01—Abstract
Summary
Summary of the 10-K filed October 24, 2023. Cited figures are marked; the original filing is the authoritative source.
AutoZone Inc. reported record net income of $2.5 billiona for fiscal year 2023, a 4.1% increase over the prior year, with sales growing by 7.4% to $17.5 billion.
This growth was driven by strong performance in both domestic and international markets, with domestic same-store sales increasing by 3.4% and international comparable store sales seeing a significant rise of 29.3% (17.5% in constant currency). The company continues to expand its store footprint, opening 197 net new stores, bringing the total to 7,140 locations across the Americas. Key financial highlights include a substantial increase in diluted earnings per share to $132.36b, up from $117.19 in the prior year, partly due to effective share repurchase programs.
The company also maintained a strong after-tax return on invested capital (ROIC) of 55.4%c. AutoZone's commercial sales program showed robust growth, increasing by 8.7% year-over-year. Despite some gross margin pressure due to a non-cash LIFO charge and increased operating expenses as a percentage of sales, the company's overall financial health remains strong, supported by significant operating cash flow and a revolving credit facility.
The company is focused on strategic investments in its supply chain, including hub and mega hub expansions, and new store development to support future growth. AutoZone's management remains optimistic about its ability to navigate economic factors and capitalize on opportunities in the automotive aftermarket.
02—Key points
Key Highlights
- Record net income of $2.5 billion in fiscal year 2023, a 4.1% increase from the previous year.
- Total net sales reached $17.5 billion, up 7.4% year-over-year, driven by domestic same-store sales growth of 3.4% and strong international performance.
- Diluted earnings per share increased significantly to $132.36, up 12.9% from $117.19 in fiscal year 2022.
- Continued store expansion with 197 net new stores opened, bringing the total store count to 7,140.
- Strong After-Tax Return on Invested Capital (ROIC) of 55.4%, an improvement from 52.9% in the prior year.
- Commercial sales grew by 8.7% ($368.0 million), indicating successful expansion in the commercial market.
- The company maintained robust operating cash flow of $2.9 billion.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2023, AutoZone Inc kept $0.14.
- Revenue$17.46B100.0%
- Cost of revenue−$8.39B48.0%
- Gross profit$9.07B52.0%
- Operating costs−$5.60B32.1%
- Operating income$3.47B19.9%
- Interest, other & tax−$945.6M5.4%
- Net income$2.53B14.5%
Where FY2023 revenue went
$17.46B- Cost of revenue: $8.39B, 48% of revenue
- SG&A: $5.60B, 32% of revenue
- Net income: $2.53B, 14% of revenue
- Interest, other & tax: $945.6M, 5.4% of revenue
Kept 14% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2023filed October 24, 2023Financial Statements
FY2023 against FY2022
| Line item | FY2023FY2022 | Change |
|---|---|---|
| Revenue | $17.46B$16.25B | +7.4% |
| Cost of Revenue | $8.39B$7.78B | +7.8% |
| Gross Profit | $9.07B$8.47B | +7.1% |
| SG&A Expenses | $5.60B$5.20B | +7.6% |
| Operating Income | $3.47B$3.27B | +6.2% |
| Interest Expense | $320.12M$198.88M | +61.0% |
| Net Income | $2.53B$2.43B | +4.1% |
| EPS (Basic) | $136.60$120.83 | +13.1% |
| EPS (Diluted) | $132.36$117.19 | +12.9% |
| Shares Outstanding (Basic) | 18.51M20.11M | −7.9% |
| Shares Outstanding (Diluted) | 19.10M20.73M | −7.9% |
05—Questions
Frequently Asked Questions
What was AutoZone's financial performance in fiscal year 2023?
In fiscal year 2023, AutoZone reported record net income of $2.5 billion, a 4.1% increase over fiscal year 2022. Net sales grew by 7.4% to $17.5 billion. Diluted earnings per share rose to $132.36, up from $117.19 in the prior year. The company also achieved a strong after-tax ROIC of 55.4%.
How did AutoZone's store count and commercial sales perform?
AutoZone continued its expansion in fiscal year 2023, opening 197 net new stores, bringing the total to 7,140 locations across the U.S., Mexico, and Brazil. The commercial sales program demonstrated strong growth, with domestic commercial sales increasing by 8.7%, or $368.0 million, compared to the prior year.
What are the key drivers of AutoZone's sales growth?
Sales growth is driven by a combination of factors, including increases in same-store sales (up 3.4% domestically), the opening of new stores, and the development of its commercial sales programs. The aging vehicle fleet in the U.S. (average age 12.5 years) and consistent miles driven also support demand for replacement parts.
What is AutoZone's approach to capital allocation and shareholder returns?
AutoZone actively returns capital to shareholders through its share repurchase program, repurchasing approximately $3.7 billion worth of common stock in fiscal year 2023. The company also invests in growth initiatives, including supply chain enhancements and new store development, while maintaining its investment-grade credit ratings.
06—Continue