
Daniele held several other key management positions with the Company. ​ Jamere Jackson, 54—Chief Financial Officer, Customer Satisfaction Jamere Jackson was named Chief Financial Officer in January 2021 and, in that capacity, leads the Finance and Store Development teams. Mr. Jackson also held the title of Executive Vice President from January 2021 until his promotion in September 2023.
Prior to 2005, Mr. Daniele held several other key management positions with the Company. ​ Jamere Jackson, 55—Chief Financial Officer, Customer Satisfaction Jamere Jackson was named Chief Financial Officer in September 2020 and, in that capacity, leads the Finance and Store Development teams . Prior to joining AutoZone, Mr.
Hackney served as Senior Vice President, Merchandising, since rejoining the Company in October 2022 after a brief retirement. Mr. Hackney’s career with AutoZone began in 1983, and he has held several key management roles within the Company, including Senior Vice President, Merchandising, Vice President, Store Operations Support and Vice President, Merchandising. Jennifer M.
Hackney’s career with AutoZone began in 1983, and he has held several key management roles within the Company, including Senior Vice President – Merchandising, Vice President – Store Operations Support and Vice President – Merchandising. Jennifer M. Bedsole, 53—Senior Vice President, General Counsel & Secretary, Customer Satisfaction Jenna M.
The title of each executive officer includes the words “Customer Satisfaction” which reflects our commitment to customer service. William C. Rhodes, III, 58—Chairman, President and Chief Executive Officer, Customer Satisfaction William C. Rhodes, III has served as AutoZone’s President and Chief Executive Officer, and a director since 2005 and was named Chairman in 2007.
The title of each executive officer includes the words “Customer Satisfaction” which reflects our commitment to customer service. William C. Rhodes, III, 59—Executive Chairman, Customer Satisfaction William C. Rhodes, III was appointed Executive Chairman by the Board of Directors in January 2024 and has been Chairman since 2007. Prior to that, Mr.
Over the longer term, we believe the effects of weather balance out, as we have stores throughout the Americas. AutoZone Websites Our primary website is www.autozone.com.
Mild or rainy weather tends to soften sales, as parts failure rates are lower in mild weather and elective maintenance is deferred during periods of rainy weather. Over the longer term, we believe the effects of weather balance out, as we have stores throughout the Americas. AutoZone Websites Our primary website is www.autozone.com.
Hurtado held different positions with RadioShack including Director General in Mexico and General Manager in Venezuela. Dennis W. LeRiche, 55—Senior Vice President – Store Operations, Customer Satisfaction Dennis W. LeRiche was named Senior Vice President – Store Operations in June 2021. From 2015 to 2021, Mr. LeRiche was a Divisional Vice President – Store Operations. Prior to 2015, Mr.
Hurtado held different positions with RadioShack including Director General in Mexico and General Manager in Venezuela. Kenneth E. Jaycox, 56 — Senior Vice President – Commercial, Customer Satisfaction Kenneth E. Jaycox was named Senior Vice President – Commercial in July 2024. From 2020 to 2024, Mr.
Since then, five other BRGs now exist to help AutoZoners across the organization grow and succeed in their careers. ​ Health and Safety We are committed to providing a safe working and shopping environment for our AutoZoners and customers.
The BRGs are open to all AutoZoners. ​ Health and Safety We are committed to providing a safe working and shopping environment for our AutoZoners and customers.
Rhodes has notified the Board of his intention to relinquish his roles as President and Chief Executive Officer, effective January 2024, and the Board intends to appoint Mr. Rhodes to the role of Executive Chairman at such time. Philip B. Daniele III, 54—CEO-Elect, Customer Satisfaction Philip B. Daniele III was named CEO-Elect in June 2023. Previously Mr.
Daniele III, 55—President and Chief Executive Officer, Customer Satisfaction Philip B. Daniele III was appointed President and Chief Executive Officer and was also appointed to serve on the Board in January 2024. Prior to his appointment as President and Chief Executive Officer, Mr. Daniele was named CEO-Elect in June 2023. Prior to that, Mr.
With the oversight and support of a cross-functional Diversity Council and DEI Steering Committee, our DEI efforts influence and inform many parts of our human capital management efforts including talent acquisition, retention, professional development and workforce management. Our first business resource group (“BRG”) was established in 2014 (AutoZone Women’s Initiative).
Our DEI efforts influence and inform many parts of our human capital management efforts including talent acquisition, retention, professional development and workforce management. Our first BRG was established in 2014 (AutoZone Women’s Initiative). Since then, five other BRGs now exist to help AutoZoners across the organization grow and succeed in their careers.
From 1998 to 2007, Mr. Newbern was Divisional Vice President – Store Operations. Mr. Newbern began his career with AutoZone in 1985. ​ William R. Hackney, 58—Executive Vice President – Merchandising, Marketing and Supply Chain, Customer Satisfaction William R. Hackney was named Executive Vice President – Merchandising, Marketing and Supply Chain in September 2023. Previously, Mr.
Newbern served as 11 Table of Contents Senior Vice President – Store Operations, with additional oversight of Loss Prevention and Store Development. From 1998 to 2007, Mr. Newbern was Divisional Vice President – Store Operations. Mr. Newbern began his career with AutoZone in 1985. ​ William R.
Approximately 90% to 99% of each store’s square footage is selling space. In our satellite stores, approximately 40% to 50% of our space is dedicated to hard parts inventory, while our hub and mega hub stores have 70% to 85% of their space utilized for hard parts.
Most of our stores carry approximately 20,000 to 25,000 unique SKUs with 40% to 50% of the space dedicated to hard parts inventory. Hub stores carry approximately 40,000 to 50,000 unique SKUs and mega hub stores carry approximately 80,000 to 110,000 unique SKUs with 70% to 85% of their space utilized for hard parts.
Extremely hot or extremely cold weather may enhance sales by causing parts to fail; thereby increasing sales of seasonal products. Mild or rainy weather tends to soften sales, as parts failure rates are lower in mild weather and elective maintenance is deferred during periods of rainy weather.
During short periods of time, a store’s sales can be affected by weather conditions. Extremely hot or extremely cold weather may enhance sales by causing parts to fail; thereby increasing sales of seasonal products.
Seasonality Our business is somewhat seasonal in nature, with the highest sales typically occurring in the spring and summer months of February through September, and the lowest sales in the months of December and January. During short periods of time, a store’s sales can be affected by weather conditions.
Our trademark registrations have various expiration dates; however, assuming that the trademarks are properly maintained and in use, such registrations may typically be renewed indefinitely. 10 Table of Contents Seasonality Our business is somewhat seasonal in nature, with the highest sales typically occurring in the spring and summer months of February through September, and the lowest sales in the months of December and January.
LeRiche held several other key management positions with the Company. ​ Grant E. McGee, 61—Senior Vice President – Commercial, Customer Satisfaction Grant E. McGee was named Senior Vice President – Commercial in June 2021 and has notified the Company of his intent to retire, effective around the end of the 2023 calendar year. From 2007 to 2021, Mr.
LeRiche was named Senior Vice President – Store Operations in June 2021. From 2015 to 2021, Mr. LeRiche was a Divisional Vice President – Store Operations. Prior to 2015, Mr. LeRiche held several other key management positions with the Company. ​ Richard C. Smith, 60—Senior Vice President – Human Resources, Customer Satisfaction Richard C.
Mega hubs work in concert with other hubs to drive customer satisfaction through improved local parts availability and expanded product assortments. A mega hub carries inventory of 80,000 to 110,000 unique SKUs, approximately twice what a hub store carries. Mega hubs provide coverage to both surrounding stores and other hub stores multiple times a day or on an overnight basis.
Additionally, we have three mega hub stores in Mexico. Hub and mega hub stores work in concert with other stores to drive customer satisfaction through improved local parts availability and expanded product assortments.
Hub stores have increased our ability to distribute products on a timely basis to many of our stores and to expand our product assortment. As a subset of our domestic hub stores, we ended fiscal 2023 with 98 mega hubs, an increase of 20 since the end of fiscal 2022. Additionally, we have two mega hubs in Mexico.
Stores are replenished primarily by the nearest distribution center but also typically have same-day access to one of our 327 domestic and 46 international hub stores’ expanded inventory assortment. As a subset of our domestic hub stores, we ended fiscal 2024 with 109 mega hub stores, an increase of 11 since the end of fiscal 2023.
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We ended fiscal 2023 with 308 domestic and 39 international hub stores, which have a larger assortment of products as well as regular replenishment items that can be delivered to a store in its network within 24 hours. Hub stores are generally replenished from distribution centers multiple times per week.
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We do not derive revenue from automotive repair or installation services. Our websites and the information contained therein or linked thereto are not intended to be incorporated into this report.
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Currently, we have over 6,000 domestic stores with access to mega hub inventory. A majority of these stores currently receive mega hub service same day. Competition The sale of automotive parts, accessories and maintenance items is highly competitive due to numerous factors, including name recognition, product availability, customer service, store location and price.
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We have dedicated sales teams focused on independent repair shops as well as national, regional and fleet commercial accounts.
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AutoZone competes in the aftermarket auto parts industry, which includes both the retail DIY and commercial do-it-for-me (“DIFM”) auto parts and products markets.
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While compliance with the numerous laws and regulations applicable to our business, including environmental regulations, has not had a material adverse effect on capital expenditures, earnings or our competitive position to date, we can make no assurances as to the future costs of compliance.
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Daniele had served as Executive Vice President – Merchandising, Marketing and Supply Chain from June 2021 to September 2023. The Board of Directors intends to appoint Mr. Daniele to the role of Chief Executive Officer and also appoint him to serve on the 11 Table of Contents Board in January 2024. Previously, Mr.
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Hackney, 59—Executive Vice President – Merchandising, Marketing and Supply Chain, Customer Satisfaction William R. Hackney was named Executive Vice President – Merchandising, Marketing and Supply Chain in September 2023. Prior to that, Mr. Hackney served as Senior Vice President – Merchandising, since rejoining the Company in October 2022 after a brief retirement. Mr.
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Frazer was named Senior Vice President Finance, Store Development and Strategy in March 2023. From 2021 to 2023 Mr. Frazer served as Executive Vice President – Store Operations, Commercial and Loss Prevention. From 2019 to 2021 Mr. Frazer served as Senior Vice President – Store Operations. Prior to that, Mr. Frazer was Vice President – Store Operations Support. Mr.
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Jaycox served as Senior Vice President and Chief Commercial Officer for United States Steel Corporation where he was responsible for their commercial functions, customer value creation, pricing and revenue growth. Prior to that, Mr. Jaycox served as Vice President of Transformation at Sysco Corporation, where he led numerous sales, digital transformation and supply chain initiatives. Lindsay W.
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Frazer began his career with AutoZone in 2006 in Finance and has held several key functional roles. Prior to joining AutoZone, Mr. Frazer was a senior manager with the accounting firm of KPMG, LLP. Eric S. Gould, 54—Senior Vice President – Supply Chain, Customer Satisfaction Eric S. Gould was named Senior Vice President, Supply Chain in February 2021.
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Lehman, 46 — Senior Vice President – Marketing, Customer Satisfaction Lindsay Lehman was named Senior Vice President – Marketing in November 2023, where she leads the Marketing and E-commerce teams. Prior to that, Ms. Lehman held the role of Vice President – Marketing for AutoZone. Prior to joining AutoZone in 2020, Ms.
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McGee was a Divisional Vice President – Store Operations. From 2004 to 2007, Mr. McGee was Vice President – Commercial. Prior to 2004, Mr.
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Lehman served as Senior Vice President, Marketing at Norwegian Cruise Line Holdings, where she was responsible for global marketing, digital and analytics functions. Ms. Lehman previously held roles of increasing responsibility at Kraft Foods, Hearst Corporation and Goldman Sachs. ​ 12 Table of Contents Dennis W. LeRiche, 56—Senior Vice President – Store Operations, Customer Satisfaction Dennis W.
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McGee held several other key positions with the Company. ​ Charlie Pleas, III, 58— Senior Vice President – Accounting and Finance, Customer Satisfaction Charlie Pleas, III, became Senior Vice President, Finance and Accounting in December 2021 and has notified the Company of his intent to retire, effective around the end of the 2023 calendar year. Mr.
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Pleas was named Senior Vice President and Controller during 2007. Prior to that, Mr. Pleas held several key management positions within the Company’s accounting department. Prior to joining AutoZone, Mr. Pleas was a Division Controller with Fleming Companies, Inc. where he served in various capacities during his tenure from 1988 to 1996. Prior to 1988, Mr.
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Pleas is a member of the Board of Directors for Kirkland’s Inc. ​ Albert Saltiel, 59—Senior Vice President – Marketing and E-Commerce, Customer Satisfaction Albert Saltiel was named Senior Vice President – Marketing and E-Commerce during October 2014 and has notified the Company of his intent to retire, effective around the end of the 2023 calendar year. Previously, Mr.
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Saltiel was Senior Vice President – Marketing since 2013. Prior to that, Mr. Saltiel was Chief Marketing Officer and a key member of the leadership team at Navistar International Corporation. Mr. Saltiel has also been with Sony Electronics as General Manager, Marketing, and Ford Motor Company where he held multiple marketing roles. ​ Richard C.
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Smith served in various key positions within the Company. ​ ​ 13 Table of Contents

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

61 edited+8 added−6 removed47 unchanged
Biggest changeAccomplishing store development and expansion goals will depend upon a number of factors, including the ability to identify and obtain suitable sites for new and expanded stores in a timely manner and at acceptable costs, the hiring and training of qualified personnel and the integration of new stores into existing operations.
Biggest changeManagement’s Discussion and Analysis of Financial Condition and Results of Operations” for further discussion of same store sales. ​ Our ability to grow depends in part on new store openings, existing store remodels and expansions and effective utilization of our existing supply chain and hub network. ​ We have increased our store count in the past five fiscal years, growing from 6,411 stores at August 31, 2019 to 7,353 stores at August 31, 2024, a compounded annual growth rate of approximately three percent. ​ Achieving our store development and expansion goals will depend upon our ability to identify and obtain suitable sites for new and expanded stores in a timely manner and at acceptable costs, the hiring and training of qualified personnel and the integration of new stores into existing operations, among other factors.
Our business could also be affected by additional factors that are presently unknown to us or that we currently believe to be immaterial to our business. ​ Strategic and Operational Risks ​ If demand for our products slows, then our business may be materially adversely affected.
Our business could also be materially affected by additional factors that are presently unknown to us or that we currently believe to be immaterial to our business. Strategic and Operational Risks ​ If demand for our products slows, then our business may be materially adversely affected.
Changes to the price or flow of these goods for any reason, such as civil unrest or acts of war, currency fluctuations, disruptions in maritime lanes, port labor disputes, economic conditions and instability in the countries in which foreign suppliers are located, the financial instability of suppliers, suppliers’ failure to meet our standards, issues with labor practices of our suppliers or labor problems they may experience (such as strikes, stoppages or slowdowns, which could also increase labor costs during and following the disruption), the availability and cost of raw materials to suppliers, increased import duties or tariffs, merchandise quality or safety issues, shipping and transport availability and cost, increases in wage rates and taxes, transport security, foreign trade policies, trade sanctions, import limitations on certain types of goods or of goods containing certain materials from other countries, port labor agreements, inflation and other factors relating to the suppliers and the countries in which they are located or from which they import, often are beyond our control and could adversely affect our operations and profitability.
Changes to the price or flow of these goods for any reason, such as civil unrest or acts of war, currency fluctuations, disruptions in maritime lanes, port labor disputes and other issues, economic conditions and instability in the countries in which foreign suppliers are located, the financial instability of suppliers, suppliers’ failure to meet our standards, issues with labor practices of our suppliers or labor problems they may experience (such as strikes, stoppages or slowdowns, which could also increase labor costs during and following the disruption), the availability and cost of raw materials to suppliers, increased import duties or tariffs, merchandise quality or safety issues, shipping and transport availability and cost, increases in wage rates and taxes, transport security, foreign trade policies, trade sanctions, import limitations on certain types of goods or of goods containing certain materials from other countries, inflation and other factors relating to the suppliers and the countries in which they are located or from which they import, often are beyond our control and could adversely affect our operations and profitability.
Further, our responses to any union organizing efforts could negatively impact how our brand is perceived by customers and AutoZoners and have adverse effects on our business and financial results. ​ If we are unable to hire, properly train and retain qualified AutoZoners, we could experience higher employment costs, reduced sales, losses of customers and diminution of our brand or company culture, which could adversely affect our earnings.
Further, our responses to any union organizing efforts could negatively impact how our brand is perceived by customers and AutoZoners and have material adverse effects on our business and financial results. ​ If we are unable to hire, properly train and retain qualified AutoZoners, we could experience higher employment costs, reduced sales, losses of customers and diminution of our brand or company culture, which could adversely affect our earnings.
For example, in recent years, ports, rails and domestic long-hauls in the U.S. and elsewhere have been negatively impacted by capacity constraints, congestion and delays, periodic labor disputes, security issues, weather-related events, and natural disasters, which have been further exacerbated by the COVID-19 pandemic and other factors beyond our control.
For example, in recent years, ports, rails and domestic long-hauls in the U.S. and elsewhere have been negatively impacted by capacity constraints, congestion and delays, periodic labor disputes, security issues, weather-related events, and natural disasters, which were further exacerbated by the COVID-19 pandemic and other factors beyond our control.
We may not be able to accurately predict, prepare for and respond to new kinds of technological innovations with respect to electric vehicles and other technologies that minimize emissions. Compliance with any new or more stringent laws or regulations, or stricter interpretations of existing laws, could require additional expenditures by us or our suppliers.
We may not be able to accurately predict, prepare for and effectively respond to new kinds of technological innovations with respect to electric vehicles and other technologies that minimize emissions. Compliance with any new or more stringent laws or regulations, or stricter interpretations of existing laws, could require additional expenditures by us or our suppliers.
Failure to attract and retain qualified personnel in key roles could adversely affect our operations. ​ Inability to acquire and provide quality merchandise at competitive prices could adversely affect our sales and results of operations. ​ We are dependent upon our domestic and international vendors continuing to supply us with quality merchandise at competitive prices and payment terms.
Failure to attract and retain qualified personnel in key roles could materially adversely affect our operations. ​ Inability to acquire and provide quality merchandise at competitive prices could materially adversely affect our sales and results of operations. ​ We are dependent upon our domestic and international vendors continuing to supply us with quality merchandise at competitive prices and payment terms.
The damages sought against us in these proceedings may be material and may adversely affect our business, results of operations, financial condition and cash flows. ​ General Risks ​ Significant changes in macroeconomic and geo-political factors could adversely affect our financial condition and results of operations. ​ Macroeconomic conditions impact both our customers and our suppliers.
The damages sought against us in these proceedings may be material and may adversely affect our business, results of operations, financial condition and cash flows. ​ General Risks ​ Significant changes in macroeconomic and geo-political factors could materially adversely affect our financial condition and results of operations. ​ Macroeconomic conditions impact both our customers and our suppliers.
Such disruptions may result from damage or destruction of our distribution centers, our ability to attract and retain qualified drivers, costs associated with maintaining or operating our fleet or macroeconomic conditions impacting the broader supply chain industry at large.
Such disruptions may result from damage or destruction of our distribution centers, our ability to attract and retain qualified drivers, costs associated with maintaining or operating our fleet or macroeconomic conditions impacting the broader logistics or supply chain industry at large.
The unexpected loss of the services of any such persons could adversely affect our operations. There can be no assurance that our succession planning, retention or hiring efforts will be successful.
The unexpected loss of the services of any such persons could materially adversely affect our operations. There can be no assurance that our succession planning, retention or hiring efforts will be successful.
While such incidents have not been material to date, any future incident could significantly disrupt our operations and key business processes, result in the impairment or loss of critical data, be costly and resource-intensive to remedy; harm our reputation and relationship with customers, AutoZoners, vendors and other stakeholders; and have a material adverse impact on our business and operating results. ​ In addition, our information technology systems, infrastructure and personnel require substantial investments, such as replacing existing systems, some of which are older, legacy systems that are less flexible and efficient, with successor systems; making changes to existing systems, including the migration of applications to the cloud; maintaining or enhancing legacy systems that are not currently being replaced; or designing or cost-effectively 19 Table of Contents acquiring new systems with new functionality.
While such incidents have not been material to date, any future incident could significantly disrupt our operations and key business processes, result in the impairment or loss of critical data, be costly and resource-intensive to remedy; harm our reputation and relationship with customers, AutoZoners, vendors and other stakeholders; and have a material adverse impact on our business and operating results. ​ In addition, our information technology systems, infrastructure and personnel require substantial investments, such as replacing existing systems, some of which are older, legacy systems that are less flexible and efficient, with successor systems; making changes to existing systems, including the migration of applications to the cloud; maintaining or enhancing legacy systems that are not currently being replaced; or designing or cost-effectively acquiring and implementing new systems with new functionality.
Further, the National Labor Relations Board (NLRB) has issued decisions making it easier for employees to organize. Although none of our employees are currently covered by collective bargaining agreements, there can be no assurance that our employees will not elect to be represented by labor unions in the future.
Further, the National Labor Relations Board (NLRB) has issued decisions making it easier for employees to organize. Although none of our domestic employees are covered by collective bargaining agreements, there can be no assurance that our domestic employees will not elect to be represented by labor unions in the future.
As a result, foreign currency exchange rates and fluctuations in those rates may adversely impact our financial performance. ​ Business interruptions may negatively impact our operating hours, operability of our computer and other systems, availability of merchandise and otherwise have a material negative effect on our sales and our business. ​ Business interruptions including war or acts of terrorism, political or civil unrest, unusual or severe weather conditions such as hurricanes, tornadoes, windstorms, fires, earthquakes and floods, public health crises and other disasters or the threat of any of them, may negatively impact the hours and operations of our stores, distribution centers, store support centers or sourcing offices; may negatively impact our supply chain and distribution network; and may impede our ability to source quality merchandise domestically and outside of the U.S. on favorable terms. ​ In the event commercial transportation is curtailed or substantially delayed, we may have difficulty transporting merchandise to our distribution centers and stores resulting in lost sales and/or a potential loss of customer loyalty.
As a result, foreign currency exchange rates and fluctuations in those rates may adversely impact our financial performance. ​ Business interruptions may negatively impact our operating hours, operability of our computer and other systems, availability of merchandise and otherwise have a material adverse effect on our sales and our business. ​ Business interruptions including war or acts of terrorism, political or civil unrest, unusual or severe weather conditions such as hurricanes, tornadoes, windstorms, fires, earthquakes and floods, public health crises and other disasters or the threat of any of them, may negatively impact the hours and operations of our stores, distribution centers, store support centers or sourcing offices; may negatively impact our supply chain and distribution network; and may impede our ability to source quality merchandise domestically and outside of the U.S. on favorable terms. 17 Table of Contents ​ In the event commercial transportation is curtailed or substantially delayed, we may have difficulty transporting merchandise to our distribution centers and stores resulting in lost sales and/or a potential loss of customer loyalty.
For example, significant increases in fuel economy requirements, new federal or state restrictions on emissions of carbon dioxide or new federal or state incentive programs that may be imposed on vehicles and automobile fuels could adversely affect demand for vehicles, annual miles driven or the products we sell.
For example, significant increases in fuel economy requirements, new federal or state restrictions on emissions of carbon dioxide or new federal or state incentive programs or other regulations that may be imposed on vehicles and automobile fuels could adversely affect demand for vehicles, annual miles driven or the products we sell.
Achievement of these aspirations, targets, plans and goals is subject to numerous risks and uncertainties, many of which are outside of our control.
Achievement of these aspirations, plans and goals is subject to numerous risks and uncertainties, many of which are outside of our control.
Certain challenges we face in the achievement of our ESG 22 Table of Contents objectives are also captured within our ESG reporting, which is not incorporated by reference into and does not form any part of this report. ​ Our business, financial condition, results of operations and cash flows may be affected by litigation. ​ We are involved in lawsuits, regulatory investigations, governmental and other legal proceedings arising out of the ordinary course of business.
Certain challenges we face in the achievement of our ESG objectives are also captured within our ESG reporting, which is not incorporated by reference into and does not form any part of this report. ​ Our business, financial condition, results of operations and cash flows may be affected by litigation. ​ We are involved in lawsuits, regulatory investigations, governmental and other legal proceedings arising out of the ordinary course of business.
Our inability to appropriately respond to such changes could adversely impact our business, financial condition, results of operations or cash flows ​ We may be unable to achieve the goals and aspirations set forth in our environmental, social and governance (ESG) report, particularly with respect to the reduction of greenhouse gas (GHG) emissions, or otherwise meet the expectations of our stakeholders with respect to ESG matters. ​ Increasing governmental and societal attention to ESG matters, including expanding mandatory and voluntary reporting, and disclosure topics such as climate change, sustainability, natural resources, waste reduction, energy, human capital, and risk oversight could expand the nature, scope, and complexity of matters that we are required to control, assess, and report.
Our inability to appropriately respond to such changes could materially adversely impact our business, financial condition, results of operations or cash flows. ​ We may be unable to achieve the goals and aspirations set forth in our environmental, social and governance (ESG) report, particularly with respect to the reduction of GHG emissions, or otherwise meet the expectations of our stakeholders with respect to ESG matters. ​ Increasing governmental and societal attention to ESG matters, including expanding mandatory and voluntary reporting of GHG emissions and other sustainability metrics, and disclosure topics such as climate change, sustainability, natural resources, waste reduction, energy, human capital, and risk oversight could expand the nature, scope, and complexity of matters that we are required to control, assess, and report.
These could adversely affect our financial condition and operations. ​ Item 1B. Unresolved Staff Comments None.
These could materially adversely affect our financial condition and operations. ​ Item 1B. Unresolved Staff Comments None.
If a significant portion of our work force were to become unionized, our culture and operating model could be challenged by inserting a third party between our current terrific relationships between our leaders and hourly AutoZoners.
If a significant portion of our work force were to become unionized, our culture and operating model could be challenged by inserting a third party into our current relationships between our leaders and hourly AutoZoners.
A violation or change in employment and labor laws (including changes in existing employment benefit programs such as health insurance) could have a material adverse effect on our results of operations, financial condition and cash flows. ​ Our future success depends on the skills and experience of our management and other key personnel.
A violation or change in employment and labor laws (including changes in existing employment benefit programs such as health insurance) could have a material adverse effect on our results of operations, financial condition and cash flows. ​ 15 Table of Contents Our future success depends on the skills and experience of our management and other key personnel.
We cannot be assured that we can continue to hire, train and retain qualified employees at current wage rates since we operate in a competitive labor market, and there are currently significant inflationary and other pressures on wages. ​ In the U.S., there has been an increase in workers exercising their right to form or join a union, both generally and in the retail industry.
We cannot be assured that we can continue to hire, train and retain qualified employees at current wage rates since we operate in a competitive labor market, and there are currently significant inflationary and other pressures on wages. ​ In the U.S., over the last few years there has been an increase in workers exercising their right to form or join a union, both generally and in the retail industry.
Customers are also increasingly using social media to provide feedback and information about our Company, our products and services in a manner that is rapidly and broadly disseminated.
Customers are also increasingly using social media to provide feedback, criticism and other information about our Company, our products and our services in a manner that is rapidly and broadly disseminated.
To the extent any cyber incident involving our or one of our third-party service provider’s information systems results in the unauthorized access, loss, damage or misappropriation of information, we may be required by law to notify impacted individuals and face substantial liability due to claims arising from customers, financial institutions, regulatory authorities, payment card issuers and others.
To the extent any cyber incident involving our or one of our third-party service provider’s information systems results in the unauthorized access, loss, damage or misappropriation of information, we may be required by law to notify impacted individuals and face substantial 19 Table of Contents liability due to claims arising from customers, financial institutions, AutoZoners, regulatory authorities, payment card issuers and others.
Events that give rise to actual, potential or perceived product safety concerns could expose us to government enforcement action or private litigation, result in 16 Table of Contents costly product recalls and other liabilities and lead to reputational harm and loss of customer confidence.
Events that give rise to actual, potential or perceived product safety concerns could expose us to government enforcement action or private litigation, result in costly product recalls and other liabilities and lead to reputational harm and loss of customer confidence.
Increased prevalence of electric vehicles, whether due to changes in consumer preferences or regulatory action incentivizing the purchase of electric vehicles, can result in less frequent parts failures and reduced need for parts. ● the quality of the vehicles manufactured by the original vehicle manufacturers and the length of the warranties or maintenance offered on new vehicles. ● restrictions on access to telematics and diagnostic tools and repair information imposed by the original vehicle manufacturers or by governmental regulation.
Increased prevalence of electric vehicles, whether due to changes in consumer preferences or regulatory actions incentivizing the purchase of electric vehicles, can result in less frequent parts failures and reduced need for parts. ● the quality of the vehicles manufactured by the original vehicle manufacturers and the length of the warranties or maintenance offered on new vehicles. 13 Table of Contents ● restrictions on access to telematics and diagnostic tools and repair information imposed by the original vehicle manufacturers or by governmental regulation.
The potential effects of the various laws regulating the collection, processing, transfer and use of personal or protected information are far-reaching and may require significant time, resources and costs to comply, may require changes to our existing 20 Table of Contents practices and processes that are not advantageous to our business, and otherwise limit our ability to use data to provide a more personalized customer experience or as otherwise desired.
The potential effects of the various laws regulating the collection, transfer, use and other types of processing of personal or protected information are far-reaching and may require significant time, resources and costs to comply, may require changes to our existing practices and processes that are not advantageous to our business, and otherwise limit our ability to use data to provide a more personalized customer experience or as otherwise desired.
In addition, failure to comply with applicable requirements by us or our business partners or third-party service providers or vendors could subject us to fines, sanctions, governmental investigations, lawsuits or reputational damage. ​ Additionally, while we seek to comply with these various laws as they take effect, many of the concepts are novel and rulemaking is not finalized.
In addition, failure to comply with applicable requirements by us or our business partners or third-party service providers or vendors could subject us to fines, sanctions, governmental investigations, lawsuits or reputational damage. ​ Additionally, while we seek to comply with these various laws as they take effect, many of the concepts are novel.
Although we believe we compete effectively in the commercial market on the basis of customer service, merchandise quality, selection and availability, price, delivery times, product warranty, distribution locations and the strength of our AutoZone brand name, trademarks and service marks, some automotive aftermarket participants have been in business for substantially longer periods of time than we have, and as a result have developed long-term customer relationships and have large available inventories.
Although we believe we compete effectively in the commercial market on the basis of customer service, merchandise quality, selection and availability, price, delivery times, product warranty, distribution locations and the strength of our AutoZone brand, trademarks and service marks, some automotive aftermarket participants have been in business for substantially longer periods of time than we have, and as a result have developed long-term customer relationships, an experienced sales organization, considerable market presence and have large available inventories.
Negative incidents can erode trust and confidence quickly, and adverse publicity about us could damage our brand and reputation, undermine our customers’ confidence in us, reduce demand for our products and services, affect our ability to recruit and retain employees, attract regulatory scrutiny, and impact our relationships with suppliers and vendors.
Negative incidents can erode trust and confidence quickly, and adverse publicity about us, whether or not based in fact, could damage our brand and reputation, undermine our customers’ confidence in us, reduce demand for our products and services, affect our ability to recruit and retain employees, attract regulatory scrutiny, and impact our relationships with suppliers and vendors.
A failure or perceived failure to meet these expectations could adversely affect public perception of our business, employee morale or customer or shareholder support. ​ We have announced certain aspirations and goals related to ESG matters, such as plans to reduce certain GHG emissions over time.
A 21 Table of Contents failure or perceived failure to meet these expectations could adversely affect public perception of our business, employee morale or customer or shareholder support. ​ We have announced certain aspirations and goals related to ESG matters, such as our intention to reduce certain GHG emissions over time.
Growing concern over climate change has led policy makers in the U.S. to consider the enactment of legislative and regulatory proposals that would impose mandatory requirements for reductions of greenhouse gas (GHG) emissions. Such laws, if enacted, are likely to impact our business in a number of ways.
Growing concern over climate change has led policy makers in the U.S. to consider the enactment of legislative and regulatory proposals that would impose extensive mandatory reporting requirements as well as requirements for reductions of greenhouse gas (“GHG”) emissions. Such laws, if enacted, are likely to impact our business in a number of ways.
If we fail to effectively utilize our existing hubs and/or supply chains, or if our investments in our supply chain initiatives, including directly sourcing some products from outside the U.S., do not provide the anticipated benefits, we could experience sub-optimal inventory levels in our stores or increases in our operating costs, which could adversely affect our sales volume and/or our margins. ​ Our success in international operations is dependent on our ability to manage the unique challenges presented by international markets. ​ The various risks we face in our U.S. operations generally also exist when conducting operations in and sourcing products and materials from outside of the U.S., in addition to the unique costs, risks and difficulties of managing international operations.
If we fail to effectively implement these changes, or if our investments in our supply chain initiatives do not provide the anticipated benefits, we could experience sub-optimal inventory levels in our stores or increases in our operating costs, which could adversely affect our sales volume and/or our margins. ​ Our success in international operations is dependent on our ability to manage the unique challenges presented by international markets. ​ The various risks we face in our U.S. operations generally also exist when conducting operations in and sourcing products and materials from outside of the U.S., in addition to the unique costs, risks and difficulties of managing international operations.
Although we seek to effectively maintain and safeguard our systems and our data and we seek to ensure our third-party service providers effectively maintain and safeguard their systems and our data, such efforts are not always successful.
Although we seek to 18 Table of Contents effectively maintain and safeguard our systems and our data and we seek to ensure our third-party service providers effectively maintain and safeguard their systems and our data, such efforts are not always successful.
Any damage to, failure of, or interruption in these systems could have a material adverse impact on our business and operating results. ​ We rely extensively on information technology systems, some of which are managed or provided by third-party service providers, to collect, analyze, process, store, manage, transmit and protect key business processes, transactions and data, such as sales data, customer data, employee data, demand forecasting, merchandise ordering, inventory replenishment, supply chain management, payment processing, order fulfillment and more.
Any damage to, failure of, or interruption in these systems or our inability to realize the anticipated benefits associated with investments in new or upgraded systems could have a material adverse effect on our business and operating results. ​ We rely extensively on information technology systems, some of which are managed or provided by third-party service providers, to collect, analyze, process, store, manage, transmit and protect key business processes, transactions and data, such as sales data, customer data, employee data, demand forecasting, merchandise ordering, inventory replenishment, supply chain management, payment processing, order fulfillment and more.
Item 1A. Risk Factors Our business is subject to a variety of risks and uncertainties. The risks and uncertainties described below could materially and adversely affect our business, financial condition, operating results, cash flows and stock price.
Item 1A. Risk Factors Our business is subject to a variety of risks and uncertainties. The risks and uncertainties described below could materially and adversely affect our business, financial condition, results of operations, liquidity and stock price.
Given the short amount of time between finalized rulemaking and the dates these laws become effective and enforceable, there can be no assurance that compliance efforts taken by us in good faith will be sufficient, and we may be the subject of an investigation or enforcement action instituted by a state agency or other regulatory body. ​ Indebtedness, Financial and Market Risks We are self-insured for certain costs associated with our operations and an increase in our insurance claims and expenses may have a material negative impact on us. ​ We are self-insured up to certain limits for workers’ compensation, employee group medical, general liability, product liability, property and automobile.
There can be no assurance that compliance efforts taken by us in good faith will be sufficient, and we may be the subject of an investigation or enforcement action instituted by a state agency or other regulatory body. ​ Indebtedness, Financial and Market Risks We are self-insured for certain costs associated with our operations and an increase in our insurance claims and expenses may have a material negative impact on us. ​ We are self-insured up to certain limits for workers’ compensation, employee group medical, general liability, product liability, property and automobile.
If we are unable to profitably develop new commercial customers, our sales growth may be limited. ​ 15 Table of Contents Our business depends upon hiring, training and retaining qualified employees, including members of management and other key personnel. ​ We believe much of our brand value lies in the quality of the approximately 119,000 AutoZoners employed in our stores, distribution centers, store support centers and ALLDATA.
If we are unable to profitably grow our sales with existing commercial customers, our sales growth may be limited. ​ Our business depends upon hiring, training and retaining qualified employees, including members of management and other key personnel. ​ We believe much of our brand value lies in the quality of the approximately 126,000 AutoZoners employed in our stores, distribution centers, store support centers and ALLDATA.
In periods of declining economic conditions, including as a result of inflation, consumers may reduce their discretionary spending by deferring vehicle maintenance or repair. Additionally, such conditions may affect our customers’ ability to obtain credit.
In periods of declining economic conditions, including as a result of inflation, high levels of consumer debt, and/or high interest rates, consumers may reduce their discretionary spending by deferring vehicle maintenance or repair. Additionally, such conditions may affect our customers’ ability to obtain credit.
These restrictions may cause vehicle owners to rely on dealers to perform maintenance and repairs. ​ ​ These factors could result in a decline in the demand for our products, which could adversely affect our business and overall financial condition. ​ 14 Table of Contents If we are unable to compete successfully against other businesses that sell the products that we sell, we could lose customers and our sales and profits may decline.
These restrictions may cause vehicle owners to rely on dealers to perform maintenance and repairs. ​ ​ These factors could result in a decline in the demand for our products, which could materially adversely affect our business and overall financial condition. ​ If we are unable to compete successfully against other businesses that sell the products that we sell, we could lose customers and our sales and profits may decline. ​ The sale of automotive parts, accessories and maintenance items is highly competitive.
These costs may have a material adverse impact on our business and results of operations . ​ The regulatory environment related to information security, data collection, processing and use, and data privacy is becoming increasingly rigorous and complex.
These costs may have a material adverse impact on our business and results of operations . ​ The regulatory environment related to information security, data collection, processing and use, and data privacy is becoming increasingly rigorous and complex. Multiple states in the U.S. have passed, and continue to pass, data protection laws.
Furthermore, we accept payments using a variety of methods, including credit, debit, electronic payments and gift cards, which present information security risks, and we may offer new payment options in the future presenting new risks of which we are currently unaware. ​ While addressing vulnerabilities is a priority for us, the methods used to obtain unauthorized access are constantly evolving, increasing in frequency and sophistication, and can be difficult to anticipate or detect for long periods of time.
Furthermore, we accept payments using a variety of methods, including credit, debit, electronic payments and gift cards, which present information security risks, and we may offer new payment options in the future presenting new risks of which we are currently unaware. ​ While addressing vulnerabilities is a priority for us, the methods used to obtain unauthorized access are constantly evolving and increasing in frequency and sophistication, including through the use of evolving artificial intelligence tools to identify and exploit vulnerabilities.
The security measures we or our third-party service providers and vendors have in place today in an effort to keep up with growing and evolving risks do not always prevent or mitigate the impact of a cyber incident or provide us with sufficient visibility to determine if a cyber incident has occurred, and there can be no assurance that such measures we introduce in the future will be sufficiently effective either.
We cannot assure you that the security measures we or our third-party service providers and vendors have in place today will be successful in their efforts to prevent or mitigate the impact of a cyber incident or provide us with sufficient visibility to determine if a cyber incident has occurred, and there can be no assurance that such measures we introduce in the future will be sufficiently effective either.
If we do not maintain competitive wages or benefit packages, our customer service could suffer due to a declining quality of our workforce, or, alternatively, our earnings could decrease if we increase our wage rates.
If we do not maintain competitive wages or benefit packages, our customer service could suffer from any resultant declining quality of our workforce, or, alternatively, our earnings could decrease if we increase our wage rates and resultant labor costs.
Our workforce costs represent our largest operating expense, and our ability to meet our labor needs while controlling labor costs is subject to numerous external factors, including market pressures with respect to prevailing wage rates and unemployment levels. Our business is also subject to employment laws and regulations, including those related to minimum wage, benefits and scheduling requirements.
Our workforce costs represent our largest operating expense, and our ability to meet our labor needs while controlling labor costs is subject to numerous external factors, including market pressures with respect to prevailing wage rates and unemployment levels.
Although we have implemented policies and procedures to help ensure compliance with these laws, there can be no certainty that our employees and third parties with whom we do business will not take actions in violation of our policies or applicable laws.
These laws may change over time and may differ substantially across the areas where we operate. Although we have implemented policies and procedures to help ensure compliance with these laws, there can be no certainty that our AutoZoners and third parties with whom we do business will not take actions in violation of our policies or applicable laws.
See “Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations” for further discussion of same store sales. ​ We open new stores only after evaluating customer buying trends and market demand/needs, all of which could be adversely affected by persistent unemployment, wage cuts, small business failures, microeconomic conditions unique to the automotive industry and our ability to expand into international markets.
Furthermore, we open new stores only after evaluating customer buying trends and market demand/needs, all of which could be adversely affected by persistent unemployment, wage cuts, small business failures, microeconomic conditions unique to the automotive industry and our ability to expand into international markets.
Further, our actual or perceived response or lack of response to social, political, environmental or other sensitive issues, whether or not based in fact, could damage our reputation and may result in reduced demand for our merchandise.
Further, our actual or perceived strategies, initiatives, responses or lack of response relating to social, political, environmental or other issues, whether or not based in fact, could damage our reputation, negatively impact our stock price or result in reduced demand for our merchandise.
Business” above for additional information regarding our competitive environment. ​ Although we believe we compete effectively, our competitors may have greater financial and marketing resources allowing them to sell merchandise at lower prices, larger stores with more merchandise, longer operating histories with deeper customer relationships, more frequent customer visits and more effective advertising.
Business” above for additional information regarding our competitive environment. ​ Although we believe we compete effectively, our competitors may have greater financial resources allowing them to invest more in their business, greater sourcing capabilities allowing them to sell merchandise at lower prices, larger stores with more merchandise, longer operating histories with deeper customer relationships, more frequent customer visits, more effective advertising and more successful utilization of data analytics, artificial intelligence and other new and emerging technologies.
Any changes in regulations, the imposition of additional regulations, or the enactment of any new legislation, including tax legislation, could have an adverse impact, directly or indirectly, on our financial condition and results of operations.
Any changes in the enforcement or interpretation of existing laws and regulations or the enactment of any new laws and regulations, including tax legislation, could have a material adverse impact on our financial condition and results of operations.
Milder weather conditions may lower the failure rates of automotive parts, while extremely hot or cold conditions may enhance demand for our products due to increased failure rates of our customers’ automotive parts. Extended periods of rain and winter precipitation may cause our customers to defer maintenance and repair on their vehicles.
Milder weather conditions may lower the failure rates of automotive parts, while extremely hot or cold conditions may enhance demand for our products due to increased failure rates of our customers’ automotive parts.
A delay, failure or perceived failure or delay to meet our goals and aspirations could adversely affect public perception of our business, or we may lose shareholder support.
A delay, failure or perceived failure or delay to meet our goals and aspirations could adversely affect public perception of our business, cause us to lose shareholder support, and subject us to legal claims and liabilities with respect to such matters.
We have made, and plan to continue to make, significant investments in our supply chain to improve product availability and product assortment, fulfill evolving consumer product demands and keep up with our long-term store expansion goals.
These investments seek to improve product availability and assortment, fulfill evolving consumer product demands and keep up with our long-term store expansion goals.
Furthermore, such business interruptions could cause additional negative impacts of which we are not currently aware or magnify other risks associated with our business and operations. 18 Table of Contents Our failure to protect our brand and reputation could have an adverse effect on our relationships with our customers, employees, suppliers, vendors and other stakeholders, thereby negatively impacting sales and profitability. ​ We believe our continued strong sales growth is driven in significant part by our AutoZone and private label brand names and our positive reputation with customers, employees, suppliers, vendors and other stakeholders.
Our failure to protect our brand and reputation could have an adverse effect on our relationships with our customers, AutoZoners, suppliers, vendors and other stakeholders, thereby negatively impacting sales and profitability. ​ We believe our continued sales growth is driven in significant part by our AutoZone and private label brand names and our positive reputation with customers, AutoZoners, suppliers, vendors and other stakeholders.
Same store sales are impacted both by customer demand levels and by the prices we are able to charge for our products, which can also be negatively impacted by economic pressures. ​ If we cannot profitably increase our market share in the commercial auto parts business, our sales growth may be limited. ​ Although we are a leading distributor of automotive parts and other products in the commercial market, we must effectively compete against national, regional and local auto parts chains, independently owned parts stores, wholesalers, jobbers, repair shops, auto dealers, online retailers and others in order to increase our commercial market share.
There can be no assurance we will be able 14 Table of Contents to achieve our store expansion goals, manage our growth effectively, successfully integrate the planned new stores into our operations or operate our new, remodeled and expanded stores profitably. ​ If we cannot profitably increase our market share in the commercial auto parts business, our sales growth may be limited. ​ Although we are a leading distributor of automotive parts and other products in the commercial market, we must effectively compete against national, regional and local auto parts chains, independently owned parts stores, wholesalers, jobbers, repair shops, auto dealers, online retailers and others in order to increase our commercial market share.
Credit market and other macroeconomic conditions could also have a material adverse effect on the ability of our global and domestic suppliers to finance and operate their businesses. ​ If any of our significant vendors experience financial difficulties, business disruptions or are unable to deliver merchandise to us on a timely basis, or at all, we could have product shortages in our stores that could adversely affect customers’ perceptions of us and cause us to lose customers and sales. ​ Disruptions in our supply chain and other factors affecting the distribution of our merchandise could adversely impact our business. ​ A disruption to our supply chain or distribution network could adversely affect our ability to receive and distribute inventory in a timely manner, which could result in low inventory availability, lost sales, increased supply chain costs and loss of customer loyalty, among other things.
Credit market and other macroeconomic conditions could also have a material adverse effect on the ability of our global and domestic suppliers to finance and operate their businesses. ​ If any of our significant vendors experience financial difficulties or business disruptions or are otherwise unable to deliver merchandise to us on a timely basis, or at all, we could have product shortages in our stores that could adversely affect customers’ perceptions of us and cause us to lose customers and sales. ​ We are subject to risks associated with products sourced outside the U.S. ​ We directly imported approximately 13% of our purchases in fiscal 2024, but many of our domestic vendors directly import their products or components of their products.
In addition, because our business strategy is based on offering superior levels of customer service to complement the products we offer, our cost structure is higher than some of our competitors, which also puts pressure on our margins. ​ Consumers are embracing shopping online, including through mobile applications.
In addition, because our business strategy is based on offering superior levels of customer service to complement the products we offer, our cost structure is higher than some of our competitors, which also puts pressure on our margins. ​ With the increasing use of digital tools, our customers often begin their shopping experience online and are quickly able to compare prices, product assortment, product availability and feedback from other customers before purchasing products.
With the increasing use of digital tools and social media, and our competitors’ increased focus on optimizing customers’ online experience, our customers are quickly able to compare prices, product assortment, product availability and feedback from other customers before purchasing products. ​ If we are unable to continue to manage in-stock inventory and costs, provide competitive delivery options, develop successful competitive strategies, including the maintenance of effective promotions, advertising and loyalty programs, develop and execute effective digital and omni-channel strategies or otherwise compete effectively, or if our competitors develop more effective strategies, we could lose customers and our sales and profits may decline. ​ We may not be able to sustain our historic rate of sales growth. ​ We have increased our store count in the past five fiscal years, growing from 6,202 stores at August 25, 2018, to 7,140 stores at August 26, 2023, a compounded annual growth rate of three percent.
We may be unable to differentiate ourselves or unable to anticipate and adapt to new or enhanced digital experiences offered by other retailers. ​ If we are unable to continue to manage in-stock inventory and costs, provide competitive delivery options, develop successful competitive strategies, including the maintenance of effective promotions, advertising and loyalty programs, develop and execute effective digital and omni-channel strategies or otherwise compete effectively, or if our competitors develop more effective strategies, we could lose customers and our sales and profits may decline. ​ We may not be able to sustain our historic rate of sales growth. ​ We have increased annual revenues in the past five fiscal years from $11.9 billion in fiscal 2019 to $18.5 billion in fiscal 2024, with a compounded annual growth rate of approximately nine percent.
Additionally, climate changes can create more variability in the short-term or lead to other weather conditions that could impact our business. ● technological advances. Advances in automotive technology, such as improved parts design, can result in cars needing maintenance less frequently and parts lasting longer. ● prevalence of electric vehicles.
Advances in automotive technology, such as improved parts design, can result in cars needing maintenance less frequently and parts lasting longer. ● prevalence of electric vehicles.
Moreover, significant deterioration in the financial condition of large financial institutions during the Great Recession resulted in a severe loss of liquidity and availability of credit in global credit markets and in more stringent borrowing terms. We can provide no assurance that such similar events that occurred during the Great Recession will not occur again in the foreseeable future.
Moreover, significant deterioration in the financial condition of large financial institutions could result in a severe loss of liquidity and availability of credit in global credit markets and in more stringent 20 Table of Contents borrowing terms.
Our business and competitive position may be negatively impacted if we are unable to successfully mitigate the impacts of such disruption to our supply chain or if we are unable to manage such disruptions more effectively than our competitors. ​ We are subject to risks associated with products sourced outside the U.S. ​ We directly imported approximately 16% of our purchases in fiscal 2023, but many of our domestic vendors directly import their products or components of their products.
Our business and competitive position may be negatively impacted if we are unable to successfully mitigate the impacts of such disruption to our supply chain or if we are unable to manage such disruptions more effectively than our competitors. ​ In addition, we have made, and plan to continue to make, significant investments in our supply chain, such as the construction of multiple new distribution centers and the execution of various technology initiatives.
These and other factors affecting our suppliers and our access to products could adversely affect our business and financial performance.
Furthermore, these risks may be amplified if we are unable to diversify our supply chain or rely too heavily on a single country to source our or our vendors’ products. These and other factors affecting our suppliers and our access to products could materially adversely affect our business and financial performance.
Removed
The sale of automotive parts, accessories and maintenance items is highly competitive. See “Item 1.
Added
However, extended periods of rain and winter precipitation may adversely impact store traffic, decreasing sales, or may cause our customers to defer maintenance and repair on their vehicles. Additionally, climate changes can create more variability in the short-term or lead to other weather conditions that could impact our business. ● technological advances.
Removed
Additionally, we have increased annual revenues in the past five fiscal years from $11.2 billion in fiscal 2018 to $17.5 billion in fiscal 2023, with a compounded annual growth rate of nine percent. Annual revenue growth is driven by increases in same store sales, the opening of new stores and the development of new commercial programs.
Added
Annual revenue growth is driven by increases in same store sales, the opening of new stores and the development of new commercial programs. Same store sales are impacted both by customer demand levels and by the prices we are able to charge for our products, which can also be negatively impacted by economic pressures. See “Item 7.
Removed
As we or our domestic vendors increase the importation of merchandise or components from foreign vendors, these risks are likely to increase. ​ Our ability to grow depends in part on new store openings, existing store remodels and expansions and effective utilization of our existing supply chain and hub network. ​ Our continued growth and success will depend in part on our ability to open and operate new stores and expand and remodel existing stores to meet customers’ needs on a timely and profitable basis.
Added
Our business is also subject to employment laws and regulations, including those related to minimum wage, benefits and scheduling requirements, and these laws are subject to change over time.
Removed
There can be no assurance we will be able to 17 Table of Contents achieve our store expansion goals, manage our growth effectively, successfully integrate the planned new stores into our operations or operate our new, remodeled and expanded stores profitably. ​ In addition, we extensively utilize our hub network, our supply chain and our logistics management techniques to efficiently stock our stores.
Added
As we or our domestic vendors increase the importation of merchandise or components from foreign vendors, these risks are likely to increase. ​ 16 Table of Contents Disruptions in our supply chain and other factors affecting the distribution of our merchandise could adversely impact our business. ​ A disruption to our supply chain or distribution network could adversely affect our ability to receive and distribute inventory in a timely manner, which could result in low inventory availability, lost sales, increased supply chain costs and loss of customer loyalty, among other things.
Removed
Multiple states in the U.S. have passed, and continue to pass, data protection laws designed to provide new rights to consumers and, in some cases, employees.
Added
Furthermore, such business interruptions could cause additional negative impacts of which we are not currently aware or magnify other risks associated with our business and operations.
Removed
These laws may change over time and may differ 21 Table of Contents substantially across the areas where we operate.
Added
Attempts to gain unauthorized access can be difficult to anticipate or promptly detect.
Added
Additionally, a downgrade in our credit or changes in the financial markets may limit financial institutions’ willingness to participate in our supplier financing arrangements, which may result in vendors seeking to renegotiate their payment terms.
Added
In addition, some jurisdictions have adopted laws and other regulations that may subject companies operating in those jurisdictions to legal liability for failing to meet published goals.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeProperties The following table reflects the square footage and number of leased and owned properties for our stores as of August 26, 2023: ​ ​ ​ ​ ​ ​ No. of Store Square ​ ​ Stores ​ Footage (1) Leased 3,931 26,158,259 Owned 3,209 21,741,090 Total 7,140 47,899,349 ​ (1) Square footage excludes store support centers, regional offices, distribution centers and the areas that hold the local mega hub and hub expanded assortment.
Biggest changeProperties The following table reflects the number of leased and owned properties and square footage of selling space for our stores as of August 31, 2024: ​ ​ ​ ​ ​ ​ No. of Store Square ​ ​ Stores ​ Footage (1) Leased 4,081 27,226,410 Owned 3,272 22,190,827 Total 7,353 49,417,237 ​ (1) Square footage excludes store support centers, regional offices, distribution centers and the areas that hold the local mega hub and hub expanded assortment.
We have approximately 6.9 million square feet in distribution centers servicing our stores, of which approximately 2.0 million square feet is leased and the remainder is owned. We have 11 distribution centers located throughout the U.S., two in Mexico, and one in Brazil. Our primary store support center is located in Memphis, Tennessee, and consists of approximately 325,000 square feet.
We have approximately 7.1 million square feet in distribution centers servicing our stores, of which approximately 2.1 million square feet is leased and the remainder is owned. We have 11 distribution centers located throughout the U.S., two in Mexico, and one in Brazil. Our primary store support center is located in Memphis, Tennessee, and consists of approximately 325,000 square feet.
We also have three additional store support centers located in Monterrey, Mexico; Chihuahua, Mexico and Sao Paulo, Brazil. Our primary International Sourcing Office is located in Shanghai, China. The ALLDATA headquarters in Elk Grove, California is leased, and we also own or lease other properties which are not material individually or in the aggregate. 23 Table of Contents
We also have four additional store support centers located in Monterrey, Mexico; Chihuahua, Mexico; Sao Paulo, Brazil; and Gurugram, India. Our primary International Sourcing Office is located in Shanghai, China. The ALLDATA headquarters in Elk Grove, California is leased, and we also own or lease other properties which are not material individually or in the aggregate.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeAdditionally, we are not involved in any environmental proceeding in which a governmental authority is a party, and such proceeding involves potential monetary sanctions that we reasonably believe will exceed an applied threshold of $1 million. Item 4. Mine Safety Disclosures Not applicable. PART II
Biggest changeAdditionally, we are not involved in any environmental proceeding in which a governmental authority is a party, and such proceeding involves potential monetary sanctions that we reasonably believe will exceed an applied threshold of $1 million. Item 4. Mine Safety Disclosures Not applicable. 24 Table of Contents PART II
Item 3. Legal Proceedings We are involved in various other legal proceedings incidental to the conduct of our business, including, but not limited to, claims and allegations related to wage and hour violations, unlawful termination, employment practices, product liability, privacy and cybersecurity, environmental matters, intellectual property rights or regulatory compliance.
Item 3. Legal Proceedings We are involved in various legal proceedings incidental to the conduct of our business, including, but not limited to, claims and allegations related to wage and hour violations, unlawful termination, employment practices, product liability, privacy and cybersecurity, environmental matters, intellectual property rights or regulatory compliance.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 24 ​ ​ ​ PART II ​ 24 Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 24 Item 6. Reserved 26 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 27 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 41 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 24 ​ ​ ​ PART II ​ 25 Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 25 Item 6. Reserved 26 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 27 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 39 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeShares of common stock repurchased by the Company during the quarter ended August 26, 2023 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Period Total Number of Shares Purchased ​ ​ Average Price Paid per Share (1) ​ Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs ​ ​ Maximum Dollar Value that May Yet Be Purchased Under the Plans or Programs May 7, 2023 to June 3, 2023 86,678 ​ $ 2,560.49 ​ 86,678 ​ $ 621,625,545 June 4, 2023 to July 1, 2023 94,541 ​ 2,416.71 ​ 94,541 ​ ​ 2,393,147,061 July 2, 2023 to July 29, 2023 107,560 ​ 2,532.00 ​ 107,560 ​ ​ 2,120,805,558 July 30, 2023 to August 26, 2023 114,620 ​ ​ 2,499.71 ​ 114,620 ​ ​ 1,834,288,894 Total 403,399 ​ $ 2,501.93 ​ 403,399 ​ $ 1,834,288,894 ​ (1) Average price per share includes excise tax assessed at one percent of the fair market value of net stock repurchases. ​ 24 Table of Contents The Company also repurchased, at market value, an additional 4,886 and 7,611 shares in fiscal years 2022 and 2021, respectively, from employees electing to sell their stock under the Company’s Eighth Amended and Restated Employee Stock Purchase Plan (as amended from time to time, the “Employee Plan”), qualified under Section 423 of the Internal Revenue Code, under which all eligible employees may purchase AutoZone’s common stock at 85% of the lower of the market price of the common stock on the first day or last day of each calendar quarter through payroll deductions.
Biggest changeShares of common stock repurchased by the Company during the quarter ended August 31, 2024 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Period Total Number of Shares Purchased ​ ​ Average Price Paid per Share ​ Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs ​ ​ Maximum Dollar Value that May Yet Be Purchased Under the Plans or Programs May 5, 2024 to June 1, 2024 65,636 ​ $ 2,891.87 ​ 65,636 ​ $ 1,184,718,249 June 2, 2024 to June 29, 2024 81,197 ​ 2,881.79 ​ 81,197 ​ ​ 2,450,725,318 June 30, 2024 to July 27, 2024 84,860 ​ 2,936.78 ​ 84,860 ​ ​ 2,201,510,545 July 28, 2024 to August 31, 2024 12,096 ​ ​ 3,103.60 ​ 12,096 ​ ​ 2,163,969,364 Total 243,789 ​ $ 2,914.65 ​ 243,789 ​ $ 2,163,969,364 ​ The Company also repurchased, at market value, an additional 4,886 shares in fiscal year 2022 from employees electing to sell their stock under the Company’s Eighth Amended and Restated Employee Stock Purchase Plan (as amended from time to time, the “Employee Plan”), qualified under Section 423 of the Internal Revenue Code, under which all eligible employees may purchase AutoZone’s common stock at 85% of the lower of the market price of the common stock on the first day or last day of each calendar quarter through payroll deductions.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The principal market on which our common stock is traded is the New York Stock Exchange under the symbol “AZO.” On October 16, 2023, there were 1,703 stockholders of record, which does not include the number of beneficial owners whose shares were represented by security position listings.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The principal market on which our common stock is traded is the New York Stock Exchange under the symbol “AZO.” On October 21, 2024, there were 1,603 stockholders of record, which does not include the number of beneficial owners whose shares were represented by security position listings.
At August 26, 2023, 232,966 shares of common stock were reserved for future issuance under the Executive Plan. ​ 25 Table of Contents Stock Performance Graph The graph below presents changes in the value of AutoZone’s stock as compared to Standard & Poor’s 500 Composite Index (“S&P 500”) and to Standard & Poor’s Retail Index (“S&P Retail Index”) for the five-year period beginning August 25, 2018 and ending August 26, 2023. ​
At August 31, 2024, 232,426 shares of common stock were reserved for future issuance under the Executive Plan. 25 Table of Contents Stock Performance Graph The graph below presents changes in the value of AutoZone’s stock as compared to Standard & Poor’s 500 Composite Index (“S&P 500”) and to Standard & Poor’s Retail Index (“S&P Retail Index”) for the five-year period beginning August 31, 2019, and ending August 31, 2024.
Maximum permitted annual purchases are $15,000 per employee or 10 percent of compensation, whichever is less. Under the Employee Plan, 5,183, 6,238 and 8,479 shares were sold to employees in fiscal 2023, 2022 and 2021, respectively. At August 26, 2023, 122,341 shares of common stock were reserved for future issuance under the Employee Plan.
Maximum permitted annual purchases are $15,000 per employee or 10 percent of compensation, whichever is less. Under the Employee Plan, 5,000, 5,183 and 6,238 shares were sold to employees in fiscal 2024, 2023 and 2022, respectively. At August 31, 2024, 117,341 shares of common stock were reserved for future issuance under the Employee Plan.
Purchases by executives under the Executive Plan were 689, 709 and 997 shares in fiscal 2023, 2022 and 2021, respectively.
Purchases by executives under the Executive Plan were 540, 689 and 709 shares in fiscal 2024, 2023 and 2022, respectively.
On June 14, 2023, the Board of Directors authorized the repurchase of an additional $2.0 billion of the Company’s common stock, bringing the total value of authorized share repurchases to $35.7 billion.
The Board voted to increase the repurchase authorization by $2.0 billion on December 20, 2023 and $1.5 billion on June 19, 2024, bringing the total value of authorized share repurchases to $39.2 billion.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe average age of light vehicles has exceeded 12 years since 2012. ​ 28 Table of Contents Results of Operations The following table highlights selected financial information over the past 5 years: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year Ended August (in thousands, except per share data, same store sales and selected operating data) 2023 2022 2021 (1) 2020 (1) 2019 (2)(3) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income Statement Data ​ ​ ​ ​ ​ Net sales ​ $ 17,457,209 ​ $ 16,252,230 ​ $ 14,629,585 ​ $ 12,631,967 ​ $ 11,863,743 ​ Cost of sales, including warehouse and delivery expenses ​ 8,386,787 ​ 7,779,580 ​ 6,911,800 ​ 5,861,214 ​ 5,498,742 ​ Gross profit ​ 9,070,422 ​ 8,472,650 ​ 7,717,785 ​ 6,770,753 ​ 6,365,001 ​ Operating, selling, general and administrative expenses ​ 5,596,436 ​ 5,201,921 ​ 4,773,258 ​ 4,353,074 ​ 4,148,864 ​ Operating profit ​ 3,473,986 ​ 3,270,729 ​ 2,944,527 ​ 2,417,679 ​ 2,216,137 ​ Interest expense, net ​ 306,372 ​ 191,638 ​ 195,337 ​ 201,165 ​ 184,804 ​ Income before income taxes ​ 3,167,614 ​ 3,079,091 ​ 2,749,190 ​ 2,216,514 ​ 2,031,333 ​ Income tax expense (4) ​ 639,188 ​ 649,487 ​ 578,876 ​ 483,542 ​ 414,112 ​ Net income (4) ​ $ 2,528,426 ​ $ 2,429,604 ​ $ 2,170,314 ​ $ 1,732,972 ​ $ 1,617,221 ​ Diluted earnings per share (4) ​ $ 132.36 ​ $ 117.19 ​ $ 95.19 ​ $ 71.93 ​ $ 63.43 ​ Weighted average shares for diluted earnings per share (4) ​ 19,103 ​ 20,733 ​ 22,799 ​ 24,093 ​ 25,498 ​ Same Store Sales ​ ​ ​ ​ ​ ​ ​ Increase in domestic comparable store net sales (5) ​ 3.4 % 8.4 % 13.6 % ​ 7.4 % ​ 3.0 % Increase in international comparable store net sales (5) ​ ​ 29.3 % ​ 19.1 % ​ 22.5 % ​ (2.8) % ​ 4.6 % Increase in international comparable store net sales (constant currency) (5) ​ ​ 17.5 % ​ 19.2 % ​ 20.7 % ​ 4.7 % ​ 7.2 % Increase in total company comparable store net sales (5) ​ ​ 5.6 % ​ 9.2 % ​ 14.3 % ​ 6.6 % ​ 3.2 % Increase in total company comparable store net sales (constant currency) (5) ​ ​ 4.6 % ​ 9.2 % ​ 14.1 % ​ 7.2 % ​ 3.4 % Balance Sheet Data ​ ​ ​ ​ ​ ​ Current assets ​ $ 6,779,426 ​ $ 6,627,984 ​ $ 6,415,303 ​ $ 6,811,872 ​ $ 5,028,685 ​ Operating lease right-of-use assets (6) ​ ​ 2,998,097 ​ ​ 2,918,817 ​ ​ 2,718,712 ​ ​ 2,581,677 ​ ​ — ​ Working capital (deficit) (7) ​ (1,732,430) ​ (1,960,409) ​ (954,451) ​ 528,781 ​ (483,456) ​ Total assets ​ 15,985,878 ​ 15,275,043 ​ 14,516,199 ​ 14,423,872 ​ 9,895,913 ​ Current liabilities ​ 8,511,856 ​ 8,588,393 ​ 7,369,754 ​ 6,283,091 ​ 5,512,141 ​ Debt ​ 7,668,549 ​ 6,122,092 ​ 5,269,820 ​ 5,513,371 ​ 5,206,344 ​ Finance lease liabilities, less current portion (6) ​ 200,702 ​ 217,428 ​ 186,122 ​ 155,855 ​ 123,659 ​ Operating lease liabilities, less current portion (6) ​ ​ 2,917,046 ​ ​ 2,837,973 ​ ​ 2,632,842 ​ ​ 2,501,560 ​ ​ — ​ Stockholders’ deficit ​ (4,349,894) ​ (3,538,913) ​ (1,797,536) ​ (877,977) ​ (1,713,851) ​ Selected Operating Data ​ ​ ​ ​ ​ ​ Number of stores at beginning of year ​ 6,943 ​ 6,767 ​ 6,549 ​ 6,411 ​ 6,202 ​ New stores ​ 198 ​ 177 ​ 219 ​ 138 ​ 209 ​ Closed stores ​ 1 ​ 1 ​ 1 ​ — ​ — ​ Net new stores ​ 197 ​ 176 ​ 218 ​ 138 ​ 209 ​ Relocated stores ​ 12 ​ 13 ​ 12 ​ 5 ​ 2 ​ Number of stores at end of year ​ 7,140 ​ 6,943 ​ 6,767 ​ 6,549 ​ 6,411 ​ AutoZone domestic commercial programs ​ 5,682 ​ 5,342 ​ 5,179 ​ 5,007 ​ 4,893 ​ Total Company Store Data ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Inventory per store (in thousands) ​ $ 807 ​ $ 812 ​ $ 686 ​ $ 683 ​ $ 674 ​ Total AutoZone store square footage (in thousands) ​ 47,899 ​ 46,435 ​ 45,057 ​ 43,502 ​ 42,526 ​ Average square footage per AutoZone store ​ 6,709 ​ 6,688 ​ 6,658 ​ 6,643 ​ 6,633 ​ Increase in AutoZone store square footage ​ 3.2 % 3.1 % 3.6 % 2.3 % 3.6 % Average net sales per AutoZone store (in thousands) ​ $ 2,435 ​ $ 2,329 ​ $ 2,160 ​ $ 1,914 ​ $ 1,847 ​ Net sales per AutoZone store average square foot ​ $ 363 ​ $ 349 ​ $ 325 ​ $ 288 ​ $ 279 ​ Total employees at end of year (in thousands) ​ 119 ​ 112 ​ 105 ​ 100 ​ 96 ​ Inventory turnover (8) ​ 1.5x ​ 1.5x ​ 1.5x ​ 1.3x ​ 1.3x ​ Accounts payable to inventory ratio ​ 124.9 % 129.5 % 129.6 % 115.3 % 112.6 % After-tax return on invested capital (9) ​ 55.4 % 52.9 % 41.0 % 35.7 % 35.7 % Adjusted debt to EBITDAR (10) ​ 2.3 ​ 2.1 ​ 2.0 ​ 2.4 ​ 2.5 ​ Net cash provided by operating activities (in thousands) (4) ​ $ 2,940,788 ​ $ 3,211,135 ​ $ 3,518,543 ​ $ 2,720,108 ​ $ 2,128,513 ​ Cash flow before share repurchases and changes in debt (in thousands) (11) ​ $ 2,156,026 ​ $ 2,599,636 ​ $ 3,048,841 ​ $ 2,185,418 ​ $ 1,758,672 ​ Share repurchases (in thousands) (7) ​ $ 3,723,289 ​ $ 4,359,991 ​ $ 3,378,321 ​ $ 930,903 ​ $ 2,004,896 ​ Number of shares repurchased (in thousands) (7) ​ 1,524 ​ 2,220 ​ 2,592 ​ 826 ​ 2,182 ​ 29 Table of Contents (1) The 52 weeks ended August 28, 2021 and August 29, 2020 were negatively impacted by pandemic related expenses, including Emergency Time-Off of approximately $43.0 million (pre-tax) and $83.9 million (pre-tax), respectively.
Biggest changeOur experience is that at this point in a vehicle’s life, most vehicles are not covered by warranties and increased maintenance and repairs are needed to keep the vehicle operating. 27 Table of Contents Results of Operations The following table highlights selected financial information over the past five years: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year Ended August (in thousands, except per share data, same store sales and selected operating data) 2024 (1) 2023 2022 2021 (2) 2020 (2) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income Statement Data ​ ​ ​ ​ ​ Net sales ​ $ 18,490,268 ​ $ 17,457,209 ​ $ 16,252,230 ​ $ 14,629,585 ​ $ 12,631,967 ​ Cost of sales, including warehouse and delivery expenses ​ 8,673,216 ​ 8,386,787 ​ 7,779,580 ​ 6,911,800 ​ 5,861,214 ​ Gross profit ​ 9,817,052 ​ 9,070,422 ​ 8,472,650 ​ 7,717,785 ​ 6,770,753 ​ Operating, selling, general and administrative expenses ​ 6,028,344 ​ 5,596,436 ​ 5,201,921 ​ 4,773,258 ​ 4,353,074 ​ Operating profit ​ 3,788,708 ​ 3,473,986 ​ 3,270,729 ​ 2,944,527 ​ 2,417,679 ​ Interest expense, net ​ 451,578 ​ 306,372 ​ 191,638 ​ 195,337 ​ 201,165 ​ Income before income taxes ​ 3,337,130 ​ 3,167,614 ​ 3,079,091 ​ 2,749,190 ​ 2,216,514 ​ Income tax expense (3) ​ 674,703 ​ 639,188 ​ 649,487 ​ 578,876 ​ 483,542 ​ Net income (3) ​ $ 2,662,427 ​ $ 2,528,426 ​ $ 2,429,604 ​ $ 2,170,314 ​ $ 1,732,972 ​ Diluted earnings per share (3) ​ $ 149.55 ​ $ 132.36 ​ $ 117.19 ​ $ 95.19 ​ $ 71.93 ​ Weighted average shares for diluted earnings per share (3) ​ 17,803 ​ 19,103 ​ 20,733 ​ 22,799 ​ 24,093 ​ Same Store Sales ​ ​ ​ ​ ​ ​ ​ Increase in domestic comparable store net sales (4) ​ 0.4 % 3.4 % 8.4 % ​ 13.6 % ​ 7.4 % Increase (decrease) in international comparable store net sales (4) ​ ​ 16.1 % ​ 29.3 % ​ 19.1 % ​ 22.5 % ​ (2.8) % Increase in international comparable store net sales (constant currency) (4) ​ ​ 10.2 % ​ 17.5 % ​ 19.2 % ​ 20.7 % ​ 4.7 % Increase in total company comparable store net sales (4) ​ ​ 2.1 % ​ 5.6 % ​ 9.2 % ​ 14.3 % ​ 6.6 % Increase in total company comparable store net sales (constant currency) (4) ​ ​ 1.4 % ​ 4.6 % ​ 9.2 % ​ 14.1 % ​ 7.2 % Balance Sheet Data ​ ​ ​ ​ ​ ​ Current assets ​ $ 7,306,759 ​ $ 6,779,426 ​ $ 6,627,984 ​ $ 6,415,303 ​ $ 6,811,872 ​ Operating lease right-of-use assets ​ ​ 3,057,780 ​ ​ 2,998,097 ​ ​ 2,918,817 ​ ​ 2,718,712 ​ ​ 2,581,677 ​ Working capital (deficit) (5) ​ (1,407,484) ​ (1,732,430) ​ (1,960,409) ​ (954,451) ​ 528,781 ​ Total assets ​ 17,176,538 ​ 15,985,878 ​ 15,275,043 ​ 14,516,199 ​ 14,423,872 ​ Current liabilities ​ 8,714,243 ​ 8,511,856 ​ 8,588,393 ​ 7,369,754 ​ 6,283,091 ​ Debt ​ 9,024,381 ​ 7,668,549 ​ 6,122,092 ​ 5,269,820 ​ 5,513,371 ​ Finance lease liabilities, less current portion ​ 283,882 ​ 200,702 ​ 217,428 ​ 186,122 ​ 155,855 ​ Operating lease liabilities, less current portion ​ ​ 2,960,174 ​ ​ 2,917,046 ​ ​ 2,837,973 ​ ​ 2,632,842 ​ ​ 2,501,560 ​ Stockholders’ deficit ​ (4,749,614) ​ (4,349,894) ​ (3,538,913) ​ (1,797,536) ​ (877,977) ​ Selected Operating Data ​ ​ ​ ​ ​ ​ Number of stores at beginning of year ​ 7,140 ​ 6,943 ​ 6,767 ​ 6,549 ​ 6,411 ​ New stores ​ 217 ​ 198 ​ 177 ​ 219 ​ 138 ​ Closed stores ​ 4 ​ 1 ​ 1 ​ 1 ​ — ​ Net new stores ​ 213 ​ 197 ​ 176 ​ 218 ​ 138 ​ Relocated stores ​ 6 ​ 12 ​ 13 ​ 12 ​ 5 ​ Number of stores at end of year ​ 7,353 ​ 7,140 ​ 6,943 ​ 6,767 ​ 6,549 ​ AutoZone domestic commercial programs ​ 5,898 ​ 5,682 ​ 5,342 ​ 5,179 ​ 5,007 ​ Total Company Store Data ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Inventory per store (in thousands) ​ $ 837 ​ $ 807 ​ $ 812 ​ $ 686 ​ $ 683 ​ Total AutoZone store square footage (in thousands) ​ 49,417 ​ 47,899 ​ 46,435 ​ 45,057 ​ 43,502 ​ Average square footage per AutoZone store ​ 6,721 ​ 6,709 ​ 6,688 ​ 6,658 ​ 6,643 ​ Increase in AutoZone store square footage ​ 3.2 % 3.2 % 3.1 % 3.6 % 2.3 % Average net sales per AutoZone store (in thousands) ​ $ 2,505 ​ $ 2,435 ​ $ 2,329 ​ $ 2,160 ​ $ 1,914 ​ Net sales per AutoZone store average square foot ​ $ 373 ​ $ 363 ​ $ 349 ​ $ 325 ​ $ 288 ​ Total employees at end of year (in thousands) ​ 126 ​ 119 ​ 112 ​ 105 ​ 100 ​ Inventory turnover (6) ​ 1.5x ​ 1.5x ​ 1.5x ​ 1.5x ​ 1.3x ​ Accounts payable to inventory ratio ​ 119.5 % 124.9 % 129.5 % 129.6 % 115.3 % After-tax return on invested capital (7) ​ 49.7 % 55.4 % 52.9 % 41.0 % 35.7 % Adjusted debt to EBITDAR (8) ​ 2.5 ​ 2.3 ​ 2.1 ​ 2.0 ​ 2.4 ​ Net cash provided by operating activities (in thousands) (3) ​ $ 3,004,116 ​ $ 2,940,788 ​ $ 3,211,135 ​ $ 3,518,543 ​ $ 2,720,108 ​ Cash flow before share repurchases and changes in debt (in thousands) (9) ​ $ 1,791,635 ​ $ 2,156,026 ​ $ 2,599,636 ​ $ 3,048,841 ​ $ 2,185,418 ​ Share repurchases (in thousands) (5)(10) ​ $ 3,170,320 ​ $ 3,723,289 ​ $ 4,359,991 ​ $ 3,378,321 ​ $ 930,903 ​ Number of shares repurchased (in thousands) (5) ​ 1,149 ​ 1,524 ​ 2,220 ​ 2,592 ​ 826 ​ 28 Table of Contents (1) The fiscal year ended August 31, 2024 consisted of 53 weeks.
The standby letters of credit and surety bond arrangements expire within one year but have automatic renewal clauses. 36 Table of Contents Reconciliation of Non-GAAP Financial Measures “Management’s Discussion and Analysis of Financial Condition and Results of Operations” includes certain financial measures not derived in accordance with generally accepted accounting principles (“GAAP”).
The standby letters of credit and surety bond arrangements expire within one year but have automatic renewal clauses. 35 Table of Contents Reconciliation of Non-GAAP Financial Measures “Management’s Discussion and Analysis of Financial Condition and Results of Operations” includes certain financial measures not derived in accordance with generally accepted accounting principles (“GAAP”).
While we have not experienced any fundamental shifts in our category sales mix as compared to previous years, in our domestic stores we see a slight decrease in mix of sales of the discretionary category and a slight increase in the maintenance category compared to last year.
While we have not experienced any fundamental shifts in our category sales mix as compared to previous years, in our domestic stores we see a decrease in mix of sales of the discretionary category and a slight increase in the maintenance and failure categories compared to last year.
Although these obligations do not have scheduled maturities, the timing of future payments are predictable based upon historical patterns. Accordingly, we reflect the net present value of these obligations in our Consolidated Balance Sheets. (5) Represents commitments to make additional capital contributions to certain tax credit equity investments upon achievement of project milestones.
Although these obligations do not have scheduled maturities, the timing of future payments are predictable based upon historical patterns. Accordingly, we reflect the net present value of these obligations in our Consolidated Balance Sheets. (5) Represents commitments to make additional capital contributions to certain tax credit instruments upon achievement of project milestones.
Accordingly, we reflect the net present value of the obligations we determine to be long-term using the risk-free interest rate as of the balance sheet date. If the discount rate used to calculate the present value of these reserves changed by 25 basis points, net income would have been affected by approximately $1.1 million for fiscal 2023.
Accordingly, we reflect the net present value of the obligations we determine to be long-term using the risk-free interest rate as of the balance sheet date. If the discount rate used to calculate the present value of these reserves changed by 25 basis points, net income would have been affected by approximately $1.2 million for fiscal 2024.
The table below outlines the calculation of rent expense and reconciles rent expense to total lease cost, per ASC 842, the most directly comparable GAAP financial measure, for the 52 weeks ended, August 26, 2023, August 27, 2022 and August 28, 2021. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended (in thousands) ​ August 26, 2023 ​ August 27, 2022 ​ August 28, 2021 ​ August 29, 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total lease cost, per ASC 842 ​ $ 524,283 ​ $ 470,563 ​ $ 427,443 ​ $ 415,505 Less: Finance lease interest and amortization ​ (86,521) ​ ​ (69,564) ​ ​ (56,334) ​ ​ (60,275) Less: Variable operating lease components, related to insurance and common area maintenance ​ (31,364) ​ ​ (27,721) ​ ​ (25,729) ​ ​ (25,447) Rent expense ​ $ 406,398 ​ $ 373,278 ​ $ 345,380 ​ $ 329,783 ​ (3) For fiscal 2023, 2022, 2021 and 2020, the effective tax rate was 20.2%, 21.1%, 21.1% and 21.8%, respectively.
(2) The table below outlines the calculation of rent expense and reconciles rent expense to total lease cost, per ASC 842, the most directly comparable GAAP financial measure, for the 53 weeks ended, August 31, 2024, and the 52 weeks ended August 26, 2023, August 27,2022, August 28, 2021 and August 29, 2020. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended (in thousands) ​ August 31, 2024 ​ August 26, 2023 ​ August 27, 2022 ​ August 28, 2021 ​ August 29, 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total lease cost, per ASC 842 ​ $ 588,835 ​ $ 524,283 ​ $ 470,563 ​ $ 427,443 ​ $ 415,505 Less: Finance lease interest and amortization ​ (103,670) ​ ​ (86,521) ​ ​ (69,564) ​ ​ (56,334) ​ ​ (60,275) Less: Variable operating lease components, related to insurance and common area maintenance ​ (37,472) ​ ​ (31,364) ​ ​ (27,721) ​ ​ (25,729) ​ ​ (25,447) Rent expense ​ $ 447,693 ​ $ 406,398 ​ $ 373,278 ​ $ 345,380 ​ $ 329,783 ​ (3) For fiscal 2024, 2023, 2022, 2021 and 2020, the effective tax rate was 20.2%, 20.2%, 21.1%, 21.1% and 21.8%, respectively.
In recent history, our methods for determining our exposure have remained 39 Table of Contents consistent, and our historical trends have been appropriately factored into our reserve estimates. As we obtain additional information and refine our methods regarding the assumptions and estimates we use to recognize liabilities incurred, we will adjust our reserves accordingly.
In recent history, our methods for determining our exposure have remained consistent, and our historical trends have been appropriately factored into our reserve estimates. As we obtain additional information and refine our methods regarding the assumptions and estimates we use to recognize liabilities incurred, we will adjust our reserves accordingly.
The 2022 Shelf Registration Statement allows us to sell an indeterminate amount in debt securities to fund general corporate purposes, including repaying, redeeming or repurchasing outstanding debt and for working capital, capital expenditures, new store or distribution center openings, stock repurchases and acquisitions. Proceeds from the debt issuance were used for general corporate purposes.
The 2022 Shelf Registration Statement allows us to sell an indeterminate amount in debt securities to fund general corporate purposes, including repaying, redeeming or repurchasing outstanding debt and for working capital, capital expenditures, new store or distribution center openings, stock repurchases and acquisitions.
At August 26, 2023, in 5,682 of our domestic stores as well as the vast majority of our stores in Mexico and Brazil, we had a commercial sales program that provided commercial credit and prompt delivery of parts and other products to local, regional and national repair garages, dealers, service stations, fleet owners and other accounts.
At August 31, 2024, in 5,898 of our domestic stores as well as the vast majority of our stores in Mexico and Brazil, we had a commercial sales program that provided prompt delivery of parts and other products and commercial credit to local, regional and national repair garages, dealers, service stations, fleet owners and other accounts.
For the fiscal year ended August 26, 2023, our adjusted debt to earnings before interest, taxes, depreciation, amortization, rent and share-based compensation expense (“EBITDAR”) ratio was 2.3:1 as compared to 2.1:1 as of the comparable prior year end.
For the fiscal year ended August 31, 2024, our adjusted debt to earnings before interest, taxes, depreciation, amortization, rent and share-based compensation expense (“EBITDAR”) ratio was 2.5:1 as compared to 2.3:1 as of the comparable prior year end.
(4) Fiscal 2023, 2022, 2021, 2020 and 2019 include excess tax benefits from stock option exercises of $92.2 million, $63.2 million, $56.4 million, $20.9 million, and $46.0 million, respectively. (5) The domestic and international comparable sales increases are based on sales for all AutoZone stores open at least one year.
(3) Fiscal 2024, 2023, 2022, 2021 and 2020 include excess tax benefits from stock option exercises of $81.4 million, $92.2 million, $63.2 million, $56.4 million, and $20.9 million, respectively. (4) The domestic and international comparable sales increases are based on sales for all AutoZone stores open at least one year.
Since the beginning of the fiscal year and through July 2023 miles driven in the U.S. increased by 1.3% compared to the same period in the prior year based on the latest information available from the U.S. Department of Transportation.
Since the beginning of the fiscal year and through July 2024 miles driven in the U.S. increased 1.2% compared to the same period in the prior year based on the latest information available from the U.S. Department of Transportation.
Once the target ratio is achieved, to the extent adjusted EBITDAR increases, we expect our debt levels to increase; conversely, if adjusted EBITDAR decreases, we would expect our debt levels to decrease. Refer to the “Reconciliation of Non-GAAP Financial Measures” section for further details of our calculation.
To the extent adjusted EBITDAR increases, we expect our debt levels to increase; conversely, if adjusted EBITDAR decreases, we would expect our debt levels to decrease. Refer to the “Reconciliation of Non-GAAP Financial Measures” section for further details of our calculation.
Seven Year Old or Older Vehicles As the number of seven year old or older vehicles on the road increases, we expect an increase in demand for the products we sell. We expect the aging vehicle population to continue to increase as consumers keep their cars longer in an effort to save money. According to the U.S.
Seven Year Old or Older Vehicles As the number of seven-year-old or older vehicles on the road increases, we expect an increase in demand for the products we sell. We expect the aging vehicle population to continue to increase as consumers keep their cars longer.
For the fiscal year ended August 26, 2023, our adjusted after-tax return on invested capital (“ROIC”), which is a non-GAAP measure, was 55.4% as compared to 52.9% for the prior year. Adjusted ROIC is calculated as after-tax operating profit (excluding rent charges) divided by invested capital (which includes a factor to capitalize operating leases).
For the fiscal year ended August 31, 2024, our adjusted after-tax return on invested capital (“ROIC”), which is a non-GAAP measure, was 49.7% as compared to 55.4% for the prior year. Adjusted ROIC is calculated as after-tax operating profit (excluding rent charges) divided by invested capital (which includes a factor to capitalize operating leases).
As of August 26, 2023, we had no outstanding borrowings and $1.8 million of outstanding letters of credit under the Revolving Credit Agreement. 33 Table of Contents The Revolving Credit Agreement requires that our consolidated interest coverage ratio as of the last day of each quarter shall be no less than 2.5:1.
As of August 31, 2024, we had no outstanding borrowings and $1.8 million of outstanding letters of credit under the Revolving Credit Agreement. The Revolving Credit Agreement requires that our consolidated interest coverage ratio as of the last day of each quarter shall be no less than 2.5:1.
As of August 26, 2023, and August 27, 2022, cash and cash equivalents of $108.5 million and $86.8 million, respectively, were held outside of the U.S. and were generally utilized to support the liquidity needs in our foreign operations.
As of August 31, 2024, and August 26, 2023, cash and cash equivalents of $99.8 million and $108.5 million, respectively, were held outside of the U.S. and were generally utilized to support the liquidity needs in our foreign operations.
Reconciliation of Non-GAAP Financial Measure: Cash Flow Before Share Repurchases and Changes in Debt The following table reconciles net increase (decrease) in cash and cash equivalents to cash flow before share repurchases and changes in debt, which is presented in “Management’s Discussion and Analysis of Financial Condition and Results of Operations”: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year Ended August (in thousands) ​ 2023 2022 2021 2020 2019 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash provided by/(used in): ​ ​ ​ ​ ​ Operating activities ​ $ 2,940,788 ​ $ 3,211,135 ​ $ 3,518,543 ​ $ 2,720,108 ​ $ 2,128,513 Investing activities ​ (876,178) ​ (648,099) ​ (601,778) ​ (497,875) ​ (491,846) Financing activities ​ (2,060,082) ​ (3,470,497) ​ (3,500,417) ​ (643,636) ​ (1,674,088) Effect of exchange rate changes on cash ​ ​ 8,146 ​ 506 ​ 4,172 ​ (4,082) ​ (4,103) Net (decrease)/increase in cash and cash equivalents ​ ​ 12,674 ​ (906,955) ​ (579,480) ​ 1,574,515 ​ (41,524) Less: increase/(decrease) in debt, excluding deferred financing costs ​ ​ 1,556,200 ​ 853,400 ​ (250,000) ​ 320,000 ​ 204,700 Plus: Share repurchases ​ 3,699,552 ​ 4,359,991 ​ 3,378,321 ​ 930,903 (1) ​ 2,004,896 Cash flow before share repurchases and changes in debt ​ $ 2,156,026 ​ $ 2,599,636 ​ $ 3,048,841 ​ $ 2,185,418 ​ $ 1,758,672 ​ (1) During the third quarter of fiscal 2020, the Company temporarily suspended share repurchases under the share repurchase program in response to the COVID-19 pandemic. ​ ​ ​ ​ ​ ​ 37 Table of Contents Reconciliation of Non-GAAP Financial Measure: Adjusted After-tax ROIC The following table calculates the percentage of ROIC.
Reconciliation of Non-GAAP Financial Measure: Cash Flow Before Share Repurchases and Changes in Debt The following table reconciles net increase (decrease) in cash and cash equivalents to cash flow before share repurchases and changes in debt, which is presented in “Management’s Discussion and Analysis of Financial Condition and Results of Operations”: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year Ended August (in thousands) ​ 2024 2023 2022 2021 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash provided by/(used in): ​ ​ ​ ​ ​ ​ Operating activities ​ $ 3,004,116 ​ $ 2,940,788 ​ $ 3,211,135 ​ $ 3,518,543 ​ $ 2,720,108 ​ Investing activities ​ (1,286,506) ​ (876,178) ​ (648,099) ​ (601,778) ​ (497,875) ​ Financing activities ​ (1,683,736) ​ (2,060,082) ​ (3,470,497) ​ (3,500,417) ​ (643,636) ​ Effect of exchange rate changes on cash ​ ​ (12,756) ​ 8,146 ​ 506 ​ 4,172 ​ (4,082) ​ Net increase/(decrease) in cash and cash equivalents ​ ​ 21,118 ​ 12,674 ​ (906,955) ​ (579,480) ​ 1,574,515 ​ Less: increase/(decrease) in debt, excluding deferred financing costs ​ ​ 1,370,400 ​ 1,556,200 ​ 853,400 ​ (250,000) ​ 320,000 ​ Plus: Share repurchases ​ 3,140,917 ​ 3,699,552 ​ 4,359,991 ​ 3,378,321 ​ 930,903 (1) ​ Cash flow before share repurchases and changes in debt ​ $ 1,791,635 ​ $ 2,156,026 ​ $ 2,599,636 ​ $ 3,048,841 ​ $ 2,185,418 ​ ​ (1) During the third quarter of fiscal 2020, the Company temporarily suspended share repurchases under the share repurchase program in response to the COVID-19 pandemic. ​ ​ ​ ​ ​ ​ 36 Table of Contents Reconciliation of Non-GAAP Financial Measure: Adjusted After-tax ROIC The following table calculates the percentage of ROIC.
Our net cash flows used in investing activities were $876.2 million, $648.1 million and $601.8 million in fiscal 2023, 2022 and 2021, respectively. The increase in net cash used in investing activities in fiscal 2023 was primarily due to an increase in capital expenditures.
Our net cash flows used in investing activities were $1.3 billion, $876.2 million and $648.1 million in fiscal 2024, 2023 and 2022, respectively. The increase in net cash used in investing activities in fiscal 2024 was primarily due to an increase in capital expenditures.
We target our debt levels to a specified ratio of adjusted debt to EBITDAR in order to maintain our investment grade credit ratings and believe this is important information for the management of our debt levels. Management expects the ratio of adjusted debt to EBITDAR to return to pre-pandemic levels in the future, increasing debt levels.
We target our debt levels to a specified ratio of adjusted debt to EBITDAR in order to maintain our investment grade credit ratings and believe this is important information for the management of our debt levels.
We had net new store openings of 197, 176 and 218 for fiscal 2023, 2022 and 2021, respectively. We invest a portion of our assets held by our wholly owned insurance captive in marketable debt securities. We purchased marketable debt securities of $66.9 million, $56.0 million and $63.7 million in fiscal 2023, 2022 and 2021, respectively.
We had net new store openings of 213, 197 and 176 for fiscal 2024, 2023 and 2022, respectively. We invest a portion of our assets held by our wholly owned insurance captive in marketable debt securities. We purchased marketable debt securities of $38.8 million, $66.9 million and $56.0 million in fiscal 2024, 2023 and 2022, respectively.
As of August 26, 2023, we had $2.2 billion of availability under our Revolving Credit Agreement, without giving effect to commercial paper borrowings, which would allow us to replace these short-term obligations with a long-term financing facility. On July 17, 2023, we repaid the $500 million 3.125% Senior Notes due July 2023.
As of August 31, 2024, we had $2.2 billion of availability under our Revolving Credit Agreement, without giving effect to commercial paper borrowings, which would allow us to replace these short-term obligations with a long-term financing facility. On April 18, 2024, we repaid the $300 million 3.125% Senior Notes due April 2024.
We reported a total auto parts segment (domestic, Mexico and Brazil) sales increase of 7.4% for fiscal 2023. ​ Gross profit for fiscal 2023 was $9.1 billion, or 52.0% of net sales, a 17 basis point decrease compared with $8.5 billion, or 52.1% of net sales for fiscal 2022.
We reported a total auto parts segment (domestic, Mexico and Brazil) sales increase of 5.9% for fiscal 2024. ​ Gross profit for fiscal 2024 was $9.8 billion, or 53.1% of net sales, a 114 basis point increase compared with $9.1 billion, or 52.0% of net sales for fiscal 2023.
We did not reflect these obligations in the table above as we are unable to make an estimate of the timing of payments of the long-term liabilities due to uncertainties in the timing and amounts of the settlement of these tax positions. ​ Off-Balance Sheet Arrangements The following table reflects outstanding letters of credit and surety bonds as of August 26, 2023: ​ ​ ​ ​ ​ Total ​ ​ Other (in thousands) ​ Commitments ​ ​ ​ ​ Standby letters of credit ​ $ 133,953 Surety bonds ​ ​ 43,076 ​ ​ $ 177,029 ​ A substantial portion of the outstanding standby letters of credit (which are primarily renewed on an annual basis) and surety bonds are used to cover reimbursement obligations to our workers’ compensation carriers.
We did not reflect these obligations in the table above as we are unable to make an estimate of the timing of payments of the long-term liabilities due to uncertainties in the timing and amounts of the settlement of these tax positions. ​ Off-Balance Sheet Arrangements The following table reflects outstanding letters of credit and surety bonds as of August 31, 2024: ​ ​ ​ ​ ​ Total ​ ​ Other (in thousands) ​ Commitments ​ ​ ​ ​ Standby letters of credit ​ $ 143,393 Surety bonds ​ ​ 48,868 ​ ​ $ 192,261 ​ A substantial portion of the outstanding standby letters of credit (which are primarily renewed on an annual basis) and surety bonds are used to cover reimbursement obligations to our workers’ compensation carriers.
As of August 26, 2023, we held $277.1 million of cash and cash equivalents, as well as $2.2 billion in undrawn capacity on our revolving credit facility, without giving effect to commercial paper borrowings.
As of August 31, 2024, we held $298.2 million of cash and cash equivalents, as well as $2.2 billion in undrawn capacity on our revolving credit facility, without giving effect to commercial paper borrowings.
Interest is paid on a semi-annual basis. 34 Table of Contents As of August 26, 2023, we were in compliance with all covenants and expect to remain in compliance with all covenants under our borrowing arrangements.
Interest is paid on a semi-annual basis. As of August 31, 2024, we were in compliance with all covenants and expect to remain in compliance with all covenants under our borrowing arrangements.
The ROIC percentages are presented in “Management’s Discussion and Analysis of Financial Condition and Results of Operations”: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year Ended August ​ (in thousands, except percentage) 2023 2022 2021 2020 2019 (1) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income $ 2,528,426 $ 2,429,604 $ 2,170,314 $ 1,732,972 $ 1,617,221 ​ Adjustments: ​ ​ ​ ​ ​ ​ ​ Interest expense 306,372 ​ 191,638 ​ 195,337 ​ 201,165 ​ 184,804 ​ Rent expense (2) 406,398 ​ 373,278 ​ 345,380 ​ 329,783 ​ 332,726 ​ Tax effect (3) (143,980) ​ (119,197) ​ (114,091) ​ (115,747) ​ (105,576) ​ Deferred tax liabilities, net of repatriation tax (4) — ​ — ​ — ​ — ​ (6,340) ​ Adjusted after-tax return $ 3,097,216 ​ $ 2,875,323 ​ $ 2,596,940 ​ $ 2,148,173 ​ $ 2,022,835 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average debt (5) $ 6,900,354 ​ $ 5,712,301 ​ $ 5,416,471 ​ $ 5,375,356 ​ $ 5,126,286 ​ Average stockholders’ deficit (5) (4,042,495) ​ (2,797,181) ​ (1,397,892) ​ (1,542,355) ​ (1,615,339) ​ Add: Rent x 6 (2)(6) 2,438,388 ​ 2,239,668 ​ 2,072,280 ​ 1,978,696 ​ 1,996,358 ​ Average finance lease liabilities (5) 296,599 ​ 284,453 ​ 237,267 ​ 203,998 ​ 162,591 ​ Invested capital $ 5,592,846 ​ $ 5,439,241 ​ $ 6,328,126 ​ $ 6,015,695 ​ $ 5,669,896 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted after-tax ROIC 55.4 % 52.9 % 41.0 % 35.7 % 35.7 % ​ Reconciliation of Non-GAAP Financial Measure: Adjusted Debt to EBITDAR The following table calculates the ratio of adjusted debt to EBITDAR.
The ROIC percentages are presented in “Management’s Discussion and Analysis of Financial Condition and Results of Operations”: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year Ended August ​ (in thousands, except percentage) ​ 2024 (1) 2023 2022 2021 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income $ 2,662,427 $ 2,528,426 $ 2,429,604 $ 2,170,314 $ 1,732,972 ​ Adjustments: ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest expense ​ 451,578 ​ 306,372 ​ 191,638 ​ 195,337 ​ 201,165 ​ Rent expense (2) ​ 447,693 ​ 406,398 ​ 373,278 ​ 345,380 ​ 329,783 ​ Tax effect (3) ​ (181,653) ​ (143,980) ​ (119,197) ​ (114,091) ​ (115,747) ​ Adjusted after-tax return ​ $ 3,380,045 ​ $ 3,097,216 ​ $ 2,875,323 ​ $ 2,596,940 ​ $ 2,148,173 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average debt (4) ​ $ 8,580,659 ​ $ 6,900,354 ​ $ 5,712,301 ​ $ 5,416,471 ​ $ 5,375,356 ​ Average stockholders’ deficit (4) ​ (4,797,747) ​ (4,042,495) ​ (2,797,181) ​ (1,397,892) ​ (1,542,355) ​ Add: Rent x 6 (2)(5) ​ 2,686,158 ​ 2,438,388 ​ 2,239,668 ​ 2,072,280 ​ 1,978,696 ​ Average finance lease liabilities (4) ​ 329,225 ​ 296,599 ​ 284,453 ​ 237,267 ​ 203,998 ​ Invested capital ​ $ 6,798,295 ​ $ 5,592,846 ​ $ 5,439,241 ​ $ 6,328,126 ​ $ 6,015,695 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted after-tax ROIC ​ 49.7 % 55.4 % 52.9 % 41.0 % 35.7 % ​ ​ Reconciliation of Non-GAAP Financial Measure: Adjusted Debt to EBITDAR The following table calculates the ratio of adjusted debt to EBITDAR.
The fourth quarter of fiscal year 2023 represented 32.6% of annual sales and 34.2% of net income; the fourth quarter of fiscal year 2022 represented 32.9% of annual sales and 33.3% 31 Table of Contents of net income; and the fourth quarter of fiscal year 2021 represented 33.6% of annual sales and 36.2% of net income.
The fourth quarter of fiscal year 2024 represented 33.6% of annual sales and 33.9% of net income; the fourth quarter of fiscal year 2023 represented 32.6% of annual sales and 34.2% of net income; and the fourth quarter of fiscal year 2022 represented 32.9% of annual sales and 33.3% of net income.
Our self-insurance reserve estimates totaled $268.8 million at August 26, 2023, and $264.3 million at August 27, 2022. Where estimates are possible, losses covered by insurance are recognized on a gross basis with a corresponding insurance receivable.
Our self-insurance reserve estimates totaled $257.7 million at August 31, 2024, and $268.8 million at August 26, 2023. Where estimates are possible, losses covered by insurance are recognized on a gross basis with a corresponding insurance receivable.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations We are the leading retailer and distributor of automotive replacement parts and accessories in the Americas. We began operations in 1979 and at August 26, 2023, operated 6,300 stores in the U.S., 740 stores in Mexico and 100 stores in Brazil.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations We are the leading retailer and distributor of automotive replacement parts and accessories in the Americas. We began operations in 1979 and at August 31, 2024, operated 6,432 stores in the U.S., 794 stores in Mexico and 127 stores in Brazil.
See Reconciliation of Non-GAAP Financial Measures in Management’s Discussion and Analysis of Financial Condition and Results of Operations (11) Cash flow before share repurchases and changes in debt is defined as the change in cash and cash equivalents less the change in debt plus treasury stock purchases.
(9) Cash flow before share repurchases and changes in debt is defined as the change in cash and cash equivalents less the change in debt plus treasury stock purchases. See Reconciliation of Non-GAAP Financial Measures in Management’s Discussion and Analysis of Financial Condition and Results of Operations. (10) Share repurchases are inclusive of excise tax in fiscal 2024 and 2023.
On January 27, 2023 we issued $450 million in 4.500% Senior Notes due February 2028 and $550 million in 4.750% Senior Notes due February 2033 under the 2022 Shelf Registration Statement. Proceeds from the debt issuance were used to repay a portion of the Company’s outstanding commercial paper borrowings and for other general corporate purposes.
Proceeds from the debt issuance were used to repay a portion of our outstanding commercial paper borrowings and for other general corporate purposes. On October 25, 2023, we issued $500 million in 6.250% Senior Notes due November 2028 and $500 million 6.550% Senior Notes due November 2033 under the 2022 Shelf Registration Statement.
The adjusted debt to EBITDAR ratios are presented in “Management’s Discussion and Analysis of Financial Condition and Results of Operations”: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year Ended August (in thousands, except ratio) ​ 2023 2022 2021 2020 2019 (1) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income $ 2,528,426 $ 2,429,604 $ 2,170,314 $ 1,732,972 $ 1,617,221 Add: Interest expense ​ 306,372 ​ 191,638 ​ 195,337 ​ 201,165 ​ 184,804 Income tax expense ​ ​ 639,188 ​ ​ 649,487 ​ ​ 578,876 ​ ​ 483,542 ​ ​ 414,112 EBIT ​ 3,473,986 ​ 3,270,729 ​ 2,944,527 ​ 2,417,679 ​ 2,216,137 Add: Depreciation and amortization expense ​ 497,577 ​ 442,223 ​ 407,683 ​ 397,466 ​ 369,957 Rent expense (2) ​ 406,398 ​ 373,278 ​ 345,380 ​ 329,783 ​ 332,726 Share-based expense ​ 93,087 ​ 70,612 ​ 56,112 ​ 44,835 ​ 43,255 EBITDAR ​ $ 4,471,048 ​ $ 4,156,842 ​ $ 3,753,702 ​ $ 3,189,763 ​ $ 2,962,075 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Debt ​ $ 7,668,549 ​ $ 6,122,092 ​ $ 5,269,820 ​ $ 5,513,371 ​ $ 5,206,344 Financing lease liabilities ​ 287,618 ​ 310,305 ​ 276,054 ​ 223,353 ​ 179,905 Add: Rent x 6 (2)(6) ​ 2,438,388 ​ 2,239,668 ​ 2,072,280 ​ 1,978,696 ​ 1,996,358 Adjusted debt ​ $ 10,394,555 ​ $ 8,672,065 ​ $ 7,618,154 ​ $ 7,715,420 ​ $ 7,382,607 Adjusted debt to EBITDAR ​ 2.3 ​ 2.1 ​ 2.0 ​ 2.4 ​ 2.5 ​ ​ 38 Table of Contents (1) The fiscal year ended August 31, 2019 consisted of 53 weeks.
The adjusted debt to EBITDAR ratios are presented in “Management’s Discussion and Analysis of Financial Condition and Results of Operations”: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year Ended August (in thousands, except ratio) ​ 2024 (1) 2023 2022 2021 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income $ 2,662,427 $ 2,528,426 $ 2,429,604 $ 2,170,314 $ 1,732,972 Add: Interest expense ​ 451,578 ​ 306,372 ​ 191,638 ​ 195,337 ​ 201,165 Income tax expense ​ ​ 674,703 ​ ​ 639,188 ​ ​ 649,487 ​ ​ 578,876 ​ ​ 483,542 EBIT ​ 3,788,708 ​ 3,473,986 ​ 3,270,729 ​ 2,944,527 ​ 2,417,679 Add: Depreciation and amortization expense ​ 549,755 ​ 497,577 ​ 442,223 ​ 407,683 ​ 397,466 Rent expense (2) ​ 447,693 ​ 406,398 ​ 373,278 ​ 345,380 ​ 329,783 Share-based expense ​ 106,246 ​ 93,087 ​ 70,612 ​ 56,112 ​ 44,835 EBITDAR ​ $ 4,892,402 ​ $ 4,471,048 ​ $ 4,156,842 ​ $ 3,753,702 ​ $ 3,189,763 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Debt ​ $ 9,024,381 ​ $ 7,668,549 ​ $ 6,122,092 ​ $ 5,269,820 ​ $ 5,513,371 Financing lease liabilities ​ 399,441 ​ 287,618 ​ 310,305 ​ 276,054 ​ 223,353 Add: Rent x 6 (2)(5) ​ 2,686,158 ​ 2,438,388 ​ 2,239,668 ​ 2,072,280 ​ 1,978,696 Adjusted debt ​ $ 12,109,980 ​ $ 10,394,555 ​ $ 8,672,065 ​ $ 7,618,154 ​ $ 7,715,420 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted debt to EBITDAR ​ 2.5 ​ 2.3 ​ 2.1 ​ 2.0 ​ 2.4 ​ ​ 37 Table of Contents (1) The fiscal year ended August 31, 2024, consisted of 53 weeks.
This ratio is defined as the ratio of (i) consolidated earnings before interest, taxes and rents to (ii) consolidated interest expense plus consolidated rents. Our consolidated interest coverage ratio as of August 26, 2023 was 6.3:1.
This ratio is defined as the ratio of (i) consolidated earnings before interest, taxes and rents to (ii) consolidated interest expense plus consolidated rents. Our consolidated interest coverage ratio as of August 31, 2024 was 5.4:1.
Cash flow before share repurchases and changes in debt was $2.2 billion, $2.6 billion and $3.0 billion for the fiscal year ended August 26, 2023, August 27, 2022 and August 28, 2021, respectively.
Cash flow before share repurchases and changes in debt was $1.8 billion, $2.2 billion and $2.6 billion for the fiscal year ended August 31, 2024, August 26, 2023 and August 27, 2022, respectively.
A 10% change in our self-insurance liability would have affected net income by approximately $19.3 million for fiscal 2023.
A 10% change in our self-insurance liability would have affected net income by approximately $18.8 million for fiscal 2024.
As of August 26, 2023, the $1.2 billion of commercial paper borrowings and the $300 million 3.125% Senior Notes due April 2024 were classified as long-term in the Consolidated Balance Sheets as we have the current ability and intent to refinance them on a long-term basis through available capacity in our revolving credit facility.
As of August 31, 2024, the $580 million of commercial paper borrowings, the $400 million 3.250% Senior Notes due April 2025 and the $500 million 3.625% Senior Notes due April 2025 were classified as long-term in the Consolidated Balance Sheets as we have the current ability and intent to refinance them on a long-term basis through available capacity in our revolving credit facility.
Same store sales, or sales for our domestic and international stores open at least one year, are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year Ended August ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Constant Currency (1) ​ ​ Constant Currency (1) ​ 2023 ​ 2023 ​ 2022 ​ 2022 ​ Domestic ​ 3.4 % ​ 3.4 % ​ 8.4 % ​ 8.4 % International 29.3 % 17.5 % 19.1 % 19.2 % Total Company 5.6 % 4.6 % 9.2 % 9.2 % ​ (1) Constant currency same store sales exclude impacts from fluctuations of foreign exchange rates by converting both the current year and prior year international results at the prior year foreign currency exchange rate. ​ At August 26, 2023, we operated 6,300 domestic stores, 740 in Mexico and 100 in Brazil, compared with 6,168 domestic stores, 703 in Mexico and 72 in Brazil at August 27, 2022.
Same store sales, or sales for our domestic and international stores open at least one year, are computed on a 52-week basis and are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year Ended August ​ ​ ​ ​ ​ Constant Currency (1) ​ ​ 2024 ​ 2023 ​ 2024 ​ 2023 Domestic ​ 0.4 % ​ 3.4 % ​ 0.4 % ​ 3.4 % International 16.1 % 29.3 % 10.2 % 17.5 % Total Company 2.1 % 5.6 % 1.4 % 4.6 % ​ (1) Constant currency same store sales exclude impacts from fluctuations of foreign exchange rates by converting both the current year and prior year international results at the prior year foreign currency exchange rate. ​ At August 31, 2024, we operated 6,432 domestic stores, 794 in Mexico and 127 in Brazil, compared with 6,300 domestic stores, 740 in Mexico and 100 in Brazil at August 26, 2023.
Considering cumulative repurchases as of August 26, 2023 we had $1.8 billion remaining under the Board’s authorization to repurchase our common stock.
Considering cumulative repurchases as of August 31, 2024 we had $2.2 billion remaining under the Board’s authorization to repurchase our common stock.
(10) Adjusted debt to EBITDAR is defined as the sum of total debt, finance lease obligations and annual rents times six; divided by net income plus interest, taxes, depreciation, amortization, rent and share-based compensation expense.
(8) Adjusted debt to EBITDAR is defined as the sum of total debt, finance lease obligations and annual rents times six; divided by net income plus interest, taxes, depreciation, amortization, rent and share-based compensation expense. See Reconciliation of Non-GAAP Financial Measures in Management’s Discussion and Analysis of Financial Condition and Results of Operations.
On January 18, 2022, we repaid the $500 million 3.700% Senior Notes due April 2022, which were callable at par in January 2022. ​ On March 15, 2021, we repaid the $250 million 2.500% Senior Notes due April 2021, which were callable at par in March 2021.
On July 17, 2023, we repaid the $500 million 3.125% Senior Notes due July 2023. On January 17, 2023, we repaid the $300 million 2.875% Senior Notes due January 2023. On January 18, 2022, we repaid the $500 million 3.700% Senior Notes due April 2022, which were callable at par in January 2022.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended August 27, 2022, filed with the SEC on October 24, 2022, which is available free of charge on the SECs website at www.sec.gov and at www.autozone.com, by clicking “Investor Relations” located at the bottom of the page.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended August 26, 2023, filed with the SEC on October 24, 2023, which is available free of charge on the SECs website at www.sec.gov and at www.autozone.com, by clicking “Investor Relations” located at the bottom of the page. 30 Table of Contents Quarterly Periods Each of the first three quarters of our fiscal year consists of 12 weeks, and the fourth quarter consisted of 17 weeks in 2024 and 16 weeks in 2023 and 2022.
As of August 26, 2023, we had $25 million in letters of credit outstanding under the letter of credit facility. In addition to the outstanding letters of credit issued under the committed facility discussed above, we had $107.2 million in letters of credit outstanding as of August 26, 2023.
As of August 31, 2024, we had no letters of credit outstanding under the letter of credit facility. In addition to the outstanding letters of credit issued under the committed facility discussed above, we had $141.6 million in letters of credit outstanding as of August 31, 2024.
Liquidity and Capital Resources The primary source of our liquidity is our cash flows realized through the sale of automotive parts, products and accessories. Continued progress on our initiatives improved our operating performance for the fiscal year.
Liquidity and Capital Resources The primary source of our liquidity is our cash flows realized through the sale of automotive parts, products and accessories.
Fiscal 2022 Compared with Fiscal 2021 A discussion of changes in our results of operations from fiscal 2022 to fiscal 2021 has been omitted from this Annual Report on Form 10-K, but may be found in “Item 7.
The impact on the fiscal 2024 diluted earnings per share from stock repurchases was an increase of $0.96. Fiscal 2023 Compared with Fiscal 2022 A discussion of changes in our results of operations from fiscal 2023 to fiscal 2022 has been omitted from this Annual Report on Form 10-K, but may be found in “Item 7.
The net cash used in financing activities reflected purchases of treasury stock, which totaled $3.7 billion, $4.4 billion and $3.4 billion for fiscal 2023, 2022 and 2021, respectively. The treasury stock purchases in fiscal 2023, 2022 and 2021 were primarily funded by cash flows from operations.
Net cash used in financing activities was $1.7 billion, $2.1 billion and $3.5 billion in fiscal 2024, 2023 and 2022, respectively. The net cash used in financing activities reflected purchases of treasury stock, which totaled $3.1 billion, $3.7 billion and $4.4 billion for fiscal 2024, 2023 and 2022, respectively.
On July 21, 2023, we issued $450 million in 5.050% Senior Notes due July 2026 and $300 million in 5.200% Senior Notes due August 2033 under our automatic shelf registration statement on Form S-3, filed with the SEC on July 19, 2022 (File No. 333-266209) (the “2022 Shelf Registration Statement”).
On June 28, 2024, we issued $600 million in 5.100% Senior Notes due July 2029 and $700 million 5.400% Senior Notes due July 2034 under our automatic shelf registration statement on Form S-3, filed with the SEC on July 19, 2022 (File No. 333-266209) (the “2022 Shelf Registration Statement”).
Under our Revolving Credit Agreement, covenants include restrictions on liens, a maximum debt to earnings ratio, a minimum fixed charge coverage ratio and a change of control provision that may require acceleration of the repayment obligations under certain circumstances.
The Revolving Credit Agreement includes (i) a $75 million sublimit for swingline loans, (ii) a $50 million individual issuer letter of credit sublimit and (iii) a $250 million aggregate sublimit for all letters of credit. 32 Table of Contents Under our Revolving Credit Agreement, covenants include restrictions on liens, a maximum debt to earnings ratio, a minimum fixed charge coverage ratio and a change of control provision that may require acceleration of the repayment obligations under certain circumstances.
The deleverage in gross margin was impacted by a non-cash LIFO charge of $44.0 million in fiscal 2023 versus a $15.0 million charge in fiscal 2022. Operating, selling, general and administrative expenses for fiscal 2023 increased to $5.6 billion, or 32.1% of net sales, from $5.2 billion, or 32.0% of net sales for fiscal 2022.
The increase in gross margin was driven by higher merchandise margins and 47 basis points ($84.0 million net) from non-cash LIFO favorability. Operating, selling, general and administrative expenses for fiscal 2024 increased to $6.0 billion, or 32.6% of net sales, from $5.6 billion, or 32.1% of net sales for fiscal 2023.
The Board voted to increase the repurchase authorization by $1.5 billion on October 5, 2021, $1.5 billion on December 15, 2021, $2.0 billion on March 22, 2022, $2.5 billion on October 4, 2022 and $2.0 billion on June 14, 2023, bringing the total authorization to $35.7 billion.
The Board voted to increase the repurchase authorization by $2.0 billion on December 20, 2023 and $1.5 billion on June 19, 2024, bringing the total authorization to $39.2 billion. Previously, the Board voted to increase the authorization by $4.5 billion in fiscal 2023 and $5.0 billion in fiscal 2022.
Our tax liability for uncertain tax positions, including interest and penalties, was $51.0 million at August 26, 2023. Approximately $11.2 million is classified as current liabilities and $39.8 million is classified as long-term liabilities.
Our tax liability for uncertain tax positions, including interest and penalties, was $45.4 million at August 31, 2024. Approximately $23.1 million is classified as current liabilities and $22.3 million is classified as long-term liabilities.
(8) Inventory turnover is calculated as cost of sales divided by the average merchandise inventory balance over the trailing 5 quarters. (9) After-tax return on invested capital is defined as after-tax operating profit (excluding rent charges) divided by invested capital (which includes a factor to capitalize leases).
(7) After-tax return on invested capital is defined as after-tax operating profit (excluding rent charges) divided by invested capital (which includes a factor to capitalize leases).
We invested $796.7 million, $672.4 million and $621.8 million in capital assets in fiscal 2023, 2022 and 2021, respectively. The increase in capital expenditures from fiscal 2022 to fiscal 2023 was primarily driven by our growth initiatives, including new stores, hub and mega hub expansion initiatives and supply chain projects.
We invested $1.1 billion, $796.7 million and $672.4 million in capital assets in fiscal 2024, 2023 and 2022, respectively. The increase in capital expenditures from fiscal 2023 to fiscal 2024 was primarily driven by our growth initiatives, including investments in new distribution centers and stores to be opened in subsequent periods as well as stores opened in the current year.
Subsequent to August 26, 2023 and through October 16, 2023, we have repurchased 200,303 shares of common stock at an aggregate cost of $512.4 million.
Subsequent to August 31, 2024 and through October 21, 2024, we have repurchased 67,677 shares of common stock at an aggregate cost of $212.0 million.
During the year ended August 26, 2023, we repaid our $300 million 2.875% Senior Notes due January 2023 and our $500 million 3.125% Senior Notes due July 2023 and issued $1.8 billion of new debt compared to $750 million in 2022 and none in 2021.
The treasury stock purchases in fiscal 2024, 2023 and 2022 were primarily funded by cash flows from operations and increased borrowings. During the year ended August 31, 2024, we repaid our $300 million 3.125% Senior Notes due April 2024 and issued $2.3 billion of new debt compared to $1.8 billion in 2023 and $750 million in 2022.
The following items in our Consolidated Financial Statements represent our critical accounting policies and estimates by management: Self-Insurance Reserves We retain a significant portion of the risks associated with workers’ compensation, general, product liability, property and vehicle liability; and we obtain third party insurance to limit the exposure related to certain of these risks.
Our senior management has identified self-insurance reserves as a critical accounting estimate that is materially impacted by assumptions and has discussed this policy with the Audit Committee of our Board. 38 Table of Contents Self-Insurance Reserves We retain a significant portion of the risks associated with workers’ compensation, general, product liability, property and vehicle liability; and we obtain third party insurance to limit the exposure related to certain of these risks.
The two statistics we believe have the closest correlation to our market growth over the long-term are miles driven and the number of seven year old or older vehicles on the road.
Given the nature of these macroeconomic factors, which are generally outside of our control, we cannot predict whether or for how long certain trends will continue, nor can we predict to what degree these trends will impact us in the future. ​ The two statistics we believe have the closest correlation to our market growth over the long-term are miles driven and the number of seven-year-old or older vehicles on the road.
Net cash provided by operating activities was $2.9 billion in 2023, $3.2 billion in 2022 and $3.5 billion in 2021. Cash flows from operations are below last year primarily due to unfavorable changes in accounts payable and accrued expenses.
Net cash provided by operating activities was $3.0 billion in 2024, $2.9 billion in 2023 and $3.2 billion in 2022. Cash flows from operations are favorable compared to last year primarily due to higher net income partially due to the additional week of sales in the current year.
Extended payment terms from our vendors have allowed us to continue our high accounts payable to inventory ratio. We had an accounts payable to inventory ratio of 124.9% at August 26, 2023 and 129.5% at August 27, 2022.
We plan to continue negotiating extended terms with our suppliers, benefitting our working capital and resulting in a high accounts payable to inventory ratio. We had an accounts payable to inventory ratio of 119.5% at August 31, 2024 and 124.9% at August 26, 2023.
In fiscal years 2023 and 2022 the proceeds from the issuance of debt were used for general corporate purposes. The Company had net proceeds from the issuance of commercial paper and short term borrowing of $606.2 million and $603.4 million during fiscal 2023 and fiscal 2022, respectively.
The Company had net repayments of commercial paper and short-term borrowing of $629.6 million during fiscal 2024, and net proceeds from the issuance of commercial paper and short-term borrowings of $606.2 million and $603.4 million during fiscal 2023 and 2022, respectively. 31 Table of Contents During fiscal 2025, we expect to increase the investment in our business as compared to fiscal 2024.
We had proceeds from the sale of marketable debt securities of $58.4 million, $53.9 million and $95.4 million in fiscal 2023, 2022 and 2021, respectively. Net cash used in financing activities was $2.1 billion in fiscal 2023 and $3.5 billion in fiscal 2022 and fiscal 2021.
We had proceeds from the sale of marketable debt securities of $40.8 million, $58.4 million and $53.9 million in fiscal 2024, 2023 and 2022, respectively. Our investment in tax credit equity investments was $227.5 million, $98.0 million and $31.5 million in fiscal 2024, 2023 and 2022, respectively.
From January 1998 to August 26, 2023, we have repurchased a total of 154.0 million shares at an aggregate cost of $33.8 billion.
From January 1998 to August 31, 2024, we have repurchased a total of 155.2 million shares at an aggregate cost of $37.0 billion. We repurchased 1.1 million, 1.5 million and 2.2 million shares of common stock at an aggregate cost of $3.2 billion, $3.7 billion and $4.4 billion during fiscal 2024, 2023 and 2022, respectively.
Our retail sales and commercial sales in our domestic and international markets grew this past year as we made progress on our initiatives aimed at improving our ability to say “Yes” to our customers more frequently. ​ Our business is impacted by various factors within the economy that affect both our consumer and our industry, including but not limited to inflation, fuel costs, wage rates, supply chain disruptions, hiring and other economic conditions.
Our business is impacted by various factors within the economy that affect both our consumer and our industry, including but not limited to inflation, interest rates, levels of consumer debt, fuel and energy costs, prevailing wage rates, foreign exchange rate fluctuations, supply chain disruptions, hiring and other economic conditions.
The excise tax is assessed at one percent of the fair market value of net stock repurchases after December 31, 2022. During the third quarter of fiscal 2020, the Company temporarily suspended share repurchases under the share repurchase program in response to the COVID-19 pandemic which was restarted beginning in the first quarter of fiscal 2021.
(5) During the third quarter of fiscal 2020, the Company temporarily suspended share repurchases under the share repurchase program in response to the COVID-19 pandemic which was restarted beginning in the first quarter of fiscal 2021. (6) Inventory turnover is calculated as cost of sales divided by the average merchandise inventory balance over the trailing 5 quarters.
Historically, we have negotiated extended payment terms from suppliers, reducing the working capital required and resulting in a high accounts payable to inventory ratio. We plan to continue leveraging our inventory purchases; however, our ability to do so may be limited by our vendors’ capacity to factor their receivables from us.
In addition to building and land costs, our new stores and distribution centers require working capital, predominantly for inventories. Historically, we have negotiated extended payment terms from suppliers, reducing the working capital required and resulting in a high accounts payable to inventory ratio.
We do not derive revenue from automotive repair or installation services. Executive Summary For fiscal 2023, we achieved record net income of $2.5 billion, a 4.1% increase over the prior year, and sales growth of $1.2 billion, a 7.4% increase over the prior year.
We do not derive revenue from automotive repair or installation services. Executive Summary For fiscal 2024, net sales increased to $18.5 billion, a 5.9% increase over the prior year. Our retail sales and commercial sales in our domestic and international markets grew as we continue to make progress on our growth initiatives aimed at improving parts availability and providing WOW!
According to the latest data provided by the Auto Care Association, as of January 1, 2023, the average age of light vehicles on the road was 12.5 years and these vehicles account for more than 40% of U.S. vehicles.
According to the latest data provided by S&P Global Mobility, the average age of light vehicles on the road was 12.6 years and these vehicles account for approximately 38% of U.S. vehicles. According to the U.S. Department of Transportation – Federal Highway Administration, vehicles are driven an average of approximately 11,000 miles each year.
Our effective income tax rate was 20.2% and 21.1% of pre-tax income for fiscal 2023 and fiscal 2022, respectively. The benefit from stock options exercised in fiscal 2023 was $92.2 million compared to $63.2 million in fiscal 2022 (see “Note D – Income Taxes” in the Notes to Consolidated Financial Statements).
The benefit from stock options exercised in fiscal 2024 was $81.4 million compared to $92.2 million in fiscal 2023 (see “Note E – Income Taxes” in the Notes to Consolidated Financial Statements). Net income for fiscal 2024 increased by 5.3% to $2.7 billion, and diluted earnings per share increased 13.0% to $149.55 from $132.36 in fiscal 2023.
Interest expense, net for fiscal 2023 was $306.4 million compared with $191.6 million during fiscal 2022. Average borrowings for fiscal 2023 were $7.0 billion, compared with $5.8 billion for fiscal 2022. Weighted average borrowing rates were 3.78% and 3.29% for fiscal 2023 and 2022, respectively.
The increase in operating expenses as a percentage of sales was primarily driven by domestic store payroll. Interest expense, net for fiscal 2024 was $451.6 million compared with $306.4 million during fiscal 2023. Average borrowings for fiscal 2024 were $8.7 billion, compared with $7.0 billion for fiscal 2023.
We repurchased 1.5 million, 2.2 million and 2.6 million shares of common stock at an aggregate cost of $3.7 billion (inclusive of excise tax of $23.7 million), $4.4 billion and $3.4 billion during fiscal 2023, 2022 and 2021, respectively. The excise tax is assessed at one percent of the fair market value of net stock repurchases after December 31, 2022.
The excise tax is assessed at one percent of the fair market value of net stock repurchases after December 31, 2022. ​ 29 Table of Contents Fiscal 2024 Compared with Fiscal 2023 For the fiscal year ended August 31, 2024, we had net sales of $18.5 billion compared with $17.5 billion for the year ended August 26, 2023, an increase of 5.9%.
This growth was driven primarily by a domestic same store sales increase of 3.4% and net sales of $327.8 million from new domestic and international stores. Domestic commercial sales increased $368.0 million, or 8.7%, over domestic commercial sales for fiscal 2022.
This growth was driven primarily by the additional 53 rd week sales of $365.9 million, net sales of $292.4 million from new domestic and international stores and a n increase in total company same store sales of 1.4% on a constant currency basis.
Considering the cumulative repurchases through October 16, 2023, we have $1.3 billion remaining under the Board’s authorization to repurchase its common stock. ​ 35 Table of Contents Financial Commitments The following table shows our significant contractual obligations as of August 26, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ Payment Due by Period ​ ​ Contractual ​ Less than ​ Between ​ Between ​ Over (in thousands) ​ Obligations 1 year 1 ‑ 3 years 3 ‑ 5 years 5 years ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Debt (1) $ 7,709,600 ​ $ 1,509,600 ​ $ 1,750,000 ​ $ 1,050,000 ​ $ 3,400,000 Interest payments (2) ​ 1,468,738 ​ ​ 252,600 ​ ​ 455,325 ​ ​ 321,125 ​ ​ 439,688 Operating leases (3) ​ 4,097,510 ​ ​ 372,849 ​ ​ 781,663 ​ ​ 682,165 ​ ​ 2,260,833 Finance leases (3) ​ 319,186 ​ ​ 88,284 ​ ​ 143,106 ​ ​ 44,568 ​ ​ 43,228 Self-insurance reserves (4) ​ 279,407 ​ ​ 96,795 ​ ​ 95,288 ​ ​ 38,757 ​ ​ 48,567 Construction commitments ​ 198,926 ​ 198,926 ​ ​ — ​ ​ — ​ ​ — Other (5) ​ ​ 9,326 ​ ​ 9,326 ​ ​ — ​ ​ — ​ ​ — ​ ​ $ 14,082,693 ​ $ 2,528,380 ​ $ 3,225,382 ​ $ 2,136,615 ​ $ 6,192,316 ​ (1) Debt balances represent principal maturities, excluding interest, discounts, and debt issuance costs.
Considering the cumulative repurchases through October 21, 2024, we have $2.0 billion remaining under the Board’s authorization to repurchase our common stock. 34 Table of Contents Financial Commitments The following table shows our significant contractual obligations as of August 31, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ Payment Due by Period ​ ​ Contractual ​ Less than ​ Between ​ Between ​ Over (in thousands) ​ Obligations 1 year 1 ‑ 3 years 3 ‑ 5 years 5 years ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Debt (1) $ 9,080,000 ​ $ 1,480,000 ​ $ 1,450,000 ​ $ 2,000,000 ​ $ 4,150,000 Interest payments (2) ​ 2,198,888 ​ ​ 375,625 ​ ​ 653,775 ​ ​ 527,550 ​ ​ 641,938 Operating leases (3) ​ 4,157,877 ​ ​ 391,901 ​ ​ 828,934 ​ ​ 719,996 ​ ​ 2,217,046 Finance leases (3) ​ 461,654 ​ ​ 116,999 ​ ​ 209,841 ​ ​ 92,389 ​ ​ 42,425 Self-insurance reserves (4) ​ 267,779 ​ ​ 82,976 ​ ​ 97,736 ​ ​ 42,585 ​ ​ 44,482 Construction commitments ​ 103,780 ​ 103,780 ​ ​ — ​ ​ — ​ ​ — Other (5) ​ ​ 49,259 ​ ​ 49,259 ​ ​ — ​ ​ — ​ ​ — ​ ​ $ 16,319,237 ​ $ 2,600,540 ​ $ 3,240,286 ​ $ 3,382,520 ​ $ 7,095,891 ​ (1) Debt balances represent principal maturities, excluding interest, discounts, and debt issuance costs.
During fiscal 2023, failure and maintenance related categories represented the largest portion of our sales mix, at approximately 85% of total sales categories continuing to comprise our largest set of categories.
Customer Service. Operating profit increased 9.1% to $3.8 billion, net income increased 5.3% to $2.7 billion and diluted earnings per share increased 13.0% to $149.55 for the year. During fiscal 2024, failure and maintenance related categories represented the largest portion of our sales mix, at approximately 86% of total sales.
We did not have any commercial paper or short-term borrowing activity during fiscal 2021. During fiscal 2024, we expect to increase the investment in our business as compared to fiscal 2023. Our investments are expected to be directed primarily to our supply chain initiatives, which includes expanded hub and mega hubs, as well as distribution center expansions and new stores.
Our investments are expected to be directed primarily to our supply chain initiatives, which include new distribution centers and new stores, including expanded hub stores and mega hub stores.
(4) For fiscal 2019 after-tax operating profit was adjusted for the impact of the revaluation of deferred tax liabilities, net of repatriation tax. (5) All averages are computed based on trailing five quarters.
(4) All averages are computed based on trailing five quarters.
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Given the nature of these macroeconomic factors, we cannot predict whether or for how long certain trends will continue, nor can we predict to what degree these trends will impact us in the future. ​ One macroeconomic factor affecting our customers and our industry is gas prices. We believe fluctuations in gas prices impact our customers’ level of disposable income.
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In seven years, the average miles driven equates to approximately 77,000 miles.
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With approximately 11 billion gallons of unleaded gas consumption each month across the U.S., each $1 increase at the pump reduces approximately $11 billion of additional spending capacity to consumers each month.
Added
(2) The 52 weeks ended August 28, 2021 and August 29, 2020 were negatively impacted by pandemic related expenses, including Emergency Time-Off of approximately $43.0 million (pre-tax) and $83.9 million (pre-tax), respectively.
Removed
Given the unpredictability of gas prices, we cannot predict whether gas prices will increase or decrease, nor can we predict how any future changes in gas prices will impact our sales in future periods. ​ We have also experienced continued pressure on average hourly wages in the U.S. during fiscal 2023.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeInterest Rate Risk Our financial market risk results primarily from changes in interest rates. At times, we reduce our exposure to changes in interest rates by entering into various interest rate hedge instruments such as interest rate swap contracts, treasury lock agreements and forward-starting interest rate swaps.
Biggest changeAt times, we reduce our exposure to changes in interest rates by entering into various interest rate hedge instruments such as interest rate swap contracts, treasury lock agreements and forward-starting interest rate swaps. We have historically utilized interest rate swaps to convert variable rate debt to fixed rate debt and to lock in fixed rates on future debt issuances.
A hypothetical 10 percent adverse change in average exchange rates would not have a material impact on our results of operations. ​ 42 Table of Contents
A hypothetical 10 percent adverse change in average exchange rates would not have a material impact on our results of operations. ​ 40 Table of Contents
Item 7A. Quantitative and Qualitative Disclosures about Market Risk We are exposed to market risk from, among other things, changes in interest rates, foreign exchange rates and fuel prices. From time to time, we use various derivative instruments to reduce interest rate and fuel price risks.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk We are exposed to market risk from, among other things, changes in interest rates, foreign exchange rates and fuel prices. From time to time, we use various derivative instruments to reduce interest rate and fuel price risks. To date, no derivative instruments have been utilized to reduce foreign exchange rate risk.
The fair value of our debt was estimated at $7.3 billion as of August 26, 2023, and $5.9 billion as of August 27, 2022, based on the quoted market prices for the same or similar debt issues or on the current rates available to us for debt having the same remaining maturities.
The fair value of our debt was estimated at $9.0 billion as of August 31, 2024, and $7.3 billion as of August 26, 2023, based on the quoted market prices for the same or similar debt issues or on the current rates available to us for debt having the same remaining maturities.
A one percentage point increase in interest rates would have reduced the fair value of our fixed rate debt by approximately $264.7 million at August 26, 2023. Foreign Currency Risk Foreign currency exposures arising from transactions include firm commitments and anticipated transactions denominated in a currency other than our entities’ functional currencies.
A one percentage point increase in interest rates would have reduced the fair value of our fixed rate debt by approximately $365.1 million at August 31, 2024. Foreign Currency Risk Foreign currency exposures arising from transactions include firm commitments and anticipated transactions denominated in a currency other than our entities’ functional currencies.
The potential loss in value 41 Table of Contents of our net assets in the Mexican subsidiaries resulting from a hypothetical 10 percent adverse change in quoted foreign currency exchange rates at August 26, 2023 and August 27, 2022, would have been approximately $37.3 million and approximately $24.6 million, respectively.
The potential loss in value of our net assets in the Mexican subsidiaries resulting from a hypothetical 10 percent adverse change in quoted foreign currency exchange rates at August 31, 2024 and August 26, 2023, would have been approximately $43.5 million and approximately $37.3 million, respectively.
The net asset exposure in the Mexican subsidiaries translated into U.S. dollars using the year-end exchange rates was $409.8 million at August 26, 2023 and $270.2 million at August 27, 2022.
The net asset exposure in the Mexican subsidiaries translated into U.S. dollars using the year-end exchange rates was $478.4 million at August 31, 2024 and $409.8 million at August 26, 2023.
The year-end exchange rates with respect to the Mexican peso increased by 15.7% with respect to the U.S. dollar during fiscal 2023 and decreased by less than 1.0% with respect to the U.S. dollar during fiscal 2022.
The year-end exchange rates with respect to the Mexican peso decreased by 17.9% with respect to the U.S. dollar during fiscal 2024 and increased by 15.7% with respect to the U.S. dollar during fiscal 2023.
Our interest rate hedge instruments are designated as cash flow hedges. As of August 26, 2023 and August 27, 2022, no such interest rate swaps were outstanding. Unrealized gains and losses on interest rate hedges are deferred in stockholders’ deficit as a component of Accumulated Other Comprehensive Loss.
As of August 31, 2024 and August 26, 2023, no such interest rate swaps were outstanding. 39 Table of Contents Unrealized gains and losses on interest rate hedges are deferred in stockholders’ deficit as a component of Accumulated Other Comprehensive Loss.
We had outstanding fixed rate debt of $6.5 billion, net of unamortized debt issuance costs of $41.1 million, at August 26, 2023, and $5.5 billion, net of unamortized debt issuance costs of $31.3 million, at August 27, 2022.
We had $580.0 million in variable rate debt outstanding at August 31, 2024 and $1.2 billion in August 26, 2023. We had outstanding fixed rate debt of $8.4 billion, net of unamortized debt issuance costs of $55.6 million, at August 31, 2024, and $6.5 billion, net of unamortized debt issuance costs of $41.1 million, at August 26, 2023.
Such fair value is less than the carrying value of debt by $406.6 million and $182.8 million at August 26, 2023 and August 27, 2022, respectively, which reflects its face amount, adjusted for any unamortized debt issuance costs and discounts. We had $1.2 billion in variable rate debt outstanding at August 26, 2023 and $603.4 million in August 27, 2022.
Such fair value is greater than the carrying value of debt by $3.5 million and less than the carrying value of debt by $406.6 million at August 31, 2024 and August 26, 2023, respectively. This amount reflects face amount, adjusted for any unamortized debt issuance costs and discounts.
To date, based upon our current level of foreign operations, no derivative instruments have been utilized to reduce foreign exchange rate risk. All of our hedging activities are governed by guidelines that are authorized by the Board. Further, we do not buy or sell derivative instruments for trading purposes.
All of our hedging activities are governed by guidelines that are authorized by the Board. Further, we do not buy or sell derivative instruments for trading purposes. Interest Rate Risk Our financial market risk results primarily from changes in interest rates.
We have historically utilized interest rate swaps to convert variable rate debt to fixed rate debt and to lock in fixed rates on future debt issuances. We reflect the current fair value of all interest rate hedge instruments as a component of either other current assets or accrued expenses and other.
We reflect the current fair value of all interest rate hedge instruments as a component of either other current assets or accrued expenses and other. Our interest rate hedge instruments are designated as cash flow hedges.

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