01—Abstract
Summary
Summary of the 10-K filed October 26, 2020. Cited figures are marked; the original filing is the authoritative source.
AutoZone Inc. reported strong financial performance for the fiscal year ended August 29, 2020, with record net income of $1.733 billiona, a 7.2% increase year-over-year.
Net sales grew by 6.5% to $12.632 billionb, driven by a robust 7.4% increase in domestic same-store sales and expansion in its commercial business. The company navigated the challenges of the COVID-19 pandemic, which initially impacted sales but were followed by record levels.
AutoZone responded by temporarily suspending share repurchases to conserve liquidity, while also investing in employee benefits and safety measures related to the pandemic. The company's strategic initiatives to improve customer service and accelerate commercial growth continue to show positive results, supported by an aging vehicle population that typically requires more maintenance and repairs.
02—Key points
Key Highlights
- Record net income of $1.733 billion, a 7.2% increase year-over-year.
- Net sales increased 6.5% to $12.632 billion.
- Domestic comparable store net sales increased by 7.4%.
- The average age of vehicles on the road in the US was 11.9 years, indicating continued demand for maintenance and repair parts.
- Expanded its store count to 6,549 locations across the Americas.
- Temporarily suspended share repurchases during fiscal 2020 due to COVID-19 uncertainty but resumed them in Q1 FY2021.
- Invested $83.9 million in COVID-19 related expenses, including employee benefits and safety measures.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2020, AutoZone Inc kept $0.14.
- Revenue$12.63B100.0%
- Cost of revenue−$5.86B46.4%
- Gross profit$6.77B53.6%
- Operating costs−$4.35B34.5%
- Operating income$2.42B19.1%
- Interest, other & tax−$684.7M5.4%
- Net income$1.73B13.7%
Where FY2020 revenue went
$12.63B- Cost of revenue: $5.86B, 46% of revenue
- SG&A: $4.35B, 34% of revenue
- Net income: $1.73B, 14% of revenue
- Interest, other & tax: $684.7M, 5.4% of revenue
Kept 14% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2020filed October 26, 2020Financial Statements
FY2020 against FY2019
| Line item | FY2020FY2019 | Change |
|---|---|---|
| Revenue | $12.63B$11.86B | +6.5% |
| Cost of Revenue | $5.86B$5.50B | +6.6% |
| Gross Profit | $6.77B$6.37B | +6.4% |
| SG&A Expenses | $4.35B$4.15B | +4.9% |
| Operating Income | $2.42B$2.22B | +9.1% |
| Interest Expense | $208.02M$193.67M | +7.4% |
| Net Income | $1.73B$1.62B | +7.2% |
| EPS (Basic) | $73.62$64.78 | +13.6% |
| EPS (Diluted) | $71.93$63.43 | +13.4% |
| Shares Outstanding (Basic) | 23.54M24.97M | −5.7% |
| Shares Outstanding (Diluted) | 24.09M25.50M | −5.5% |
05—Questions
Frequently Asked Questions
How did AutoZone perform financially in fiscal year 2020?
AutoZone reported record net income of $1.733 billion and net sales of $12.632 billion for the fiscal year ended August 29, 2020. This represents a 7.2% increase in net income and a 6.5% increase in net sales compared to the prior year.
What was the impact of COVID-19 on AutoZone's business?
While COVID-19 initially negatively impacted sales, the company saw a rebound to record levels. AutoZone incurred approximately $83.9 million in expenses related to the pandemic, covering enhanced employee benefits and safety measures. To conserve liquidity, the company temporarily suspended share repurchases in fiscal year 2020 but has since restarted them.
What is AutoZone's store growth strategy?
AutoZone continues to expand its physical footprint, ending fiscal year 2020 with 6,549 stores across the U.S., Mexico, and Brazil. The company strategically opens new stores based on market demand, demographics, and the presence of older vehicles, which typically require more maintenance.
How does AutoZone's commercial sales program contribute to its performance?
The commercial sales program, which provides parts and delivery to repair garages and other businesses, is a significant growth driver. In fiscal year 2020, domestic commercial sales increased by 6.4% and represented 21.6% of total sales, highlighting its importance to the company's overall performance.
What is AutoZone's approach to capital allocation, particularly share repurchases?
AutoZone has a history of returning capital to shareholders through share repurchases. Although repurchases were temporarily suspended due to COVID-19 in fiscal year 2020, the company has restarted these programs. The company prioritizes investments in the business and uses remaining capital for share repurchases while maintaining strong credit ratings.
06—Continue