Segment Reporting

12 Months Ended

Aug. 31, 2024

Segment Reporting

Segment Reporting

Note Q – Segment Reporting

The Company’s primary 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.”

The Auto Parts Stores segment is the leading retailer and distributor of automotive parts and accessories through the Company’s 7,353 stores in the U.S., Mexico and 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.

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. The following table shows segment results for the following fiscal years:

	Year Ended
	August 31,		August 26,		August 27,
(in thousands)	2024		2023		2022
Net Sales
Auto Parts Stores	$	18,151,276	$	17,145,137	$	15,963,196
Other		338,992		312,072		289,034
Total	$	18,490,268	$	17,457,209	$	16,252,230
Segment Profit
Auto Parts Stores	$	9,616,098	$	8,885,403	$	8,301,234
Other		200,954		185,019		171,416
Gross profit		9,817,052		9,070,422		8,472,650
Operating, selling, general and administrative expenses		(6,028,344)		(5,596,436)		(5,201,921)
Interest expense, net		(451,578)		(306,372)		(191,638)
Income before income taxes	$	3,337,130	$	3,167,614	$	3,079,091
Segment Assets:
Auto Parts Stores	$	16,829,351	$	15,664,891	$	15,060,704
Other		347,187		320,987		214,339
Total	$	17,176,538	$	15,985,878	$	15,275,043
Capital Expenditures:
Auto Parts Stores	$	1,048,952	$	775,601	$	650,495
Other		23,744		21,056		21,896
Total	$	1,072,696	$	796,657	$	672,391
Auto Parts Stores Sales by Product Grouping:
Failure	$	8,979,152	$	8,407,690	$	7,801,155
Maintenance items		6,618,494		6,223,620		5,670,278
Discretionary		2,553,630		2,513,827		2,491,763
Auto Parts Stores net sales	$	18,151,276	$	17,145,137	$	15,963,196

The following table presents the Company’s net sales disaggregated by geographical area:

	Year Ended
	August 31,		August 26,		August 27,
	2024		2023		2022
United States	88	%	89	%	92	%
Mexico	11	%	10	%	8	%
Brazil	1	%	1	%	—	%
Total	100	%	100	%	100	%

The Company’s long-lived assets, consisting primarily of property and equipment, net and operating lease right-of-use assets, within the United States were 89%, 88% and 91% in fiscal years 2024, 2023 and 2022, respectively. No individual country outside of the United States had long-lived assets that were material to the consolidated totals.