EX-99.1 2 exh_991.htm PRESS RELEASE EdgarFiling


AutoZone 4th Quarter Same Store Sales Increase 6.2%; 4th Quarter EPS Increases to $40.51; Annual Sales of $16.3 Billion

MEMPHIS, Tenn., Sept. 19, 2022 (GLOBE NEWSWIRE) -- AutoZone, Inc. (NYSE: AZO) today reported net sales of $5.3 billion for its fourth quarter (16 weeks) ended August 27, 2022, an increase of 8.9% from the fourth quarter of fiscal 2021 (16 weeks). Domestic same store sales, or sales for stores open at least one year, increased 6.2% for the quarter.

“Our results are a testament to our AutoZoners’ ongoing commitment to delivering exceptional customer service every day.  Our retail business performed well this quarter ending with positive same store sales on top of last year’s strong performance.  And, our commercial business growth continued to be exceptionally strong at 22%. The investments we have made in both inventory availability and technology are enhancing our competitive positioning.  We are optimistic about our growth prospects heading into our new fiscal year,”  said Bill Rhodes, Chairman, President and Chief Executive Officer.

For the quarter, gross profit, as a percentage of sales, was 51.5%, a decrease of 73 basis points versus the prior year. The decrease in gross margin was driven by accelerated growth in our Commercial business and a 28 basis point non-cash LIFO charge driven largely by rising freight costs. Operating expenses, as a percentage of sales, were 30.9% versus 31.0% last year.

Operating profit increased 5.7% to $1.1 billion. Net income for the quarter increased 3.1% over the same period last year to $810.0 million, while diluted earnings per share increased 13.4% to $40.51 from $35.72 in the year-ago quarter.

For the fiscal year ended August 27, 2022, sales were $16.3 billion, an increase of 11.1% from the prior year, while domestic same store sales were up 8.4%. Gross profit, as a percentage of sales, was 52.1% versus 52.8%. The decrease in gross margin was primarily attributable to the initiatives to accelerate growth in our Commercial business. Operating expenses, as a percentage of sales, were 32.0% versus 32.6%. For fiscal 2022, net income increased 11.9% to $2.4 billion and diluted earnings per share increased 23.1% to $117.19 from $95.19. Return on invested capital finished at 52.9%.

Under its share repurchase program, AutoZone repurchased 474 thousand shares of its common stock for $1 billion during the fourth quarter, at an average price of $2,111 per share. For the fiscal year, the Company repurchased 2.2 million shares of its common stock for $4.4 billion, at an average price of $1,964 per share. At year end, the Company had $1.058 billion remaining under its current share repurchase authorization.

The Company’s inventory increased 21.5% over the same period last year, driven by our growth initiatives and inflation. Net inventory, defined as merchandise inventories less accounts payable, on a per store basis, was negative $240 thousand versus negative $203 thousand last year and negative $216 thousand last quarter.

“We are committed to being the best place to shop for everyone’s automotive needs while delivering on our ongoing promise to be a great place to work. We believe our initiatives will drive growth in the new fiscal year. As we continue to prudently invest capital in our business, we remain steadfast in our long-term, disciplined approach to increasing operating earnings and cash flows while utilizing our balance sheet effectively,” said Rhodes.

Additionally, AutoZone announced today that Doug Brooks is not standing for re-election to the Company’s Board of Directors at the Annual Meeting of Stockholders to be held December 14, 2022. “AutoZone has truly benefited from Doug’s insightful guidance, tutelage, and service these past nine years. Doug’s efforts have contributed to helping make our Company what it is today. I thank him for his leadership and commitment to our Company, and I wish him well in his future endeavors,” said Rhodes.

During the fiscal year ended August 27, 2022, AutoZone opened 118 new stores and closed one in the U.S., opened 39 stores in Mexico and 20 stores in Brazil. As of August 27, 2022, the Company had 6,168 stores in the U.S., 703 in Mexico and 72 in Brazil for a total store count of 6,943.

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, Monday, September 19, 2022, beginning at 10:00 a.m. (ET) to discuss its fourth 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 404601. In addition, a telephone replay will be available by dialing (877) 481-4010, replay passcode 46463 through October 3, 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 4th Quarter Highlights - Fiscal 2022 
Condensed Consolidated Statements of Operations   
4th Quarter, FY2022    
(in thousands, except per share data)     
    GAAP Results 
    16 Weeks Ended 16 Weeks Ended 
    August 27, 2022 August 28, 2021 
Net sales $5,348,355  $4,913,484  
Cost of sales  2,592,505   2,345,646  
Gross profit  2,755,850   2,567,838  
Operating, SG&A expenses  1,652,036   1,523,808  
Operating profit (EBIT)  1,103,814   1,044,030  
Interest expense, net  63,995   58,119  
Income before taxes  1,039,819   985,911  
Income tax expense  229,777   200,140  
Net income $810,042  $785,771  
Net income per share:     
 Basic $41.81  $36.72  
 Diluted $40.51  $35.72  
Weighted average shares outstanding:     
 Basic  19,373   21,400  
 Diluted  19,996   22,000  
Fiscal Year 2022     
(in thousands, except per share data)     
    GAAP Results 
    52 Weeks Ended 52 Weeks Ended 
    August 27, 2022 August 28, 2021(1) 
Net sales $16,252,230  $14,629,585  
Cost of sales  7,779,580   6,911,800  
Gross profit  8,472,650   7,717,785  
Operating, SG&A expenses  5,201,921   4,773,258  
Operating profit (EBIT)  3,270,729   2,944,527  
Interest expense, net  191,638   195,337  
Income before taxes  3,079,091   2,749,190  
Income taxes  649,487   578,876  
Net income $2,429,604  $2,170,314  
Net income per share:     
 Basic $120.83  $97.60  
 Diluted $117.19  $95.19  
Weighted average shares outstanding:     
 Basic  20,107   22,237  
 Diluted  20,733   22,799  
(1)The 52 weeks ended August 28, 2021 was negatively impacted by pandemic related expenses, including Emergency Time-Off of approximately $43.0M (pre-tax) 
Selected Balance Sheet Information     
(in thousands)     
    August 27, 2022 August 28, 2021 
Cash and cash equivalents $264,380  $1,171,335  
Merchandise inventories  5,638,004   4,639,813  
Current assets  6,627,984   6,415,303  
Property and equipment, net  5,170,419   4,856,891  
Operating lease right-of-use assets  2,918,817   2,718,712  
Total assets  15,275,043   14,516,199  
Accounts payable  7,301,347   6,013,924  
Current liabilities  8,588,393   7,369,754  
Operating lease liabilities, less current portion  2,837,973   2,632,842  
Total debt  6,122,092   5,269,820  
Stockholders' deficit  (3,538,913)  (1,797,536) 
Working capital  (1,960,409)  (954,451) 

AutoZone's 4th Quarter Highlights - Fiscal 2022             
Condensed Consolidated Statements of Operations           
Adjusted Debt / EBITDAR          
(in thousands, except adjusted debt to EBITDAR ratio) Trailing 4 Quarters      
     August 27, 2022 August 28, 2021      
Net income  $2,429,604  $2,170,314       
Add: Interest expense  191,638   195,337       
Income tax expense  649,487   578,876       
EBIT    3,270,729   2,944,527       
Add: Depreciation and amortization  442,223   407,683       
Rent expense(1)  373,278   345,380       
Share-based expense  70,612   56,112       
EBITDAR  $4,156,842  $3,753,702       
Debt   $6,122,092  $5,269,820       
Financing lease liabilities  310,305   276,054       
Add: Rent x 6(1)  2,239,668   2,072,280       
Adjusted debt $8,672,065  $7,618,154       
Adjusted debt to EBITDAR  2.1   2.0       
Adjusted Return on Invested Capital (ROIC)          
(in thousands, except ROIC)          
     Trailing 4 Quarters      
     August 27, 2022 August 28, 2021      
Net income  $2,429,604  $2,170,314       
Interest expense  191,638   195,337       
Rent expense(1)  373,278   345,380       
Tax effect(2)  (119,197)  (114,091)      
Adjusted after-tax return $2,875,323  $2,596,940       
Average debt(3) $5,712,301  $5,416,471       
Average stockholders' deficit(3)  (2,797,181)  (1,397,892)      
Add: Rent x 6(1)  2,239,668   2,072,280       
Average financing lease liabilities(3)  284,453   237,267       
Invested capital $5,439,241  $6,328,126       
Adjusted After-Tax ROIC  52.9%   41.0%       
(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 August 27, 2022 and August 28, 2021      
     Trailing 4 Quarters      
(in thousands)  August 27, 2022 August 28, 2021      
Total lease cost, per ASC 842, for the trailing four quarters $470,563  $427,443       
Less: Financing lease interest and amortization  (69,564)  (56,334)      
Less: Variable operating lease components, related to insurance and common area maintenance  (27,721)  (25,729)      
Rent expense for the trailing four quarters $373,278  $345,380       
(2) Effective tax rate over trailing four quarters ended August 27, 2022 and August 28, 2021 was 21.1% 
(3)All averages are computed based on trailing five quarter balances 
Other Selected Financial Information          
(in thousands)           
     August 27, 2022 August 28, 2021      
Cumulative share repurchases ($ since fiscal 1998) $30,092,422  $25,732,431       
Remaining share repurchase authorization ($)  1,057,578   417,569       
Cumulative share repurchases (shares since fiscal 1998)  152,508   150,288       
Shares outstanding, end of quarter  19,126   21,138       
     16 Weeks Ended 16 Weeks Ended  52 Weeks Ended 52 Weeks Ended 
     August 27, 2022 August 28, 2021  August 27, 2022 August 28, 2021 
Depreciation and amortization $140,858  $129,639   $442,223 $407,683 
Cash flow from operations  1,228,021   1,288,196    3,211,135  3,518,543 
Capital spending  303,041   246,114    672,391  621,767 

AutoZone's 4th Quarter Highlights - Fiscal 2022 
Condensed Consolidated Statements of Operations
Selected Operating Highlights
Store Count & Square Footage
     16 Weeks Ended  16 Weeks Ended  52 Weeks Ended  52 Weeks Ended 
     August 27, 2022  August 28, 2021  August 27, 2022  August 28, 2021 
 Beginning stores  6,115    5,975    6,051    5,885  
 Stores opened  53    76    118    167  
 Stores closed  -    -    (1)   (1) 
 Ending domestic stores  6,168    6,051    6,168    6,051  
 Relocated stores  5    1    13    12  
 Stores with commercial programs  5,342    5,179    5,342    5,179  
 Square footage (in thousands)  40,653    39,727    40,653    39,727  
 Beginning stores  673    635    664    621  
 Stores opened  30    29    39    43  
 Ending Mexico stores  703    664    703    664  
 Beginning stores  58    47    52    43  
 Stores opened  14    5    20    9  
 Ending Brazil stores  72    52    72    52  
   6,943    6,767    6,943    6,767  
 Square footage (in thousands)  46,435    45,057    46,435    45,057  
 Square footage per store  6,688    6,658    6,688    6,658  
Sales Statistics            
($ in thousands, except sales per average square foot)            
     16 Weeks Ended  16 Weeks Ended  Trailing 4 Quarters  Trailing 4 Quarters 
Total AutoZone Stores (Domestic, Mexico and Brazil)August 27, 2022  August 28, 2021  August 27, 2022  August 28, 2021 
 Sales per average store $762   $720   $2,329   $2,160  
 Sales per average square foot $114   $108   $349   $325  
Total Auto Parts (Domestic, Mexico and Brazil)             
 Total auto parts sales $5,256,176   $4,830,136   $15,963,196   $14,381,712  
 % Increase vs. LY  8.8%    8.0%    11.0%    15.9%  
Domestic Commercial             
 Total domestic commercial sales $1,442,313   $1,182,626   $4,230,414   $3,345,450  
 % Increase vs. LY  22.0%    21.2%    26.5%    22.6%  
 Average sales per program per week $17.0   $14.4   $15.5   $12.6  
 % Increase vs. LY  18.1%    18.0%    23.0%    18.9%  
All Other, including ALLDATA            
 All other sales $92,179   $83,348   $289,034   $247,873  
 % Increase vs. LY  10.6%    14.4%    16.6%    9.7%  
     16 Weeks Ended  16 Weeks Ended  52 Weeks Ended  52 Weeks Ended 
     August 27, 2022  August 28, 2021  August 27, 2022  August 28, 2021 
Domestic same store sales  6.2%    4.3%    8.4%    13.6%  
Inventory Statistics (Total Stores)            
     as of  as of       
     August 27, 2022  August 28, 2021       
 Accounts payable/inventory  129.5%    129.6%        
 ($ in thousands)             
 Inventory  $5,638,004   $4,639,813        
 Inventory per store  812    686        
 Net inventory (net of payables)  (1,663,343)   (1,374,111)       
 Net inventory / per store  (240)   (203)       
     Trailing 5 Quarters       
     August 27, 2022  August 28, 2021       
 Inventory turns  1.5 x   1.5 x