10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the quarterly period ended November 18, 2023, or
☐	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the transition period from _______ to ________.
	Commission file number 1-10714

AUTOZONE, INC.

(Exact name of registrant as specified in its charter)

Nevada	62-1482048
(State or other jurisdiction of	(I.R.S. Employer Identification No.)
incorporation or organization)

123 South Front Street, Memphis, Tennessee	38103
(Address of principal executive offices)	(Zip Code)

(901) 495-6500

(Registrant’s telephone number, including area code)

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

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

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on which Registered
Common Stock ($0.01 par value)	AZO	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒	Accelerated filer ☐
Non-accelerated filer ☐	Smaller reporting company ☐
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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common Stock, $.01 Par Value – 17,291,904 shares outstanding as of December 11, 2023.

TABLE OF CONTENTS

PART I.		FINANCIAL INFORMATION	3
	Item 1.	Financial Statements	3
		CONDENSED CONSOLIDATED BALANCE SHEETS	3
		CONDENSED CONSOLIDATED STATEMENTS OF INCOME	4
		CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME	4
		CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS	5
		CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT	6
		NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	7
		REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	16
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25
	Item 4.	Controls and Procedures	25
PART II.		OTHER INFORMATION	25
	Item 1.	Legal Proceedings	25
	Item 1A.	Risk Factors	26
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26
	Item 3.	Defaults Upon Senior Securities	26
	Item 4.	Mine Safety Disclosures	26
	Item 5.	Other Information	26
	Item 6.	Exhibits	26
SIGNATURES			28

2

PART I. FINANCIAL INFORMATION

Item 1.Financial Statements.

AUTOZONE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	November 18,		August 26,
(in thousands)	2023		2023
Assets
Current assets:
Cash and cash equivalents	$	282,981	$	277,054
Accounts receivable		511,907		520,385
Merchandise inventories		5,774,467		5,764,143
Other current assets		387,446		217,844
Total current assets		6,956,801		6,779,426
Property and equipment:
Property and equipment		10,550,192		10,337,890
Less: Accumulated depreciation and amortization		(4,837,035)		(4,741,342)
		5,713,157		5,596,548
Operating lease right-of-use assets		2,998,672		2,998,097
Goodwill		302,645		302,645
Deferred income taxes		84,087		86,002
Other long-term assets		237,208		223,160
Total long-term assets		3,622,612		3,609,904
Total assets	$	16,292,570	$	15,985,878
Liabilities and Stockholders’ Deficit
Current liabilities:
Accounts payable	$	7,182,948	$	7,201,281
Current portion of operating lease liabilities		288,854		257,256
Accrued expenses and other		1,202,508		1,000,841
Income taxes payable		111,312		52,478
Total current liabilities		8,785,622		8,511,856
Long-term debt		8,583,523		7,668,549
Operating lease liabilities, less current portion		2,910,727		2,917,046
Deferred income taxes		534,472		536,278
Other long-term liabilities		691,897		702,043
Commitments and contingencies
Stockholders’ deficit:
Preferred stock, authorized 1,000 shares; no shares issued		—		—
Common stock, par value $.01 per share, authorized 200,000 shares; 18,984 shares issued and 17,326 shares outstanding as of November 18, 2023; 18,936 shares issued and 17,857 shares outstanding as of August 26, 2023		190		189
Additional paid-in capital		1,548,510		1,484,992
Retained deficit		(2,365,815)		(2,959,278)
Accumulated other comprehensive loss		(210,359)		(190,836)
Treasury stock, at cost		(4,186,197)		(2,684,961)
Total stockholders’ deficit		(5,213,671)		(4,349,894)
Total liabilities and stockholders' deficit	$	16,292,570	$	15,985,878

See Notes to Condensed Consolidated Financial Statements.

3

AUTOZONE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Twelve Weeks Ended
	November 18,		November 19,
(in thousands, except per share data)	2023		2022
Net sales	$	4,190,277	$	3,985,067
Cost of sales, including warehouse and delivery expenses		1,976,261		1,990,445
Gross profit		2,214,016		1,994,622
Operating, selling, general and administrative expenses		1,365,412		1,271,589
Operating profit		848,604		723,033
Interest expense, net		91,384		57,723
Income before income taxes		757,220		665,310
Income tax expense		163,757		125,992
Net income	$	593,463	$	539,318
Weighted average shares for basic earnings per share		17,709		19,007
Effect of dilutive stock equivalents		525		638
Weighted average shares for diluted earnings per share		18,234		19,645
Basic earnings per share	$	33.51	$	28.37
Diluted earnings per share	$	32.55	$	27.45

See Notes to Condensed Consolidated Financial Statements.

AUTOZONE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	Twelve Weeks Ended
	November 18,		November 19,
(in thousands)	2023		2022
Net income	$	593,463	$	539,318
Other comprehensive income:
Foreign currency translation adjustments		(20,221)		3,335
Unrealized gains (losses) on marketable debt securities, net of taxes		295		(671)
Net derivative activities, net of taxes		403		607
Total other comprehensive (loss) income		(19,523)		3,271
Comprehensive income	$	573,940	$	542,589

See Notes to Condensed Consolidated Financial Statements.

4

AUTOZONE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Twelve Weeks Ended
	November 18,		November 19,
(in thousands)	2023		2022
Cash flows from operating activities:
Net income	$	593,463	$	539,318
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property and equipment		120,224		109,253
Other non-cash (income) charges		(2,000)		81,000
Amortization of debt origination fees		2,810		1,905
Deferred income taxes		882		13,816
Share-based compensation expense		22,913		19,005
Changes in operating assets and liabilities:
Accounts receivable		6,856		4,100
Merchandise inventories		(21,899)		(39,308)
Accounts payable and accrued expenses		33,762		6,574
Income taxes		96,793		73,954
Other, net		(23,545)		(16,030)
Net cash provided by operating activities		830,259		793,587
Cash flows from investing activities:
Capital expenditures		(235,428)		(114,397)
Purchase of marketable debt securities		(4,115)		(11,989)
Proceeds from sale of marketable debt securities		1,944		4,893
Investment in tax credit equity investments		(41,150)		(2,474)
Proceeds from disposal of capital assets and other, net		8,235		10,080
Net cash used in investing activities		(270,514)		(113,887)
Cash flows from financing activities:
Net (payments of) proceeds from commercial paper		(76,900)		204,900
Proceeds from issuance of debt		1,000,000		—
Net proceeds from sale of common stock		41,448		40,828
Purchase of treasury stock		(1,486,876)		(899,998)
Repayment of principal portion of finance lease liabilities		(20,202)		(20,598)
Other, net		(9,696)		(783)
Net cash used in financing activities		(552,226)		(675,651)
Effect of exchange rate changes on cash		(1,592)		1,361
Net increase in cash and cash equivalents		5,927		5,410
Cash and cash equivalents at beginning of period		277,054		264,380
Cash and cash equivalents at end of period	$	282,981	$	269,790

See Notes to Condensed Consolidated Financial Statements.

5

AUTOZONE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

(Unaudited)

	Twelve Weeks Ended November 18, 2023
								Accumulated
	Common			Additional				Other
	Shares	Common		Paid-in		Retained		Comprehensive		Treasury
(in thousands)	Issued	Stock		Capital		Deficit		Loss		Stock		Total
Balance at August 26, 2023	18,936	$	189	$	1,484,992	$	(2,959,278)	$	(190,836)	$	(2,684,961)	$	(4,349,894)
Net income	—		—		—		593,463		—		—		593,463
Total other comprehensive income	—		—		—		—		(19,523)		—		(19,523)
Purchase of 580 shares of treasury stock(1)	—		—		—		—		—		(1,501,236)		(1,501,236)
Issuance of common stock under stock options and stock purchase plans	48		1		41,447		—		—		—		41,448
Share-based compensation expense	—		—		22,071		—		—		—		22,071
Balance at November 18, 2023	18,984	$	190	$	1,548,510	$	(2,365,815)	$	(210,359)	$	(4,186,197)	$	(5,213,671)

	Twelve Weeks Ended November 19, 2022
								Accumulated
	Common			Additional				Other
	Shares	Common		Paid-in		Retained		Comprehensive		Treasury
(in thousands)	Issued	Stock		Capital		Deficit		Loss		Stock		Total
Balance at August 27, 2022	20,732	$	207	$	1,354,252	$	(1,330,067)	$	(300,536)	$	(3,262,769)	$	(3,538,913)
Net income	—		—		—		539,318		—		—		539,318
Total other comprehensive income	—		—		—		—		3,271		—		3,271
Purchase of 392 shares of treasury stock	—		—		—		—		—		(899,998)		(899,998)
Issuance of common stock under stock options and stock purchase plans	62		1		40,828		—		—		—		40,829
Share-based compensation expense	—		—		17,570		—		—		—		17,570
Balance at November 19, 2022	20,794	$	208	$	1,412,650	$	(790,749)	$	(297,265)	$	(4,162,767)	$	(3,837,923)

(1) Inclusive of excise tax of $14.4 million for the quarter ended November 18, 2023. The excise tax is assessed at one percent of the fair value of net stock repurchases after December 31, 2022.

See Notes to Condensed Consolidated Financial Statements.

6

AUTOZONE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note A – General

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“U.S. GAAP”) for interim financial information and are presented in accordance with the requirements of Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission’s (the “SEC”) rules and regulations. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments, including normal recurring accruals, considered necessary for a fair presentation have been included. For further information, refer to the consolidated financial statements and related notes included in the AutoZone, Inc. (“AutoZone” or the “Company”) Annual Report on Form 10-K for the year ended August 26, 2023.

Operating results for the twelve weeks ended November 18, 2023 are not necessarily indicative of the results that may be expected for the full fiscal year ending August 31, 2024. Each of the first three quarters of AutoZone’s fiscal year consists of 12 weeks, and the fourth quarter consists of 16 or 17 weeks. The fourth quarter of fiscal 2024 has 17 weeks, and the fourth quarter of fiscal 2023 had 16 weeks.

Recently Adopted Accounting Pronouncements

In September 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-04, Liabilities – Supplier Finance Programs (Subtopic 405-50). This ASU requires buyers in a supplier finance program to disclose sufficient qualitative and quantitative information about the program to allow a reader of the financial statements to understand the program’s nature, activity during the period, changes from period to period and the program’s potential magnitude. This ASU is effective for all companies for fiscal years beginning after December 15, 2022, including interim periods within those years, and requires retrospective adoption. The Company adopted the required disclosures of this standard on a retrospective basis beginning with its first quarter ending November 18, 2023. The adoption of ASU 2022-04 did not have a material impact on the Company’s Condensed Consolidated Financial Statements and related disclosures. Refer to “Note F – Supplier Financing Programs.”

Recently Issued Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280). The amendments in this ASU require disclosures, on an annual and interim basis, of significant segment expenses that are regularly provided to the chief operating decision maker (CODM), as well as the aggregate amount of other segment items included in the reported measure of segment profit or loss. This ASU requires that a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss. Public entities will be required to provide all annual disclosures currently required by Topic 280 in interim periods, and entities with a single reportable segment are required to provide all the disclosures required by the amendments in the update and existing segment disclosures in Topic 280. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and requires retrospective adoption. Early adoption is permitted. The Company will adopt this standard beginning with our fiscal year ending August 30, 2025. The Company is currently evaluating these new disclosure requirements and does not expect the adoption to have a material impact.

R

Note B – Merchandise Inventories

Merchandise inventories include related purchasing, storage and handling costs. Inventory cost has been determined using the last-in, first-out (“LIFO”) method stated at the lower of cost or net realizable value for domestic inventories and the weighted average cost method stated at the lower of cost or net realizable value for Mexico and Brazil inventories. The Company’s policy is not to write up inventory in excess of replacement cost. Due to price inflation on the Company’s merchandise purchases, primarily driven by increased freight costs, the Company’s LIFO credit reserve

7

balance was $57.0 million at November 18, 2023, and $59.0 million at August 26, 2023. Increases to the Company’s LIFO credit reserve balance are recorded as a non-cash charge to cost of sales and decreases are recorded as a non-cash benefit to cost of sales.

Note C – Variable Interest Entities

The Company invests in certain tax credit funds that promote renewable energy and generate a return primarily through the realization of federal tax credits. The Company considers its investment in these tax credit funds as an investment in a variable interest entity (“VIE”). The Company evaluates the investment in any VIE to determine whether it is the primary beneficiary. The Company considers a variety of factors in identifying the entity that holds the power to direct matters that most significantly impact the VIE’s economic performance including, but not limited to, the ability to direct financing, leasing, construction and other operating decisions and activities. As of November 18, 2023, the Company held tax credit equity investments that were deemed to be VIE’s and determined that it was not the primary beneficiary of the entities, as it did not have the power to direct the activities that most significantly impacted the entity and accounted for this investment using the equity method. The Company’s maximum exposure to losses is generally limited to its net investment, which was $23.8 million as of November 18, 2023.

Note D – Fair Value Measurements

The Company defines fair value as the price received to transfer an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In accordance with ASC 820, Fair Value Measurements and Disclosures, the Company uses the fair value hierarchy, which prioritizes the inputs used to measure fair value. The hierarchy, as defined below, gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three levels of the fair value hierarchy are set forth below:

Level 1 inputs—unadjusted quoted prices in active markets for identical assets or liabilities that the Company can access at the measurement date.

Level 2 inputs—inputs other than quoted market prices included within Level 1 that are observable, either directly or indirectly, for the asset or liability.

Level 3 inputs—unobservable inputs for the asset or liability, which are based on the Company’s own assumptions as there is little, if any, observable activity in identical assets or liabilities.

Marketable Debt Securities Measured at Fair Value on a Recurring Basis

The Company’s marketable debt securities measured at fair value on a recurring basis were as follows:

	November 18, 2023
(in thousands)	Level 1		Level 2		Level 3		Fair Value
Other current assets	$	46,696	$	3,741	$	—	$	50,437
Other long-term assets		63,519		10,099		—		73,618
	$	110,215	$	13,840	$	—	$	124,055

	August 26, 2023
(in thousands)	Level 1		Level 2		Level 3		Fair Value
Other current assets	$	35,349	$	4,290	$	—	$	39,639
Other long-term assets		71,028		10,846		—		81,874
	$	106,377	$	15,136	$	—	$	121,513

8

At November 18, 2023, the fair value measurement amounts for assets and liabilities recorded in the accompanying Condensed Consolidated Balance Sheets consisted of short-term marketable debt securities, which are included within Other current assets, and long-term marketable debt securities, which are included in Other long-term assets. The Company’s marketable debt securities are typically valued at the closing price in the principal active market as of the last business day of the quarter or through the use of other market inputs relating to the securities, including benchmark yields and reported trades. The fair values of the marketable debt securities, by asset class, are described in “Note E – Marketable Debt Securities.”

Financial Instruments not Recognized at Fair Value

The Company has financial instruments, including cash and cash equivalents, accounts receivable, other current assets and accounts payable. The carrying amounts of these financial instruments approximate fair value because of their short maturities. A discussion of the carrying values and fair values of the Company’s debt is included in “Note H – Financing.”

Note E – Marketable Debt Securities

Marketable debt securities are carried at fair value, with unrealized gains and losses, net of income taxes, recorded in Accumulated other comprehensive loss until realized, and any credit risk related losses are recognized in net income in the period incurred. The Company’s basis for determining the cost of a security sold is the “Specific Identification Model.”

The Company’s available-for-sale marketable debt securities consisted of the following:

	November 18, 2023
	Amortized		Gross		Gross
	Cost		Unrealized		Unrealized		Fair
(in thousands)	Basis		Gains		Losses		Value
Corporate debt securities	$	30,998	$	—	$	(477)	$	30,521
Government bonds		63,885		475		(1,655)		62,705
Mortgage-backed securities		2,838		—		(151)		2,687
Asset-backed securities and other		28,334		—		(192)		28,142
	$	126,055	$	475	$	(2,475)	$	124,055

	August 26, 2023
	Amortized		Gross		Gross
	Cost		Unrealized		Unrealized		Fair
(in thousands)	Basis		Gains		Losses		Value
Corporate debt securities	$	31,683	$	17	$	(504)	$	31,196
Government bonds		63,747		—		(1,440)		62,307
Mortgage-backed securities		3,215		—		(213)		3,002
Asset-backed securities and other		25,242		—		(234)		25,008
	$	123,887	$	17	$	(2,391)	$	121,513

9

The marketable debt securities held at November 18, 2023, had effective maturities ranging from less than one year to approximately twelve years. At November 18, 2023, the Company held 73 securities that are in an unrealized loss position of approximately $2.5 million. In evaluating whether a credit loss exists for the securities, the Company considers factors such as the severity of the loss position, the credit worthiness of the investee, the term to maturity and the intent and ability to hold the investments until maturity or until recovery of fair value. An allowance for credit losses was deemed unnecessary given consideration of the factors above. The Company did not realize any material gains or losses on its marketable debt securities during the twelve week period ended November 18, 2023 and the comparable prior year period.

Included above in total available-for-sale marketable debt securities are $106.4 million of marketable debt securities transferred by the Company’s insurance captive to a trust account to secure its obligations to an insurance company related to future workers’ compensation and casualty losses.

Note F – Supplier Financing Programs

The Company has arrangements with third-party financial institutions to confirm invoice balances owed by the Company to certain suppliers and pay the financial institutions the confirmed amounts on the invoice due dates. These arrangements allow the Company’s inventory suppliers, at their sole discretion, to enter into agreements directly with these financial institutions to finance the Company’s obligations to the suppliers at terms negotiated between the suppliers and the financial institutions. Supplier participation is optional and our obligations to our suppliers, including the amount and dates due, are not impacted by our suppliers’ decision to enter into an agreement with a third-party financial institution. As of November 18, 2023 and August 26, 2023, the Company had supplier obligations outstanding that had been confirmed under these arrangements of $4.8 billion for each period, which are included in Accounts payable and $209.6 million and $224.8 million, respectively, which are included in Other long-term liabilities in the Condensed Consolidated Balance Sheets.

Note G – Litigation

The Company is involved in various legal proceedings incidental to the conduct of its 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. The Company does not currently believe that, either individually or in the aggregate, these matters will result in liabilities material to the Company’s financial condition, results of operations or cash flows.

10

Note H – Financing

The Company’s debt consisted of the following:

	November 18,		August 26,
(in thousands)	2023		2023
3.125% Senior Notes due April 2024, effective interest rate 3.32%	$	300,000	$	300,000
3.250% Senior Notes due April 2025, effective interest rate 3.36%		400,000		400,000
3.625% Senior Notes due April 2025, effective interest rate 3.78%		500,000		500,000
3.125% Senior Notes due April 2026, effective interest rate 3.28%		400,000		400,000
5.050% Senior Notes due July 2026, effective interest rate 5.09%		450,000		450,000
3.750% Senior Notes due June 2027, effective interest rate 3.83%		600,000		600,000
4.500% Senior Notes due February 2028, effective interest rate 4.43%		450,000		450,000
6.250% Senior Notes due November 2028, effective interest rate 6.46%		500,000		—
3.750% Senior Notes due April 2029, effective interest rate 3.86%		450,000		450,000
4.000% Senior Notes due April 2030, effective interest rate 4.09%		750,000		750,000
1.650% Senior Notes due January 2031, effective interest rate 2.19%		600,000		600,000
4.750% Senior Notes due August 2032, effective interest rate 4.76%		750,000		750,000
4.750% Senior Notes due February 2033, effective interest rate 4.70%		550,000		550,000
5.200% Senior Notes due August 2033, effective interest rate 5.22%		300,000		300,000
6.550% Senior Notes due November 2033, effective interest rate 6.71%		500,000		—
Commercial paper, weighted average interest rate 5.43% at November 18, 2023 and August 26, 2023		1,132,700		1,209,600
Total debt before discounts and debt issuance costs		8,632,700		7,709,600
Less: Discounts and debt issuance costs		49,177		41,051
Long-term Debt	$	8,583,523	$	7,668,549

On November 15, 2021, the Company amended and restated its existing revolving credit facility (as amended from time to time, the “Revolving Credit Agreement”) pursuant to which the Company’s borrowing capacity was increased from $2.0 billion to $2.25 billion, and the maximum borrowing under the Revolving Credit Agreement may, at the Company’s option, subject to lenders’ approval, be increased from $2.25 billion to $3.25 billion. On November 15, 2022, the Company amended the Revolving Credit Agreement, extending the termination date by one year. As amended, the Revolving Credit Agreement will terminate, and all amounts borrowed will be due and payable on November 15, 2027, but AutoZone may make one additional request to extend the termination date for an additional period of one year. Revolving borrowings under the Revolving Credit Agreement may be base rate loans, Term Secured Overnight Financing Rate (“SOFR”) loans, or a combination of both, at AutoZone’s election. 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.

Under the Company’s 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.

As of November 18, 2023, the Company had no outstanding borrowings and $1.8 million of outstanding letters of credit under the Revolving Credit Agreement.

The Company also maintains a letter of credit facility that allows it to request the participating bank to issue letters of credit on its behalf up to an aggregate amount of $25 million. The letter of credit facility is in addition to the letters of credit that may be issued under the Revolving Credit Agreement. As of November 18, 2023, the Company had $25.0 million in letters of credit outstanding under the letter of credit facility, which expires in June 2025.

In addition to the outstanding letters of credit issued under the committed facilities discussed above, the Company had $120.5 million in letters of credit outstanding as of November 18, 2023. These letters of credit have various maturity dates and were issued on an uncommitted basis.

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As of November 18, 2023, the $1.1 billion commercial paper borrowings and the $300 million 3.125% Senior Notes due April 2024 were classified as long-term in the accompanying Consolidated Balance Sheets as the Company currently has the ability and intent to refinance them on a long-term basis through available capacity under its Revolving Credit Agreement. As of November 18, 2023, the Company had $2.2 billion of availability under its Revolving Credit Agreement, without giving effect to commercial paper borrowings, which would allow it to replace these short-term obligations with a long-term financing facility.

On October 25, 2023, the Company issued $500 million in 6.250% Senior Notes due November 2028 and $500 million in 6.550% Senior Notes due November 2033. Proceeds from the debt issuances were used for general corporate purposes.

The Senior Notes contain a provision that repayment may be accelerated if the Company experiences a change of control (as defined in the agreements). The Company’s borrowings under its Senior Notes contain minimal covenants, primarily restrictions on liens. All of the repayment obligations under its borrowing arrangements may be accelerated and come due prior to the scheduled payment date if covenants are breached or an event of default occurs. Interest for the Senior Notes is paid on a semi-annual basis.

The fair value of the Company’s debt was estimated at $8.2 billion as of November 18, 2023, and $7.3 billion as of August 26, 2023, based on the quoted market prices for the same or similar issues or on the current rates available to the Company for debt of the same terms (Level 2). Such fair value is less than the carrying value of debt by $372.0 million and $406.6 million at November 18, 2023 and August 26, 2023, respectively, which reflects their face amount, adjusted for any unamortized debt issuance costs and discounts.

As of November 18, 2023, the Company was in compliance with all covenants and expects to remain in compliance with all covenants under its borrowing arrangements.

Note I – Stock Repurchase Program

From January 1, 1998 to November 18, 2023, the Company has repurchased a total of 154.6 million shares of its common stock at an aggregate cost of $35.3 billion, including 579.7 thousand shares of its common stock at an aggregate cost of $1.5 billion (inclusive of excise tax of $14.4 million) during the twelve week period ended November 18, 2023. The excise tax is assessed at one percent of the fair market value of net stock repurchases after December 31, 2022.

On June 14, 2023, the Board voted to authorize the repurchase of an additional $2.0 billion of the Company’s common stock in connection with its ongoing share repurchase program, which raised the total value of shares authorized to be repurchased to $35.7 billion. Considering the cumulative repurchases as of November 18, 2023, the Company had $333.1 million remaining under the Board’s authorization to repurchase its common stock.

Subsequent to November 18, 2023 and through December 11, 2023, the Company has repurchased 40.1 thousand shares of its common stock at an aggregate cost of $106.0 million.

Note J – Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss includes foreign currency translation adjustments, activity for interest rate swaps and treasury rate locks that qualified as cash flow hedges and unrealized gains (losses) on available-for-sale marketable debt securities.

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Changes in Accumulated other comprehensive loss for the twelve week periods ended November 18, 2023 and November 19, 2022 consisted of the following:

			Net
	Foreign		Unrealized
	Currency		Gain (Loss)
(in thousands)	and Other(1)		on Securities		Derivatives		Total
Balance at August 26, 2023	$	(176,557)	$	(1,851)	$	(12,428)	$	(190,836)
Other comprehensive income (loss) before reclassifications(2)(3)		(20,221)		295		—		(19,926)
Amounts reclassified from Accumulated other comprehensive loss(3)		—		—		403		403
Balance at November 18, 2023	$	(196,778)	$	(1,556)	$	(12,025)	$	(210,359)

			Net
	Foreign		Unrealized
	Currency		Gain (Loss)
(in thousands)	and Other(1)		on Securities		Derivatives		Total
Balance at August 27, 2022	$	(280,190)	$	(2,171)	$	(18,175)	$	(300,536)
Other comprehensive income (loss) before reclassifications(2)(3)		3,335		(671)		—		2,664
Amounts reclassified from Accumulated other comprehensive loss(3)		—		—		607		607
Balance at November 19, 2022	$	(276,855)	$	(2,842)	$	(17,568)	$	(297,265)

(1) Foreign currency is shown net of U.S. tax to account for foreign currency impacts of certain undistributed non-U.S. subsidiaries’ earnings. Other foreign currency is not shown net of additional U.S. tax as other basis differences of non-U.S. subsidiaries are intended to be permanently reinvested.

(2) Amounts in parentheses indicate debits to Accumulated Other Comprehensive Loss.

(3) Amounts shown are net of tax.

Note K – Share-Based Payments

AutoZone maintains several equity incentive plans, which provide equity-based compensation to non-employee directors and eligible employees for their service to AutoZone, its subsidiaries or affiliates. The Company recognizes compensation expense for share-based payments based on the fair value of the awards at the grant date. Share-based payments include stock option grants, restricted stock grants, restricted stock unit grants, stock appreciation rights, discounts on shares sold to employees under share purchase plans and other awards. Additionally, directors’ fees are paid in restricted stock units with value equivalent to the value of shares of common stock as of the grant date. The change in fair value of liability-based stock awards is also recognized in share-based compensation expense.

Stock Options:

The Company made stock option grants for 130,723 shares during the twelve week period ended November 18, 2023 and granted options to purchase 157,113 shares during the comparable prior year period. The Company grants options to purchase common stock to certain of its employees under its equity incentive plans at prices equal to or above the market value of the stock on the date of grant. Option-vesting periods range from four to five years, with the vast majority of options vesting ratably over four years. The fair value of each option is amortized into compensation expense on a straight-line basis over the requisite service period, less estimated forfeitures. Beginning with grants made in fiscal 2024, employees who meet the qualified retirement provisions under the AutoZone, Inc. 2020 Omnibus Incentive Award Plan are assumed to have a 0% forfeiture rate. All other employee grants assume a 10% forfeiture rate, which is based on historical experience.

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The weighted average fair value of the stock option awards granted during the twelve week period ended November 18, 2023 and November 19, 2022, using the Black-Scholes-Merton multiple-option pricing valuation model, was $913.31 and $760.82 per share, respectively, using the following weighted average key assumptions:

	Twelve Weeks Ended
	November 18,		November 19,
	2023		2022
Expected price volatility	29	%	29	%
Risk-free interest rate	4.8	%	3.8	%
Weighted average expected lives (in years)	5.4		5.4
Forfeiture rate	7	%	10	%
Dividend yield	0	%	0	%

During the twelve week period ended November 18, 2023, and the comparable prior year period, 44,644 and 57,092 stock options, respectively, were exercised at a weighted average exercise price of $931.85 and $725.86, respectively.

As of November 18, 2023, total unrecognized share-based expense related to stock options, net of estimated forfeitures, was approximately $177.9 million, before income taxes, which we expect to recognize over an estimated weighted average period of 3.5 years.

Restricted Stock Units:

Restricted stock unit awards are valued at the market price of a share of the Company’s stock on the date of grant. Grants of employee restricted stock units vest ratably on an annual basis over a four-year service period and are payable in shares of common stock on the vesting date. Compensation expense for grants of employee restricted stock units is recognized on a straight-line basis over the requisite service period, less estimated forfeitures, which are consistent with stock option forfeiture assumptions. Grants of non-employee director restricted stock units are made and expensed on January 1 of each year, as they vest immediately.

As of November 18, 2023, total unrecognized stock-based compensation expense related to nonvested restricted stock unit awards, net of estimated forfeitures, was approximately $12.0 million, before income taxes, which we expect to recognize over an estimated weighted average period of 2.9 years.

Transactions related to restricted stock units for the twelve weeks ended November 18, 2023 were as follows:

		Weighted-
	Number	Average Grant
	of Shares	Date Fair Value
Nonvested at August 26, 2023	8,133	$	1,572.87
Granted	2,173		2,549.04
Vested	(3,741)		1,383.34
Forfeited	(183)		1,933.41
Nonvested at November 18, 2023	6,382	$	2,000.23

Total share-based compensation expense (a component of Operating, selling, general and administrative expenses) for the twelve week period ended November 18, 2023, was $22.9 million and $19.0 million for the comparable prior year period.

For the twelve week periods ended November 18, 2023 and November 19, 2022, 169,798 and 87,696 stock options, respectively, were excluded from the diluted earnings per share computation because they would have been anti-dilutive.

See AutoZone’s Annual Report on Form 10-K for the year ended August 26, 2023 and other filings with the SEC, for a discussion regarding the methodology used in developing AutoZone’s assumptions to determine the fair value of the

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option awards and a description of AutoZone’s Amended and Restated 2011 Equity Incentive Award Plan, the AutoZone, Inc. 2020 Omnibus Incentive Award Plan and the Director Compensation Program.

Note L – Segment Reporting

The Company’s operating segments (Domestic Auto Parts, Mexico and Brazil) are aggregated as one reportable segment: Auto Parts Stores. The criteria the Company used to identify the reportable segment are primarily the nature of the products the Company sells and the operating results that are regularly reviewed by the Company’s chief operating decision maker to make decisions about the resources to be allocated to the business units and to assess performance. The accounting policies of the Company’s reportable segment are the same as those described in “Note A – Significant Accounting Policies” in its Annual Report on Form 10-K for the year ended August 26, 2023.

The Auto Parts Stores segment is a retailer and distributor of automotive replacement parts and accessories through the Company’s 7,165 stores in the U.S., Mexico and Brazil. 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.

The Other category reflects business activities of two operating segments that are not separately reportable due to the materiality of these operating segments. The operating segments include ALLDATA, which produces, sells and maintains diagnostic, repair, collision and shop management software used in the automotive repair industry and E-commerce, which includes direct sales to customers through www.autozone.com for sales that are not fulfilled by local stores.

The Company evaluates its reportable segment primarily on the basis of net sales and segment profit, which is defined as gross profit. Segment results for the periods presented were as follows:

	Twelve Weeks Ended
	November 18,		November 19,
(in thousands)	2023		2022
Net Sales
Auto Parts Stores	$	4,115,694	$	3,915,907
Other		74,583		69,160
Total	$	4,190,277	$	3,985,067
Segment Profit
Auto Parts Stores	$	2,170,025	$	1,953,728
Other		43,991		40,894
Gross profit		2,214,016		1,994,622
Operating, selling, general and administrative expenses		(1,365,412)		(1,271,589)
Interest expense, net		(91,384)		(57,723)
Income before income taxes	$	757,220	$	665,310

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Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors of

AutoZone, Inc.

Results of Review of Interim Financial Statements

We have reviewed the accompanying condensed consolidated balance sheet of AutoZone, Inc. (the Company) as of November 18, 2023, the related condensed consolidated statements of income, comprehensive income, stockholders’ deficit and cash flows for the twelve week periods ended November 18, 2023 and November 19, 2022, and the related notes (collectively referred to as the “condensed consolidated interim financial statements”). Based on our reviews, we are not aware of any material modifications that should be made to the condensed consolidated interim financial statements for them to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of August 26, 2023, the related consolidated statements of income, comprehensive income, stockholders’ deficit and cash flows for the year then ended, and the related notes (not presented herein); and in our report dated October 24, 2023, we expressed an unqualified audit opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of August 26, 2023, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

These financial statements are the responsibility of the Company’s management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the SEC and the PCAOB. We conducted our review in accordance with the standards of the PCAOB. A review of interim financial statements consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

/s/ Ernst & Young LLP

Memphis, Tennessee

December 18, 2023

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

In Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), we provide a historical and prospective narrative of our general financial condition, results of operations, liquidity and certain other factors that may affect the future results of AutoZone, Inc. (“AutoZone” or the “Company”). The following MD&A discussion should be read in conjunction with our Condensed Consolidated Financial Statements, related notes to those statements and other financial information, including forward-looking statements and risk factors, that appear elsewhere in this Quarterly Report on Form 10-Q, our Annual Report on Form 10-K for the year ended August 26, 2023 and other filings we make with the SEC.

Forward-Looking Statements

Certain statements contained herein 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, including extreme temperatures, natural disasters and general weather conditions; competition; credit market conditions; cash flows; access to available and feasible financing on favorable terms; 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; inflation, including wage inflation; the ability to hire, train and retain qualified employees including members of management and other key personnel; construction delays; failure or interruption of our information technology systems; issues relating to the confidentiality, integrity or availability of information, including due to cyber-attacks; historic growth rate sustainability; downgrade of our credit ratings; damage to our reputation; challenges associated with doing business in and expanding into international markets; origin and raw material costs of suppliers; inventory availability; disruption in our supply chain; impact of tariffs; impact of new accounting standards; our ability to execute our growth initiatives; and other 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 our Annual Report on Form 10-K for the year ended August 26, 2023. 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. 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.

Overview

We are the leading retailer and distributor of automotive replacement parts and accessories in the Americas. We began operations in 1979 and at November 18, 2023, operated 6,316 stores in the U.S., 745 stores in Mexico and 104 stores in Brazil. Each store carries an extensive product line for cars, sport utility vehicles, vans and light duty trucks, including new and remanufactured automotive hard parts, maintenance items, accessories and non-automotive products. At November 18, 2023, in 5,803 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. We also 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. Additionally, we sell the ALLDATA brand of automotive diagnostic, repair, collision and shop management software through www.alldata.com. We also provide product information on our Duralast branded products through www.duralastparts.com. 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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Operating results for the twelve weeks ended November 18, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending August 31, 2024. Each of the first three quarters of our fiscal year consists of 12 weeks, and the fourth quarter consists of 16 or 17 weeks. The fourth quarter of fiscal 2024 has 17 weeks and the fourth quarter of fiscal 2023 has 16 weeks. Our business is somewhat seasonal in nature, with the highest sales generally occurring during the months of February through September, and the lowest sales generally occurring in the months of December and January.

Executive Summary

Net sales increased to $4.2 billion, a 5.1% increase over the prior year period. Our retail and commercial sales in our domestic and international markets grew as we continue to make progress on our growth initiatives. Operating profit increased 17.4% to $848.6 million, net income increased 10.0% to $593.5 million and diluted earnings per share increased 18.6% to $32.55.

During the first quarter of fiscal 2024, failure and maintenance related categories represented the largest portion of our sales mix at approximately 86% of total sales, which is consistent with the comparable prior year period. Failure related categories continue to be the largest portion of our sales mix. We did not experience any fundamental shifts in our category sales mix as compared to the previous year. Our sales mix can be impacted by weather over a short-term period. Over the long-term, we believe the impact of weather on our sales mix is not significant.

Our business is impacted by various factors within the economy that affect both our consumers and our industry, including but not limited to inflation, fuel costs, wage rates, supply chain disruptions, hiring and other economic conditions. 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.

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. While over the long-term we have seen a close correlation between our net sales and the number of miles driven, we have also seen time frames of minimal correlation in sales performance and miles driven. During the periods of minimal correlation between net sales and miles driven, we believe net sales have been positively impacted by other factors, including macroeconomic factors and the number of seven year old or older vehicles on the road. The average age of the U.S. light vehicle fleet remains in our industry’s favor as the average age has exceeded 11 years since 2012, 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. Since the beginning of the fiscal year and through September 2023 (latest publicly available information), miles driven in the U.S. increased 0.9% compared to the same period in the prior year.

Twelve Weeks Ended November 18, 2023

Compared with Twelve Weeks Ended November 19, 2022

Net sales for the twelve weeks ended November 18, 2023 increased $205.2 million to $4.2 billion, or 5.1% over net sales of $4.0 billion for the comparable prior year period. This growth was driven primarily by an increase in total company same store sales of 2.1% on a constant currency basis and net sales of $75.7 million from new domestic and international stores. Domestic commercial sales increased $58.6 million to $1.1 billion, or 5.7% over the comparable prior year period.

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Same store sales, or sales for our domestic and international stores open at least one year, are as follows:

	Twelve Weeks Ended
						Constant Currency (1)
		November 18,		November 19,		November 18,		November 19,
		2023		2022		2023		2022
Domestic		1.2	%	5.6	%	1.2	%	5.6	%
International		25.1	%	23.3	%	10.9	%	20.8	%
Total Company		3.4	%	7.0	%	2.1	%	6.8	%

(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.

Gross profit for the twelve weeks ended November 18, 2023 was $2.2 billion, compared with $2.0 billion during the comparable prior year period. Gross profit, as a percentage of sales, was 52.8% compared to 50.1% during the comparable prior year period. The increase in gross margin was driven by 208 basis point ($83.0 million net) non-cash LIFO favorability, with the remaining increase primarily from favorable supply chain costs and higher merchandise margins.

Operating, selling, general and administrative expenses for the twelve weeks ended November 18, 2023 were $1.4 billion compared with $1.3 billion during the comparable prior year period. As a percentage of sales, these expenses were 32.6% compared with 31.9% during the comparable prior year period. The increase was driven primarily by domestic store payroll and investment in technology related initiatives.

Net interest expense was $91.4 million and $57.7 million for the twelve weeks ended November 18, 2023 and November 19, 2022, respectively. Average borrowings were $8.1 billion and $6.2 billion, and weighted average borrowing rates were 4.23% and 3.47% for the twelve weeks ended November 18, 2023 and November 19, 2022, respectively.

Our effective income tax rate was 21.6% and 18.9% of pretax income for the twelve weeks ended November 18, 2023, and November 19, 2022, respectively. The benefit from stock options exercised for the twelve week period ended November 18, 2023 was $11.2 million compared to $29.7 million in the comparable prior year period.

Net income for the twelve weeks ended November 18, 2023 increased by $54.1 million from the comparable prior year period to $593.5 million due to the factors set forth above, and diluted earnings per share increased by 18.6% to $32.55 from $27.45. The impact on current quarter diluted earnings per share from stock repurchases since the end of the comparable prior year period was an increase of $0.41.

Liquidity and Capital Resources

The primary source of our liquidity is our cash flows realized through the sale of automotive parts, products and accessories. We believe that our cash generated from operating activities and available credit, supplemented with our long-term borrowings will provide ample liquidity to fund our operations while allowing us to make strategic investments to support long-term growth initiatives and return excess cash to shareholders in the form of share repurchases. As of November 18, 2023, we held $283.0 million of cash and cash equivalents, as well as $2.2 billion in undrawn capacity on our Revolving Credit Agreement, before giving effect to commercial paper borrowings. We believe our sources of liquidity will continue to be adequate to fund our operations and investments to grow our business, repay our debt as it becomes due and fund our share repurchases over the short-term and long-term. In addition, we believe we have the ability to obtain alternative sources of financing, if necessary. However, decreased demand for our products or changes in customer buying patterns would negatively impact our ability to generate cash from operating activities. Decreased demand or changes in buying patterns could also impact our ability to meet the debt covenants of our credit agreements and, therefore, negatively impact the funds available under our Revolving Credit Agreement. In the event our liquidity is insufficient, we may be required to limit our spending.

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For the twelve week periods ended November 18, 2023 and November 19, 2022, our net cash flows from operating activities provided $830.3 million and $793.6 million, respectively.

Our net cash flows used in investing activities for the twelve weeks ended November 18, 2023 were $270.5 million as compared with $113.9 million in the comparable prior year period. Capital expenditures for the twelve weeks ended November 18, 2023 were $235.4 million compared to $114.4 million in the comparable prior year period. The increase in capital expenditures was primarily driven by our growth initiatives, including new stores, hub and mega hub expansion projects and new distribution centers. During the twelve weeks ended November 18, 2023 and November 19, 2022, we opened 25 and 35 net new stores, respectively. Investing cash flows were impacted by our wholly owned captive, which purchased $4.1 million and sold $1.9 million in marketable debt securities during the twelve weeks ended November 18, 2023. During the comparable prior year period, the captive purchased $12.0 million and sold $4.9 million in marketable debt securities. Our investment in tax credit equity investments was $41.2 million during the twelve weeks ended November 18, 2023 compared to $2.5 million during the comparable prior year period.

Our net cash flows used in financing activities for the twelve weeks ended November 18, 2023 were $552.2 million compared to $675.6 million in the comparable prior year period. During the twelve weeks ended November 18, 2023, we received $1.0 billion in debt issuances and no debt was issued in the comparable prior year period. Stock repurchases were $1.5 billion in the current twelve week period as compared with $900.0 million in the comparable prior year period. The treasury stock repurchases were primarily funded by cash flows from operations. For the twelve week period ended November 18, 2023, we had $76.9 million in net repayments of commercial paper compared to $204.9 million in net proceeds from commercial paper in the comparable prior year period. Proceeds from the sale of common stock and exercises of stock options for the twelve weeks ended November 18, 2023 and November 19, 2022 provided $41.4 million and $40.8 million, respectively.

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 include expanded hub and mega hubs, as well as distribution center expansions and new stores. The amount of investments in our new stores is impacted by different factors, including whether the building and land are purchased (requiring higher investment) or leased (generally lower investment) and whether such buildings are located in the U.S., Mexico or Brazil, or located in urban or rural areas.

In addition to the building and land costs, our new stores 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 plan to continue leveraging our inventory purchases; however, our ability to do so may be limited by our supplier’s capacity to factor their receivables from us. The Company has arrangements with third-party financial institutions to confirm invoice balances owed by the Company to certain suppliers and pay the financial institutions the confirmed amounts on the invoice due dates. These arrangements allow the Company’s inventory suppliers, at their sole discretion, to enter into agreements with these financial institutions to finance the Company’s obligations to the suppliers at terms negotiated between the suppliers and the financial institutions. Supplier participation is optional and our obligations to our suppliers, including the amount and dates due, are not impacted by our suppliers’ decision to enter into an agreement with a third-party financial institution. A downgrade in our credit or changes in the financial markets could limit the financial institutions’ willingness to participate in these arrangements; however, we do not believe such risk would have a material impact on our working capital or cash flows. We plan to continue negotiating extended terms with our suppliers, reducing our working capital required and resulting in a high accounts payable to inventory ratio. We had an accounts payable to inventory ratio of 124.4% at November 18, 2023 and 131.0% at November 19, 2022.

Depending on the timing and magnitude of our future investments (either in the form of leased or purchased properties or acquisitions), we anticipate that we will rely primarily on internally generated funds and available borrowing capacity to support a majority of our capital expenditures, working capital requirements and stock repurchases. The balance may be funded through new borrowings. We anticipate that we will be able to obtain such financing based on our current credit ratings and favorable experiences in the debt markets in the past.

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For the trailing four quarters ended November 18, 2023, our adjusted after-tax return on invested capital (“ROIC”), which is a non-GAAP measure, was 55.0% as compared to 54.3% for the comparable prior year period. Adjusted ROIC is calculated as after-tax operating profit (excluding rent charges) divided by invested capital (which includes a factor to capitalize operating leases). We use adjusted ROIC to evaluate whether we are effectively using our capital resources and believe it is an important indicator of our overall operating performance. Refer to the “Reconciliation of Non-GAAP Financial Measures” section for further details of our calculation.

Debt Facilities

On November 15, 2021, we amended and restated our existing revolving credit facility (as amended from time to time, the “Revolving Credit Agreement”) pursuant to which our borrowing capacity under the Revolving Credit Agreement was increased from $2.0 billion to $2.25 billion, and the maximum borrowing under the Revolving Credit Agreement may, at our option, subject to lenders’ approval, be increased from $2.25 billion to $3.25 billion. On November 15, 2022, we amended the Revolving Credit Agreement, extending the termination date by one year. As amended, the Revolving Credit Agreement will terminate, and all amounts borrowed will be due and payable, on November 15, 2027, but we may make one additional request to extend the termination date for an additional period of one year. Revolving borrowings under the Revolving Credit Agreement may be base rate loans, Term SOFR loans, or a combination of both, at our election. 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.

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.

As of November 18, 2023, we had no outstanding borrowings and $1.8 million of outstanding letters of credit under our Revolving Credit Agreement.

We also maintain a letter of credit facility that allows us to request the participating bank to issue letters of credit on our behalf up to an aggregate amount of $25 million. The letter of credit facility is in addition to the letters of credit that may be issued under the Revolving Credit Agreement. As of November 18, 2023, we had $25.0 million in letters of credit outstanding under the letter of credit facility, which expires in June 2025.

In addition to the outstanding letters of credit issued under the committed facilities discussed above, we had $120.5 million in letters of credit outstanding as of November 18, 2023. These letters of credit have various maturity dates and were issued on an uncommitted basis.

As of November 18, 2023, the $1.1 billion commercial paper borrowings and the $300 million 3.125% Senior Notes due April 2024 were classified as long-term in the accompanying Consolidated Balance Sheets as we currently have the ability and intent to refinance them on a long-term basis through available capacity under our Revolving Credit Agreement. As of November 18, 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 October 25, 2023, we issued $500 million in 6.250% Senior Notes due November 2028 and $500 million in 6.550% Senior Notes due November 2033. Proceeds from the debt issuance were used for general corporate purposes.

The Senior Notes contain a provision that repayment may be accelerated if we experience a change of control (as defined in the agreements governing the Senior Notes). The Company’s borrowings under our Senior Notes contain minimal covenants, primarily restrictions on liens. All of the repayment obligations under its borrowing arrangements may be accelerated and come due prior to the applicable scheduled payment date if covenants are breached or an event of default occurs.

21

As of November 18, 2023, we were in compliance with all covenants and expect to remain in compliance with all covenants under our borrowing arrangements.

Our adjusted debt to earnings before interest, taxes, depreciation, amortization, rent and share-based compensation expense (“EBITDAR”) ratio was 2.5:1 as of November 18, 2023 and was 2.2:1 as of November 19, 2022. We calculate adjusted debt as the sum of total debt, financing lease liabilities and rent times six; and we calculate EBITDAR by adding interest, taxes, depreciation, amortization, rent, and share-based compensation expense to net income. Adjusted debt to EBITDAR is calculated on a trailing four quarter basis. We target our debt levels to a ratio of adjusted debt to EBITDAR in order to maintain our investment grade credit ratings. We believe this is important information for the management of our debt levels. To the extent EBITDAR increases, we expect our debt levels to increase; conversely, if 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.

Stock Repurchases

From January 1, 1998 to November 18, 2023, we have repurchased a total of 154.6 million shares of our common stock at an aggregate cost of $35.3 billion, including 579.7 thousand shares of our common stock at an aggregate cost of $1.5 billion (inclusive of excise tax of $14.4 million) during the twelve week period ended November 18, 2023. The excise tax is assessed at one percent of the fair market value of net stock repurchases after December 31, 2022.

On June 14, 2023, the Board voted to authorize the repurchase of an additional $2.0 billion of our common stock in connection with our ongoing share repurchase program, which raised the total value of shares authorized to be repurchased to $35.7 billion. Considering the cumulative repurchases as of November 18, 2023, we had $333.1 million remaining under the Board’s authorization to repurchase our common stock.

Subsequent to November 18, 2023 and through December 11, 2023, we have repurchased 40.1 thousand shares of our common stock at an aggregate cost of $106.0 million.

Off-Balance Sheet Arrangements

Since our fiscal year end, we have canceled, issued and modified stand-by letters of credit that are primarily renewed on an annual basis to cover deductible payments to our casualty insurance carriers. Our total stand-by letters of credit commitment at November 18, 2023, was $147.2 million, compared with $134.0 million at August 26, 2023, and our total surety bonds commitment at November 18, 2023, was $43.4 million, compared with $43.1 million at August 26, 2023.

Financial Commitments

Except for the previously discussed Revolving Credit Agreement, the $500 million 6.250% Senior Notes due November 2028 and $500 million 6.550% Senior Notes due November 2033 debt issuances, and the $76.9 million net decrease in commercial paper, there were no significant changes to our contractual obligations as described in our Annual Report on Form 10-K for the year ended August 26, 2023.

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 GAAP, including Adjusted After-Tax ROIC and Adjusted Debt to EBITDAR. Non-GAAP financial measures should not be used as a substitute for GAAP financial measures, or considered in isolation, for the purpose of analyzing our operating performance, financial position or cash flows. However, we have presented non-GAAP financial measures, as we believe they provide additional information that is useful to investors. Additionally, our management uses these non-GAAP financial measures to review and assess our underlying operating results and the Compensation Committee of the Board uses select measures to determine payments of performance-based compensation against pre-established targets.

22

Adjusted After-Tax ROIC and Adjusted Debt to EBITDAR provide additional information for determining our optimal capital structure and are used to assist management in evaluating performance and in making appropriate business decisions to maximize stockholders’ value.

We have included reconciliations of this information to the most comparable GAAP measures in the following reconciliation tables.

Reconciliation of Non-GAAP Financial Measure: Adjusted After-Tax ROIC

The following tables calculate the percentages of adjusted ROIC for the trailing four quarters ended November 18, 2023 and November 19, 2022.

	A		B		A-B=C		D		C+D
	Fiscal Year		Twelve		Forty		Twelve		Trailing Four
	Ended		Weeks Ended		Weeks Ended		Weeks Ended		Quarters Ended
	August 26,		November 19,		August 26,		November 18,		November 18,
(in thousands, except percentage)	2023		2022		2023		2023		2023
Net income	$	2,528,426	$	539,318	$	1,989,108	$	593,463	$	2,582,571
Adjustments:
Interest expense		306,372		57,723		248,649		91,384		340,033
Rent expense(1)		406,398		92,881		313,517		98,693		412,210
Tax effect(2)		(148,256)		(31,326)		(116,930)		(39,536)		(156,466)
Adjusted after-tax return	$	3,092,940	$	658,596	$	2,434,344	$	744,004	$	3,178,348
Average debt(3)									$	7,392,640
Average stockholders’ deficit(3)										(4,377,447)
Add: Rent x 6(1)										2,473,260
Average finance lease liabilities(3)										291,567
Invested capital									$	5,780,020
Adjusted after-tax ROIC										55.0	%

	A		B		A-B=C		D		C+D
	Fiscal Year		Twelve		Forty		Twelve		Trailing Four
	Ended		Weeks Ended		Weeks Ended		Weeks Ended		Quarters Ended
	August 27,		November 20,		August 27,		November 19,		November 19,
(in thousands, except percentage)	2022		2021		2022		2022		2022
Net income	$	2,429,604	$	555,235	$	1,874,369	$	539,318	$	2,413,687
Adjustments:
Interest expense		191,638		43,284		148,354		57,723		206,077
Rent expense(1)		373,278		82,327		290,951		92,929		383,880
Tax effect(2)		(115,243)		(25,625)		(89,618)		(30,733)		(120,351)
Adjusted after-tax return	$	2,879,277	$	655,221	$	2,224,056	$	659,237	$	2,883,293
Average debt(3)									$	5,924,006
Average stockholders' deficit(3)										(3,205,259)
Add: Rent x 6(1)										2,303,280
Average finance lease liabilities(3)										291,106
Invested capital									$	5,313,133
Adjusted after-tax ROIC										54.3	%

23

Reconciliation of Non-GAAP Financial Measure: Adjusted Debt to EBITDAR

The following tables calculate the ratio of adjusted debt to EBITDAR for the trailing four quarters ended November 18, 2023 and November 19, 2022.

	A		B		A-B=C		D		C+D
	Fiscal Year		Twelve		Forty		Twelve		Trailing Four
	Ended		Weeks Ended		Weeks Ended		Weeks Ended		Quarters Ended
	August 26,		November 19,		August 26,		November 18,		November 18,
(in thousands, except ratio)	2023		2022		2023		2023		2023
Net income	$	2,528,426	$	539,318	$	1,989,108	$	593,463	$	2,582,571
Add: Interest expense		306,372		57,723		248,649		91,384		340,033
Income tax expense		639,188		125,992		513,196		163,757		676,953
EBIT		3,473,986		723,033		2,750,953		848,604		3,599,557
Add: Depreciation and amortization expense		497,577		109,253		388,324		120,224		508,548
Rent expense(1)		406,398		92,881		313,517		98,693		412,210
Share-based expense		93,087		19,005		74,082		22,913		96,995
EBITDAR	$	4,471,048	$	944,172	$	3,526,876	$	1,090,434	$	4,617,310
Debt									$	8,583,523
Financing lease liabilities										285,145
Add: Rent x 6(1)										2,473,260
Adjusted debt									$	11,341,928
Adjusted debt to EBITDAR
										2.5

	A		B		A-B=C		D		C+D
	Fiscal Year		Twelve		Forty		Twelve		Trailing Four
	Ended		Weeks Ended		Weeks Ended		Weeks Ended		Quarters Ended
	August 27,		November 20,		August 27,		November 19,		November 19,
(in thousands, except ratio)	2022		2021		2022		2022		2022
Net income	$	2,429,604	$	555,235	$	1,874,369	$	539,318	$	2,413,687
Add: Interest expense		191,638		43,284		148,354		57,723		206,077
Income tax expense		649,487		155,966		493,521		125,992		619,513
EBIT		3,270,729		754,485		2,516,244		723,033		3,239,277
Add: Depreciation and amortization expense		442,223		99,590		342,633		109,253		451,886
Rent expense(1)		373,278		82,327		290,951		92,929		383,880
Share-based expense		70,612		14,295		56,317		19,005		75,322
EBITDAR	$	4,156,842	$	950,697	$	3,206,145	$	944,220	$	4,150,365
Debt									$	6,328,344
Financing lease liabilities										309,320
Add: Rent x 6(1)										2,303,280
Adjusted debt									$	8,940,944
Adjusted debt to EBITDAR										2.2

(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 November 18, 2023 and November 19, 2022.

	Trailing Four Quarters Ended
(in thousands)	November 18, 2023		November 19, 2022
Total lease cost, per ASC 842	$	536,217	$	483,867
Less: Finance lease interest and amortization		(90,864)		(72,400)
Less: Variable operating lease components, related to insurance and common area maintenance		(33,143)		(27,587)
Rent expense	$	412,210	$	383,880

(2) Effective tax rate over trailing four quarters ended November 18, 2023 and November 19, 2022 was 20.8% and 20.4%, respectively.

(3) All averages are computed based on trailing five quarter balances.

24

Recent Accounting Pronouncements

Refer to Note A of the Notes to Condensed Consolidated Financial Statements for the discussion of recent accounting pronouncements.

Critical Accounting Policies and Estimates

Our critical accounting policies are described in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended August 26, 2023. There have been no significant changes to our critical accounting policies since the filing of our Annual Report on Form 10-K for the year ended August 26, 2023.

Item 3.Quantitative and Qualitative Disclosures about Market Risk

At November 18, 2023, the only material changes to our instruments and positions that are sensitive to market risk since the disclosures in our Annual Report on Form 10-K for the year ended August 26, 2023 were the $500 million 6.250% Senior Notes due November 2028 and $500 million 6.550% Senior Notes due November 2033 debt issuances, and the $76.9 million net decrease in commercial paper.

The fair value of the Company’s debt was estimated at $8.2 billion as of November 18, 2023, and $7.3 billion as of August 26, 2023, based on the quoted market prices for the same or similar issues or on the current rates available to the Company for debt of the same terms (Level 2). Such fair value is less than the carrying value of debt by $372.0 million and $406.6 million at November 18, 2023 and August 26, 2023, respectively, which reflects their face amount, adjusted for any unamortized debt issuance costs and discounts. We had $1.1 billion of variable rate debt outstanding at November 18, 2023 and $1.2 billion in variable rate debt outstanding at August 26, 2023. At these borrowing levels for variable rate debt, a one percentage point increase in interest rates would have had an unfavorable annual impact on our pre-tax earnings and cash flows of $11.3 million in fiscal 2024. The primary interest rate exposure is based on the federal funds rate. We had outstanding fixed rate debt of $7.5 billion, net of unamortized debt issuance costs of $49.2 million at November 18, 2023 and $6.5 billion, net of unamortized debt issuance costs of $41.1 million at August 26, 2023. A one percentage point increase in interest rates would have reduced the fair value of our fixed rate debt by $310.2 million at November 18, 2023.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of November 18, 2023, an evaluation was performed under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as amended. Based on that evaluation, our management, including the Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were effective as of November 18, 2023.

Changes in Internal Controls

There were no changes in our internal control over financial reporting that occurred during the quarter ended November 18, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

As of the date of this filing, there have been no additional material legal proceedings or material developments in the legal proceedings disclosed in Part 1, Item 3, of our Annual Report in Form 10-K for the fiscal year ended August 26, 2023.

25

Item 1A. Risk Factors

As of the date of this filing, there have been no material changes in our risk factors from those disclosed in Part I, Item 1A, of our Annual Report on Form 10-K for the fiscal year ended August 26, 2023.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Shares of common stock repurchased by the Company during the quarter ended November 18, 2023 were as follows:

Issuer Repurchases of Equity Securities

				Total Number of	Maximum Dollar
				Shares Purchased as	Value that May Yet
	Total Number	Average		Part of Publicly	Be Purchased Under
	of Shares	Price Paid		Announced Plans or	the Plans or
Period	Purchased	per Share		Programs	Programs
August 27, 2023 to September 23, 2023	49,066	$	2,572.72	49,066	$	1,708,055,998
September 24, 2023 to October 21, 2023	203,373		2,591.91	203,373		1,180,931,636
October 22, 2023 to November 18, 2023	327,277		2,590.71	327,277		333,052,581
Total	579,716	$	$2,589.61	579,716	$	333,052,581

During 1998, we announced a program permitting us to repurchase a portion of our outstanding shares not to exceed a dollar maximum established by our Board of Directors. This program was most recently amended by the Board on June 14, 2023 to authorize the repurchase of an additional $2.0 billion of our common stock. This brings the cumulative share repurchase authorization to $35.7 billion. All of the above repurchases were part of this program.

Subsequent to November 18, 2023 and through December 11, 2023, we have repurchased 40.1 thousand shares of our common stock at an aggregate cost of $106.0 million.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

Item 6. Exhibits

The following exhibits are being filed herewith:

	Restated Articles of Incorporation of AutoZone, Inc. Incorporated by reference to Exhibit 3.1 to the Quarterly Report on Form 10-Q for the quarter ended February 13, 1999.
3.1	Restated Articles of Incorporation of AutoZone, Inc. Incorporated by reference to Exhibit 3.1 to the Quarterly Report on Form 10-Q for the quarter ended February 13, 1999.
3.2	Eighth Amended and Restated By-Laws of AutoZone, Inc. Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K dated March 23, 2023.
4.1	Officers’ Certificate dated October 25, 2023, pursuant to Section 3.2 of the Indenture dated August 8, 2003, setting forth the terms of the 6.250% Senior Notes due 2028. Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K dated October 25, 2023.

26

4.2	Form of 6.250% Senior Notes due 2028. Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K dated October 25, 2023.
4.3	Officers’ Certificate dated October 25, 2023, pursuant to Section 3.2 of the Indenture dated August 8, 2003, setting forth the terms of the 6.550% Senior Notes due 2033. Incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K dated October 25, 2023.
4.4	Form of 6.550% Senior Notes due 2033. Incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K dated October 25, 2023.
15.1*	Letter Regarding Unaudited Interim Financial Statements.
31.1*	Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101. INS	Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	The cover page for the Company’s Quarterly Report on Form 10-Q for the quarter ended November 18, 2023, has been formatted in Inline XBRL.

* Furnished herewith.

27

SIGNATURES

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 thereunto duly authorized.

	AUTOZONE, INC.
	By:	/s/ JAMERE JACKSON
	Jamere Jackson
	Chief Financial Officer
	(Principal Financial Officer)
	By:	/s/ J. SCOTT MURPHY
	J. Scott Murphy
	Vice President, Controller (Principal Accounting Officer)
Dated: December 18, 2023

28

EX-15.1

Exhibit 15.1

To the Stockholders and Board of Directors of

AutoZone, Inc.

We are aware of the incorporation by reference in the following Registration Statements:

Registration Statement (Form S-8 No. 333-139559) pertaining to the AutoZone, Inc. 2006 Stock Option Plan

Registration Statement (Form S-8 No. 333-103665) pertaining to the AutoZone, Inc. 2003 Director Compensation Award Plan

Registration Statement (Form S-8 No. 333-42797) pertaining to the AutoZone, Inc. Amended and Restated Employee Stock Purchase Plan

Registration Statement (Form S-8 No. 333-88241) pertaining to the AutoZone, Inc. Amended and Restated Director Compensation Plan

Registration Statement (Form S-8 No. 333-75140) pertaining to the AutoZone, Inc. Executive Stock Purchase Plan

Registration Statement (Form S-8 No. 333-171186) pertaining to the AutoZone, Inc. 2011 Equity Incentive Award Plan

Registration Statement (Form S-3ASR No. 333-180768) pertaining to a shelf registration to sell debt securities

Registration Statement (Form S-3ASR No. 333-203439) pertaining to a shelf registration to sell debt securities

Registration Statement (Form S-3ASR No. 333-230719) pertaining to a shelf registration to sell debt securities

Registration Statement (Form S-8 No. 333-251506) pertaining to the AutoZone, Inc. 2020 Omnibus Incentive Award Plan

Registration Statement (Form S-3ASR No. 333-266209) pertaining to a shelf registration to sell debt securities;

and in the related Prospectuses of our report dated December 18, 2023, relating to the unaudited condensed consolidated interim financial statements of AutoZone, Inc. that are included in its Form 10-Q for the quarter ended November 18, 2023.

/s/ Ernst & Young LLP

Memphis, Tennessee

December 18, 2023

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, William C. Rhodes, III, certify that:

1.    I have reviewed this Quarterly Report on Form 10-Q of AutoZone, Inc. (“registrant”);

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)   designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)  designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)   evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)  disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.    The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)   all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)   any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

December 18, 2023
	/s/ WILLIAM C. RHODES, III
	William C. Rhodes, III
	Chairman, President and Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Jamere Jackson, certify that:

1.    I have reviewed this Quarterly Report on Form 10-Q of AutoZone, Inc. (“registrant”);

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)   designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)  designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)   evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)  disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.    The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)   all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)  any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

une
December 18, 2023
	/s/ JAMERE JACKSON
	Jamere Jackson
	Chief Financial Officer
	(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of AutoZone, Inc. (the “Company”) on Form 10-Q for the period ended November 18, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, William C. Rhodes, III, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(i)           the Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and

(ii)          the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

December 18, 2023
	/s/ WILLIAM C. RHODES, III
	William C. Rhodes, III
	Chairman, President and Chief Executive Officer
	(Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of AutoZone, Inc. (the “Company”) on Form 10-Q for the period ended November 18, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jamere Jackson, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(i) the Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and

(ii)          the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

December 18, 2023
	/s/ JAMERE JACKSON
	Jamere Jackson
	Chief Financial Officer
	(Principal Financial Officer)

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Cover Page - shares	3 Months Ended
	Nov. 18, 2023	Dec. 11, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Nov. 18, 2023
Entity File Number	1-10714
Entity Registrant Name	AUTOZONE INC
Entity Incorporation, State or Country Code	NV
Entity Tax Identification Number	62-1482048
Entity Address, Address Line One	123 South Front Street
Entity Address, City or Town	Memphis
Entity Address, State or Province	TN
Entity Address, Postal Zip Code	38103
City Area Code	901
Local Phone Number	495-6500
Title of 12(b) Security	Common Stock
Trading Symbol	AZO
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		17,291,904
Current Fiscal Year End Date	--08-31
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q1
Entity Central Index Key	0000866787
Amendment Flag	false

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CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Nov. 18, 2023	Aug. 26, 2023
Current assets:
Cash and cash equivalents	$ 282,981	$ 277,054
Accounts receivable	511,907	520,385
Merchandise inventories	5,774,467	5,764,143
Other current assets	387,446	217,844
Total current assets	6,956,801	6,779,426
Property and equipment:
Property and equipment	10,550,192	10,337,890
Less: Accumulated depreciation and amortization	(4,837,035)	(4,741,342)
Property and equipment, net	5,713,157	5,596,548
Operating lease right-of-use assets	2,998,672	2,998,097
Goodwill	302,645	302,645
Deferred income taxes	84,087	86,002
Other long-term assets	237,208	223,160
Total long-term assets	3,622,612	3,609,904
Total assets	16,292,570	15,985,878
Current liabilities:
Accounts payable	7,182,948	7,201,281
Current portion of operating lease liabilities	288,854	257,256
Accrued expenses and other	1,202,508	1,000,841
Income taxes payable	111,312	52,478
Total current liabilities	8,785,622	8,511,856
Long-term debt	8,583,523	7,668,549
Operating lease liabilities, less current portion	2,910,727	2,917,046
Deferred income taxes	534,472	536,278
Other long-term liabilities	691,897	702,043
Commitments and contingencies
Stockholders' deficit:
Preferred stock, authorized 1,000 shares; no shares issued
Common stock, par value $.01 per share, authorized 200,000 shares; 18,984 shares issued and 17,326 shares outstanding as of November 18, 2023; 18,936 shares issued and 17,857 shares outstanding as of August 26, 2023	190	189
Additional paid-in capital	1,548,510	1,484,992
Retained deficit	(2,365,815)	(2,959,278)
Accumulated other comprehensive loss	(210,359)	(190,836)
Treasury stock, at cost	(4,186,197)	(2,684,961)
Total stockholders' deficit	(5,213,671)	(4,349,894)
Total liabilities and stockholders' deficit	$ 16,292,570	$ 15,985,878

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CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares shares in Thousands	Nov. 18, 2023	Aug. 26, 2023
Preferred Stock
Preferred stock, shares authorized	1,000	1,000
Preferred stock, shares issued	0	0
Common Stock
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	200,000	200,000
Common stock, shares issued	18,984	18,936
Common stock, shares outstanding	17,326	17,857

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CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Nov. 18, 2023	Nov. 19, 2022
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
Net sales	$ 4,190,277	$ 3,985,067
Cost of sales, including warehouse and delivery expenses	1,976,261	1,990,445
Gross profit	2,214,016	1,994,622
Operating, selling, general and administrative expenses	1,365,412	1,271,589
Operating profit	848,604	723,033
Interest expense, net	91,384	57,723
Income before income taxes	757,220	665,310
Income tax expense	163,757	125,992
Net income	$ 593,463	$ 539,318
Weighted average shares for basic earnings per share	17,709	19,007
Effect of dilutive stock equivalents	525	638
Weighted average shares for diluted earnings per share	18,234	19,645
Basic earnings per share	$ 33.51	$ 28.37
Diluted earnings per share	$ 32.55	$ 27.45

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Nov. 18, 2023	Nov. 19, 2022
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
Net income	$ 593,463	$ 539,318
Other comprehensive income:
Foreign currency translation adjustments	(20,221)	3,335
Unrealized gains (losses) on marketable debt securities, net of taxes	295	(671)
Net derivative activities, net of taxes	403	607
Total other comprehensive (loss) income	(19,523)	3,271
Comprehensive income	$ 573,940	$ 542,589

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Nov. 18, 2023	Nov. 19, 2022
Cash flows from operating activities:
Net income	$ 593,463	$ 539,318
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property and equipment	120,224	109,253
Other non-cash (income) charges	(2,000)	81,000
Amortization of debt origination fees	2,810	1,905
Deferred income taxes	882	13,816
Share-based compensation expense	22,913	19,005
Changes in operating assets and liabilities:
Accounts receivable	6,856	4,100
Merchandise inventories	(21,899)	(39,308)
Accounts payable and accrued expenses	33,762	6,574
Income taxes	96,793	73,954
Other, net	(23,545)	(16,030)
Net cash provided by operating activities	830,259	793,587
Cash flows from investing activities:
Capital expenditures	(235,428)	(114,397)
Purchase of marketable debt securities	(4,115)	(11,989)
Proceeds from sale of marketable debt securities	1,944	4,893
Investment in tax credit equity investments	(41,150)	(2,474)
Proceeds from disposal of capital assets and other, net	8,235	10,080
Net cash used in investing activities	(270,514)	(113,887)
Cash flows from financing activities:
Net (payments of) proceeds from commercial paper	(76,900)	204,900
Proceeds from issuance of debt	1,000,000
Net proceeds from sale of common stock	41,448	40,828
Purchase of treasury stock	(1,486,876)	(899,998)
Repayment of principal portion of finance lease liabilities	(20,202)	(20,598)
Other, net	(9,696)	(783)
Net cash used in financing activities	(552,226)	(675,651)
Effect of exchange rate changes on cash	(1,592)	1,361
Net increase in cash and cash equivalents	5,927	5,410
Cash and cash equivalents at beginning of period	277,054	264,380
Cash and cash equivalents at end of period	$ 282,981	$ 269,790

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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT (Unaudited) - USD ($) $ in Thousands		Common Stock	Additional Paid-in Capital	Retained Deficit	Accumulated Other Comprehensive Loss	Treasury Stock	Total
Balance at Aug. 27, 2022		$ 207	$ 1,354,252	$ (1,330,067)	$ (300,536)	$ (3,262,769)	$ (3,538,913)
Balance, shares at Aug. 27, 2022		20,732,000
Net income				539,318			539,318
Total other comprehensive income					3,271		3,271
Purchase of treasury stock						(899,998)	$ (899,998)
Purchase of treasury stock, shares							(392,000)
Issuance of common stock under stock options and stock purchase plans		$ 1	40,828				$ 40,829
Issuance of common stock under stock options and stock purchase plans, shares		62,000
Share-based compensation expense			17,570				17,570
Balance at Nov. 19, 2022		$ 208	1,412,650	(790,749)	(297,265)	(4,162,767)	(3,837,923)
Balance, shares at Nov. 19, 2022		20,794,000
Balance at Aug. 26, 2023		$ 189	1,484,992	(2,959,278)	(190,836)	(2,684,961)	(4,349,894)
Balance, shares at Aug. 26, 2023		18,936,000
Net income				593,463			593,463
Total other comprehensive income					(19,523)		(19,523)
Purchase of treasury stock	[1]					(1,501,236)	$ (1,501,236)
Purchase of treasury stock, shares							(579,700)
Issuance of common stock under stock options and stock purchase plans		$ 1	41,447				$ 41,448
Issuance of common stock under stock options and stock purchase plans, shares		48,000
Share-based compensation expense			22,071				22,071
Balance at Nov. 18, 2023		$ 190	$ 1,548,510	$ (2,365,815)	$ (210,359)	$ (4,186,197)	$ (5,213,671)
Balance, shares at Nov. 18, 2023		18,984,000

[1] Inclusive of excise tax of $14.4 million for the quarter ended November 18, 2023. The excise tax is assessed at one percent of the fair value of net stock repurchases after December 31, 2022.

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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT (Unaudited) (Parenthetical) - USD ($) $ in Millions	3 Months Ended		311 Months Ended
	Nov. 18, 2023	Nov. 19, 2022	Nov. 18, 2023
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT (Unaudited)
Purchase of treasury stock, shares	579,700	392,000	154,600,000
Excise tax	$ 14.4

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General

3 Months Ended

Nov. 18, 2023

General

General

Note A – General

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“U.S. GAAP”) for interim financial information and are presented in accordance with the requirements of Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission’s (the “SEC”) rules and regulations. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments, including normal recurring accruals, considered necessary for a fair presentation have been included. For further information, refer to the consolidated financial statements and related notes included in the AutoZone, Inc. (“AutoZone” or the “Company”) Annual Report on Form 10-K for the year ended August 26, 2023.

Operating results for the twelve weeks ended November 18, 2023 are not necessarily indicative of the results that may be expected for the full fiscal year ending August 31, 2024. Each of the first three quarters of AutoZone’s fiscal year consists of 12 weeks, and the fourth quarter consists of 16 or 17 weeks. The fourth quarter of fiscal 2024 has 17 weeks, and the fourth quarter of fiscal 2023 had 16 weeks.

Recently Adopted Accounting Pronouncements

In September 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-04, Liabilities – Supplier Finance Programs (Subtopic 405-50). This ASU requires buyers in a supplier finance program to disclose sufficient qualitative and quantitative information about the program to allow a reader of the financial statements to understand the program’s nature, activity during the period, changes from period to period and the program’s potential magnitude. This ASU is effective for all companies for fiscal years beginning after December 15, 2022, including interim periods within those years, and requires retrospective adoption. The Company adopted the required disclosures of this standard on a retrospective basis beginning with its first quarter ending November 18, 2023. The adoption of ASU 2022-04 did not have a material impact on the Company’s Condensed Consolidated Financial Statements and related disclosures. Refer to “Note F – Supplier Financing Programs.”

Recently Issued Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280). The amendments in this ASU require disclosures, on an annual and interim basis, of significant segment expenses that are regularly provided to the chief operating decision maker (CODM), as well as the aggregate amount of other segment items included in the reported measure of segment profit or loss. This ASU requires that a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss. Public entities will be required to provide all annual disclosures currently required by Topic 280 in interim periods, and entities with a single reportable segment are required to provide all the disclosures required by the amendments in the update and existing segment disclosures in Topic 280. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and requires retrospective adoption. Early adoption is permitted. The Company will adopt this standard beginning with our fiscal year ending August 30, 2025. The Company is currently evaluating these new disclosure requirements and does not expect the adoption to have a material impact.

R

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Merchandise Inventories

3 Months Ended

Nov. 18, 2023

Merchandise Inventories

Merchandise Inventories

Note B – Merchandise Inventories

Merchandise inventories include related purchasing, storage and handling costs. Inventory cost has been determined using the last-in, first-out (“LIFO”) method stated at the lower of cost or net realizable value for domestic inventories and the weighted average cost method stated at the lower of cost or net realizable value for Mexico and Brazil inventories. The Company’s policy is not to write up inventory in excess of replacement cost. Due to price inflation on the Company’s merchandise purchases, primarily driven by increased freight costs, the Company’s LIFO credit reserve

balance was $57.0 million at November 18, 2023, and $59.0 million at August 26, 2023. Increases to the Company’s LIFO credit reserve balance are recorded as a non-cash charge to cost of sales and decreases are recorded as a non-cash benefit to cost of sales.

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Variable Interest Entities

3 Months Ended

Nov. 18, 2023

Variable Interest Entities

Variable Interest Entities

Note C – Variable Interest Entities

The Company invests in certain tax credit funds that promote renewable energy and generate a return primarily through the realization of federal tax credits. The Company considers its investment in these tax credit funds as an investment in a variable interest entity (“VIE”). The Company evaluates the investment in any VIE to determine whether it is the primary beneficiary. The Company considers a variety of factors in identifying the entity that holds the power to direct matters that most significantly impact the VIE’s economic performance including, but not limited to, the ability to direct financing, leasing, construction and other operating decisions and activities. As of November 18, 2023, the Company held tax credit equity investments that were deemed to be VIE’s and determined that it was not the primary beneficiary of the entities, as it did not have the power to direct the activities that most significantly impacted the entity and accounted for this investment using the equity method. The Company’s maximum exposure to losses is generally limited to its net investment, which was $23.8 million as of November 18, 2023.

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Fair Value Measurements

3 Months Ended

Nov. 18, 2023

Fair Value Measurements

Fair Value Measurements

Note D – Fair Value Measurements

The Company defines fair value as the price received to transfer an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In accordance with ASC 820, Fair Value Measurements and Disclosures, the Company uses the fair value hierarchy, which prioritizes the inputs used to measure fair value. The hierarchy, as defined below, gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three levels of the fair value hierarchy are set forth below:

Level 1 inputs—unadjusted quoted prices in active markets for identical assets or liabilities that the Company can access at the measurement date.

Level 2 inputs—inputs other than quoted market prices included within Level 1 that are observable, either directly or indirectly, for the asset or liability.

Level 3 inputs—unobservable inputs for the asset or liability, which are based on the Company’s own assumptions as there is little, if any, observable activity in identical assets or liabilities.

Marketable Debt Securities Measured at Fair Value on a Recurring Basis

The Company’s marketable debt securities measured at fair value on a recurring basis were as follows:

	November 18, 2023
(in thousands)	Level 1		Level 2		Level 3		Fair Value
Other current assets	$	46,696	$	3,741	$	—	$	50,437
Other long-term assets		63,519		10,099		—		73,618
	$	110,215	$	13,840	$	—	$	124,055

	August 26, 2023
(in thousands)	Level 1		Level 2		Level 3		Fair Value
Other current assets	$	35,349	$	4,290	$	—	$	39,639
Other long-term assets		71,028		10,846		—		81,874
	$	106,377	$	15,136	$	—	$	121,513

At November 18, 2023, the fair value measurement amounts for assets and liabilities recorded in the accompanying Condensed Consolidated Balance Sheets consisted of short-term marketable debt securities, which are included within Other current assets, and long-term marketable debt securities, which are included in Other long-term assets. The Company’s marketable debt securities are typically valued at the closing price in the principal active market as of the last business day of the quarter or through the use of other market inputs relating to the securities, including benchmark yields and reported trades. The fair values of the marketable debt securities, by asset class, are described in “Note E – Marketable Debt Securities.”

Financial Instruments not Recognized at Fair Value

The Company has financial instruments, including cash and cash equivalents, accounts receivable, other current assets and accounts payable. The carrying amounts of these financial instruments approximate fair value because of their short maturities. A discussion of the carrying values and fair values of the Company’s debt is included in “Note H – Financing.”

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Marketable Debt Securities

3 Months Ended

Nov. 18, 2023

Marketable Debt Securities

Marketable Debt Securities

Note E – Marketable Debt Securities

Marketable debt securities are carried at fair value, with unrealized gains and losses, net of income taxes, recorded in Accumulated other comprehensive loss until realized, and any credit risk related losses are recognized in net income in the period incurred. The Company’s basis for determining the cost of a security sold is the “Specific Identification Model.”

The Company’s available-for-sale marketable debt securities consisted of the following:

	November 18, 2023
	Amortized		Gross		Gross
	Cost		Unrealized		Unrealized		Fair
(in thousands)	Basis		Gains		Losses		Value
Corporate debt securities	$	30,998	$	—	$	(477)	$	30,521
Government bonds		63,885		475		(1,655)		62,705
Mortgage-backed securities		2,838		—		(151)		2,687
Asset-backed securities and other		28,334		—		(192)		28,142
	$	126,055	$	475	$	(2,475)	$	124,055

	August 26, 2023
	Amortized		Gross		Gross
	Cost		Unrealized		Unrealized		Fair
(in thousands)	Basis		Gains		Losses		Value
Corporate debt securities	$	31,683	$	17	$	(504)	$	31,196
Government bonds		63,747		—		(1,440)		62,307
Mortgage-backed securities		3,215		—		(213)		3,002
Asset-backed securities and other		25,242		—		(234)		25,008
	$	123,887	$	17	$	(2,391)	$	121,513

The marketable debt securities held at November 18, 2023, had effective maturities ranging from less than one year to approximately twelve years. At November 18, 2023, the Company held 73 securities that are in an unrealized loss position of approximately $2.5 million. In evaluating whether a credit loss exists for the securities, the Company considers factors such as the severity of the loss position, the credit worthiness of the investee, the term to maturity and the intent and ability to hold the investments until maturity or until recovery of fair value. An allowance for credit losses was deemed unnecessary given consideration of the factors above. The Company did not realize any material gains or losses on its marketable debt securities during the twelve week period ended November 18, 2023 and the comparable prior year period.

Included above in total available-for-sale marketable debt securities are $106.4 million of marketable debt securities transferred by the Company’s insurance captive to a trust account to secure its obligations to an insurance company related to future workers’ compensation and casualty losses.

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Supplier Financing Programs

3 Months Ended

Nov. 18, 2023

Supplier Financing Programs

Supplier Financing Programs

Note F – Supplier Financing Programs

The Company has arrangements with third-party financial institutions to confirm invoice balances owed by the Company to certain suppliers and pay the financial institutions the confirmed amounts on the invoice due dates. These arrangements allow the Company’s inventory suppliers, at their sole discretion, to enter into agreements directly with these financial institutions to finance the Company’s obligations to the suppliers at terms negotiated between the suppliers and the financial institutions. Supplier participation is optional and our obligations to our suppliers, including the amount and dates due, are not impacted by our suppliers’ decision to enter into an agreement with a third-party financial institution. As of November 18, 2023 and August 26, 2023, the Company had supplier obligations outstanding that had been confirmed under these arrangements of $4.8 billion for each period, which are included in Accounts payable and $209.6 million and $224.8 million, respectively, which are included in Other long-term liabilities in the Condensed Consolidated Balance Sheets.

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Litigation

3 Months Ended

Nov. 18, 2023

Litigation

Litigation

Note G – Litigation

The Company is involved in various legal proceedings incidental to the conduct of its 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. The Company does not currently believe that, either individually or in the aggregate, these matters will result in liabilities material to the Company’s financial condition, results of operations or cash flows.

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Financing

3 Months Ended

Nov. 18, 2023

Financing

Financing

Note H – Financing

The Company’s debt consisted of the following:

	November 18,		August 26,
(in thousands)	2023		2023
3.125% Senior Notes due April 2024, effective interest rate 3.32%	$	300,000	$	300,000
3.250% Senior Notes due April 2025, effective interest rate 3.36%		400,000		400,000
3.625% Senior Notes due April 2025, effective interest rate 3.78%		500,000		500,000
3.125% Senior Notes due April 2026, effective interest rate 3.28%		400,000		400,000
5.050% Senior Notes due July 2026, effective interest rate 5.09%		450,000		450,000
3.750% Senior Notes due June 2027, effective interest rate 3.83%		600,000		600,000
4.500% Senior Notes due February 2028, effective interest rate 4.43%		450,000		450,000
6.250% Senior Notes due November 2028, effective interest rate 6.46%		500,000		—
3.750% Senior Notes due April 2029, effective interest rate 3.86%		450,000		450,000
4.000% Senior Notes due April 2030, effective interest rate 4.09%		750,000		750,000
1.650% Senior Notes due January 2031, effective interest rate 2.19%		600,000		600,000
4.750% Senior Notes due August 2032, effective interest rate 4.76%		750,000		750,000
4.750% Senior Notes due February 2033, effective interest rate 4.70%		550,000		550,000
5.200% Senior Notes due August 2033, effective interest rate 5.22%		300,000		300,000
6.550% Senior Notes due November 2033, effective interest rate 6.71%		500,000		—
Commercial paper, weighted average interest rate 5.43% at November 18, 2023 and August 26, 2023		1,132,700		1,209,600
Total debt before discounts and debt issuance costs		8,632,700		7,709,600
Less: Discounts and debt issuance costs		49,177		41,051
Long-term Debt	$	8,583,523	$	7,668,549

On November 15, 2021, the Company amended and restated its existing revolving credit facility (as amended from time to time, the “Revolving Credit Agreement”) pursuant to which the Company’s borrowing capacity was increased from $2.0 billion to $2.25 billion, and the maximum borrowing under the Revolving Credit Agreement may, at the Company’s option, subject to lenders’ approval, be increased from $2.25 billion to $3.25 billion. On November 15, 2022, the Company amended the Revolving Credit Agreement, extending the termination date by one year. As amended, the Revolving Credit Agreement will terminate, and all amounts borrowed will be due and payable on November 15, 2027, but AutoZone may make one additional request to extend the termination date for an additional period of one year. Revolving borrowings under the Revolving Credit Agreement may be base rate loans, Term Secured Overnight Financing Rate (“SOFR”) loans, or a combination of both, at AutoZone’s election. 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.

Under the Company’s 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.

As of November 18, 2023, the Company had no outstanding borrowings and $1.8 million of outstanding letters of credit under the Revolving Credit Agreement.

The Company also maintains a letter of credit facility that allows it to request the participating bank to issue letters of credit on its behalf up to an aggregate amount of $25 million. The letter of credit facility is in addition to the letters of credit that may be issued under the Revolving Credit Agreement. As of November 18, 2023, the Company had $25.0 million in letters of credit outstanding under the letter of credit facility, which expires in June 2025.

In addition to the outstanding letters of credit issued under the committed facilities discussed above, the Company had $120.5 million in letters of credit outstanding as of November 18, 2023. These letters of credit have various maturity dates and were issued on an uncommitted basis.

As of November 18, 2023, the $1.1 billion commercial paper borrowings and the $300 million 3.125% Senior Notes due April 2024 were classified as long-term in the accompanying Consolidated Balance Sheets as the Company currently has the ability and intent to refinance them on a long-term basis through available capacity under its Revolving Credit Agreement. As of November 18, 2023, the Company had $2.2 billion of availability under its Revolving Credit Agreement, without giving effect to commercial paper borrowings, which would allow it to replace these short-term obligations with a long-term financing facility.

On October 25, 2023, the Company issued $500 million in 6.250% Senior Notes due November 2028 and $500 million in 6.550% Senior Notes due November 2033. Proceeds from the debt issuances were used for general corporate purposes.

The Senior Notes contain a provision that repayment may be accelerated if the Company experiences a change of control (as defined in the agreements). The Company’s borrowings under its Senior Notes contain minimal covenants, primarily restrictions on liens. All of the repayment obligations under its borrowing arrangements may be accelerated and come due prior to the scheduled payment date if covenants are breached or an event of default occurs. Interest for the Senior Notes is paid on a semi-annual basis.

The fair value of the Company’s debt was estimated at $8.2 billion as of November 18, 2023, and $7.3 billion as of August 26, 2023, based on the quoted market prices for the same or similar issues or on the current rates available to the Company for debt of the same terms (Level 2). Such fair value is less than the carrying value of debt by $372.0 million and $406.6 million at November 18, 2023 and August 26, 2023, respectively, which reflects their face amount, adjusted for any unamortized debt issuance costs and discounts.

As of November 18, 2023, the Company was in compliance with all covenants and expects to remain in compliance with all covenants under its borrowing arrangements.

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Stock Repurchase Program

3 Months Ended

Nov. 18, 2023

Equity [Abstract]

Stock Repurchase Program

Note I – Stock Repurchase Program

From January 1, 1998 to November 18, 2023, the Company has repurchased a total of 154.6 million shares of its common stock at an aggregate cost of $35.3 billion, including 579.7 thousand shares of its common stock at an aggregate cost of $1.5 billion (inclusive of excise tax of $14.4 million) during the twelve week period ended November 18, 2023. The excise tax is assessed at one percent of the fair market value of net stock repurchases after December 31, 2022.

On June 14, 2023, the Board voted to authorize the repurchase of an additional $2.0 billion of the Company’s common stock in connection with its ongoing share repurchase program, which raised the total value of shares authorized to be repurchased to $35.7 billion. Considering the cumulative repurchases as of November 18, 2023, the Company had $333.1 million remaining under the Board’s authorization to repurchase its common stock.

Subsequent to November 18, 2023 and through December 11, 2023, the Company has repurchased 40.1 thousand shares of its common stock at an aggregate cost of $106.0 million.

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Accumulated Other Comprehensive Loss

3 Months Ended

Nov. 18, 2023

Equity [Abstract]

Accumulated Other Comprehensive Loss

Note J – Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss includes foreign currency translation adjustments, activity for interest rate swaps and treasury rate locks that qualified as cash flow hedges and unrealized gains (losses) on available-for-sale marketable debt securities.

Changes in Accumulated other comprehensive loss for the twelve week periods ended November 18, 2023 and November 19, 2022 consisted of the following:

			Net
	Foreign		Unrealized
	Currency		Gain (Loss)
(in thousands)	and Other(1)		on Securities		Derivatives		Total
Balance at August 26, 2023	$	(176,557)	$	(1,851)	$	(12,428)	$	(190,836)
Other comprehensive income (loss) before reclassifications(2)(3)		(20,221)		295		—		(19,926)
Amounts reclassified from Accumulated other comprehensive loss(3)		—		—		403		403
Balance at November 18, 2023	$	(196,778)	$	(1,556)	$	(12,025)	$	(210,359)

			Net
	Foreign		Unrealized
	Currency		Gain (Loss)
(in thousands)	and Other(1)		on Securities		Derivatives		Total
Balance at August 27, 2022	$	(280,190)	$	(2,171)	$	(18,175)	$	(300,536)
Other comprehensive income (loss) before reclassifications(2)(3)		3,335		(671)		—		2,664
Amounts reclassified from Accumulated other comprehensive loss(3)		—		—		607		607
Balance at November 19, 2022	$	(276,855)	$	(2,842)	$	(17,568)	$	(297,265)

(1) Foreign currency is shown net of U.S. tax to account for foreign currency impacts of certain undistributed non-U.S. subsidiaries’ earnings. Other foreign currency is not shown net of additional U.S. tax as other basis differences of non-U.S. subsidiaries are intended to be permanently reinvested.

(2) Amounts in parentheses indicate debits to Accumulated Other Comprehensive Loss.

(3) Amounts shown are net of tax.

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Share-Based Payments

3 Months Ended

Nov. 18, 2023

Share-Based Payments

Share-Based Payments

Note K – Share-Based Payments

AutoZone maintains several equity incentive plans, which provide equity-based compensation to non-employee directors and eligible employees for their service to AutoZone, its subsidiaries or affiliates. The Company recognizes compensation expense for share-based payments based on the fair value of the awards at the grant date. Share-based payments include stock option grants, restricted stock grants, restricted stock unit grants, stock appreciation rights, discounts on shares sold to employees under share purchase plans and other awards. Additionally, directors’ fees are paid in restricted stock units with value equivalent to the value of shares of common stock as of the grant date. The change in fair value of liability-based stock awards is also recognized in share-based compensation expense.

Stock Options:

The Company made stock option grants for 130,723 shares during the twelve week period ended November 18, 2023 and granted options to purchase 157,113 shares during the comparable prior year period. The Company grants options to purchase common stock to certain of its employees under its equity incentive plans at prices equal to or above the market value of the stock on the date of grant. Option-vesting periods range from four to five years, with the vast majority of options vesting ratably over four years. The fair value of each option is amortized into compensation expense on a straight-line basis over the requisite service period, less estimated forfeitures. Beginning with grants made in fiscal 2024, employees who meet the qualified retirement provisions under the AutoZone, Inc. 2020 Omnibus Incentive Award Plan are assumed to have a 0% forfeiture rate. All other employee grants assume a 10% forfeiture rate, which is based on historical experience.

The weighted average fair value of the stock option awards granted during the twelve week period ended November 18, 2023 and November 19, 2022, using the Black-Scholes-Merton multiple-option pricing valuation model, was $913.31 and $760.82 per share, respectively, using the following weighted average key assumptions:

	Twelve Weeks Ended
	November 18,		November 19,
	2023		2022
Expected price volatility	29	%	29	%
Risk-free interest rate	4.8	%	3.8	%
Weighted average expected lives (in years)	5.4		5.4
Forfeiture rate	7	%	10	%
Dividend yield	0	%	0	%

During the twelve week period ended November 18, 2023, and the comparable prior year period, 44,644 and 57,092 stock options, respectively, were exercised at a weighted average exercise price of $931.85 and $725.86, respectively.

As of November 18, 2023, total unrecognized share-based expense related to stock options, net of estimated forfeitures, was approximately $177.9 million, before income taxes, which we expect to recognize over an estimated weighted average period of 3.5 years.

Restricted Stock Units:

Restricted stock unit awards are valued at the market price of a share of the Company’s stock on the date of grant. Grants of employee restricted stock units vest ratably on an annual basis over a four-year service period and are payable in shares of common stock on the vesting date. Compensation expense for grants of employee restricted stock units is recognized on a straight-line basis over the requisite service period, less estimated forfeitures, which are consistent with stock option forfeiture assumptions. Grants of non-employee director restricted stock units are made and expensed on January 1 of each year, as they vest immediately.

As of November 18, 2023, total unrecognized stock-based compensation expense related to nonvested restricted stock unit awards, net of estimated forfeitures, was approximately $12.0 million, before income taxes, which we expect to recognize over an estimated weighted average period of 2.9 years.

Transactions related to restricted stock units for the twelve weeks ended November 18, 2023 were as follows:

		Weighted-
	Number	Average Grant
	of Shares	Date Fair Value
Nonvested at August 26, 2023	8,133	$	1,572.87
Granted	2,173		2,549.04
Vested	(3,741)		1,383.34
Forfeited	(183)		1,933.41
Nonvested at November 18, 2023	6,382	$	2,000.23

Total share-based compensation expense (a component of Operating, selling, general and administrative expenses) for the twelve week period ended November 18, 2023, was $22.9 million and $19.0 million for the comparable prior year period.

For the twelve week periods ended November 18, 2023 and November 19, 2022, 169,798 and 87,696 stock options, respectively, were excluded from the diluted earnings per share computation because they would have been anti-dilutive.

See AutoZone’s Annual Report on Form 10-K for the year ended August 26, 2023 and other filings with the SEC, for a discussion regarding the methodology used in developing AutoZone’s assumptions to determine the fair value of the

option awards and a description of AutoZone’s Amended and Restated 2011 Equity Incentive Award Plan, the AutoZone, Inc. 2020 Omnibus Incentive Award Plan and the Director Compensation Program.

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Segment Reporting

3 Months Ended

Nov. 18, 2023

Segment Reporting

Segment Reporting

Note L – Segment Reporting

The Company’s operating segments (Domestic Auto Parts, Mexico and Brazil) are aggregated as one reportable segment: Auto Parts Stores. The criteria the Company used to identify the reportable segment are primarily the nature of the products the Company sells and the operating results that are regularly reviewed by the Company’s chief operating decision maker to make decisions about the resources to be allocated to the business units and to assess performance. The accounting policies of the Company’s reportable segment are the same as those described in “Note A – Significant Accounting Policies” in its Annual Report on Form 10-K for the year ended August 26, 2023.

The Auto Parts Stores segment is a retailer and distributor of automotive replacement parts and accessories through the Company’s 7,165 stores in the U.S., Mexico and Brazil. 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.

The Other category reflects business activities of two operating segments that are not separately reportable due to the materiality of these operating segments. The operating segments include ALLDATA, which produces, sells and maintains diagnostic, repair, collision and shop management software used in the automotive repair industry and E-commerce, which includes direct sales to customers through www.autozone.com for sales that are not fulfilled by local stores.

The Company evaluates its reportable segment primarily on the basis of net sales and segment profit, which is defined as gross profit. Segment results for the periods presented were as follows:

	Twelve Weeks Ended
	November 18,		November 19,
(in thousands)	2023		2022
Net Sales
Auto Parts Stores	$	4,115,694	$	3,915,907
Other		74,583		69,160
Total	$	4,190,277	$	3,985,067
Segment Profit
Auto Parts Stores	$	2,170,025	$	1,953,728
Other		43,991		40,894
Gross profit		2,214,016		1,994,622
Operating, selling, general and administrative expenses		(1,365,412)		(1,271,589)
Interest expense, net		(91,384)		(57,723)
Income before income taxes	$	757,220	$	665,310

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General (Policies)

3 Months Ended

Nov. 18, 2023

General

Basis of Accounting

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“U.S. GAAP”) for interim financial information and are presented in accordance with the requirements of Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission’s (the “SEC”) rules and regulations. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments, including normal recurring accruals, considered necessary for a fair presentation have been included. For further information, refer to the consolidated financial statements and related notes included in the AutoZone, Inc. (“AutoZone” or the “Company”) Annual Report on Form 10-K for the year ended August 26, 2023.

Fiscal Period

Operating results for the twelve weeks ended November 18, 2023 are not necessarily indicative of the results that may be expected for the full fiscal year ending August 31, 2024. Each of the first three quarters of AutoZone’s fiscal year consists of 12 weeks, and the fourth quarter consists of 16 or 17 weeks. The fourth quarter of fiscal 2024 has 17 weeks, and the fourth quarter of fiscal 2023 had 16 weeks.

Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In September 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-04, Liabilities – Supplier Finance Programs (Subtopic 405-50). This ASU requires buyers in a supplier finance program to disclose sufficient qualitative and quantitative information about the program to allow a reader of the financial statements to understand the program’s nature, activity during the period, changes from period to period and the program’s potential magnitude. This ASU is effective for all companies for fiscal years beginning after December 15, 2022, including interim periods within those years, and requires retrospective adoption. The Company adopted the required disclosures of this standard on a retrospective basis beginning with its first quarter ending November 18, 2023. The adoption of ASU 2022-04 did not have a material impact on the Company’s Condensed Consolidated Financial Statements and related disclosures. Refer to “Note F – Supplier Financing Programs.”

Recently Issued Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280). The amendments in this ASU require disclosures, on an annual and interim basis, of significant segment expenses that are regularly provided to the chief operating decision maker (CODM), as well as the aggregate amount of other segment items included in the reported measure of segment profit or loss. This ASU requires that a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss. Public entities will be required to provide all annual disclosures currently required by Topic 280 in interim periods, and entities with a single reportable segment are required to provide all the disclosures required by the amendments in the update and existing segment disclosures in Topic 280. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and requires retrospective adoption. Early adoption is permitted. The Company will adopt this standard beginning with our fiscal year ending August 30, 2025. The Company is currently evaluating these new disclosure requirements and does not expect the adoption to have a material impact.

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Fair Value Measurements (Tables)

3 Months Ended

Nov. 18, 2023

Fair Value Measurements

Company's marketable debt securities measured at Fair Value on Recurring Basis

The Company’s marketable debt securities measured at fair value on a recurring basis were as follows:

	November 18, 2023
(in thousands)	Level 1		Level 2		Level 3		Fair Value
Other current assets	$	46,696	$	3,741	$	—	$	50,437
Other long-term assets		63,519		10,099		—		73,618
	$	110,215	$	13,840	$	—	$	124,055

	August 26, 2023
(in thousands)	Level 1		Level 2		Level 3		Fair Value
Other current assets	$	35,349	$	4,290	$	—	$	39,639
Other long-term assets		71,028		10,846		—		81,874
	$	106,377	$	15,136	$	—	$	121,513

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Marketable Debt Securities (Tables)

3 Months Ended

Nov. 18, 2023

Marketable Debt Securities

Available-for-Sale Marketable Securities

The Company’s available-for-sale marketable debt securities consisted of the following:

	November 18, 2023
	Amortized		Gross		Gross
	Cost		Unrealized		Unrealized		Fair
(in thousands)	Basis		Gains		Losses		Value
Corporate debt securities	$	30,998	$	—	$	(477)	$	30,521
Government bonds		63,885		475		(1,655)		62,705
Mortgage-backed securities		2,838		—		(151)		2,687
Asset-backed securities and other		28,334		—		(192)		28,142
	$	126,055	$	475	$	(2,475)	$	124,055

	August 26, 2023
	Amortized		Gross		Gross
	Cost		Unrealized		Unrealized		Fair
(in thousands)	Basis		Gains		Losses		Value
Corporate debt securities	$	31,683	$	17	$	(504)	$	31,196
Government bonds		63,747		—		(1,440)		62,307
Mortgage-backed securities		3,215		—		(213)		3,002
Asset-backed securities and other		25,242		—		(234)		25,008
	$	123,887	$	17	$	(2,391)	$	121,513

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Financing (Tables)

3 Months Ended

Nov. 18, 2023

Financing

Schedule of Debt

The Company’s debt consisted of the following:

	November 18,		August 26,
(in thousands)	2023		2023
3.125% Senior Notes due April 2024, effective interest rate 3.32%	$	300,000	$	300,000
3.250% Senior Notes due April 2025, effective interest rate 3.36%		400,000		400,000
3.625% Senior Notes due April 2025, effective interest rate 3.78%		500,000		500,000
3.125% Senior Notes due April 2026, effective interest rate 3.28%		400,000		400,000
5.050% Senior Notes due July 2026, effective interest rate 5.09%		450,000		450,000
3.750% Senior Notes due June 2027, effective interest rate 3.83%		600,000		600,000
4.500% Senior Notes due February 2028, effective interest rate 4.43%		450,000		450,000
6.250% Senior Notes due November 2028, effective interest rate 6.46%		500,000		—
3.750% Senior Notes due April 2029, effective interest rate 3.86%		450,000		450,000
4.000% Senior Notes due April 2030, effective interest rate 4.09%		750,000		750,000
1.650% Senior Notes due January 2031, effective interest rate 2.19%		600,000		600,000
4.750% Senior Notes due August 2032, effective interest rate 4.76%		750,000		750,000
4.750% Senior Notes due February 2033, effective interest rate 4.70%		550,000		550,000
5.200% Senior Notes due August 2033, effective interest rate 5.22%		300,000		300,000
6.550% Senior Notes due November 2033, effective interest rate 6.71%		500,000		—
Commercial paper, weighted average interest rate 5.43% at November 18, 2023 and August 26, 2023		1,132,700		1,209,600
Total debt before discounts and debt issuance costs		8,632,700		7,709,600
Less: Discounts and debt issuance costs		49,177		41,051
Long-term Debt	$	8,583,523	$	7,668,549

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Accumulated Other Comprehensive Loss (Tables)

3 Months Ended

Nov. 18, 2023

Equity [Abstract]

Changes in Accumulated Other Comprehensive Loss

			Net
	Foreign		Unrealized
	Currency		Gain (Loss)
(in thousands)	and Other(1)		on Securities		Derivatives		Total
Balance at August 26, 2023	$	(176,557)	$	(1,851)	$	(12,428)	$	(190,836)
Other comprehensive income (loss) before reclassifications(2)(3)		(20,221)		295		—		(19,926)
Amounts reclassified from Accumulated other comprehensive loss(3)		—		—		403		403
Balance at November 18, 2023	$	(196,778)	$	(1,556)	$	(12,025)	$	(210,359)

			Net
	Foreign		Unrealized
	Currency		Gain (Loss)
(in thousands)	and Other(1)		on Securities		Derivatives		Total
Balance at August 27, 2022	$	(280,190)	$	(2,171)	$	(18,175)	$	(300,536)
Other comprehensive income (loss) before reclassifications(2)(3)		3,335		(671)		—		2,664
Amounts reclassified from Accumulated other comprehensive loss(3)		—		—		607		607
Balance at November 19, 2022	$	(276,855)	$	(2,842)	$	(17,568)	$	(297,265)

(1) Foreign currency is shown net of U.S. tax to account for foreign currency impacts of certain undistributed non-U.S. subsidiaries’ earnings. Other foreign currency is not shown net of additional U.S. tax as other basis differences of non-U.S. subsidiaries are intended to be permanently reinvested.

(2) Amounts in parentheses indicate debits to Accumulated Other Comprehensive Loss.

(3) Amounts shown are net of tax.

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Share-Based Payments (Tables)

3 Months Ended

Nov. 18, 2023

Share-Based Payments

Schedule of Weighted Average for Key Assumptions Used in Determining Fair Value of Options Granted and Related Share-Based Compensation Expense

The weighted average fair value of the stock option awards granted during the twelve week period ended November 18, 2023 and November 19, 2022, using the Black-Scholes-Merton multiple-option pricing valuation model, was $913.31 and $760.82 per share, respectively, using the following weighted average key assumptions:

	Twelve Weeks Ended
	November 18,		November 19,
	2023		2022
Expected price volatility	29	%	29	%
Risk-free interest rate	4.8	%	3.8	%
Weighted average expected lives (in years)	5.4		5.4
Forfeiture rate	7	%	10	%
Dividend yield	0	%	0	%

Schedule of Nonvested Restricted Stock Units Activity

Transactions related to restricted stock units for the twelve weeks ended November 18, 2023 were as follows:

		Weighted-
	Number	Average Grant
	of Shares	Date Fair Value
Nonvested at August 26, 2023	8,133	$	1,572.87
Granted	2,173		2,549.04
Vested	(3,741)		1,383.34
Forfeited	(183)		1,933.41
Nonvested at November 18, 2023	6,382	$	2,000.23

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Segment Reporting (Tables)

3 Months Ended

Nov. 18, 2023

Segment Reporting

Segment Results

	Twelve Weeks Ended
	November 18,		November 19,
(in thousands)	2023		2022
Net Sales
Auto Parts Stores	$	4,115,694	$	3,915,907
Other		74,583		69,160
Total	$	4,190,277	$	3,985,067
Segment Profit
Auto Parts Stores	$	2,170,025	$	1,953,728
Other		43,991		40,894
Gross profit		2,214,016		1,994,622
Operating, selling, general and administrative expenses		(1,365,412)		(1,271,589)
Interest expense, net		(91,384)		(57,723)
Income before income taxes	$	757,220	$	665,310

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Merchandise Inventories (Detail) - USD ($) $ in Millions	Nov. 18, 2023	Aug. 26, 2023
Merchandise Inventories
LIFO credit reserve balance	$ 57.0	$ 59.0

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Variable Interest Entities (Detail) $ in Millions	Nov. 18, 2023 USD ($)
Variable Interest Entity Not Primary Beneficiary Member
Variable Interest Entities
Maximum exposure to losses amount	$ 23.8

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Fair Value Measurements - Company's Marketable Debt Securities Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands	Nov. 18, 2023	Aug. 26, 2023
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	$ 124,055	$ 121,513
Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other current assets	50,437	39,639
Other long-term assets	73,618	81,874
Total	124,055	121,513
Level 1 | Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other current assets	46,696	35,349
Other long-term assets	63,519	71,028
Total	110,215	106,377
Level 2 | Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other current assets	3,741	4,290
Other long-term assets	10,099	10,846
Total	$ 13,840	$ 15,136

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Marketable Debt Securities - Available-for-Sale Marketable Securities (Detail) - USD ($) $ in Thousands	Nov. 18, 2023	Aug. 26, 2023
Schedule of Available-for-sale Securities [Line Items]
Available-For-Sale Marketable Securities, Amortized Cost Basis	$ 126,055	$ 123,887
Available-For-Sale Marketable Securities, Gross Unrealized Gains	475	17
Available-For-Sale Marketable Securities, Gross Unrealized Losses	(2,475)	(2,391)
Available-For-Sale Marketable Securities, Fair Value	124,055	121,513
Corporate debt securities
Schedule of Available-for-sale Securities [Line Items]
Available-For-Sale Marketable Securities, Amortized Cost Basis	30,998	31,683
Available-For-Sale Marketable Securities, Gross Unrealized Gains		17
Available-For-Sale Marketable Securities, Gross Unrealized Losses	(477)	(504)
Available-For-Sale Marketable Securities, Fair Value	30,521	31,196
Government bonds
Schedule of Available-for-sale Securities [Line Items]
Available-For-Sale Marketable Securities, Amortized Cost Basis	63,885	63,747
Available-For-Sale Marketable Securities, Gross Unrealized Gains	475
Available-For-Sale Marketable Securities, Gross Unrealized Losses	(1,655)	(1,440)
Available-For-Sale Marketable Securities, Fair Value	62,705	62,307
Mortgage-backed securities
Schedule of Available-for-sale Securities [Line Items]
Available-For-Sale Marketable Securities, Amortized Cost Basis	2,838	3,215
Available-For-Sale Marketable Securities, Gross Unrealized Losses	(151)	(213)
Available-For-Sale Marketable Securities, Fair Value	2,687	3,002
Asset-backed securities and other
Schedule of Available-for-sale Securities [Line Items]
Available-For-Sale Marketable Securities, Amortized Cost Basis	28,334	25,242
Available-For-Sale Marketable Securities, Gross Unrealized Losses	(192)	(234)
Available-For-Sale Marketable Securities, Fair Value	$ 28,142	$ 25,008

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Marketable Debt Securities - Additional Information (Detail) $ in Thousands	Nov. 18, 2023 USD ($) security	Aug. 26, 2023 USD ($)
Marketable Debt Securities
Available for sale securities debt maturity period range	less than one year to approximately twelve years
Number of securities available for sale loss position | security	73
Unrealized loss on securities	$ 2,475	$ 2,391
Marketable securities transferred	$ 106,400

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Supplier Financing Programs (Details) - Supplier Financing - USD ($) $ in Millions	Nov. 18, 2023	Aug. 26, 2023
Accounts payable
Loss Contingencies [Line Items]
Obligations outstanding under supplier financing arrangements	$ 4,800.0	$ 4,800.0
Other long-term liabilities
Loss Contingencies [Line Items]
Obligations outstanding under supplier financing arrangements	$ 209.6	$ 224.8

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Financing - Schedule of Debt (Detail) - USD ($) $ in Thousands	Nov. 18, 2023	Oct. 25, 2023	Aug. 26, 2023
Debt Instrument [Line Items]
Total debt before discounts and debt issuance costs	$ 8,632,700		$ 7,709,600
Less: Discounts and debt issuance costs	49,177		41,051
Long-term debt	8,583,523		7,668,549
3.125% Senior Notes due April 2024, effective interest rate 3.32%
Debt Instrument [Line Items]
Senior notes	300,000		300,000
3.250% Senior Notes due April 2025, effective interest rate 3.36%
Debt Instrument [Line Items]
Senior notes	400,000		400,000
3.625% Senior Notes due April 2025, effective interest rate 3.78%
Debt Instrument [Line Items]
Senior notes	500,000		500,000
3.125% Senior Notes due April 2026, effective interest rate 3.28%
Debt Instrument [Line Items]
Senior notes	400,000		400,000
5.050% Senior Notes due July 2026, effective interest rate 5.09%
Debt Instrument [Line Items]
Senior notes	450,000		450,000
3.750% Senior Notes due June 2027, effective interest rate 3.83%
Debt Instrument [Line Items]
Senior notes	600,000		600,000
4.500% Senior Notes due February 2028, effective interest rate 4.43%
Debt Instrument [Line Items]
Senior notes	450,000		450,000
6.250% Senior Notes due November 2028, effective interest rate 6.46%
Debt Instrument [Line Items]
Senior notes	500,000	$ 500,000
3.750% Senior Notes due April 2029, effective interest rate 3.86%
Debt Instrument [Line Items]
Senior notes	450,000		450,000
4.000% Senior Notes due April 2030, effective interest rate 4.09%
Debt Instrument [Line Items]
Senior notes	750,000		750,000
1.650% Senior Notes due January 2031, effective interest rate 2.19%
Debt Instrument [Line Items]
Senior notes	600,000		600,000
4.750% Senior Notes due August 2032, effective interest rate 4.76%
Debt Instrument [Line Items]
Senior notes	750,000		750,000
4.750% Senior Notes due February 2033, effective interest rate 4.70%
Debt Instrument [Line Items]
Senior notes	550,000		550,000
5.200% Senior Notes due August 2033, effective interest rate 5.22%
Debt Instrument [Line Items]
Senior notes	300,000		300,000
6.550% Senior Notes due November 2033, effective interest rate 6.71%
Debt Instrument [Line Items]
Senior notes	500,000	$ 500,000
Commercial paper
Debt Instrument [Line Items]
Commercial paper	$ 1,132,700		$ 1,209,600

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Financing - Schedule of Debt - Interest Rates And Maturity (Detail)	3 Months Ended	12 Months Ended
	Nov. 18, 2023	Aug. 26, 2023	Oct. 25, 2023
3.125% Senior Notes due April 2024, effective interest rate 3.32%
Debt Instrument [Line Items]
Stated interest rate percentage	3.125%	3.125%
Debt instrument maturity, month and year	2024-04	2024-04
Effective interest rate	3.32%	3.32%
3.250% Senior Notes due April 2025, effective interest rate 3.36%
Debt Instrument [Line Items]
Stated interest rate percentage	3.25%	3.25%
Debt instrument maturity, month and year	2025-04	2025-04
Effective interest rate	3.36%	3.36%
3.625% Senior Notes due April 2025, effective interest rate 3.78%
Debt Instrument [Line Items]
Stated interest rate percentage	3.625%	3.625%
Debt instrument maturity, month and year	2025-04	2025-04
Effective interest rate	3.78%	3.78%
3.125% Senior Notes due April 2026, effective interest rate 3.28%
Debt Instrument [Line Items]
Stated interest rate percentage	3.125%	3.125%
Debt instrument maturity, month and year	2026-04	2026-04
Effective interest rate	3.28%	3.28%
5.050% Senior Notes due July 2026, effective interest rate 5.09%
Debt Instrument [Line Items]
Stated interest rate percentage	5.05%	5.05%
Debt instrument maturity, month and year	2026-07	2026-07
Effective interest rate	5.09%	5.09%
3.750% Senior Notes due June 2027, effective interest rate 3.83%
Debt Instrument [Line Items]
Stated interest rate percentage	3.75%	3.75%
Debt instrument maturity, month and year	2027-06	2027-06
Effective interest rate	3.83%	3.83%
4.500% Senior Notes due February 2028, effective interest rate 4.43%
Debt Instrument [Line Items]
Stated interest rate percentage	4.50%	4.50%
Debt instrument maturity, month and year	2028-02	2028-02
Effective interest rate	4.43%	4.43%
6.250% Senior Notes due November 2028, effective interest rate 6.46%
Debt Instrument [Line Items]
Stated interest rate percentage	6.25%		6.25%
Debt instrument maturity, month and year	2028-11
Effective interest rate	6.46%
3.750% Senior Notes due April 2029, effective interest rate 3.86%
Debt Instrument [Line Items]
Stated interest rate percentage	3.75%	3.75%
Debt instrument maturity, month and year	2029-04	2029-04
Effective interest rate	3.86%	3.86%
4.000% Senior Notes due April 2030, effective interest rate 4.09%
Debt Instrument [Line Items]
Stated interest rate percentage	4.00%	4.00%
Debt instrument maturity, month and year	2030-04	2030-04
Effective interest rate	4.09%	4.09%
1.650% Senior Notes due January 2031, effective interest rate 2.19%
Debt Instrument [Line Items]
Stated interest rate percentage	1.65%	1.65%
Debt instrument maturity, month and year	2031-01	2031-01
Effective interest rate	2.19%	2.19%
4.750% Senior Notes due August 2032, effective interest rate 4.76%
Debt Instrument [Line Items]
Stated interest rate percentage	4.75%	4.75%
Debt instrument maturity, month and year	2032-08	2032-08
Effective interest rate	4.76%	4.76%
4.750% Senior Notes due February 2033, effective interest rate 4.70%
Debt Instrument [Line Items]
Stated interest rate percentage	4.75%	4.75%
Debt instrument maturity, month and year	2033-02	2033-02
Effective interest rate	4.70%	4.70%
5.200% Senior Notes due August 2033, effective interest rate 5.22%
Debt Instrument [Line Items]
Stated interest rate percentage	5.20%	5.20%
Debt instrument maturity, month and year	2033-08	2033-08
Effective interest rate	5.22%	5.22%
6.550% Senior Notes due November 2033, effective interest rate 6.71%
Debt Instrument [Line Items]
Stated interest rate percentage	6.55%		6.55%
Debt instrument maturity, month and year	2033-11
Effective interest rate	6.71%
Commercial paper
Debt Instrument [Line Items]
Weighted average interest rate of commercial paper	5.43%	5.43%

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Financing - Additional Information (Detail) - USD ($) $ in Thousands	Nov. 15, 2022	Nov. 15, 2021	Nov. 18, 2023	Oct. 25, 2023	Aug. 26, 2023	Nov. 14, 2021
Debt Instrument [Line Items]
Remaining borrowing capacity under revolving credit agreement			$ 2,200,000
Fair value of the Company's debt			8,200,000		$ 7,300,000
Excess (shortfall) of fair value of debt over (from) carrying value			(372,000)		(406,600)
Revolving Credit Agreement
Debt Instrument [Line Items]
Amount available under credit facility		$ 2,250,000				$ 2,000,000
Maximum amount available under credit facility		$ 3,250,000				$ 2,250,000
Additional amount of year(s) to extend termination date of agreement		1 year
Borrowings, outstanding			0
Letters of credit, outstanding			1,800
Swingline Loans
Debt Instrument [Line Items]
Maximum amount available under credit facility		$ 75,000
Individual Issuer, Letter of Credit
Debt Instrument [Line Items]
Maximum amount available under credit facility		50,000
Letter of Credit
Debt Instrument [Line Items]
Maximum amount available under credit facility		$ 250,000	25,000
Borrowings, outstanding			120,500
Letters of credit, outstanding			25,000
Master Extension Agreement
Debt Instrument [Line Items]
Credit facility expiration date	Nov. 15, 2027
3.125% Senior Notes due April 2024, effective interest rate 3.32%
Debt Instrument [Line Items]
Senior notes			$ 300,000		$ 300,000
Stated interest rate percentage			3.125%		3.125%
6.250% Senior Notes due November 2028, effective interest rate 6.46%
Debt Instrument [Line Items]
Senior notes			$ 500,000	$ 500,000
Stated interest rate percentage			6.25%	6.25%
6.550% Senior Notes due November 2033, effective interest rate 6.71%
Debt Instrument [Line Items]
Senior notes			$ 500,000	$ 500,000
Stated interest rate percentage			6.55%	6.55%
Commercial paper
Debt Instrument [Line Items]
Commercial paper borrowings			$ 1,132,700		$ 1,209,600

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Stock Repurchase Program - Additional Information (Detail) - USD ($) $ in Thousands		1 Months Ended	3 Months Ended			311 Months Ended
	Jun. 14, 2023	Dec. 11, 2023	Nov. 18, 2023		Nov. 19, 2022	Nov. 18, 2023
Equity, Class of Treasury Stock [Line Items]
Purchase of treasury stock, shares			579,700		392,000	154,600,000
Purchase of treasury stock			$ 1,501,236	[1]	$ 899,998	$ 35,300,000
Excise tax			14,400
Increase in authorization of stock repurchase, value	$ 2,000,000
Stock repurchase authorized	$ 35,700,000
Remaining value authorized for share repurchases			$ 333,100			$ 333,100
Subsequent Events
Equity, Class of Treasury Stock [Line Items]
Purchase of treasury stock, shares		40,100
Purchase of treasury stock		$ 106,000

[1] Inclusive of excise tax of $14.4 million for the quarter ended November 18, 2023. The excise tax is assessed at one percent of the fair value of net stock repurchases after December 31, 2022.

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Accumulated Other Comprehensive Loss - Changes in Accumulated Other Comprehensive Loss (Detail) - USD ($) $ in Thousands	3 Months Ended
	Nov. 18, 2023	Nov. 19, 2022
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance	$ (4,349,894)	$ (3,538,913)
Balance	(5,213,671)	(3,837,923)
Foreign Currency and Other
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance	(176,557)	(280,190)
Other comprehensive income (loss) before reclassifications	(20,221)	3,335
Balance	(196,778)	(276,855)
Net Unrealized Gain (Loss) on Securities
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance	(1,851)	(2,171)
Other comprehensive income (loss) before reclassifications	295	(671)
Balance	(1,556)	(2,842)
Derivatives
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance	(12,428)	(18,175)
Other comprehensive income (loss) before reclassifications	0
Amounts reclassified from Accumulated other comprehensive loss	403	607
Balance	(12,025)	(17,568)
Accumulated Other Comprehensive Loss
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance	(190,836)	(300,536)
Other comprehensive income (loss) before reclassifications	(19,926)	2,664
Amounts reclassified from Accumulated other comprehensive loss	403	607
Balance	$ (210,359)	$ (297,265)

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Share-Based Payments - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Nov. 18, 2023	Nov. 19, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options granted	130,723	157,113
Forfeiture rate	7.00%	10.00%
Weighted average grant date fair value of options granted	$ 913.31	$ 760.82
Stock options exercised - shares	44,644	57,092
Stock options exercised - weighted average exercise price	$ 931.85	$ 725.86
Unrecognized share-based compensation expense related to stock options, net of forfeitures	$ 177.9
Estimated weighted average period	3 years 6 months
Share-based compensation expense	$ 22.9	$ 19.0
Share-Based Payment Arrangement, Employee
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Forfeiture rate	10.00%
Omnibus Incentive Award Plan 2020 | Share-Based Payment Arrangement, Employee
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Forfeiture rate	0.00%
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Estimated weighted average period	2 years 10 months 24 days
Service period	4 years
Non vested restricted stock unit award	$ 12.0
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Option-vesting periods	4 years
Anti-dilutive shares excluded from the computation of earnings per share	169,798	87,696
Stock Options | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Option-vesting periods	4 years
Stock Options | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Option-vesting periods	5 years

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Share-Based Payments - Weighted Average for Key Assumptions Used in Determining Fair Value of Options Granted and Related Share-Based Compensation Expense (Detail)	3 Months Ended
	Nov. 18, 2023	Nov. 19, 2022
Share-Based Payments
Expected price volatility	29.00%	29.00%
Risk-free interest rate	4.80%	3.80%
Weighted average expected lives (in years)	5 years 4 months 24 days	5 years 4 months 24 days
Forfeiture rate	7.00%	10.00%
Dividend yield	0.00%	0.00%

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Share-Based Payments - Schedule of Nonvested Restricted Stock Units Activity (Detail)	3 Months Ended
	Nov. 18, 2023 $ / shares shares
Share-Based Payments
Nonvested, Beginning balance, Number of Shares | shares	8,133
Granted, Number of Shares | shares	2,173
Vested, Number of Shares | shares	(3,741)
Forfeited, Number of Shares | shares	(183)
Nonvested, Ending balance, Number of Shares | shares	6,382
Nonvested, Beginning balance, Weighted Average Grant Date Fair Value | $ / shares	$ 1,572.87
Granted, Weighted Average Grant Date Fair Value | $ / shares	2,549.04
Vested, Weighted Average Grant Date Fair Value | $ / shares	1,383.34
Forfeited, Weighted Average Grant Date Fair Value | $ / shares	1,933.41
Nonvested, Ending balance, Weighted Average Grant Date Fair Value | $ / shares	$ 2,000.23

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Segment Reporting - Additional Information (Detail)	3 Months Ended
	Nov. 18, 2023 segment store
Segment Reporting Information [Line Items]
Number of reportable segments	1
Number of automotive parts and accessories locations in the United States, Mexico, and Brazil | store	7,165
Other
Segment Reporting Information [Line Items]
Number of operating segments	2

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Segment Reporting - Segment Results (Detail) - USD ($) $ in Thousands	3 Months Ended
	Nov. 18, 2023	Nov. 19, 2022
Segment Reporting Information [Line Items]
Net Sales	$ 4,190,277	$ 3,985,067
Gross profit	2,214,016	1,994,622
Operating, selling, general and administrative expenses	(1,365,412)	(1,271,589)
Interest expense, net	(91,384)	(57,723)
Income before income taxes	757,220	665,310
Auto Parts Stores
Segment Reporting Information [Line Items]
Net Sales	4,115,694	3,915,907
Gross profit	2,170,025	1,953,728
Other
Segment Reporting Information [Line Items]
Net Sales	74,583	69,160
Gross profit	$ 43,991	$ 40,894