Autozone Inc 8-K, filed Mar 2, 2021

Autozone Inc (AZO)

8-K 2021-03-02 For: 2021-03-02

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Added on April 07, 2026

About this 8-K

Autozone Inc filed this 8-K on March 2, 2021.

Items reported

Item 2.02: Financial results
Item 9.01: Financial statements and exhibits

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Nevada	1-10714	62-1482048
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	AZO	New York Stock Exchange

99.1		Press Release dated March 2, 2021

104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

	AUTOZONE, INC.


Date: March 2, 2021	By:	/s/ Jamere Jackson
		Jamere Jackson
		Chief Financial Officer and Executive Vice President - Finance and Store Development

AutoZone's 2nd Quarter Highlights - Fiscal 2021

Condensed Consolidated Statements of Operations
2nd Quarter, FY2021
(in thousands, except per share data)
		GAAP Results
		12 Weeks Ended			12 Weeks Ended
		February 13, 2021⁽²⁾			February 15, 2020

Net sales		$	2,910,818		$	2,513,663
Cost of sales			1,351,435			1,147,600
Gross profit			1,559,383			1,366,063
Operating, SG&A expenses			1,077,616			958,125
Operating profit (EBIT)			481,767			407,938
Interest expense, net			46,012			44,335
Income before taxes			435,755			363,603
Income taxes⁽¹⁾			89,809			64,321
Net income		$	345,946		$	299,282
Net income per share:
	Basic	$	15.27		$	12.70
	Diluted	$	14.93		$	12.39
Weighted average shares outstanding:
	Basic		22,648			23,570
	Diluted		23,168			24,160

⁽¹⁾The twelve weeks ended February 13, 2021 and the comparable prior year period include $11.6M and $15.0M in tax benefits from stock option exercises, respectively

⁽²⁾The twelve weeks ended February 13, 2021 was negatively impacted by charges for Emergency Time-Off benefits and other Pandemic related expenses in response to COVID-19, approximately $40M (pre-tax)


Year-To-Date 2nd Quarter, FY2021
(in thousands, except per share data)
		GAAP Results
		24 Weeks Ended			24 Weeks Ended
		February 13, 2021⁽²⁾			February 15, 2020

Net sales		$	6,065,078		$	5,306,700
Cost of sales			2,830,078			2,439,569
Gross profit			3,235,000			2,867,131
Operating, SG&A expenses			2,138,008			1,959,170
Operating profit (EBIT)			1,096,992			907,961
Interest expense, net			92,191			88,078
Income before taxes			1,004,801			819,883
Income taxes⁽¹⁾			216,422			170,263
Net income		$	788,379		$	649,620
Net income per share:
	Basic	$	34.37		$	27.38
	Diluted	$	33.59		$	26.70
Weighted average shares outstanding:
	Basic		22,935			23,722
	Diluted		23,473			24,326

⁽¹⁾The twenty-four weeks ended February 13, 2021 and the comparable prior year period include $19.2M and $16.5M in tax benefits from stock option exercises, respectively

⁽²⁾The twenty-four weeks ended February 13, 2021 was negatively impacted by charges for Emergency Time-Off benefits and other Pandemic related expenses in response to COVID-19, approximately $45M (pre-tax)


Selected Balance Sheet Information
(in thousands)
		February 13, 2021			February 15, 2020			August 29, 2020
Cash and cash equivalents		$	1,026,164		$	152,970		$	1,750,815
Merchandise inventories			4,736,826			4,606,211			4,473,282
Current assets			6,326,845			5,300,547			6,811,872
Property and equipment, net			4,627,993			4,476,426			4,509,221
Operating lease right-of-use assets			2,660,667			2,579,217			2,581,677
Total assets			14,159,993			12,863,749			14,423,872
Accounts payable			5,351,096			4,869,914			5,156,324
Current liabilities			6,554,271			5,779,560			6,283,091
Operating lease liabilities, less current portion			2,566,974			2,494,840			2,501,560
Total debt			5,516,396			5,451,471			5,513,371
Stockholders' deficit			(1,523,573	)		(1,711,119	)		(877,977	)
Working capital			(227,426	)		(479,013	)		528,781

AutoZone's 2nd Quarter Highlights - Fiscal 2021

Condensed Consolidated Statements of Operations

Adjusted Debt / EBITDAR
(in thousands, except adjusted debt to EBITDAR ratio)			Trailing 4 Quarters
			February 13, 2021			February 15, 2020
Net income			$	1,871,731		$	1,620,797
Add: Interest expense				205,278			192,513
Income tax expense				529,701			422,949
EBIT				2,606,710			2,236,259

Add: Depreciation and amortization				401,073			384,147
Rent expense⁽¹⁾				335,969			339,117
Share-based expense				46,906			43,804
EBITDAR			$	3,390,658		$	3,003,327

Debt⁽²⁾			$	4,684,979		$	5,451,471
Financing lease liabilities				225,411			196,047
Add: rent x 6⁽¹⁾				2,015,814			2,034,702
Adjusted debt			$	6,926,204		$	7,682,220

Adjusted debt to EBITDAR				2.0			2.6

Adjusted Return on Invested Capital (ROIC)
(in thousands, except ROIC)
			Trailing 4 Quarters
			February 13, 2021			February 15, 2020
Net income			$	1,871,731		$	1,620,797
Adjustments:
Interest expense				205,278			192,513
Rent expense⁽¹⁾				335,969			339,117
Tax effect⁽³⁾				(119,616	)		(110,048	)
Adjusted after-tax return			$	2,293,362		$	2,042,379

Average debt⁽⁴⁾⁽⁵⁾			$	4,648,593		$	5,241,651
Average stockholders' deficit⁽⁵⁾				(1,354,477	)		(1,676,987	)
Add: Rent x 6⁽¹⁾				2,015,814			2,034,702
Average financing lease liabilities⁽⁵⁾				220,550			178,416
Invested capital			$	5,530,480		$	5,777,782

Adjusted After-Tax ROIC				41.5	%		35.3	%

⁽¹⁾The table below outlines the calculation of rent expense and reconciles rent expense to total lease cost, per ASC 842, the most directly comparable GAAP financial measure, for the trailing four quarters ended February 13, 2021 and February 15, 2020 (in thousands):




	Total lease cost, per ASC 842, for the trailing four quarters ended February 13, 2021					$	418,100
	Less:	Financing lease interest and amortization					(55,880	)
	Less:	Variable operating lease components, related to insurance and common area maintenance					(26,251	)
	Less:						(26,251	)
	Rent expense for the trailing four quarters ended February 13, 2021					$	335,969

	Total lease cost, per ASC 842, for the 24 weeks ended February 15, 2020					$	190,390
	Less:	Financing lease interest and amortization					(28,195	)
	Less:	Variable operating lease components, related to insurance and common area maintenance					(11,444	)
	Less:						(11,444	)
	Rent expense for the 24 weeks ended February 15, 2020					$	150,751
	Add:	Rent expense for the 29 weeks ended August 31, 2019 as previously reported prior to the adoption of ASC 842					188,366
	Add:						188,366
	Rent expense for the trailing four quarters ended February 15, 2020					$	339,117

⁽²⁾The Company ended Q2 FY21 with excess cash of $831.4M. Debt is presented net of excess cash
⁽³⁾Effective tax rate over trailing four quarters ended February 13, 2021 and February 15, 2020 is 22.1% and 20.7%, respectively
⁽⁴⁾Average debt for the trailing four quarters ended February 13, 2021 is presented net of average excess cash of $834.3M
⁽⁵⁾All averages are computed based on trailing 5 quarter balances

Other Selected Financial Information
(in thousands)
			February 13, 2021			February 15, 2020
Cumulative share repurchases ($ since fiscal 1998)			$	23,932,433		$	22,188,053
Remaining share repurchase authorization ($)				717,567			961,947

Cumulative share repurchases (shares since fiscal 1998)				149,033			147,540

Shares outstanding, end of quarter				22,183			23,488



			12 Weeks Ended			12 Weeks Ended			24 Weeks Ended		24 Weeks Ended
			February 13, 2021			February 15, 2020			February 13, 2021		February 15, 2020

Depreciation and amortization			$	94,476		$	90,671		$	184,027	$	180,420

Capital spending				125,608			89,156			238,644		190,563

AutoZone's 2nd Quarter Highlights - Fiscal 2021
Selected Operating Highlights
Condensed Consolidated Statements of Operations

Store Count & Square Footage

		12 Weeks Ended			12 Weeks Ended			24 Weeks Ended			24 Weeks Ended
		February 13, 2021			February 15, 2020			February 13, 2021			February 15, 2020
Domestic:
	Beginning stores		5,924			5,790			5,885			5,772
	Stores opened		27			25			66			43
	Ending domestic stores		5,951			5,815			5,951			5,815

	Relocated stores		1			-			5			-

	Stores with commercial programs		5,088			4,942			5,088			4,942

	Square footage (in thousands)		39,003			38,077			39,003			38,077

Mexico:
	Beginning stores		621			606			621			604
	Stores opened		7			2			7			4
	Ending Mexico stores		628			608			628			608

Brazil:
	Beginning stores		45			37			43			35
	Stores opened		1			1			3			3
	Ending Brazil stores		46			38			46			38

Total			6,625			6,461			6,625			6,461

	Square footage (in thousands)		44,021			42,885			44,021			42,885
	Square footage per store		6,645			6,638			6,645			6,638

Sales Statistics
($ in thousands, except sales per average square foot)
		12 Weeks Ended			12 Weeks Ended			Trailing 4 Quarters			Trailing 4 Quarters⁽¹⁾
Total AutoZone Stores (Domestic, Mexico and Brazil)		February 13, 2021			February 15, 2020			February 13, 2021			February 15, 2020
	Sales per average store	$	433		$	382		$	2,011		$	1,867
	Sales per average square foot	$	65		$	58		$	303		$	282

Total Auto Parts (Domestic, Mexico and Brazil)
	Total auto parts sales	$	2,859,698		$	2,464,988		$	13,158,997		$	11,857,188
	% Increase vs. LY		16.0	%		2.6	%		11.0	%		6.8	%

Domestic Commercial
	Total domestic commercial sales	$	638,913		$	556,924		$	2,883,615		$	2,679,732
	% Increase vs. LY		14.7	%		8.2	%		7.6	%		15.1	%

	Average sales per program per week	$	10.5		$	9.4		$	11.1		$	10.4
	% Increase vs. LY		11.7	%		4.4	%		6.7	%		9.5	%

All Other, including ALLDATA
	All other sales	$	51,120		$	48,675		$	231,348		$	220,953
	% Increase vs. LY		5.0	%		2.0	%		4.7	%		7.7	%

⁽¹⁾Fiscal 2019 results include an additional week of sales of approximately $234.5M for Total Auto Parts, $51.3M for Domestic Commercial and $4.1M for All Other. Sales per average store and sales per average square foot benefited from the additional week by $37K and $6K, respectively


		12 Weeks Ended			12 Weeks Ended			24 Weeks Ended			24 Weeks Ended
		February 13, 2021			February 15, 2020			February 13, 2021			February 15, 2020
Domestic same store sales			15.2	%		(0.8	%)		13.6	%		1.4	%

Inventory Statistics (Total Stores)
		as of			as of
		February 13, 2021			February 15, 2020
	Accounts payable/inventory		113.0	%		105.7	%

	($ in thousands)
	Inventory	$	4,736,826		$	4,606,211
	Inventory per store		715			713
	Net inventory (net of payables)		(614,270	)		(263,703	)
	Net inventory / per store		(93	)		(41	)

		Trailing 5 Quarters
		February 13, 2021			February 15, 2020
	Inventory turns		1.4	x		1.3	x