10-KPeriod: FY2019

AUTOZONE INC Annual Report, Year Ended Aug 31, 2019

Filed October 28, 2019For Securities:AZO

Summary

AutoZone Inc.'s 2019 10-K filing highlights a strong fiscal year ending August 31, 2019, with record net income of $1.617 billion, a 20.9% increase year-over-year, and sales growth of 5.7% to $11.864 billion. This performance was driven by a combination of new domestic store openings, a beneficial 53rd week, and a 3.0% increase in domestic same-store sales, alongside robust commercial sales growth of 15.7%. The company continues to benefit from a growing fleet of older vehicles on the road, which typically require more maintenance and repairs, and an aging vehicle population, further supporting demand for its products. AutoZone emphasizes its strategic focus on superior customer service, convenient store locations, and a well-diversified product offering, including its strong portfolio of private brands. The company's expansion strategy remains focused on carefully selected new markets and increasing presence in existing ones, supported by a sophisticated supply chain including hub and mega-hub stores for efficient product distribution. Significant share repurchase activity continues to be a key component of its capital allocation strategy, returning substantial value to shareholders.

Financial Highlights

48 data points
Beta

Revenue

$11.86B

53.7% Gross Margin

Net Income

$1.62B

13.6% Net Margin

EPS (Diluted)

$63.43

Total Assets

$9.90B

Cash & Equivalents

$176.30M

Free Cash Flow

$1.63B

Financial Statements
Beta
Revenue$11.86B
Cost of Revenue$5.50B
Gross Profit$6.37B
SG&A Expenses$4.15B
Operating Income$2.22B
Interest Expense$193.67M
Net Income$1.62B
EPS (Basic)$64.78
EPS (Diluted)$63.43
Shares Outstanding (Basic)24.97M
Shares Outstanding (Diluted)25.50M

Key Highlights

  • 1Record net income of $1.617 billion and sales of $11.864 billion for fiscal year 2019.
  • 2Domestic same-store sales increased by 3.0%, indicating continued demand in core markets.
  • 3Commercial sales saw significant growth of 15.7%, demonstrating successful expansion in the B2B segment.
  • 4The company operates 6,411 stores across the U.S., Mexico, and Brazil, with continued investment in store development.
  • 5AutoZone repurchased $2.005 billion of its common stock in fiscal year 2019, underscoring a commitment to shareholder returns.
  • 6The average age of vehicles on the road (11.8 years) continues to rise, supporting demand for replacement parts.
  • 7Gross profit margin improved slightly to 53.7%, driven by favorable business mix and prior year divestitures.

Frequently Asked Questions

For the fiscal year ended August 31, 2019, AutoZone reported record net income of $1.617 billion, a 20.9% increase over the prior year, and net sales of $11.864 billion, a 5.7% increase. Domestic same-store sales grew by 3.0%, and commercial sales increased by 15.7%.

AutoZone continues to expand by opening new stores and investing in its commercial sales program. As of August 31, 2019, the company operated 6,411 stores in total, comprising 5,772 stores in the U.S., 604 in Mexico, and 35 in Brazil. The company also emphasizes strategic supply chain initiatives like hub and mega-hub stores.

Key risks identified include slowdowns in demand for products due to economic conditions, rising energy prices, or technological advancements; intense competition from various retail and online channels; inability to sustain historic sales growth rates; potential negative impacts from competitor consolidation; challenges in growing the commercial auto parts business profitably; risks associated with international operations; cybersecurity threats; and dependence on hiring, training, and retaining qualified employees.

AutoZone's primary source of liquidity is cash flow from operations. The company actively repurchases its common stock, having spent $2.005 billion on share repurchases in fiscal year 2019. While it does not currently pay a dividend, its strategy focuses on reinvesting in the business (new locations, supply chain, technology) and returning capital to shareholders through share buybacks.