10-KPeriod: FY2012

AUTOZONE INC Annual Report, Year Ended Aug 25, 2012

Filed October 22, 2012For Securities:AZO

Summary

AutoZone Inc. (AZO) reported strong performance for the fiscal year ended August 25, 2012, with record net income of $930.4 million, a 9.6% increase over the prior year, and sales growth of 6.6%. The company operates a vast network of 5,006 stores across the United States, Puerto Rico, and Mexico, focusing on the retail and commercial sale of automotive replacement parts and accessories. The increase in net income and sales was driven by a combination of factors, including a growing fleet of older vehicles, increased maintenance needs due to economic conditions, and effective inventory and sales strategies. The company's strategy emphasizes superior customer service, a wide product selection tailored to local markets, and value pricing, supported by proprietary technology like its Z-net catalog. AutoZone also operates a growing commercial sales program, serving repair garages and dealers, which contributes significantly to overall revenue. Despite economic headwinds such as high unemployment and elevated gas prices, AutoZone has demonstrated resilience, benefiting from consumers' tendency to maintain existing vehicles longer. The company's robust share repurchase program further enhances shareholder value.

Financial Highlights

51 data points
Beta

Revenue

$8.60B

51.5% Gross Margin

Net Income

$930.37M

10.8% Net Margin

EPS (Diluted)

$23.48

Total Assets

$6.27B

Cash & Equivalents

$103.09M

Free Cash Flow

$845.93M

Financial Statements
Beta
Revenue$8.60B
Cost of Revenue$4.17B
Gross Profit$4.43B
SG&A Expenses$2.80B
Operating Expenses$2.80B
Operating Income$1.63B
Interest Expense$178.55M
Net Income$930.37M
EPS (Basic)$24.04
EPS (Diluted)$23.48
Shares Outstanding (Basic)38.70M
Shares Outstanding (Diluted)39.63M

Key Highlights

  • 1Record net income of $930.4 million and sales growth of 6.6% ($8.6 billion) in fiscal year 2012.
  • 2Expansion continues with 5,006 stores across the U.S., Puerto Rico, and Mexico, with 193 new stores opened in fiscal 2012.
  • 3Strong performance in both retail (DIY) and commercial segments, with commercial sales contributing to overall growth.
  • 4Benefit from an aging vehicle population (average age 10.8 years) driving demand for maintenance and repair parts.
  • 5Focus on customer service, proprietary technology (Z-net), and in-house brands (Duralast) to maintain competitive advantage.
  • 6Significant ongoing share repurchase program, with $1.36 billion repurchased in fiscal 2012 and a substantial remaining authorization.
  • 7Solid financial health with a strong cash flow from operations and effective management of debt, maintaining investment-grade credit ratings.

Frequently Asked Questions

For the fiscal year ended August 25, 2012, AutoZone reported record net income of $930.4 million, a 9.6% increase from the previous year. Net sales grew by 6.6% to $8.6 billion, driven by a 3.9% increase in domestic same-store sales and sales from new store openings.

AutoZone is expanding through a consistent new-store development program, opening 193 new stores in fiscal 2012, bringing the total to 5,006 locations across the United States, Puerto Rico, and Mexico. The company also continues to grow its commercial sales program, serving professional repair businesses.

Sales growth is driven by factors like the increasing average age of vehicles on the road (making them more prone to maintenance and repair), consumers opting to repair existing vehicles rather than purchase new ones due to economic conditions, and a growing commercial customer base. Elevated gas prices also encourage consumers to hold onto their current vehicles longer.

AutoZone utilizes a centralized purchasing and supply chain strategy managed through its store support centers and distribution centers. The company employs hub stores to enhance product distribution and timely replenishment to satellite stores. Proprietary technology like Z-net aids in inventory management and parts lookup. They also benefit from vendor allowances, which help reduce inventory costs.

AutoZone actively returns capital to shareholders through a significant share repurchase program. In fiscal year 2012, the company repurchased approximately $1.36 billion of its common stock. As of the filing, there was a substantial remaining authorization for future repurchases. AutoZone does not currently pay a dividend.