01—Abstract
Summary
Summary of the 10-K filed October 24, 2022. Cited figures are marked; the original filing is the authoritative source.
AutoZone, Inc. reported a strong fiscal year 2022, with record net income of $2.4 billiona, an increase of 11.9% over the prior year, and sales growth of 11.1% to $16.3 billion.
This performance was driven by robust domestic commercial sales growth of 26.5%b, which now represent a significant 28.8% of domestic auto parts sales. The company continues to expand its store footprint, adding 176 net new locations in fiscal 2022, bringing the total to 6,943 stores across the Americas. Despite macroeconomic headwinds such as inflation and rising fuel costs, AutoZone demonstrated resilience.
The company's strategic focus on improving customer service and expanding its commercial business initiatives contributed to both retail and commercial sales growth. The aging vehicle population, with an average age of 12.2 years, bodes well for continued demand for AutoZone's maintenance and repair parts. The company also continued its aggressive share repurchase program, demonstrating a commitment to returning capital to shareholders.
02—Key points
Key Highlights
- Record net income of $2.4 billion in fiscal year 2022, an increase of 11.9% year-over-year.
- Total net sales increased by 11.1% to $16.3 billion for fiscal year 2022.
- Domestic commercial sales surged by 26.5%, indicating strong growth in the B2B segment.
- Expanded store network by 176 net new locations, reaching a total of 6,943 stores across the U.S., Mexico, and Brazil.
- Continued strong share repurchase program, with $4.4 billion in repurchases during fiscal 2022.
- Diluted earnings per share increased by 23.1% to $117.19.
- After-tax return on invested capital (ROIC) improved significantly to 52.9%.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2022, AutoZone Inc kept $0.15.
- Revenue$16.25B100.0%
- Cost of revenue−$7.78B47.9%
- Gross profit$8.47B52.1%
- Operating costs−$5.20B32.0%
- Operating income$3.27B20.1%
- Interest, other & tax−$841.1M5.2%
- Net income$2.43B14.9%
Where FY2022 revenue went
$16.25B- Cost of revenue: $7.78B, 48% of revenue
- SG&A: $5.20B, 32% of revenue
- Net income: $2.43B, 15% of revenue
- Interest, other & tax: $841.1M, 5.2% of revenue
Kept 15% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2022filed October 24, 2022Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $16.25B$14.63B | +11.1% |
| Cost of Revenue | $7.78B$6.91B | +12.6% |
| Gross Profit | $8.47B$7.72B | +9.8% |
| SG&A Expenses | $5.20B$4.77B | +9.0% |
| Operating Income | $3.27B$2.94B | +11.1% |
| Interest Expense | $198.88M$202.33M | −1.7% |
| Net Income | $2.43B$2.17B | +11.9% |
| EPS (Basic) | $120.83$97.60 | +23.8% |
| EPS (Diluted) | $117.19$95.19 | +23.1% |
| Shares Outstanding (Basic) | 20.11M22.24M | −9.6% |
| Shares Outstanding (Diluted) | 20.73M22.80M | −9.1% |
05—Questions
Frequently Asked Questions
What were AutoZone's key financial performance indicators for fiscal year 2022?
For fiscal year 2022, AutoZone achieved record net income of $2.4 billion, an 11.9% increase over the prior year. Total net sales grew by 11.1% to $16.3 billion. Diluted earnings per share rose to $117.19, a 23.1% increase. The company also reported strong domestic commercial sales growth of 26.5% and an improved after-tax return on invested capital (ROIC) of 52.9%.
How is AutoZone addressing macroeconomic challenges like inflation and rising fuel prices?
AutoZone's management acknowledges the impact of macroeconomic factors such as inflation and rising fuel costs on customer disposable income and business operations. While the company has not provided specific mitigation strategies for these factors in the provided text, their strong sales performance and commercial sales growth suggest resilience and the ability to pass through some costs or benefit from increased demand for maintenance parts due to economic pressures affecting consumers' decisions to defer new vehicle purchases. The aging vehicle fleet also supports consistent demand for their core products.
What is AutoZone's strategy for growth?
AutoZone's growth strategy appears to be multi-faceted. It includes expanding its physical store footprint, as evidenced by the 176 net new stores opened in fiscal 2022. A significant focus is also placed on accelerating commercial sales growth by enhancing its ability to serve professional repair garages and businesses. Additionally, the company actively returns capital to shareholders through a substantial share repurchase program, demonstrating confidence in its business model and future cash flows.
How does AutoZone manage its inventory and supply chain?
AutoZone centrally manages merchandise selection and purchasing through its store support centers. They utilize a network of 272 domestic hub stores, including 78 mega hubs, to improve product availability and assortment for local stores, ensuring timely distribution. The company also manages inventory efficiently, with inventory turnover remaining stable at 1.5x in fiscal 2022. Their high accounts payable to inventory ratio of 129.5% suggests effective management of payment terms with suppliers.
06—Continue