10-KPeriod: FY2020

AUTOZONE INC Annual Report, Year Ended Aug 29, 2020

Filed October 26, 2020For Securities:AZO

Summary

AutoZone Inc. reported strong financial performance for the fiscal year ended August 29, 2020, with record net income of $1.733 billion, a 7.2% increase year-over-year. Net sales grew by 6.5% to $12.632 billion, 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.

Financial Highlights

49 data points
Beta

Revenue

$12.63B

53.6% Gross Margin

Net Income

$1.73B

13.7% Net Margin

EPS (Diluted)

$71.93

Total Assets

$14.42B

Cash & Equivalents

$1.75B

Free Cash Flow

$2.26B

Financial Statements
Beta
Revenue$12.63B
Cost of Revenue$5.86B
Gross Profit$6.77B
SG&A Expenses$4.35B
Operating Income$2.42B
Interest Expense$208.02M
Net Income$1.73B
EPS (Basic)$73.62
EPS (Diluted)$71.93
Shares Outstanding (Basic)23.54M
Shares Outstanding (Diluted)24.09M

Key Highlights

  • 1Record net income of $1.733 billion, a 7.2% increase year-over-year.
  • 2Net sales increased 6.5% to $12.632 billion.
  • 3Domestic comparable store net sales increased by 7.4%.
  • 4The average age of vehicles on the road in the US was 11.9 years, indicating continued demand for maintenance and repair parts.
  • 5Expanded its store count to 6,549 locations across the Americas.
  • 6Temporarily suspended share repurchases during fiscal 2020 due to COVID-19 uncertainty but resumed them in Q1 FY2021.
  • 7Invested $83.9 million in COVID-19 related expenses, including employee benefits and safety measures.

Frequently Asked Questions

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.

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.

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.

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.

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.