0001171843-22-003896.txt : 20220524 0001171843-22-003896.hdr.sgml : 20220524 20220524065514 ACCESSION NUMBER: 0001171843-22-003896 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 14 CONFORMED PERIOD OF REPORT: 20220524 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20220524 DATE AS OF CHANGE: 20220524 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AUTOZONE INC CENTRAL INDEX KEY: 0000866787 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-AUTO & HOME SUPPLY STORES [5531] IRS NUMBER: 621482048 STATE OF INCORPORATION: NV FISCAL YEAR END: 0827 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10714 FILM NUMBER: 22953960 BUSINESS ADDRESS: STREET 1: 123 SOUTH FRONT ST CITY: MEMPHIS STATE: TN ZIP: 38103 BUSINESS PHONE: 9014956500 MAIL ADDRESS: STREET 1: P O BOX 2198 STREET 2: DEPT 8074 CITY: MEMPHIS STATE: TN ZIP: 38101-2198 8-K 1 f8k_052322.htm FORM 8-K Form 8-K
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________

FORM 8-K

_________________

CURRENT REPORT

Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  May 24, 2022

_______________________________

AUTOZONE, INC.

(Exact name of registrant as specified in its charter)

_______________________________

Nevada1-1071462-1482048
(State or Other Jurisdiction of Incorporation)(Commission File Number)(I.R.S. Employer Identification No.)

123 South Front Street

Memphis, Tennessee 38103

(Address of Principal Executive Offices) (Zip Code)

(901) 495-6500

(Registrant's telephone number, including area code)

 

(Former name or former address, if changed since last report)

_______________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01 per shareAZONew York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 
 
Item 2.02. Results of Operations and Financial Condition.

On May 24, 2022, AutoZone, Inc. issued a press release announcing its earnings for the fiscal quarter ended May 7, 2022 which is furnished as Exhibit 99.1.

Item 9.01. Financial Statements and Exhibits.

The following exhibits are furnished with this Current Report pursuant to Item 2.02:

(d)        Exhibits

   99.1     Press Release dated May 24, 2022

   104     Cover Page Interactive Data File (embedded within the Inline XBRL    document)

 
 

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 AUTOZONE, INC.
   
  
Date: May 24, 2022By: /s/ Jamere Jackson        
  Jamere Jackson
  Chief Financial Officer and Executive Vice President - Finance and Store Development
  

 

EX-99.1 2 exh_991.htm PRESS RELEASE EdgarFiling

EXHIBIT 99.1

AutoZone 3rd Quarter Same Store Sales Increase 2.6%; EPS Increases to $29.03

MEMPHIS, Tenn., May 24, 2022 (GLOBE NEWSWIRE) -- AutoZone, Inc. (NYSE: AZO) today reported net sales of $3.9 billion for its third quarter (12 weeks) ended May 7, 2022, an increase of 5.9% from the third quarter of fiscal 2021 (12 weeks). Domestic same store sales, or sales for stores open at least one year, increased 2.6% for the quarter.

“We are very proud to report solid same store sales growth on top of last year’s remarkable 28.9%. Both our retail and commercial sales performance exceeded our expectations this quarter. While our commercial sales growth accelerated to 26.0%, our retail sales also remained healthy considering the tough comparison from a year ago. We continue to believe the initiatives we have in place position us well for our upcoming fourth quarter,” said Bill Rhodes, Chairman, President and Chief Executive Officer.

For the quarter, gross profit, as a percentage of sales, was 51.91%, a decrease of 54 basis points versus the prior year. The decrease in gross margin was primarily driven by accelerated growth in our lower margin Commercial business. Operating expenses, as a percentage of sales, were 31.58% versus 30.44% last year. The increase in operating expenses, as a percentage of sales, was driven by payroll deleverage as last year’s historic comparable store sales drove significant leverage.

Operating profit decreased 2.2% to $785.7 million. Net income for the quarter decreased 0.6% over the same period last year to $592.6 million, while diluted earnings per share increased 9.6% to $29.03 from $26.48 in the year-ago quarter.

Under its share repurchase program, AutoZone repurchased 449 thousand shares of its common stock for $900 million during the third quarter, at an average price of $2,006 per share. At the end of the third quarter, the Company had $2.058 billion remaining under its current share repurchase authorization.

The Company’s inventory increased 13.9% over the same period last year, primarily driven by inflation with the remaining growth driven by our growth initiatives, including megahubs, hubs and new stores. Net inventory, defined as merchandise inventories less accounts payable, on a per store basis, was negative $216 thousand versus negative $167 thousand last year and negative $198 thousand last quarter.

“We remain committed to providing the best and safest place to shop for everyone’s automotive needs. During these unique and challenging times, we strive to deliver exceptional customer service while focusing on our growth initiatives. We will take nothing for granted as we continue to prudently invest in our business and remain focused on generating solid returns on capital. We are committed to our long-term approach of increasing operating earnings and free cash flows while utilizing our balance sheet effectively,” said Rhodes.  

During the quarter ended May 7, 2022, AutoZone opened 24 new stores in the U.S., opened four stores in Mexico and three stores in Brazil. As of May 7, 2022, the Company had 6,115 stores in the U.S., 673 in Mexico and 58 in Brazil for a total store count of 6,846.

AutoZone is the leading retailer and distributor of automotive replacement parts and accessories in the Americas. Each store carries an extensive product line for cars, sport utility vehicles, vans and light trucks, including new and remanufactured automotive hard parts, maintenance items, accessories, and non-automotive products. Many stores also have a commercial sales program that provides commercial credit and prompt delivery of parts and other products to local, regional and national repair garages, dealers, service stations and public sector accounts. We also have commercial programs in all stores in Mexico and Brazil. AutoZone also sells the ALLDATA brand automotive diagnostic, repair and shop management software through www.alldata.com. Additionally, we sell automotive hard parts, maintenance items, accessories and non-automotive products through www.autozone.com, and our commercial customers can make purchases through www.autozonepro.com. We also provide product information on our Duralast branded products through www.duralastparts.com. AutoZone does not derive revenue from automotive repair or installation.

AutoZone will host a conference call this morning, Tuesday, May 24, 2022, beginning at 10:00 a.m. (EST) to discuss its third quarter results. This call is being web cast and can be accessed, along with supporting slides, at AutoZone’s website at www.autozone.com and clicking on Investor Relations. Investors may also listen to the call by dialing (888) 506-0062, passcode AutoZone. In addition, a telephone replay will be available by dialing (877) 481-4010, replay passcode 45495 through June 7, 2022.

This release includes certain financial information not derived in accordance with generally accepted accounting principles (“GAAP”). These non-GAAP measures include adjustments to reflect return on invested capital, adjusted debt and adjusted debt to EBITDAR. The Company believes that the presentation of these non-GAAP measures provides information that is useful to investors as it indicates more clearly the Company’s comparative year-to-year operating results, but this information should not be considered a substitute for any measures derived in accordance with GAAP. Management targets the Company’s capital structure in order to maintain its investment grade credit ratings. The Company believes this is important information for the management of its debt levels and share repurchases. We have included a reconciliation of this additional information to the most comparable GAAP measures in the accompanying reconciliation tables.

Certain statements contained in this press release constitute forward-looking statements that are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements typically use words such as “believe,” “anticipate,” “should,” “intend,” “plan,” “will,” “expect,” “estimate,” “project,” “positioned,” “strategy,” “seek,” “may,” “could” and similar expressions. These are based on assumptions and assessments made by our management in light of experience and perception of historical trends, current conditions, expected future developments and other factors that we believe to be appropriate. These forward-looking statements are subject to a number of risks and uncertainties, including without limitation: product demand, due to changes in fuel prices, miles driven or otherwise; energy prices; weather; competition; credit market conditions; cash flows; access to available and feasible financing; future stock repurchases; the impact of recessionary conditions; consumer debt levels; changes in laws or regulations; risks associated with self-insurance; war and the prospect of war, including terrorist activity; the impact of public health issues, such as the ongoing global coronavirus pandemic; inflation; the ability to hire, train and retain qualified employees; construction delays; the compromising of confidentiality, availability or integrity of information, including due to cyber-attacks; historic growth rate sustainability; downgrade of our credit ratings; damage to our reputation; challenges in international markets; failure or interruption of our information technology systems; origin and raw material costs of suppliers; inventory availability; disruption in our supply chain; impact of tariffs; anticipated impact of new accounting standards; and business interruptions. Certain of these risks and uncertainties are discussed in more detail in the “Risk Factors” section contained in Item 1A under Part 1 of the Company’s Annual Report on Form 10-K for the year ended August 28, 2021, and these Risk Factors should be read carefully. Forward-looking statements are not guarantees of future performance, and actual results, developments and business decisions may differ from those contemplated by such forward-looking statements, and events described above and in the “Risk Factors” could materially and adversely affect our business. However, it should be understood that it is not possible to identify or predict all such risks and other factors that could affect these forward-looking statements. Forward-looking statements speak only as of the date made. Except as required by applicable law, we undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Contact Information:
Financial: Brian Campbell at (901) 495-7005, brian.campbell@autozone.com 
Media: David McKinney at (901) 495-7951, david.mckinney@autozone.com 


AutoZone's 3rd Quarter Highlights - Fiscal 2022   
        
Condensed Consolidated Statements of Operations     
3rd Quarter, FY2022       
(in thousands, except per share data)       
  GAAP Results   
  12 Weeks Ended 12 Weeks Ended   
  May 7, 2022 May 8, 2021   
        
Net sales $3,865,222  $3,651,023    
Cost of sales  1,858,808   1,736,077    
Gross profit  2,006,414   1,914,946    
Operating, SG&A expenses  1,220,744   1,111,441    
Operating profit (EBIT)  785,670   803,505    
Interest expense, net  41,888   45,026    
Income before taxes  743,782   758,479    
Income tax expense(1)  151,211   162,315    
Net income $592,571  $596,164    
Net income per share:       
Basic $29.93  $27.15    
Diluted $29.03  $26.48    
Weighted average shares outstanding:       
Basic  19,798   21,956    
Diluted  20,414   22,515    
        
(1)The twelve weeks ended May 7, 2022 and the comparable prior year period include $21.1M and $16.0M in tax benefits from stock option exercises, respectively
  
     
        
Year-To-Date 3rd Quarter, FY2022       
(in thousands, except per share data)       
  GAAP Results   
  36 Weeks Ended 36 Weeks Ended   
  May 7, 2022 May 8, 2021(2)   
        
Net sales $10,903,875  $9,716,101    
Cost of sales  5,187,075   4,566,155    
Gross profit  5,716,800   5,149,946    
Operating, SG&A expenses  3,549,885   3,249,449    
Operating profit (EBIT)  2,166,915   1,900,497    
Interest expense, net  127,642   137,217    
Income before taxes  2,039,273   1,763,280    
Income taxes(1)  419,712   378,737    
Net income $1,619,561  $1,384,543    
Net income per share:       
Basic $79.26  $61.24    
Diluted $76.90  $59.80    
Weighted average shares outstanding:       
Basic  20,433   22,609    
Diluted  21,060   23,154    
        
(1)The thirty-six weeks ended May 7, 2022 and the comparable prior year period include $55.9M and $35.2M in tax benefits from stock option exercises, respectively
   
(2)The thirty-six weeks ended May 8, 2021 was negatively impacted by pandemic related expenses, including Emergency Time-Off of approximately $46M (pre-tax)
   
        
Selected Balance Sheet Information       
(in thousands)       
  May 7, 2022 May 8, 2021 August 28, 2021 
        
Cash and cash equivalents $263,044  $975,646  $1,171,335  
Merchandise inventories  5,313,114   4,665,477   4,639,813  
Current assets  6,254,721   6,224,396   6,415,303  
Property and equipment, net  4,971,626   4,683,149   4,856,891  
Operating lease right-of-use assets  2,764,631   2,694,846   2,718,712  
Total assets  14,520,565   14,137,946   14,516,199  
Accounts payable  6,793,205   5,778,222   6,013,924  
Current liabilities  8,064,076   7,013,249   7,369,754  
Operating lease liabilities, less current portion  2,659,535   2,594,506   2,632,842  
Total debt  6,057,444   5,267,896   5,269,820  
Stockholders' deficit  (3,387,230)  (1,763,392)  (1,797,536) 
Working capital  (1,809,355)  (788,853)  (954,451) 
          



AutoZone's 3rd Quarter Highlights - Fiscal 2022         
          
Condensed Consolidated Statements of Operations          
          
Adjusted Debt / EBITDAR         
(in thousands, except adjusted debt to EBITDAR ratio) Trailing 4 Quarters     
  May 7, 2022 May 8, 2021     
Net income $2,405,332  $2,125,000      
Add: Interest expense  185,762   202,854      
    Income tax expense  619,851   590,688      
EBIT  3,210,945   2,918,542      
          
Add: Depreciation and amortization  431,004   403,395      
    Rent expense(1)  360,076   339,193      
    Share-based expense  67,109   50,645      
EBITDAR $4,069,134  $3,711,775      
          
Debt $6,057,444  $5,267,896      
Financing lease liabilities  288,483   228,597      
Add: Rent x 6(1)  2,160,456   2,035,158      
Adjusted debt $8,506,383  $7,531,651      
          
Adjusted debt to EBITDAR  2.1   2.0      
          
Adjusted Return on Invested Capital (ROIC)         
(in thousands, except ROIC)         
  Trailing 4 Quarters     
  May 7, 2022 May 8, 2021     
Net income $2,405,332  $2,125,000      
Adjustments:         
Interest expense  185,762   202,854      
Rent expense(1)  360,076   339,193      
Tax effect(2)  (111,896)  (118,167)     
Adjusted after-tax return $2,839,274  $2,548,880      
          
Average debt(3) $5,541,462  $5,446,162      
Average stockholders' deficit(3)  (2,442,077)  (1,364,932)     
Add: Rent x 6(1)  2,160,456   2,035,158      
Average financing lease liabilities(3)  268,111   227,061      
Invested capital $5,527,952  $6,343,449      
          
Adjusted After-Tax ROIC  51.4%  40.2%     
          
(1) 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 trailing four quarters ended May 7, 2022 and May 8, 2021
     
              
          
  Trailing 4 Quarters     
(in thousands) May 7, 2022 May 8, 2021     
Total lease cost, per ASC 842 $451,601  $421,750      
Less: Finance lease interest and amortization  (65,128)  (55,725)     
Less: Variable operating lease components, related to insurance and common area maintenance  (26,397)  (26,832)     
     
Rent expense $360,076  $339,193      
            
          
(2) Effective tax rate over trailing four quarters ended May 7, 2022 and May 8, 2021 is 20.5% and 21.8%, respectively     
(3) All averages are computed based on trailing five quarter balances     
          
Other Selected Financial Information         
(in thousands)         
  May 7, 2022 May 8, 2021     
Cumulative share repurchases ($ since fiscal 1998) $29,092,425  $24,832,432      
Remaining share repurchase authorization ($)  2,057,575   1,317,568      
          
Cumulative share repurchases (shares since fiscal 1998)  152,035   149,696      
          
Shares outstanding, end of quarter  19,576   21,620      
          
          
  12 Weeks Ended 12 Weeks Ended  36 Weeks Ended 36 Weeks Ended
  May 7, 2022 May 8, 2021  May 7, 2022 May 8, 2021
          
Depreciation and amortization $102,083  $94,017   $301,365 $278,044
          
Capital spending  161,207   137,009    369,350  375,653
          



AutoZone's 3rd Quarter Highlights - Fiscal 2022               
Selected Operating Highlights            
Condensed Consolidated Statements of Operations          
                
Store Count & Square Footage            
                
     12 Weeks Ended  12 Weeks Ended  36 Weeks Ended  36 Weeks Ended 
     May 7, 2022  May 8, 2021  May 7, 2022  May 8, 2021 
Domestic:
            
 Beginning stores  6,091    5,951    6,051    5,885  
 Stores opened  24    25    65    91  
 Stores closed  -    (1)   (1)   (1) 
 Ending domestic stores  6,115    5,975    6,115    5,975  
                
 Relocated stores  4    6    8    11  
                
 Stores with commercial programs  5,276    5,107    5,276    5,107  
                
 Square footage (in thousands)  40,230    39,175    40,230    39,175  
                
Mexico:
            
 Beginning stores  669    628    664    621  
 Stores opened  4    7    9    14  
 Ending Mexico stores  673    635    673    635  
                
Brazil:
            
 Beginning stores  55    46    52    43  
 Stores opened  3    1    6    4  
 Ending Brazil stores  58    47    58    47  
                
Total
  6,846    6,657    6,846    6,657  
                
 Square footage (in thousands)  45,680    44,253    45,680    44,253  
 Square footage per store  6,673    6,648    6,673    6,648  
                
Sales Statistics            
($ in thousands, except sales per average square foot)            
     12 Weeks Ended  12 Weeks Ended  Trailing 4 Quarters  Trailing 4 Quarters 
Total AutoZone Stores (Domestic, Mexico and Brazil)May 7, 2022  May 8, 2021  May 7, 2022  May 8, 2021 
 Sales per average store $556   $541   $2,301   $2,134  
 Sales per average square foot $83   $81   $346   $321  
                
Total Auto Parts (Domestic, Mexico and Brazil)             
 Total auto parts sales $3,795,290   $3,590,281   $15,537,156   $14,024,674  
    % Increase vs. LY  5.7%   31.8%   10.8%   18.4% 
                
Domestic Commercial             
 Total domestic commercial sales $1,044,293   $828,569   $3,970,727   $3,138,398  
    % Increase vs. LY  26.0%   44.4%   26.5%   18.9% 
                
 Average sales per program per week $16.6   $13.5   $14.7   $12.0  
    % Increase vs. LY  23.0%   39.2%   22.5%   17.6% 
                
All Other, including ALLDATA            
 All other sales $69,932   $60,742   $280,203   $237,395  
    % Increase vs. LY  15.1%   11.1%   18.0%   5.7% 
                
         
     12 Weeks Ended  12 Weeks Ended  36 Weeks Ended  36 Weeks Ended 
     May 7, 2022  May 8, 2021  May 7, 2022  May 8, 2021 
Domestic same store sales  2.6%   28.9%   9.5%   19.0% 
                
Inventory Statistics (Total Stores)            
     as of  as of       
     May 7, 2022  May 8, 2021       
 Accounts payable/inventory  127.9%   123.9%       
                
 ($ in thousands)            
 Inventory  $5,313,114   $4,665,477        
 Inventory per store  776    701        
 Net inventory (net of payables)  (1,480,091)   (1,112,745)       
 Net inventory / per store  (216)   (167)       
                
     Trailing 5 Quarters       
     May 7, 2022  May 8, 2021       
 Inventory turns  1.5x   1.5       

 

 

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