10-KPeriod: FY2015

AUTOZONE INC Annual Report, Year Ended Aug 29, 2015

Filed October 26, 2015For Securities:AZO

Summary

AutoZone, Inc.'s 2015 10-K filing indicates a strong performance for the fiscal year ending August 29, 2015. The company reported record net income of $1.16 billion, a 8.5% increase year-over-year, and achieved sales growth of 7.5%, reaching $10.19 billion. This growth was driven by a 3.8% increase in domestic same-store sales, expansion through new store openings, and the integration of the acquired Interamerican Motor Corporation (IMC). The company continues to benefit from an aging vehicle fleet and increased miles driven, which drive demand for replacement parts and maintenance items. AutoZone's strategy emphasizes superior customer service, value, and product availability. The company is actively managing its supply chain and inventory through initiatives like expanding assortments in select "mega hub" stores and increasing delivery frequency. Financially, AutoZone demonstrated robust cash flow from operations, enabling significant investments in new store development, strategic acquisitions like IMC, and substantial share repurchases, underscoring a commitment to returning value to shareholders. The company maintains a solid financial position with ample liquidity and expects continued investment in growth initiatives.

Financial Highlights

51 data points
Beta

Revenue

$10.19B

52.3% Gross Margin

Net Income

$1.16B

11.4% Net Margin

EPS (Diluted)

$36.03

Total Assets

$8.10B

Cash & Equivalents

$175.31M

Free Cash Flow

$1.09B

Financial Statements
Beta
Revenue$10.19B
Cost of Revenue$4.86B
Gross Profit$5.33B
SG&A Expenses$3.37B
Operating Income$1.95B
Interest Expense$153.01M
Net Income$1.16B
EPS (Basic)$36.76
EPS (Diluted)$36.03
Shares Outstanding (Basic)31.56M
Shares Outstanding (Diluted)32.21M

Key Highlights

  • 1Achieved record net income of $1.16 billion and sales growth of 7.5% to $10.19 billion in fiscal year 2015.
  • 2Domestic comparable store net sales increased by 3.8%.
  • 3Acquired Interamerican Motor Corporation (IMC) for $75.7 million, expanding its reach in the import replacement parts market.
  • 4Continued store expansion, adding 201 net new locations, bringing the total to 5,609 stores across the US, Mexico, and Brazil.
  • 5Invested significantly in capital assets ($480.6 million) for new stores, existing location enhancements, and supply chain improvements.
  • 6Returned substantial capital to shareholders through share repurchases totaling $1.27 billion.
  • 7The average age of vehicles on the road in the US increased to 11.5 years, a positive indicator for demand for AutoZone's products.

Frequently Asked Questions

Sales growth in fiscal year 2015 was primarily driven by a 3.8% increase in domestic same-store sales, the addition of net sales from new stores (201 new locations opened), and the inclusion of sales from the recently acquired Interamerican Motor Corporation (IMC).

AutoZone competes on customer service, product availability, price, and brand strength. They emphasize trustworthy advice from AutoZoners, offer multiple value choices in their product assortment (including in-house brands), and tailor inventory to local market needs. They are also investing in their commercial sales program and supply chain to enhance efficiency and product availability.

AutoZone continues to expand its store footprint, adding 201 net new locations in fiscal 2015, bringing the total to 5,609. They operate in the United States, Mexico (441 stores), and Brazil (7 stores). Expansion decisions are based on projected future profitability and achieving investment hurdle rates, considering factors like population, demographics, and vehicle age. The acquisition of IMC also supports their strategy for growth in the import parts market.

AutoZone generated strong net cash from operating activities ($1.525 billion in FY2015) which funds its capital expenditures for new store development, supply chain investments, and strategic acquisitions. The company is also very active in returning capital to shareholders through significant share repurchase programs, totaling $1.27 billion in FY2015. AutoZone does not currently pay a dividend.