Autozone Inc 10-Q for FY2024 Q2

Autozone Inc (AZO)

10-Q 2024-03-15 For: 2024-02-10

Added on April 07, 2026

About this 10-Q

Autozone Inc filed this 10-Q on March 15, 2024, covering the quarter ended February 10, 2024 (FY2024 Q2).

Headline figures

Quarter ended February 10, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $3.86B; up 4.6% from $3.69B a year earlier
Net income: $515.03M; up 8.1% from net income of $476.54M a year earlier
Diluted EPS: $28.89; up 17.2% from $24.64 a year earlier

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →


☒		Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
		For the quarterly period ended February 10, 2024 or

☐		Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
		For the transition period from _______ to ________.

		Commission file number 1-10714


Nevada	62-1482048
(State or other jurisdiction of	(I.R.S. Employer Identification No.)
incorporation or organization)


123 South Front Street, Memphis, Tennessee	38103
(Address of principal executive offices)	(Zip Code)

Title of Each Class		Trading Symbol(s)		Name of Each Exchange on which Registered
Common Stock ($0.01 par value)		AZO		New York Stock Exchange


Large accelerated filer ☒	Accelerated filer ☐
Non-accelerated filer ☐	Smaller reporting company ☐
Emerging growth company ☐


PART I.		FINANCIAL INFORMATION	3
	Item 1.	Financial Statements	3
		CONDENSED CONSOLIDATED BALANCE SHEETS	3
		CONDENSED CONSOLIDATED STATEMENTS OF INCOME	4
		CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME	4
		CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS	5
		CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT	6
		NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	7
		REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	17
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
	Item 4.	Controls and Procedures	27
PART II.		OTHER INFORMATION	27
	Item 1.	Legal Proceedings	27
	Item 1A.	Risk Factors	28
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
	Item 3.	Defaults Upon Senior Securities	28
	Item 4.	Mine Safety Disclosures	28
	Item 5.	Other Information	28
	Item 6.	Exhibits	28
SIGNATURES			30


	February 10,		August 26,
(in thousands)	2024		2023

Assets
Current assets:
Cash and cash equivalents	$	304,096	$	277,054
Accounts receivable		501,117		520,385
Merchandise inventories		5,970,175		5,764,143
Other current assets		381,668		217,844
Total current assets		7,157,056		6,779,426

Property and equipment:
Property and equipment		10,847,940		10,337,890
Less: Accumulated depreciation and amortization		(4,940,456)		(4,741,342)
		5,907,484		5,596,548

Operating lease right-of-use assets		2,999,294		2,998,097
Goodwill		302,645		302,645
Deferred income taxes		84,700		86,002
Other long-term assets		266,475		223,160
Total long-term assets		3,653,114		3,609,904
Total assets	$	16,717,654	$	15,985,878

Liabilities and Stockholders’ Deficit
Current liabilities:
Accounts payable	$	7,149,882	$	7,201,281
Current portion of operating lease liabilities		296,509		257,256
Accrued expenses and other		1,214,996		1,000,841
Income taxes payable		111,222		52,478
Total current liabilities		8,772,609		8,511,856

Long-term debt		8,630,553		7,668,549
Operating lease liabilities, less current portion		2,901,636		2,917,046
Deferred income taxes		539,911		536,278
Other long-term liabilities		710,266		702,043

Commitments and contingencies

Stockholders’ deficit:
Preferred stock, authorized 1,000 shares; no shares issued		—		—
Common stock, par value $.01 per share, authorized 200,000 shares; 17,351 shares issued and 17,312 shares outstanding as of February 10, 2024; 18,936 shares issued and 17,857 shares outstanding as of August 26, 2023		174		189
Additional paid-in capital		1,485,789		1,484,992
Retained deficit		(5,978,916)		(2,959,278)
Accumulated other comprehensive loss		(204,899)		(190,836)
Treasury stock, at cost		(139,469)		(2,684,961)
Total stockholders’ deficit		(4,837,321)		(4,349,894)
Total liabilities and stockholders' deficit	$	16,717,654	$	15,985,878


	Twelve Weeks Ended				Twenty-Four Weeks Ended
	February 10,		February 11,		February 10,		February 11,
(in thousands, except per share data)	2024		2023		2024		2023

Net sales	$	3,859,126	$	3,690,982	$	8,049,403	$	7,676,049
Cost of sales, including warehouse and delivery expenses		1,779,474		1,760,979		3,755,735		3,751,424
Gross profit		2,079,652		1,930,003		4,293,668		3,924,625
Operating, selling, general and administrative expenses		1,336,410		1,260,026		2,701,822		2,531,615
Operating profit		743,242		669,977		1,591,846		1,393,010
Interest expense, net		102,619		65,609		194,004		123,332
Income before income taxes		640,623		604,368		1,397,842		1,269,678
Income tax expense		125,593		127,824		289,349		253,816
Net income	$	515,030	$	476,544	$	1,108,493	$	1,015,862

Weighted average shares for basic earnings per share		17,319		18,705		17,514		18,856
Effect of dilutive stock equivalents		509		632		517		635
Weighted average shares for diluted earnings per share		17,828		19,337		18,031		19,491

Basic earnings per share	$	29.74	$	25.48	$	63.29	$	53.87
Diluted earnings per share	$	28.89	$	24.64	$	61.48	$	52.12


	Twelve Weeks Ended February 10, 2024
								Accumulated
	Common			Additional				Other
	Shares	Common		Paid-in		Retained		Comprehensive		Treasury
(in thousands)	Issued	Stock		Capital		Deficit		Loss		Stock		Total

Balance at November 18, 2023	18,984	$	190	$	1,548,510	$	(2,365,815)	$	(210,359)	$	(4,186,197)	$	(5,213,671)
Net income	—		—		—		515,030		—		—		515,030
Total other comprehensive income	—		—		—		—		5,460		—		5,460
Retirement of treasury shares	(1,703)		(17)		(142,391)		(4,128,131)		—		4,270,539		—
Purchase of 84 shares of treasury stock	—		—		—		—		—		(223,811)		(223,811)
Issuance of common stock under stock options and stock purchase plans	70		1		56,890		—		—		—		56,891
Share-based compensation expense	—		—		22,780		—		—		—		22,780
Balance at February 10, 2024	17,351	$	174	$	1,485,789	$	(5,978,916)	$	(204,899)	$	(139,469)	$	(4,837,321)


	Twelve Weeks Ended February 11, 2023
								Accumulated
	Common			Additional				Other
	Shares	Common		Paid-in		Retained		Comprehensive		Treasury
(in thousands)	Issued	Stock		Capital		Deficit		Loss		Stock		Total

Balance at November 19, 2022	20,794	$	208	$	1,412,650	$	(790,749)	$	(297,265)	$	(4,162,767)	$	(3,837,923)
Net income	—		—		—		476,544		—		—		476,544
Total other comprehensive income	—		—		—		—		27,953		—		27,953
Retirement of treasury shares	(2,051)		(20)		(143,440)		(4,157,637)		—		4,301,097		—
Purchase of 372 shares of treasury stock	—		—		—		—		—		(905,792)		(905,792)
Issuance of common stock under stock options and stock purchase plans	43		—		31,929		—		—		—		31,929
Share-based compensation expense	—		—		23,119		—		—		—		23,119
Balance at February 11, 2023	18,786	$	188	$	1,324,258	$	(4,471,842)	$	(269,312)	$	(767,462)	$	(4,184,170)


	Twenty-Four Weeks Ended February 10, 2024
								Accumulated
	Common			Additional				Other
	Shares	Common		Paid-in		Retained		Comprehensive		Treasury
(in thousands)	Issued	Stock		Capital		Deficit		Loss		Stock		Total

Balance at August 26, 2023	18,936	$	189	$	1,484,992	$	(2,959,278)	$	(190,836)	$	(2,684,961)	$	(4,349,894)
Net income	—		—		—		1,108,493		—		—		1,108,493
Total other comprehensive loss	—		—		—		—		(14,063)		—		(14,063)
Retirement of treasury shares	(1,703)		(17)		(142,391)		(4,128,131)		—		4,270,539		—
Purchase of 663 shares of treasury stock	—		—		—		—		—		(1,725,047)		(1,725,047)
Issuance of common stock under stock options and stock purchase plans	118		2		98,337		—		—		—		98,339
Share-based compensation expense	—		—		44,851		—		—		—		44,851
Balance at February 10, 2024	17,351	$	174	$	1,485,789	$	(5,978,916)	$	(204,899)	$	(139,469)	$	(4,837,321)


	Twenty-Four Weeks Ended February 11, 2023
								Accumulated
	Common			Additional				Other
	Shares	Common		Paid-in		Retained		Comprehensive		Treasury
(in thousands)	Issued	Stock		Capital		Deficit		Loss		Stock		Total

Balance at August 27, 2022	20,732	$	207	$	1,354,252	$	(1,330,067)	$	(300,536)	$	(3,262,769)	$	(3,538,913)
Net income	—		—		—		1,015,862		—		—		1,015,862
Total other comprehensive income	—		—		—		—		31,224		—		31,224
Retirement of treasury shares	(2,051)		(20)		(143,440)		(4,157,637)		—		4,301,097		—
Purchase of 764 shares of treasury stock	—		—		—		—		—		(1,805,790)		(1,805,790)
Issuance of common stock under stock options and stock purchase plans	105		1		72,757		—		—		—		72,758
Share-based compensation expense	—		—		40,689		—		—		—		40,689
Balance at February 11, 2023	18,786	$	188	$	1,324,258	$	(4,471,842)	$	(269,312)	$	(767,462)	$	(4,184,170)


	February 10, 2024
(in thousands)	Level 1		Level 2		Level 3		Fair Value

Other current assets	$	47,392	$	5,922	$	—	$	53,314
Other long-term assets		33,469		37,426		—		70,895
	$	80,861	$	43,348	$	—	$	124,209


	August 26, 2023
(in thousands)	Level 1		Level 2		Level 3		Fair Value

Other current assets	$	35,349	$	4,290	$	—	$	39,639
Other long-term assets		71,028		10,846		—		81,874
	$	106,377	$	15,136	$	—	$	121,513


	February 10, 2024
	Amortized		Gross		Gross
	Cost		Unrealized		Unrealized		Fair
(in thousands)	Basis		Gains		Losses		Value

Corporate debt securities	$	29,753	$	38	$	(240)	$	29,551
Government bonds		62,189		449		(1,107)		61,531
Mortgage-backed securities		3,043		—		(122)		2,921
Asset-backed securities and other		30,311		4		(109)		30,206
	$	125,296	$	491	$	(1,578)	$	124,209


	Twenty-Four Weeks Ended
	February 10,		February 11,
(in thousands)	2024		2023

Cash flows from operating activities:
Net income	$	1,108,493	$	1,015,862
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property and equipment		245,192		222,964
Other non-cash (income) charges		(16,000)		91,000
Amortization of debt origination fees		5,551		3,922
Deferred income taxes		5,998		(4,697)
Share-based compensation expense		45,961		42,379
Changes in operating assets and liabilities:
Accounts receivable		18,364		22,273
Merchandise inventories		(198,425)		(161,546)
Accounts payable and accrued expenses		(17,062)		(111,311)
Income taxes		96,282		87,400
Other, net		(29,968)		(60,185)
Net cash provided by operating activities		1,264,386		1,148,061

Cash flows from investing activities:
Capital expenditures		(490,807)		(259,234)
Purchase of marketable debt securities		(14,038)		(14,000)
Proceeds from sale of marketable debt securities		12,626		3,450
Investment in tax credit equity investments		(42,522)		(12,070)
Other, net		(9,253)		11,846
Net cash used in investing activities		(543,994)		(270,008)

Cash flows from financing activities:
Net (payments of) proceeds from commercial paper		(32,228)		227,600
Proceeds from issuance of debt		1,000,000		1,000,000
Repayment of debt		—		(300,000)
Net proceeds from sale of common stock		98,338		72,758
Purchase of treasury stock		(1,709,034)		(1,799,997)
Repayment of principal portion of finance lease liabilities		(41,459)		(40,572)
Other, net		(8,462)		(4,510)
Net cash used in financing activities		(692,845)		(844,721)

Effect of exchange rate changes on cash		(505)		3,574


	February 10,		August 26,
(in thousands)	2024		2023

3.125% Senior Notes due April 2024, effective interest rate 3.32%	$	300,000	$	300,000
3.250% Senior Notes due April 2025, effective interest rate 3.36%		400,000		400,000
3.625% Senior Notes due April 2025, effective interest rate 3.78%		500,000		500,000
3.125% Senior Notes due April 2026, effective interest rate 3.28%		400,000		400,000
5.050% Senior Notes due July 2026, effective interest rate 5.09%		450,000		450,000
3.750% Senior Notes due June 2027, effective interest rate 3.83%		600,000		600,000
4.500% Senior Notes due February 2028, effective interest rate 4.43%		450,000		450,000
6.250% Senior Notes due November 2028, effective interest rate 6.46%		500,000		—
3.750% Senior Notes due April 2029, effective interest rate 3.86%		450,000		450,000
4.000% Senior Notes due April 2030, effective interest rate 4.09%		750,000		750,000
1.650% Senior Notes due January 2031, effective interest rate 2.19%		600,000		600,000
4.750% Senior Notes due August 2032, effective interest rate 4.76%		750,000		750,000
4.750% Senior Notes due February 2033, effective interest rate 4.70%		550,000		550,000
5.200% Senior Notes due August 2033, effective interest rate 5.22%		300,000		300,000
6.550% Senior Notes due November 2033, effective interest rate 6.71%		500,000		—
Commercial paper, weighted average interest rate 5.43% at February 10, 2024 and August 26, 2023		1,177,372		1,209,600
Total debt before discounts and debt issuance costs		8,677,372		7,709,600
Less: Discounts and debt issuance costs		46,819		41,051
Long-term debt	$	8,630,553	$	7,668,549


			Net
	Foreign		Unrealized
	Currency		Gain (Loss)
(in thousands)	and Other⁽¹⁾		on Securities		Derivatives		Total

Balance at November 18, 2023	$	(196,778)	$	(1,556)	$	(12,025)	$	(210,359)
Other comprehensive income before reclassifications⁽²⁾⁽³⁾		4,339		717		—		5,056
Amounts reclassified from Accumulated other comprehensive loss⁽³⁾		—		—		404		404
Balance at February 10, 2024	$	(192,439)	$	(839)	$	(11,621)	$	(204,899)


			Net
	Foreign		Unrealized
	Currency		Gain (Loss)
(in thousands)	and Other⁽¹⁾		on Securities		Derivatives		Total

Balance at November 19, 2022	$	(276,855)	$	(2,842)	$	(17,568)	$	(297,265)
Other comprehensive income before reclassifications⁽²⁾⁽³⁾		22,060		548		4,781		27,389
Amounts reclassified from Accumulated other comprehensive loss⁽³⁾		—		—		564		564
Balance at February 11, 2023	$	(254,795)	$	(2,294)	$	(12,223)	$	(269,312)


	Twelve Weeks Ended
						Constant Currency⁽¹⁾
		February 10, 2024		February 11, 2023		February 10, 2024		February 11, 2023
Domestic		0.3	%	5.3	%	0.3	%	5.3	%
International		23.9	%	30.6	%	10.6	%	21.1	%
Total Company		3.0	%	7.6	%	1.5	%	6.7	%


	A		B		A-B=C		D		C+D
	Fiscal Year		Twenty-Four		Twenty-Eight		Twenty-Four		Trailing Four
	Ended		Weeks Ended		Weeks Ended		Weeks Ended		Quarters Ended
	August 26,		February 11,		August 26,		February 10,		February 10,
(in thousands, except percentage)	2023		2023		2023		2024		2024

Net income	$	2,528,426	$	1,015,862	$	1,512,564	$	1,108,493	$	2,621,057
Adjustments:
Interest expense		306,372		123,332		183,040		194,004		377,044
Rent expense⁽¹⁾		406,398		186,939		219,459		198,405		417,864
Tax effect⁽²⁾		(146,118)		(63,606)		(82,512)		(80,444)		(162,956)
Adjusted after-tax return	$	3,095,078	$	1,262,527	$	1,832,551	$	1,420,458	$	3,253,009

Average debt⁽³⁾									$	7,853,082
Average stockholders’ deficit⁽³⁾										(4,577,327)
Add: Rent x 6⁽¹⁾										2,507,184
Average finance lease liabilities⁽³⁾										295,494
Invested capital									$	6,078,433

Adjusted after-tax ROIC										53.5	%


	Trailing Four Quarters Ended
(in thousands)	February 10, 2024		February 11, 2023

Total lease cost, per ASC 842	$	546,195	$	498,970
Less: Finance lease interest and amortization		(93,591)		(77,302)
Less: Variable operating lease components, related to insurance and common area maintenance		(34,740)		(27,370)
Rent expense	$	417,864	$	394,298


				Total Number of	Maximum Dollar
				Shares Purchased as	Value that May Yet
	Total Number	Average		Part of Publicly	Be Purchased Under
	of Shares	Price Paid		Announced Plans or	the Plans or
Period	Purchased	per Share		Programs	Programs

November 19, 2023 to December 16, 2023	44,583	$	2,671.88	44,583	$	213,932,074
December 17, 2023 to January 13, 2024	18,386		2,599.28	18,386		2,166,141,722
January 14, 2024 to February 10, 2024	20,674		2,752.23	20,674		2,109,242,181
Total	83,643	$	$2,675.78	83,643	$	2,109,242,181

		Restated Articles of Incorporation of AutoZone, Inc. Incorporated by reference to Exhibit 3.1 to the Quarterly Report on Form 10-Q for the quarter ended February 13, 1999.
3.1		Restated Articles of Incorporation of AutoZone, Inc. Incorporated by reference to Exhibit 3.1 to the Quarterly Report on Form 10-Q for the quarter ended February 13, 1999.

3.2		Eighth Amended and Restated By-Laws of AutoZone, Inc. Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K dated March 23, 2023.


10.1		Agreement with Philip B. Daniele, III. Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K dated January 2, 2024.

10.2*		AutoZone, Inc. Director Compensation Program, effective January 1, 2024.

15.1*		Letter Regarding Unaudited Interim Financial Statements.

31.1*		Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2*		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101. INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		The cover page for the Company’s Quarterly Report on Form 10-Q for the quarter ended February 10, 2024, has been formatted in Inline XBRL.


	AUTOZONE, INC.

	By:	/s/ JAMERE JACKSON
	Jamere Jackson
	Chief Financial Officer
	(Principal Financial Officer)


	By:	/s/ J. SCOTT MURPHY
	J. Scott Murphy
	Vice President, Controller (Principal Accounting Officer)

Dated: March 15, 2024


March 15, 2024

	/s/ PHILIP B. DANIELE, III
	Philip B. Daniele, III
	President and Chief Executive Officer
	(Principal Executive Officer)