10-KPeriod: FY2011

AUTOZONE INC Annual Report, Year Ended Aug 27, 2011

Filed October 24, 2011For Securities:AZO

Summary

AutoZone Inc. (AZO) filed its annual report for the fiscal year ending August 27, 2011. The company operates as a leading retailer and distributor of automotive replacement parts and accessories, with a significant presence in the United States and Mexico. During fiscal year 2011, AutoZone demonstrated robust performance, achieving record net income and substantial sales growth. The company's strategy emphasizes superior customer service, a comprehensive product assortment tailored to local markets, competitive pricing, and effective brand marketing. AutoZone also continues to expand its commercial sales program, targeting repair garages and dealers. The business is driven by factors such as the average age of vehicles on the road and miles driven, with a notable trend of consumers holding onto older vehicles, which typically require more maintenance and repairs.

Financial Highlights

51 data points
Beta

Revenue

$8.07B

51.0% Gross Margin

Net Income

$848.97M

10.5% Net Margin

EPS (Diluted)

$19.47

Total Assets

$5.87B

Cash & Equivalents

$97.61M

Free Cash Flow

$969.93M

Financial Statements
Beta
Revenue$8.07B
Cost of Revenue$3.95B
Gross Profit$4.12B
SG&A Expenses$2.62B
Operating Expenses$2.62B
Operating Income$1.49B
Interest Expense-$173.67M
Net Income$848.97M
EPS (Basic)$19.91
EPS (Diluted)$19.47
Shares Outstanding (Basic)42.63M
Shares Outstanding (Diluted)43.60M

Key Highlights

  • 1AutoZone operated 4,813 stores across the United States and Mexico as of August 27, 2011.
  • 2The company reported record net income of $849.0 million for fiscal year 2011, a 15.0% increase year-over-year.
  • 3Net sales grew by 9.6% to $8.073 billion in fiscal year 2011, driven by a 6.3% increase in domestic same-store sales and contributions from new store openings.
  • 4The commercial sales program showed significant growth, with a 22.3% increase in domestic commercial sales for fiscal year 2011.
  • 5AutoZone's strategy emphasizes customer service, value, and an extensive product line, including exclusive in-house brands like Duralast and Valucraft.
  • 6The company actively repurchases its common stock, with $1.467 billion spent on repurchases in fiscal year 2011, and a cumulative authorization of $11.15 billion for share repurchases.
  • 7The average age of vehicles on the road was increasing, which is a positive indicator for demand in the automotive aftermarket industry.

Frequently Asked Questions

AutoZone is the leading retailer and a leading distributor of automotive replacement parts and accessories in the United States, with a growing presence in Mexico. The company serves both the DIY (Do-It-Yourself) and DIFM (Do-It-For-Me) markets, providing parts and related products without offering repair services.

In fiscal year 2011, AutoZone achieved record net income of $849.0 million, a 15.0% increase from the prior year. Net sales also grew by 9.6% to $8.073 billion, supported by a strong increase in domestic same-store sales of 6.3% and effective expansion of its commercial sales program.

Key drivers include the number of vehicles in service, particularly older vehicles (seven years or older) which tend to require more maintenance, and the number of miles driven annually. Economic conditions, such as consumer spending capacity (influenced by gas prices) and unemployment rates, also play a significant role. The trend of consumers keeping their vehicles longer due to economic pressures is a positive factor for AutoZone.

AutoZone focuses on superior customer service and trustworthy advice, offering quality parts at competitive prices with a "good/better/best" product assortment, including exclusive in-house brands. They also invest in their commercial sales program, expand their store footprint, and utilize technology like their Z-net system for efficient parts lookup and inventory management. Share repurchases are also a significant capital allocation strategy.