2023 ANNUAL REPORT
Notice of Annual Meeting of Stockholders and Proxy Statement
Corporate Profile
AutoZone is the leading retailer and distributor of automotive
replacement parts and accessories in the Americas. Each store carries
an extensive product line for cars, sport utility vehicles, vans and light
duty trucks, including new and remanufactured automotive hard
parts, maintenance items, accessories, and non-automotive products.
We have a commercial sales program that provides commercial credit
and prompt delivery of parts and other products to local, regional
and national repair garages, dealers, service stations, fleet owners
and other accounts. We also have commercial programs in the vast
majority of our stores in Mexico and Brazil. We also sell automotive
hard parts, maintenance items, accessories and non-automotive
products through www.autozone.com, and our commercial customers
can make purchases through www.autozonepro.com. Additionally,
AutoZone sells the ALLDATA brand automotive diagnostic, repair
and shop management software through www.alldata.com. We
also provide product information on our Duralast branded products
through www.duralastparts.com. AutoZone does not derive revenue
from automotive repair or installation.
• 7,140 stores (6,300 stores in 50 states in the U.S., 740
stores in Mexico, and 100 stores in Brazil)
• 5,682 domestic Commercial programs
• 14 Distribution centers
(11 in the U.S., two in Mexico and one in Brazil)
• 119,000 AutoZoners
Selected Financial Highlights
(Dollars in millions, except per share data)
2023
Net Sales
Operating Profit
Diluted Earnings per Share
After-Tax Return on Invested Capital
Domestic Same Store Sales Growth
International Same Store Sales Growth**
Operating Margin
Cash Flow from Operations
$17,457
$3,474
$132.36
55.4%
3.4%
17.5%
19.9%
$2,941
2022
$16,252
$3,271
$117.19
52.9%
8.4%
19.2%
20.1%
$3,211
2021
$14,630
$2,945
$95.19
41.0%
13.6%
20.7%
20.1%
$3,519
2020
$12,632
$2,418
$71.93
35.7%
7.4%
4.7%
19.1%
$2,720
2019*
$11,864
$2,216
$63.43
35.7%
3.0%
7.2%
18.7%
$2,129
* FY2019 includes a 53rd week of results
** Based on constant currency. Excludes impacts from fluctuations of foreign exchange rates.
AutoZone’s Pledge, est. 1986
AutoZoners always put customers fi rst!
We know our parts and products.
Our stores look great!
We’ve got the best merchandise at the right price.
Dear Customers, AutoZoners and Stockholders,
In preparation for my 19th and fi nal Stockholder letter as President and Chief Executive Off icer (CEO), I went back and
read my fi rst letter to you in the fall of 2005. I was amazed by the consistency of our focus in 2005 and today’s priorities.
Our Operating Plan theme was “Live the Pledge” and that’s the theme for fi scal 2024 (“FY24”). Our top priorities in
2005 were “U.S. Retail; Continues to be our #1 Priority”; “Commercial: Continued Signifi cant Growth Opportunities”;
and “Mexico: Steady Growth, Future Potential”. Sound familiar? Those are the same Strategic Priorities we have today
except “Mexico” has become “International”. While the focus is the same, the scale has changed tremendously – we
have basically doubled our store count and the number of fantastic AutoZoners on our team, our sales have grown from
$5.7 billion to $17.5 billion, cash fl ow from operations has grown from $648 million to averaging well over $3 billion
for the last three years and our stock price has increased from $85 in March of 2005 to, as of this writing, $2,650 –
increasing more than 30 times. Simply put, our team has delivered on those promises.
I love refl ecting on the fi nal paragraph of our 2005 letter with the benefi t of hindsight. “Can we grow this business and
grow it profi tably into the future? Yes. AutoZone is well positioned to profi tably grow sales. We have a clear plan for the
future and a strong team to execute it. I look forward to updating you on our continued success well into the future”.
I could say the exact same thing today – except for me updating you well into the future!
After eighteen years of leading the organization, this past June, I decided to step down from the President and CEO
roles in January 2024. While I will remain the Executive Chairman, my day-to-day responsibilities will change. After
a very robust formal succession planning process over three years, in June we announced that AutoZone’s next Chief
Executive Off icer will be Phil Daniele. Phil is a 30-year AutoZoner and a tremendous leader. Phil knows the intricacies of
the organization and this industry as well as anyone. He started his career as a part time employee with Walts Auto Parts
in Jacksonville, Florida. He joined AutoZone as a Manager in Training in 1993 and worked his way up the organization
through many areas and roles, most recently Executive Vice President, Merchandising, Marketing, and Supply Chain.
While I will remain very engaged and an advisor to Phil and the broader team, I want to express how excited I am that
in January 2024 Phil will become the 5th CEO in AutoZone’s near 45-year history. He has the skills, temperament,
communication skills, passion and courage to lead this organization into its next many years of success. As I told over
3,000 AutoZoners at our recent National Sales Meeting in Memphis, TN, - when we began this succession process, I
promised the board that we wouldn’t deliver a CEO, we would deliver a CEO with a strong team of leaders at their side.
I told our National Sales Meeting in September – “Mission Accomplished”. We have built a deep bench of amazing
leaders who are ready to continue leading, many in elevated roles. It is their time, and I am so excited about what they
will accomplish together as 1Team in the coming years. I want to stress our company’s success is built on our unique
and powerful culture. It is what diff erentiates us and allows us to achieve the challenging goals we set for ourselves
every year. From our founder Pitt Hyde’s vision, to our past and current leaders, we are unwavering in doing the right
things and doing them the right way. As we regularly say, you must get the little things right to accomplish large goals.
Much has evolved and changed over the years, however, AutoZone’s purpose for existing remains unchanged – we exist
to serve the needs of the motoring public, our customers. At AutoZone, everything begins and ends with putting the
customer fi rst!
One thing we know for sure, we can’t put our customers fi rst without talented, passionate, dedicated AutoZoners. I want
to thank our AutoZoners across the globe for what the company has been able to accomplish due to their eff orts since
we opened our fi rst store in Forest City, Arkansas in 1979. We have built an organization that is focused on customers
fi rst. As our Pledge begins, AutoZoners Always Put Customers First, and that is what drives us.
As I have said to many at AutoZone, this past year was a solid year, but not our best year. We dealt with the challenges of
a slowing Commercial business and a diff icult macro backdrop. Yet even with these issues, we delivered solid fi nancial
results. Being a very fi nancially disciplined company, we were able to generate operating profi t growth of an amazing
61% since fi scal 2019 (“FY19”) results. I reference FY19 because it was the year prior to the COVID-19 pandemic.
On behalf of AutoZoners everywhere, I am honored to update you on our progress, our impressive results for fi scal 2023
(“FY23”) and to review our opportunities for FY24 and beyond.
To start, I want to say a sincere thank you to our 119,000 AutoZoners across the company and around the globe for what
they have been able to accomplish over the past four years by intensely focusing on customer service and safety while
dealing with the COVID-19 pandemic and its aftermath. We asked a tremendous amount of AutoZoners in our stores and
our distribution centers who led the charge in delivering these impressive results. We achieved record sales of $17.5
billion, operating profi t of $3.5 billion, and earnings per share of $132.36 in 2023. We could not have achieved these
results without the entire organization working together to succeed.
As we turn our attention to 2024, as noted above, the operating theme that we have chosen is based on who we are:
“Live The Pledge,” which is both our action plan and a commitment to doing the right things for our Customers and
AutoZoners. We highlight the Pledge at the top of each of our annual stockholder letters, and we do this because it is
so core to who we are and the expectations of how we operate every day.
As we look to our future, I am very enthusiastic about our ability to grow by building upon the momentum gained over
the last four years and executing on some very exciting initiatives to improve our product availability and service levels.
In many respects, our business is simple - we understand that fi rst and foremost we need to have products in-stock
in our stores to be able to say “yes” to our customers’ automotive needs, and then we have to execute on our service
commitments by getting the part in the hands of our customers as soon as possible. Time is money for our customers,
and to be able to quickly service our customers, especially our professional ones, we have invested extensively in
product availability in recent years to meet or exceed our customers’ expectations. Our ongoing investments in our
AutoZoners, Supply Chain, Hubs and Mega Hubs, Information Systems, and store openings are where we will continue
to focus our deployment of capital and resources. I remain very bullish about this upcoming year, and I believe we are
well positioned to drive sales and profi ts and build on what we accomplished in FY23.
Summary of 2023 Results
For FY23, our focus was to Accelerate Together by driving continued sales growth across both our Retail and Commercial
businesses – which remain our top two strategic priorities, while also continuing with our international success. As I
previously mentioned, FY23 was a solid year, but we had our fair share of challenges when it came to execution. While
we delivered continued impressive fi nancial results with a record $17.5 billion in sales and grew domestic same stores
sales by an admirable 3.4%, our execution was not up to our high standards. I describe it as needing to exit “pandemic
mode”. While adjusting to the ever-changing environment during the pandemic was acceptable then, it certainly is not
acceptable now. Across the enterprise in FY23, we didn’t live up to our “Flawless Execution” mantra. This execution
shortfall was evident in our inability to meet our store opening goals in the U.S., Mexico and Brazil. In the stores, we
weren’t writing great schedules, our shrink expense was growing, turnover has been unacceptably high, etc. and our
supply chain hasn’t gotten back to historical norms on in-stock, turnover or productivity. Ultimately, from our store
support centers, to our stores and supply chain, we adapted during the pandemic, as we should have. Now, during more
predictable times, we have to and are returning to the process disciplines that have led to our success over the last
44+ years. Encouragingly, we opened 340 net new Commercial programs in FY23 which was more than double the 163
net new domestic Commercial programs opened in FY22. We now have 90% of our domestic stores with Commercial
program along with the vast majority of our stores in Mexico and Brazil.
Of our company’s many successes in FY23, our accelerated sales and operating profi t growth internationally was clearly
our brightest shining star. On a constant currency basis, we were able to generate 17.5% Same Store Sales results.
This marks our third consecutive year of double digit International Same Store Sales on a constant currency basis.
However, with International representing just over 10% of our overall revenues, our Domestic Commercial business
remains our top priority for growth. Domestic Commercial is just over 25% of AutoZone’s total revenues, and it grew an
impressive 8.7% in FY23, but slower than the exceptional 26.5% growth we experienced in fi scal 2022 (“FY22”). While
we appreciated that we were unlikely to grow Commercial in 2023 to the degree we grew in FY22, we were disappointed
by the 8.7% growth we delivered. Domestic Commercial remains our number one strategic growth opportunity. With
Domestic Commercial sales reaching an all-time record of $4.6 billion dollars in FY23 and having less than 5% share
of this signifi cant and growing industry, we are excited about our future growth prospects. For the year, we averaged
$16,000 in average weekly sales per Commercial program in the U.S., up from $15,500 last fi scal year.
During 2023, we continued to make signifi cant investments to enhance our supply chain and our ability to say “Yes! We’ve
Got It!” to our customers. While in FY22, we announced the future opening of three additional AutoZone distribution
centers – two in the U.S. and one in Mexico, in FY23 we began construction on two and purchased the property on the
third. These are very exciting additions to our supply chain network. In the U.S. the two new distribution centers will
grow our capacity by 20 percent. And these two centers will be the most technologically advanced facilities we’ve ever
opened. With a targeted opening date of early calendar 2025, these investments will help improve our store in-stock
positions and enhance our ability to deliver harder-to-fi nd parts to our customers. Additionally, in FY23 we opened a
new direct import facility on the west coast. This facility will make our very robust direct import program more eff icient
by allowing us to postpone inventory allocations until those parts and products are on U.S. soil.
We continue to be very bullish on our hub and mega hub strategy. As a point of reference, our hubs allow us to carry
roughly 50,000 SKUs - more than twice the assortment of a typical store - and our mega hubs allow us to carry 80,000
to 110,000 SKUs. In FY23, we ended the year with 98 domestic mega hubs and 210 domestic hubs. Our hub and
mega hub stores continue to out-perform our sales expectations, yielding increased market share gains. With a goal
of having, ultimately, 200 mega hubs and 300 hubs domestically, or 500 AutoZone stores with materially enhanced
product assortments in the U.S. over the next few years, we are only about halfway to our mega hub opening goals. In
FY24 we will again be growing our hub and mega hub stores.
Aside from store openings, we invested a record amount of capital for future growth. In recent years, as technological
innovations continue to accelerate across society, so does our appetite for technology enhancements at AutoZone.
We have made considerable and accelerated investments in technology to grow our Retail sales, while also deploying
improved technology for our commercial deliveries that improve our on-time performance. Additionally, we will continue
to leverage new technologies in our supply chain. We are investing signifi cantly in information systems and security
programs to make them more robust and resilient. We are committed to “incremental innovation” as innovation is
always required but incremental innovation lowers the risk profi le versus “revolutionary innovation.”
On the international front, we opened 65 stores during FY23, up from 59 the year before. This year we opened our
100th store in Brazil - an amazing accomplishment! We could not be prouder of our AutoZoners in Brazil. From our fi rst
international store opened in 1998 to our 100th Brazilian store opened this year; we continue to focus on how best to
serve our international customers while continuing to build our brand across the Americas. Our international business
is now over 10% of our company’s total revenues, and we are planning to accelerate our investments in these growth
markets for years to come.
We also could not have been prouder of our ALLDATA team and their results. ALLDATA had an outstanding year, growing
both sales and operating profi t to record levels. ALLDATA services customers in several countries beyond the United
States, and we believe ALLDATA continues to have signifi cant growth ahead as we drive to solve our commercial
customers’ challenges through leveraging technology.
As part of the 2022 Annual Report, we shared with you the work we were doing regarding Environmental, Social and
Governance (ESG) matters. I’m happy to report that while this is a journey, likely without a concrete destination, we have
made signifi cant progress. We expect to publish our ESG report annually, each April. Our report goes into detail on
the progress we have made and the resulting disclosures and commitments. On ESG, I’ve always felt our governance
practices are well-defi ned as we have made very intentional decisions on what we believe to be best for AutoZone, our
customers, AutoZoners and stockholders. On the social front, our unique and powerful culture shines bright and strong
and is a key diff erentiator for us in the marketplace. Additionally, I’m very proud of the diversity of our organization from
the Board of Directors to senior leadership and, in particular, our fi eld leadership team. Regarding environmental, we
have expressed our ambition to achieve Net Zero greenhouse gas emissions (GHG) by 2050. We have also made short,
medium and long-term GHG reduction targets that are intended to align with the Paris Agreement’s goal of maintaining
global temperature rise of 1.5 degrees Celsius. We look forward to continued engagement with you, our stockholders,
on this topic.
Finally, I’m very proud of our organization for the hard work and collaboration exhibited over the last few years as we
have navigated the turbulent waters of COVID-19, government and societal responses, and the most recent economic
challenges. Our team never blinked when we faced these challenges. Our leadership stepped up and delivered
exceptional results in the face of these challenges. We have grown our Retail and Commercial market share signifi cantly
since the start of the pandemic – our customers have voted with their wallets, and our sales performance relative to
industry growth rates validates the progress we have made.
Our Future
As noted above, over the last couple of years, as we navigated the pandemic we didn’t focus enough on the basics of our
business and suff iciently leverage the process disciplines we have built over decades. Sure, we had many successes.
But, to continue to enhance our competitive positioning we have to get back to fl awlessly executing. Over the last six
months, we’ve made some organizational changes, we radically intensifi ed our focus on the details of our operations
and our execution is improving. Our mantra for FY24 will be Live the Pledge – leading to fl awless execution. I am very
excited about what we can accomplish in FY24 and beyond.
For FY24, we expect there will continue to be macro challenges. These challenges will be a headwind at times, but also
represent a real opportunity for further market share gains. Our goals and expectations for the year will mirror our
longer-term historical experiences. And our focus will be keenly on “the customer” with an adherence to our Pledge.
Our strategy will be consistent. We will continue to grow our store count in the U.S, and Mexico by around 200 and we
will further accelerate growth in new stores in Brazil. We expect to open as many as 40 locations in Brazil in 2024. Our
hub and mega hub strategy will continue to be a key focus with an expectation to reach 500 locations in the U.S. over
the next several years.
Recently, we announced that after a strategic review, we would be opening more domestic and international stores on
an annual basis. Over the last fi ve years, we averaged 140 Domestic store openings and 50 International openings for
roughly 190 new stores a year in the Americas. We plan on accelerating this pace and aspire to open as many as 500
stores annually fi ve years from now. So, by fi scal 2028 we are modeling 500 store openings with the split being 300/200
between the U.S. and International. FY24 will remain around 200, but we will ramp from there. As our profi tability
per store is materially higher than it was at the start of the pandemic, our ultimate opportunities for stores in U.S. and
Mexico have expanded tremendously. We now believe we can have close to 10,000 stores in the U.S. and roughly 1,500
in Mexico and, as we further penetrate the Commercial market in both countries, those numbers are likely to grow
from here. While ramping up our store opening plans, we remain committed to being diligent and disciplined with our
investments and have no plans on changing our capital allocation strategy. We will continue to hold our investments
to the same hurdle rates driving strong returns on invested capital as we understand the capital we invest is our
stockholders’ capital.
We will be entering the fourth year of our Retail Acceleration strategy and our customers can see the fruits of those
eff orts in our rollout of self-checkout, a new Hybrid Znet (parts lookup system), and further and seamless integration of
our digital engagement with customers. Our goal in Retail is to continue to retain the market share we amassed in the
pandemic, especially in unit share, and focus on further market share growth.
In Commercial, our expectation is to continue to grow materially faster than the market. We expect our Commercial sales
to improve throughout FY24 as our many initiatives take hold. We also expect to improve our Commercial execution
and we are excited by the recent changes we’ve made. As we recently proclaimed, our long-term goal is to become
the largest in each sector where we operate and that certainly includes the U.S. Commercial business. We will continue
to refi ne and enhance our execution on the strategy we began developing about six years ago. It is a comprehensive
strategy that includes improved product availability, leveraging the Duralast brand, improving our service levels and the
productivity of our sales processes and making sure we are priced “right.”’ We will also be asking ourselves “what’s next”
to further enhance our competitive position in this highly fragmented market.
Our supply chain team is working diligently to prepare our distribution network for the next decade. We are adding
new facilities, improving our systems leveraging automation, and enhancing processes all while intensely focusing on
returning to our historical safety, service and productivity standards.
Before I close, I want to thank our entire Board of Directors for their counsel, support, guidance, and coaching. We have
a tremendous group of individuals who serve on our board. They are a strong and cohesive team, and their team-based
approach substantially enhances their individual contributions.
I also want to thank three of our senior executives who are retiring around the end of the calendar year. Grant McGee,
Senior Vice President (SVP) Commercial, Charlie Pleas, SVP Finance and Accounting and Al Saltiel, SVP of Marketing and
eCommerce have all played pivotal roles during their AutoZone tenures. They certainly will be missed but each of them
has prepared their organizations for huge success following their well-earned retirements.
This letter marks my nineteenth since becoming Chief Executive Off icer. It has been an honor serving in this capacity.
It has been a huge privilege to work alongside so many amazing AutoZoners and leaders, and I’m extraordinarily proud
of the team we have built! We have outstanding executives who are experienced and ready to take the company to
the next level of success. As I have been saying, change is in the air, and with change come opportunities. With Phil
Daniele as our Chief Executive Off icer combined with the talented team supporting him, AutoZone is well positioned for
future success.
Again, I want to thank all AutoZoners for their continued dedication and tireless eff orts in FY23. Additionally, I would like
to thank you, our stockholders, for the confi dence you have placed in our team by your decision to invest in AutoZone.
We remain committed to managing your capital wisely, achieving an appropriate return on the capital you entrust us to
deploy and returning excess cash through our share repurchase program.
We have a wonderful culture that has been built over the past 44 years and counting. We remain passionate to Live The
Pledge and our Values in order to earn our customers’ trust and business every day. I continue to believe that our best
days are ahead.
Thank you for staying in the Zone with us for all these years!
Sincerely,
Bill Rhodes
Chairman, President and CEO
Notice of Annual Meeting of Stockholders
and Proxy Statement
NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS
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DATE AND TIME
December 20, 2023
8:00 a.m. Central Time
PLACE
J. R. Hyde III Store Support Center
123 S. Front Street
Memphis, Tennessee 38103
RECORD DATE
Close of business on
October 23, 2023
ITEMS OF BUSINESS
Proposal
1. Election of 10 directors
Board Voting Recommendation
FOR
each nominee
2. Ratification of the appointment of Ernst & Young LLP as our
independent registered public accounting firm for the 2024
fiscal year
3. Approval of an advisory vote on the compensation of named
executive officers
FOR
FOR
4. Approval of frequency of advisory vote on named executive
1 YEAR
officer compensation
In addition, we will transact such other business properly brought before the meeting.
VOTING
Your vote is important. We strongly encourage you to submit your vote as promptly as possible
through the Internet, by telephone or by mailing your completed and signed proxy card (or voting
instruction form, if you hold your shares through a broker, bank or nominee). For more specific
instructions on how to vote, please see page 68.
MEETING MATERIALS
This Proxy Statement and our 2023 Annual Report are available on the Investor Relations section of
our website at investors.autozone.com. Additionally, you may access our proxy materials at
www.envisionreports.com/AZO.
ATTENDING THE MEETING
We are holding the 2023 Annual Meeting at the J. R. Hyde III Store Support Center located at 123 S.
Front St, Memphis, Tennessee 38103. For additional information on how you may attend or vote at
the meeting, please see page 68.
By Order of the Board of Directors,
Memphis, Tennessee
October 30, 2023
Jenna M. Bedsole
Secretary
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PROXY SUMMARY
This Proxy Summary provides general information about AutoZone and highlights information contained elsewhere in this
Proxy Statement. As it is only a summary, please refer to the entire Proxy Statement and the Annual Report on Form 10-K
for the fiscal year ended August 26, 2023 before you vote. In this Proxy Statement, we use the term “AutoZone,” “we,” “us,”
“our” and “the Company” to refer to AutoZone, Inc.
MEETING INFORMATION
DATE & TIME
LOCATION
RECORD DATE
December 20, 2023
at 8:00 a.m. CT
J. R. Hyde III Store Support
Center, 123 S. Front Street,
Memphis, Tennessee 38103
Shareholders of record as
of the close of business on
October 23, 2023 are
entitled to vote.
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ITEMS OF BUSINESS
Proposal No.
1. Election of 10 directors
2. Ratification of the appointment of Ernst & Young LLP as
our independent registered public accounting firm for
the 2024 fiscal year
3.
Approval of an advisory vote on the compensation of
named executive officers
4.
Approval of frequency of advisory vote on named
executive officer compensation
Board Recommendation
Page
FOR
each of the directors
FOR
FOR
1 YEAR
22
28
30
31
VOTING
We strongly encourage you to submit your vote as promptly as possible through the Internet, by telephone or by
mailing your completed and signed proxy card (or voting instruction form, if you hold your shares through a
broker, bank or nominee). You may also attend the Annual Meeting and vote in-person.
Internet
Telephone
Mail
At the Meeting
Visit the website on
your proxy card, voting
instruction form or
electronic
communications.
Call the telephone
number on your proxy
card, voting instruction
form or electronic
communications.
Sign, date and return
your proxy card or
voting instruction form
in the enclosed
envelope.
Attend the Annual
Meeting and vote in-
person.
For more specific instructions on how to vote as well as how to attend the Annual Meeting, please see page 68.
ABOUT THESE MATERIALS
We began mailing our Notice of Internet Availability of Proxy Materials (the “Notice”) to each shareholder entitled
to vote at the Annual Meeting on or about October 30, 2023. Our Board of Directors (the “Board”) has sent you
this Proxy Statement to solicit your vote at the Annual Meeting or any adjournment thereof.
2023 Proxy Statement
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AutoZone Highlights
FY23 FINANCIAL AND OPERATIONAL HIGHLIGHTS*
• $17.5 Billion in Revenue and $132.36 Diluted Earnings per Share
• Completed $3.7 billion in Share Repurchases
• Average of 17.9% Total Shareholder Return (TSR) for past 20 years
• 7,140 Stores Globally, including 6,300 in the U.S., 740 in Mexico and 100 in Brazil
• 5,682 Commercial Programs in the U.S.
For more information, see: AutoZone’s Form 10-K for FY23 filed with the Securities and
Exchange Commission (“SEC”).
CORPORATE GOVERNANCE
• Board Leadership consists of Chairman, Chief Executive Officer (“CEO”) and
President as well as Lead Independent Director
• Disciplined succession planning efforts resulted in appointment of CEO-Elect
with over 30 years of AutoZone tenure and nearly 40 years of industry experience
• Committees made up entirely of Independent Directors
• One class of outstanding shares with each share entitled to one vote
• Committee charters reflect strong oversight of environmental, social and
governance (“ESG”) matters
• Corporate Governance Principles amended to provide for Board Diversity Policy
For more information, see: Corporate Governance beginning on page 7.
EXECUTIVE COMPENSATION
• Significant portion of executive’s compensation is variable or at-risk
• Annual Incentive Plan tied to economic profit, as a function of Earnings Before
Interest and Taxes (“EBIT”) and Return on Invested Capital (“ROIC”)
• Shareholder support for Say-On-Pay Vote at 93% for average of past ten years,
and 88% last year
• Compensation plans and practices reviewed to ensure they do not encourage
excessive risk-taking
• Stock Ownership Guidelines aligned to compensation strategy
For more information, see: Compensation, Discussion & Analysis beginning on page 26.
SHAREHOLDER ENGAGMENT
•
• Conduct year-round outreach through our senior management, investor relations
and legal teams to understand shareholders’ perspectives, priorities and concerns
In the Summer and Fall of 2023, invited investors representing 59.9% of shares
outstanding to discuss corporate governance practices and CEO transition
For more information, see: Shareholder Engagement on page 15 and Compensation,
Discussion & Analysis on page 26.
* Information reflected as of, and for the fiscal year ended, August 26, 2023, as applicable
Disclaimer: The contents of any websites, reports or other materials are not incorporated by reference into this proxy
statement and do not constitute a part of this proxy statement.
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2023 Proxy Statement
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CULTURE
• Our Pledge and Values foster a strong, unique culture of teamwork and customer
service. Every AutoZoner, from the Board of Directors and CEO Team (Vice
Presidents and above) to AutoZoners in our stores, strive to Live the Pledge.
• Meetings at AutoZone begin with our Cheer, to remind us of our commitment to
customer satisfaction and our promise to put customers first, and an Extra Miler
Story, to recognize fellow AutoZoners for living our Pledge and Values and taking
care of our customers.
• We believe our commitment to living the Pledge and Values and strong culture of
recognition is what sets us apart from our competitors and drives our success.
HUMAN CAPITAL MANAGEMENT
• Approximately 119,000 AutoZoners Globally
• Named to Forbes World’s Best Employers for 2021 and 2022
• Significant diversity of backgrounds, experiences and tenures represented on the
Board and Executive Committee
• Six Business Resource Groups supported by a cross-functional Diversity
Council and Diversity, Equity and Inclusion (“DEI”) Steering Committee
• Published EEO-1 compliant disclosure in ESG Report
For more information, see: Our most recent ESG Report at investors.autozone.com.
Forward Looking Statements: Certain statements contained in this proxy statement, including statements about our
estimates, expectations, beliefs, intentions or strategies, constitute forward-looking statements that are subject to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995. These are based on assumptions and assessments
made by our management in light of experience and perception of historical trends, current conditions, expected future
developments and other factors that we believe to be appropriate. These forward-looking statements are subject to a number
of risks and uncertainties, some of which are discussed in more detail in the “Risk Factors” section contained in Item 1A
under Part 1 of the Company’s Annual Report on Form 10-K for the year ended August 26, 2023. Forward-looking
statements speak only as of the date made. Except as required by applicable law, we undertake no obligation to update
publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
2023 Proxy Statement
3
Board of Directors Nominees
Name and Principal
Occupation
Independent Age
Director
Since
Diversity
Gender
Ethnicity
Committee Membership
Comp
NomGov
Audit
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o
x
x
y
y
Michael A. George
Former President and CEO of
Qurate Retail
Linda A. Goodspeed
Former Managing Partner and
COO of WealthStrategies
Financial Advisors
62
2022
M
61
2013
M
M
Earl G. Graves, Jr.
President and CEO of Black
Enterprise
Lead
61
2002
Enderson Guimaraes
Former President and COO for
Laureate Education, Inc.
64
2012
Brian P. Hannasch
President and CEO of
Alimentation Couche-Tard
D. Bryan Jordan
Chairman, President and CEO of
First Horizon Corporation
Gale V. King
Former EVP and Chief
Administrative Officer of
Nationwide Mutual Insurance
Company
George R. Mrkonic, Jr.
Former Non-Executive Chairman
of Maru Group
57
2022
M
61
2013
67
2018
M
71
2006
M
William C. Rhodes, III
Chairman, President and CEO of
AutoZone, Inc.
58
2005
M
M
Jill A. Soltau
Former CEO of J.C. Penney
Company, Inc.
56
2018
M
indicates Committee Chairperson
M indicates Committee Member
“Lead” indicates Lead Independent Director
“CEO” indicates Chief Executive Officer
“COO” indicates Chief Operating Officer
“EVP” indicates Executive Vice President
4
2023 Proxy Statement
BOARD SKILLS
See page 12 for additional information on director composition.
Core Skills
Distinct Strengths
Leadership
10 / 10
Retail & Consumer
9 / 10
Financial Literacy
10 / 10
International
Previous Public Company
Board Experience
Strategy & Business
Development
9 / 10
10 / 10
Technology
CEO Experience
5 / 10
6 / 10
6 / 10
Risk Management
10 / 10
Financial Expertise
6 / 10
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Supply Chain
Human Capital
Management
BOARD COMPOSITION
Independence
Independent
Not Independent
Age
50 – 59 years
60 – 69 years
70+ years
9 / 10
1 / 10
3 / 10
6 / 10
1 / 10
Diversity
Gender
Race / Ethnic
Tenure
0-5 Years
6-10 Years
11-15 Years
16+ Years
6 / 10
8 / 10
3 / 10
3 / 10
4 / 10
2 / 10
1 / 10
3 / 10
EXECUTIVE COMMITTEE AT-A-GLANCE
DIVERSITY
DEI LEADERSHIP*
TENURE
Female: ●●
Black: ●●●●
Hispanic / Latin: ●●
Two or More Races: ●●
BRG Sponsors: ●●●●●●
DEI Council Members: ●●●●●●
Total: 15 Executive Committee Members
0-5 Years: ●●●
6-10 Years: ●
11-20 Years: ●
21+ Years: ●●●●●●●●●●
* Refers to leadership, support and promotion of the Company’s DEI initiatives, through serving as an Executive Sponsor of a Business
Resource Groups (“BRGs”), a member of the DEI Council or a member of the DEI Steering Committee.
2023 Proxy Statement
5
TABLE OF CONTENTS
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Corporate Governance
Governance Framework
Risk Oversight
Board and Committee Meetings
Board Composition
Director Compensation
Shareholder Engagement
Related Party Transactions
Audit Committee Report
The Proposals
Proposal 1 – Election of 10 Directors
Nominees
Proposal 2 – Ratification of Independent Registered Public Accounting Firm
Audit and Non-Audit Fees
Audit Committee Pre-Approval
Proposal 3 – Advisory Vote on Executive Compensation
Proposal 4 – Frequency of Advisory Vote on Named Executive Officer Compensation
Other Matters
Compensation Discussion and Analysis
Compensation Committee Report
Executive Summary
Compensation Framework
Compensation Governance
Compensation Program Details
Other Practices, Policies & Guidelines
Summary Compensation Table
Grants of Plan-Based Awards
Outstanding Equity Awards at Fiscal Year-End
Option Exercises and Stock Vested
Nonqualified Deferred Compensation
Potential Payments upon Termination or Change in Control
Pay Ratio Disclosure
Share Ownership Information
Beneficial Ownership Tables
Equity Compensation Plans
General Information
Attending and Voting Information
The 2024 Annual Meeting
7
7
9
10
12
16
18
20
21
22
22
23
28
29
29
30
31
31
32
32
33
35
39
44
50
54
55
56
57
57
58
61
64
64
66
67
67
70
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2023 Proxy Statement
CORPORATE GOVERNANCE
AutoZone has a long-standing commitment to promoting the long-term interests of our customers, AutoZoners
and shareholders. In furtherance of this commitment, the Board has adopted a comprehensive governance
framework to allow it to provide effective oversight and make informed decisions relating to the business,
strategy, risk, culture and more. The following section discusses key aspects of our corporate governance
structure, policies and practices.
Governance Framework
BOARD LEADERSHIP STRUCTURE
We do not have an express policy on whether the roles of Board Chairman and Chief Executive Officer should
be combined or separated. Instead, the Board prefers to maintain the flexibility to determine which leadership
structure best serves the interests of our shareholders. If the positions of the Chairman of the Board and CEO
are held by the same person, or if the Chairman is employed by or not independent of AutoZone, then the Board
will select an independent director to serve as the Lead Independent Director.
Currently, our Board believes that having a combined Chairman and CEO, a Lead Independent Director,
Independent Committee Chairs, Independent Committee members and 90% of Independent Board members
provides the best Board structure for AutoZone. This structure, together with our other corporate governance
practices, provides strong independent oversight of management while ensuring clear strategic alignment
throughout the Company.
While we currently have a combined Chairman and CEO leadership structure, the Board intends to separate the
positions of Chairman and CEO in connection with the previously announced CEO succession expected to
occur in January 2024. The Board has regularly reevaluated this leadership structure as part of the Board
evaluation and Board succession planning processes to ensure these important governance matters are
considered thoroughly and holistically.
LEAD INDEPENDENT DIRECTOR
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Earl G. Graves, Jr.
Lead Independent
Director
Our Lead Independent Director, Earl G. Graves, Jr., is a non-employee director
who is elected by the Board annually. Our Corporate Governance Principles
provide our Lead Independent Director with clearly defined responsibilities as
follows:
• Presides at all executive sessions of the Board (without management
present) at every regularly scheduled Board meeting;
• Chairs Board meetings when the Chairman is not present;
• Works with management to determine the information and materials to
be provided to Board members;
• Approves Board meeting agendas, schedules, and other information to
be provided to the Board;
• Consults with the Chairman on such other matters as are pertinent to the
Board and the Company;
• Has the authority to call meetings of the independent directors;
•
Is available for direct communication and consultation with major
shareholders upon request; and
• Serves as a liaison between the Chairman and the independent
directors.
In addition, our Lead Independent Director, Mr. Graves, serves as Chairman of the Nominating and Corporate
Governance Committee, which enables him to ensure the governance practices of the Board are best suited for
the needs of the Company and its shareholders. In this capacity, Mr. Graves and the other independent
2023 Proxy Statement
7
members of the Nominating and Corporate Governance Committee oversee Board evaluations and Board
refreshment, among other things.
DIRECTOR INDEPENDENCE
As stated in AutoZone’s Corporate Governance Principles, a substantial majority of the Board of Directors
should be independent in accordance with the rules of the New York Stock Exchange (“NYSE”). The Board
annually assesses each director’s independence after reviewing relevant relationships involving such director
and AutoZone. As part of this review, the Nominating and Corporate Governance Committee and the Board
considered all such relationships involving AutoZone’s non-employee directors, including the below matters.
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Ordinary Course Transactions and Business Relationships. The Company routinely procures goods or services
from various entities for which a director or his or her immediate family member may be affiliated. During FY23,
all such transactions were conducted in the ordinary course of business and on an arms-length basis.
• Ms. Soltau is a member of the board of directors of Southwest Airlines Co., from which AutoZone
purchased airline tickets.
• Mr. Hannasch is the President and Chief Executive Officer of Alimentation Couche-Tard, which operates
Circle K convenience stores, from whom AutoZone purchased miscellaneous goods.
• Mr. Jordan is the Chief Executive Officer and Chairman of the board of directors of First Horizon
Corporation. First Horizon holds various AutoZone deposit accounts and participates in one of
AutoZone’s supplier confirmed receivables programs (under which some AutoZone vendors are
borrowers, but AutoZone is not a party to those agreements).
• Ms. King is a member of the board of directors of Unum Group, with whom AutoZone procured group
insurance benefits.
Current or Prior Employment of Immediate Family Member. Directors may have an immediate family member
who is an employee of AutoZone. In FY23, all such employment relationships were in a non-officer capacity and
all compensation-related decisions were made in a manner that is consistent with internal practices and policies.
Charitable Contributions or Event Sponsorships. The Company periodically makes donations to not-for-profit
organizations or sponsors events with which Board members or their immediate family members may be
affiliated. During FY23, all such contributions were conducted in the ordinary course of business and consistent
with AutoZone’s charitable giving guidelines or otherwise in furtherance of a business purpose.
As such, the Board concluded that none of these transactions were, individually or cumulatively, material to
AutoZone and also did not materially benefit any director, directly or indirectly. Accordingly, the Board
affirmatively determined that none of Mses. Goodspeed, King, or Soltau or Messrs. George, Graves,
Guimaraes, Hannasch, Jordan or Mrkonic has a material relationship with the Company other than in their
capacity as a Board member and that all of them are independent within the meaning of the AutoZone
Corporate Governance Principles, the NYSE listing standards and applicable law. The Board also determined
that Mr. Rhodes is not independent since he is an employee of the Company.
COMMITTEES. AutoZone’s Board has three standing committees, each consisting solely of independent
directors—the Audit Committee, Compensation Committee and Nominating and Corporate Governance
Committee. Additional information about each of the Committees is included below.
GOVERNANCE DOCUMENTS. The key governance documents and policies adopted by the Board are:
• Corporate Governance Principles;
• Charters for its Audit, Compensation, and Nominating & Corporate Governance Committees;
• Code of Conduct for all AutoZoners, including directors, officers and employees;
• Code of Ethical Conduct for Financial Executives; and
• Policy on Political Contributions and Lobbying Engagements.
8
2023 Proxy Statement
The Board reviews these corporate governance documents and policies from time to time and revises them
when it believes it serves the interests of the Company and its shareholders to do so, such as in response to
changing governance practices or legal requirements. Each of these documents is available on our website at
investors.autozone.com and is also available, free of charge, in print to any shareholder who requests it.
ENVIRONMENTAL, SOCIAL & GOVERNANCE REPORTS. As part of our commitment to continuous
improvement and maximizing long-term shareholder value, the Company’s commitment to sustainability has
expanded over time. AutoZone has published an ESG Report, and the most current version of this report
covering the 2022 Fiscal Year is available on our website at investors.autozone.com.
Our website and the information contained therein or linked thereto are not intended to be incorporated into this
Proxy Statement. Further, our ESG Report is not, and will not be deemed to be, a part of this Proxy Statement
or incorporated by reference herein or into any of our other filings with the SEC.
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Risk Oversight
Oversight of risk management is a responsibility of the Board and is an integral part of the Board’s oversight of
AutoZone’s business. AutoZone’s management takes a variety of calculated risks in order to enhance Company
performance and shareholder value. The primary responsibility for the identification, assessment and
management of the various risks resides with AutoZone’s management. The Board is primarily responsible for
ensuring that management has established and adequately resourced processes for identifying and preparing
the Company to manage risks effectively.
Strategic Planning and Operating Risks
The Board reviews the Company’s principal strategic and operating risks as part of its regular discussion and
consideration of AutoZone’s strategy and operating results. The Board also regularly reviews with the General
Counsel legal matters that may have a material adverse impact on the Company’s financial statements, the
Company’s compliance with laws, and any material reports received from regulatory agencies.
Financial Risks
The Audit Committee is involved in the Board’s oversight of risk management. At each of its regular meetings,
the Audit Committee reviews the Company’s major financial exposures and the steps management has taken to
identify, assess, monitor, control, remediate and report such exposures. The Audit Committee, along with
management, also evaluates the effectiveness of the risk avoidance and mitigation processes in place.
Enterprise Risks
To assist with risk management and oversight, AutoZone has adopted the concept of Enterprise Risk
Management (“ERM”) using the framework issued in 2004 by the Committee of Sponsoring Organizations of the
Treadway Commission. The Company’s Vice President of Internal Audit, who reports directly to the Audit
Committee, has been charged with leading the Company’s ERM processes with the assistance of Company
management. The Vice President of Internal Audit presents to the Audit Committee a comprehensive review of
the Company’s ERM processes quarterly. This presentation includes an overview of all significant risks that
have been identified and assessed and the strategies developed by management for managing such risks. The
Vice President of Internal Audit leads open discussions with the Audit Committee members to analyze the
significance of the risks identified and seeks to verify that the list is all-inclusive. Company management is also
involved in these discussions to ensure that the Board gains a full understanding of the risks and the strategies
that management has implemented to manage the risks.
Information Security Risks
The Audit Committee, in connection with its oversight of the Company’s ERM processes described above,
reviews and discusses the Company’s information security risks directly with the Company’s Chief Information
Security Officer. This review takes place at each routine, quarterly committee meeting and includes a discussion
of significant threats, risk mitigation strategies, any IT security program assessments and identified
2023 Proxy Statement
9
improvements. Additionally, information security matters are included within a broader IT update which is
typically presented annually to the full Board of Directors.
Environmental, Social and Governance
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The Board exercises its oversight responsibilities of ESG matters both as a full Board and through its
committees as appropriate for the subject matter. The Nominating and Corporate Governance Committee has
primary responsibility for assisting the Board in overseeing Board governance policies and practices,
AutoZone’s DEI efforts, ESG reporting and ESG-related shareholder engagement efforts. The Compensation
Committee periodically reviews and discusses with management the alignment between AutoZone’s
compensation programs and human capital management strategy. The Audit Committee provides oversight of
the regulatory environment as part of ERM, including with respect to environmental and safety compliance.
Climate change is currently a matter of shared oversight. For example, reporting of initiatives and goals intended
to reduce our impact on climate change is overseen by the Nominating & Corporate Governance Committee as
part of their oversight of ESG reporting; oversight of environmental-related compliance is overseen by the Audit
Committee; and climate change, to the extent it presents a strategic risk or opportunity is overseen by the full
Board. Each of the Committees provide reports and feedback to the full Board for its collective review and
discussion.
Board and Committee Meetings
BOARD MEETINGS AND ATTENDANCE
During FY23, the Board held 5 meetings. The non-management members of our Board regularly meet in
executive sessions in conjunction with each regularly scheduled Board meeting, with our Lead Independent
Director, Mr. Graves, presiding at these sessions. All directors attended at least 75% of the meetings of the
Board and their assigned committees during FY23. All directors are expected to attend our annual meetings of
shareholders. At our 2022 Annual Meeting, all directors were present and available to answer questions.
AUDIT COMMITTEE
Meetings in FY23: 9
Members:
• D. Bryan Jordan (Chair)
• Michael A. George
• Linda A. Goodspeed
• George R. Mrkonic, Jr.
Independent: All
Qualifications: The
Board has determined
that each Committee
member meets the
qualifications of an audit
committee financial
expert as defined by the
SEC and is financially
literate as defined by the
NYSE.
The Audit Committee assists the Board in overseeing the integrity of the
Company’s financial statements; the independent auditor’s qualification,
independence and performance; the performance of the Company’s internal
audit function, and the Company’s compliance with legal and regulatory
requirements.
Accordingly, the Audit Committee has responsibility for:
• evaluating, appointing or dismissing, determining compensation for, and
overseeing the work of the independent public accounting firm
employed to conduct the annual audit, which reports to the Audit
Committee;
• conducting periodic reviews with Company officers, management,
independent auditors, and the internal audit function;
•
reviewing and discussing with management and the independent
auditor the Company’s annual audited financial statements, quarterly
financial statements, internal controls report and the independent
auditor’s attestation thereof, and other matters related to the
Company’s financial statements and disclosures;
• overseeing the Company’s internal audit function; and
•
reporting routinely to the Board and making recommendations.
10
2023 Proxy Statement
COMPENSATION COMMITTEE
Meetings in FY23: 5
Members:
• George R. Mrkonic, Jr
(Chair)
• Linda A. Goodspeed
• Brian Hannasch
• Gale V. King
The Compensation Committee has responsibility for:
•
reviewing and approving AutoZone’s compensation philosophy,
strategy and objectives;
•
•
reviewing and approving the compensation programs, plans, policies
and awards for executive officers;
leading the independent directors in the evaluation of the performance
of the CEO in meeting established goals and objectives relevant to the
compensation of the CEO;
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Independent: All
• acting as administrator of AutoZone’s short- and long-term incentive
plans and stock or stock-based plans;
•
•
reviewing the compensation of AutoZone’s non-employee directors
from time to time and recommending to the full Board any changes that
the Compensation Committee deems necessary; and
reviewing and discussing with management the alignment between
AutoZone’s compensation programs, company strategy and human
capital management strategy.
Qualifications: The Board
has determined that each
member of the
Compensation Committee
meets the additional
independence
requirements of the SEC
and NYSE applicable to
Compensation Committee
members.
NOMINATING AND CORPORATE GOVERNANCE COMMITTEE
Meetings in FY23: 3
Members:
• Earl G. Graves, Jr
(Chair)
• Enderson Guimaraes
• D. Bryan Jordan
• Jill A. Soltau
Independent: All
The Nominating and Corporate Governance Committee has responsibility
for:
• ensuring that qualified candidates are presented to the Board for
election as directors;
• assisting the Board in its oversight of AutoZone’s ESG practices,
including DEI and any related significant reporting and shareholder
engagement efforts;
• assisting the Board in developing criteria and procedures for the
evaluation of the Board, its committees and directors; and
•
reviewing and recommending changes to AutoZone’s Articles of
Incorporation, By-Laws, and Corporate Governance Principles with the
aim of best serving the interests of the shareholders.
2023 Proxy Statement
11
Board Composition
PERSONAL CHARACTERISTICS AND CORE COMPETENCIES
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The Board believes each individual director should possess certain personal characteristics, and that the Board
as a whole should possess certain core competencies. Such personal characteristics are integrity and
accountability, informed judgment, financial literacy, mature confidence, high performance standards, and
passion. They should also have demonstrated the confidence to be truly independent, as well as be business
savvy, have an owner orientation and have a genuine interest in AutoZone. Core competencies of the Board as
a whole, include accounting and finance, business judgment, management expertise, crisis response, industry
knowledge, international markets, strategy and vision. These characteristics and competencies are set forth in
more detail in AutoZone’s Corporate Governance Principles, which are available on AutoZone’s corporate
website at investors.autozone.com.
DIRECTOR SKILLS
The Board believes it can be most effective in exercising its responsibilities when it is made up of individuals
who collectively possess a diverse, yet balanced, set of skills, qualifications and expertise gained from different
experiences and professional settings. As such, the Nominating and Corporate Governance Committee annually
reviews the skills represented on the Board, which then provides a foundation for Board refreshment, Board
succession planning and director nominations.
This past year, the Nominating and Corporate Governance Committee refreshed its method of reviewing and
evaluating Board skills in an effort to (i) develop a more meaningful skills matrix that reflects each individual’s
strengths and expertise and (ii) better communicate to shareholders the key qualifications that each director
nominee brings to the Board. In doing so, the Committee identified a certain set of “core skills” which nearly all
directors possess because these skills are integral to carrying out the Board’s responsibilities. In addition to
these “core skills,” the Committee identified certain “distinct strengths” which our directors possess. These
strengths allow our Board, as a whole, to offer a comprehensive set of experiences, perspectives and expertise
to guide our decision making. In some instances, we have intentionally sought more candidates with a specific
attribute, such as CEO experience or retail industry experience, because such experience is particularly relevant
to our business and valuable to our Board. In other instances, we have considered a candidate as a whole and
concluded that he or she presents a variety of strengths that add to the richness of our Board. As a result, we
may have a larger number of Board members with a particular strength or attribute; but it is our belief that all of
these skills and experiences are of value and together allow for more thoughtful dialog and more effective
execution of Board responsibilities.
12
2023 Proxy Statement
Attribute
What this means
Why it’s valuable to AutoZone
CORE SKILLS
Leadership
Experience serving as a senior executive
of a significant enterprise.
Financial Literacy
Board Experience
Ability to read and understand financial
statements, financial ratios and other
indices for evaluating company
performance.
Experience sitting on the Board of a public
company, currently or previously.
Strategy & Business
Development
Risk Management
Experience developing and executing
upon long-term strategic plans, growth
strategies and capital allocation plans.
Experience overseeing or managing
enterprise risk management or other
functions involving significant operational,
financial or legal risk.
Having proven leadership experience allows our Board to guide,
challenge and oversee management with thoughtful and practical
insights and perspectives.
Financial literacy is a necessary attribute in order to provide
meaningful input on key business decisions and ensure we continue
to drive long-term shareholder value.
Serving on another public company Board yields insights on trends
and best practices regarding strategy, corporate governance,
operations, customer insights, executive compensation, risk
oversight and other matters impacting board effectiveness.
A key function of the Board is to oversee strategy so that AutoZone
is, and remains, well positioned for long-term, profitable growth and
success.
Having first-hand experience identifying and managing risk equips
the Board to carry out its risk oversight function most effectively,
whether such risks are overseen by the Board as a whole or by a
particular Committee.
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DISTINCT STRENGTHS
Retail & Consumer
Experience at a retailer or other consumer
facing company, such as consumer
products or food and beverage.
International
Technology
Experience with international operations
or expansion into new international
markets.
Experience with assessing opportunities
and risks of new technologies and digital
platforms.
CEO Experience
Experience serving as the senior most
leader of an organization.
Financial Expertise
Proficiency in complex financial planning,
capital allocation and/or financial reporting
processes.
Supply Chain
Human Capital
Management
Experience with managing and designing
supply chains, ranging from global
footprints to last mile solutions.
Experience managing a large or global
workforce.
We greatly value the experiences and learnings of other retailers
and consumer facing businesses, whether it relates to driving
operational efficiencies, building customer loyalty or sourcing the
best merchandise.
Managing operations in different countries presents unique and
complex challenges. Directors with relevant experience can offer
considerable insights as we continue to improve and expand our
international operations.
Knowledge or experience with new and emerging technologies
provides valuable perspectives as we develop our omni-channel
strategy, build out our technology infrastructure, manage our IT
investments and seek to mitigate cybersecurity and other IT-related
risks.
Directors who have served as their organization’s CEO or senior
most leader have a unique appreciation for the challenges attendant
to the role, such as building and leading a strong management team
and balancing the interests of numerous stakeholders.
Directors with deep financial expertise can offer significant insights
and perspectives on our efforts to invest in sustained, profitable
growth, while also challenging us to build robust financial controls
and to manage actual and potential risks to the business.
The efficiency of our supply chain and distribution network is critical
to our success both in the near-term and as we strategically position
the Company for sustainable, long-term growth.
As a global enterprise with over 100,000 AutoZoners, we are a
people-first culture and are keenly focused on managing and
developing our workforce.
2023 Proxy Statement
13
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DISTINCT STRENGTHS
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CEO Experience
Financial Expertise
Supply Chain
Human Capital Management
BOARD DIVERSITY
Consistent with AutoZone’s Pledge and Values, the Board embraces diversity in its broadest sense and believes
it is important to have directors with diverse thoughts, skills, knowledge and backgrounds. As stated in the
Corporate Governance Principles, when evaluating candidates for nomination as new directors, the Nominating
and Corporate Governance Committee will ensure that the initial list of candidates from which new director
nominees are considered include candidates with diversity of race, ethnicity or gender. And from such list, the
Board will continue to select the best candidate to fill the role.
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●
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DIVERSITY
Gender
Ethnic / Racial
BOARD REFRESHMENT
The Board has a variety of mechanisms in place to promote Board refreshment in a manner that aligns with the
long-term interests of AutoZone and its shareholders. In particular, the Board relies upon thorough and
meaningful evaluations as well as a resignation policy in the event a director experiences a change in
professional role or responsibility. The Board does not have an age-based or tenure-based resignation policy as
the Board believes neither can adequately assess an individual director’s contribution, engagement and value to
the overall effectiveness of the Board. Instead, we believe thoughtful succession planning and reflection of the
Board’s overall composition allow us to refresh the makeup of the Board in a more organic and intentional
manner. For example, we have had one director inform the Board of their decision to not stand for re-election at
each of the 2021 and 2022 Annual Meetings. Also during that time frame, we appointed two new directors to the
Board, each with experience serving as a Chief Executive Officer and each possessing other valuable skills to
ensure the Board and its Committees remain well-rounded and effective in discharging their responsibilities.
14
2023 Proxy Statement
TENURE
0-5 Years
6-10 Years
11-15 Years
15+ Years
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(
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40%
20%
10%
30%
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x
y
Director Tenure. The Board also considered the tenure of our independent directors, noting that Mr. Graves and
Mr. Mrkonic have each served on the Board for greater than 15 years. Mr. Graves brings a wealth of experience
and historical knowledge regarding the Board and how it has been most effective in executing its oversight
responsibilities. Mr. Mrkonic has a deep understanding of both the Company as well as the retail industry as a
whole, allowing him to challenge the status quo and offer insightful perspectives on matters of strategy,
operations and corporate governance. For these reasons, the Board believes each of Mr. Graves and Mr.
Mrkonic continues to be a valued member of the Board.
BOARD EVALUATIONS
The Nominating and Corporate Governance Committee annually reviews and approves the process by which
the Board, its Committees and the individual directors conduct an evaluation. These evaluations help inform
Board succession planning as well as contribute to different enhancements that may allow the Board to carry
out its roles and responsibilities more effectively. The annual Board and Committee evaluation process is
typically administered by the Corporate Secretary’s office; however, the Board has at times engaged a third-
party consultant to ensure the process remains dynamic and intentional. For example, in 2021, at the
recommendation of the Nominating and Corporate Governance Committee, the evaluation was administered by
an independent, third-party and consisted of both survey data and one-on-one interviews. These findings were
then aggregated, analyzed and reported to the full Board collectively and specific feedback was provided to
each individual director. In 2022 and 2023, the Board determined to use its more traditional evaluation process
facilitated by the Corporate Secretary’s office.
DIRECTOR NOMINATIONS
Prior to each annual meeting of shareholders at which directors are to be elected, the Nominating and
Corporate Governance Committee considers incumbent directors and other qualified individuals, if appropriate,
as potential director nominees. In evaluating a potential nominee, the Nominating and Corporate Governance
Committee considers the personal characteristics described above, reviews the composition of the full Board
and reflects upon learnings from the Board evaluations to determine the areas of expertise and core
competencies needed to enhance the effectiveness of the Board. The Nominating and Corporate Governance
Committee and Board also consider the specific experiences and skills that an individual nominee possesses
and how such experiences might be of value to the Board and the management team. Finally, the Nominating
and Corporate Governance Committee may also consider other factors such as the size of the Board, whether a
candidate is independent, the listing standards requirements of the NYSE and how many other public company
directorships a candidate holds.
The Nominating and Corporate Governance Committee uses a variety of methods for identifying potential
nominees for director. Candidates may come to the attention of the Nominating and Corporate Governance
Committee through current Board members, shareholders or other persons. The Nominating and Corporate
Governance Committee may retain a search firm or other consulting firm from time to time to identify potential
nominees. Nominees recommended by shareholders in accordance with the procedure described below, i.e.,
submitted in writing to AutoZone’s Secretary, accompanied by the biographical and business experience
information regarding the nominee and the other information required by Article III, Section 1 of AutoZone’s
Eighth Amended and Restated By-Laws (the “By-Laws”), will receive the same consideration as the Nominating
and Corporate Governance Committee’s other potential nominees.
2023 Proxy Statement
15
Director Nominations by Shareholders
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The Nominating and Corporate Governance Committee’s policy is to consider director candidate
recommendations from shareholders if they are submitted in writing to AutoZone’s Secretary in accordance with
the procedure set forth in Article III, Section 1 of By-Laws, including biographical and business experience,
information regarding the nominee and other information required by such provision in the By-laws. Copies of
the By-Laws will be provided upon written request to AutoZone’s Secretary and are also available on
AutoZone’s corporate website at investors.autozone.com.
In addition to satisfying the foregoing requirements under AutoZone’s By-laws, to comply with the universal
proxy rules, shareholders who intend to solicit proxies in support of director nominees other than AutoZone’s
nominees must provide notice that sets forth the information required by Rule 14a-19 under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”) no later than October 21, 2024, or not later than the
date that is 60 days prior to the one-year anniversary of the Annual Meeting if such meeting takes place on any
day other than December 20, 2023.
Director Compensation
AutoZone’s current director compensation program became effective January 1, 2022 (the “Director
Compensation Program”).
ANNUAL RETAINER FEES. Non-employee directors receive an annual retainer fee (the “Annual Retainer”).
Furthermore, each director is eligible to receive an additional fee (“Additional Fee”), the amount of which varies
depending on his or her role. The Additional Fees and the Annual Retainer, enumerated below, together
comprise the “Director Compensation”. There are no meeting fees.
Director Compensation Components
Annual Retainer
Additional Fees:
Lead Director
Audit Committee Chair
Audit Committee Member
Compensation Committee Chair
Nominating & Corporate Governance Committee Chair
($)
250,000
35,000
30,000
15,000
25,000
20,000
Under the 2020 Omnibus Incentive Award Plan (the “2020 Omnibus Incentive Plan”) and Director Compensation
Program, non-employee directors receive Director Compensation in the form of immediately vested Restricted
Stock Units (“RSUs”). A non-employee director may elect to receive a fixed portion of the Annual Retainer plus
any Additional Fees in the form of cash, paid in quarterly installments (the “Cash Election”), with the remainder
of the Annual Retainer paid in the form of RSUs. The Cash Election during calendar year 2023 was $100,000.
All RSUs are granted on January 1 of the applicable calendar year.
If a non-employee director is elected to the Board, or assumes a different position, after January 1, he or she will
receive the Annual Retainer and/or Additional Fees, prorated based on the number of days remaining in the
calendar year, for RSUs, or the number of days remaining in the quarter, for cash, as applicable.
RSUs granted to non-employee directors are fully vested on the date of grant and become payable, or are
settled, on the date on which the non-employee director ceases to be a director (the “Payment Date”), or at the
director’s election, on the first or fifth anniversary of the grant date. Upon timely delivery of an election form, a
non-employee director may elect to receive payment on the date on which he or she ceases to be a director.
RSUs are payable in shares of AutoZone common stock no later than the fifteenth day of the third month
following the end of the tax year in which such Payment Date occurs.
COMPENSATION-SETTING PROCESS. The Compensation Committee reviews the Board’s compensation on
a biennial basis to ensure that non-employee directors are reasonably compensated in relation to AutoZone’s
peer group companies (discussed in detail under Benchmarking) and to comparable U.S. companies in general.
AutoZone’s 2020 Omnibus Incentive Plan contains a dollar limit of $750,000 on the total amount of annual
compensation payable to its non-employee directors, provided that the Board may make exceptions to this limit
under extraordinary circumstances.
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2023 Proxy Statement
Director Compensation Table
This table shows the compensation paid to our non-employee directors during the 2023 fiscal year.
Fees
Stock
Name (1)
Douglas H. Brooks
Michael A. George
Linda A. Goodspeed
Earl G. Graves, Jr.
Enderson Guimaraes
Brian Hannasch
D. Bryan Jordan
Gale King
George R. Mrkonic, Jr.
Jill A. Soltau
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Paid in Cash
($)
(2)
25,000
Awards
($)
(3)(4)
Total
($)
25,000
—
— 265,000 265,000
— 265,000 265,000
— 305,000 305,000
— 250,000 250,000
—
250,000
— 280,000 280,000
— 250,000 250,000
— 290,000 290,000
— 250,000 250,000
250,000
(1) William C. Rhodes, III, our Chairman, President and Chief Executive Officer, serves on the Board but does not receive
any compensation for his service as a director. His compensation as an employee of the Company is shown in the
Summary Compensation Table on page 47.
(2) This column represents the portion of the Director Compensation that was paid in cash and earned in fiscal year 2023
pursuant to the Cash Election, as described above.
(3) The “Stock Awards” column represents the aggregate grant date fair value computed in accordance with the Financial
Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718 for awards of Restricted
Stock Units under the 2020 Omnibus Incentive Plan during fiscal year 2023. See Note B Share-Based Payments, to our
consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended August 26, 2023 (the
“FY23 Form 10-K”) for a discussion of our accounting for share-based awards and the assumptions used. The
aggregate number of outstanding awards of common stock under the AutoZone, Inc. 2003 Director Compensation Plan
(“Stock Units”) and Restricted Stock Units held by each director at the end of fiscal 2023 are shown in the following
footnote 4. See the section titled “Share Ownership Information” beginning on page 55 for more information about our
directors’ stock ownership.
(4) As of August 26, 2023, each current non-employee director had the following aggregate number of outstanding
Restricted Stock Units and Stock Units:
Name
Michael A. George
Linda A. Goodspeed
Earl G. Graves
Enderson Guimaraes
Brian Hannasch
D. Bryan Jordan
Gale V. King
George R. Mrkonic, Jr.
Jill A. Soltau
Restricted
Stock
Units
(#)
222
2,691
4,832
3,051
216
2,742
1,065
3,764
983
19,566
Stock
Units
(#)
—
—
3,417
—
—
—
—
1,405
—
4,822
STOCK OWNERSHIP REQUIREMENT. The Board has established a stock ownership requirement for non-
employee directors. Each director is required to own AutoZone common stock and/or restricted stock units
having a cumulative fair market value in an amount equal to seven times the value of the cash Annual Retainer
payable pursuant to the Director Compensation Program within five years of joining the Board, and to maintain
such ownership level thereafter. Exceptions to this requirement may only be made by the Board under
compelling mitigating circumstances. Shares, Stock Units and Restricted Stock Units issued under the
AutoZone, Inc. Second Amended and Restated Director Compensation Plan, the 2003 Director Compensation
Plan, the 2011 Equity Plan, the Amended 2011 Equity Plan and the 2020 Omnibus Incentive Plan count toward
2023 Proxy Statement
17
this requirement. As of the date of this Proxy Statement, each director meets or exceeds his or her obligations
under the requirement.
OTHER PREDECESSOR PLANS. The AutoZone, Inc. Second Amended and Restated Director Compensation
Plan was terminated in December 2002 and was replaced by the AutoZone, Inc. First Amended and Restated
2003 Director Compensation Plan (the “2003 Director Compensation Plan”) and the AutoZone, Inc. First
Amended and Restated 2003 Director Stock Option Plan (the “2003 Director Stock Option Plan”). The 2003
Director Compensation Plan and the 2003 Director Stock Option Plan were terminated in December 2010 and
replaced by the 2011 Equity Plan. The 2011 Equity Plan was terminated in December 2015 and replaced with
the Amended 2011 Equity Plan. In December 2020, shareholders approved the 2020 Omnibus Incentive Plan
and no further grants have been made under the Amended 2011 Equity Plan. However, grants made under
those plans continue in effect under the terms of the grant made and are included in the aggregate awards
outstanding shown above.
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Shareholder Engagement
We value our relationships with our shareholders, and we have a long-standing practice of engaging with our
shareholders on matters of Board governance, executive compensation, long-term strategy and corporate social
responsibility. We believe our engagement efforts allow us to better understand the priorities, perspectives, and
concerns of our shareholders, strengthen our relationships with our shareholders and make more informed
decisions for the benefit of our shareholders.
Engagement Team. Our engagement team typically consists of our Chairman, President and Chief Executive
Officer, CEO-Elect, Chief Financial Officer, General Counsel and Vice President of Investor Relations. However,
depending on the specific topic that our investors may wish to discuss, we may have other members of our
Executive Committee, internal subject-matter leaders or independent members of the Board participate.
Engagement Framework. Our engagement program has evolved over the years, consistent with the
expectations of our investors. Historically, we have taken a more organic approach to shareholder engagement,
in which discussions primarily focused on financial performance and long-term strategy. More recently, we
invited shareholders to discuss governance or ESG topics with us, with the majority of these calls occurring “off-
season,” not in connection with the annual meeting of shareholders. Today, we have a more intentional and
proactive approach to shareholder engagement, in which we both invite and seek feedback and perspectives on
a variety of topics during the year.
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2023 Proxy Statement
Engagement Framework
Pre-Meeting
Annual Meeting
Post-Meeting
Year-Round
• Review updates to investors’ and proxy advisory firms’ governance policies.
• Monitor governance-related trends and regulatory developments.
• Conduct off-cycle engagement to further understand investors’ views and
priorities.
• Conduct in-season outreach to discuss ballot items, as needed.
• Solicit feedback on new or revised governance practices and disclosures.
• Review annual meeting voting results.
• Discuss feedback from in-season engagement.
• Prioritize potential governance and engagement initiatives for the future.
• Discuss with sell-side analysts, institutional investors and pension funds in
connection with quarterly earnings releases, investor conferences or one-on-one
meetings.
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RESPONSE PLAN
Review
Evaluate
• Share feedback and insights, both complimentary and constructive, with
management and the relevant Committee or full Board for consideration and
discussion.
• Evaluate potential changes to existing practices or policies to determine what
action plan is most appropriate for AutoZone.
• Where appropriate, collect additional input from senior leadership or independent
third parties to better understand issues, risks and opportunities.
Respond
•
Implement governance changes, disclosure enhancements or other actions, If
warranted.
• Discuss responsive actions in subsequent Proxy Statement, ESG Report, or other
public communications, with rationale and background.
We believe these various engagement efforts, whether they are part of a broad-based discussion or the result of
a targeted outreach effort we have initiated, are invaluable as they allow us to better understand the priorities,
perspectives, and concerns of our shareholders, strengthen our relationships and make more informed
decisions for their benefit.
Recent Actions in Response to Shareholder Feedback. In recent years, we’ve adopted new or revised
existing practices in direct response to feedback we’ve received from our shareholders.
Revised our compensation disclosures to better articulate the program design, key performance
metrics, shareholder ownership guidelines and how the executive compensation program reflects a pay-
for-long-term-performance methodology.
Included a robust Board skillset matrix to better showcase the complementary set of skills and
strengths represented on our Board.
Enhanced director biographies to convey each nominee’s individual experiences and why such
nominee remains a valuable member of the Board.
Added discussion to better explain why we believe our independent audit firm continues to be highly
effective in the role despite lengthy tenure.
2023 Proxy Statement
19
Expanded discussion on our shareholder engagement program to better communicate how we
engage with our shareholders and how we’ve responded to shareholder feedback.
Amended Committee Charters to formalize Board oversight of corporate social responsibility
matters.
Included EEO-1 Compliant Data in our ESG Report.
Communicated our Net Zero Ambition with short, medium and long-term goals across Scopes 1 and 2.
Developed a regular ESG-reporting cadence with a commitment of publishing our annual ESG Report
by April 15 of each calendar year.
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FY23 Shareholder Engagement Highlights. During the fourth quarter of fiscal 2023, we invited our top
shareholders to discuss our corporate governance initiatives, any feedback or suggestions they might have and
also the recently announced CEO transition plan.
•
Initial Outreach: We contacted 33 of our top shareholders representing approx. 59.9% of our shares
outstanding.
• Meetings Scheduled: In response, 17 shareholders representing approx. 36.2% of our shares
outstanding accepted our invitation to discuss. Our Chairman, President and CEO participated in all of
these meetings.
• Topics Discussed: Board oversight of CEO Succession; shareholder engagement and outreach
cadence; ESG Report and initiatives; compensation program; compensation determinations relating to
leadership transition; Board composition; and strategy.
PROCEDURE FOR COMMUNICATION WITH THE BOARD OF DIRECTORS
Shareholders and other interested parties may communicate with the Board by writing to the Board, to any
individual director or to the non-management directors as a group c/o Corporate Secretary, AutoZone, Inc., 123
South Front Street, Dept. 8074, Memphis, Tennessee 38103. The Company’s General Counsel and Secretary
will review all such correspondence and will forward correspondence that, in her opinion, deals with the function
of the Board or that she otherwise determines requires the attention of any member, group or committee of the
Board. Communications addressed to the Board or to the non-management directors as a group, and
determined by the Company’s General Counsel and Secretary to merit their attention, will be forwarded to the
Chair of the Nominating and Corporate Governance Committee, and communications addressed to a committee
of the Board, and determined by the Company’s General Counsel and Secretary to merit their attention, will be
forwarded to the chair of that committee.
Related Party Transactions
Our Board has adopted a Related Person Transaction Policy (the “Policy”) which requires the Audit Committee
of the Board to conduct a reasonable prior review of, and approve or ratify, all Related Person Transactions.
The Audit Committee considers the relevant facts and circumstances of each transaction, including but not
limited to the benefits to the Company; the impact on a director’s independence in the event the Related Person
is a director, an immediate family member of a director or an entity in which a director is a partner, shareholder
or executive officer; the availability of other sources for comparable products or services; the terms of the
transaction; the terms available to unrelated third parties generally and the existence of any potential conflicts of
interest. The Policy further provides that the Audit Committee shall not approve or ratify any such transaction it
determines to be inconsistent with the interests of the Company and its shareholders. Related Person
Transactions must also comply with the policies and procedures specified in our Code of Conduct and
Corporate Governance Principles, as described below.
The Policy also requires disclosure of all Related Person Transactions that are required to be disclosed in
AutoZone’s filings with the SEC, in accordance with all applicable legal and regulatory requirements.
A “Related Person Transaction” is defined in the Policy as a transaction, arrangement or relationship (or any
series of similar transactions, arrangements or relationships) that occurred since the beginning of the
Company’s most recent fiscal year in which the Company (including any of its subsidiaries) was, is or will be a
participant and the amount involved exceeds $120,000 and in which any Related Person had, has or will have a
20
2023 Proxy Statement
direct or indirect material interest. “Related Persons” include a director or executive officer of the Company, a
nominee to become a director of the Company, any person known to be the beneficial owner of more than 5% of
any class of the Company’s voting securities, any immediate family member of any of the foregoing persons,
and any firm, corporation or other entity in which any of the foregoing persons is employed or is a partner or
principal or in a similar position or in which such person has a 5% or greater beneficial ownership interest.
Our Board has adopted a Code of Conduct (the “Code of Conduct”) that applies to the Company’s directors,
officers and employees. The Code of Conduct prohibits directors and executive officers from engaging in
activities that create conflicts of interest, taking corporate opportunities for personal use or competing with the
Company, among other things. Our Board has also adopted a Code of Ethical Conduct for Financial Executives
(the “Financial Code of Conduct”) that applies to the Company’s officers and employees who hold the position of
principal executive officer, principal financial officer, principal accounting officer or controller as well as to the
Company’s officers and employees who perform similar functions (“Financial Executives”). The Financial Code
of Conduct requires the Financial Executives to, among other things, report any actual or apparent conflicts of
interest between personal or professional relationships involving the Company’s management or any other
Company employee with a role in financial reporting disclosures or internal controls. Additionally, our Corporate
Governance Principles require each director who is faced with an issue that presents, or may give the
appearance of presenting, a conflict of interest to disclose that fact to the Chairman of the Board and the
Secretary, and to refrain from participating in discussions or votes on such issue unless a majority of the Board
determines, after consultation with counsel, that no conflict of interest exists as to such matter.
We have concluded there are no material Related Party Transactions or agreements that were entered into
during the fiscal year ended August 26, 2023, and through the date of this proxy statement requiring disclosure
under these policies, except as follows: The daughter of Grant McGee, Senior Vice President, Commercial, has
been employed by the Company since 2015 and currently serves as Manager, DIY Promotions and Cost Admin
in our Merchandising department. She received aggregate compensation and benefits in fiscal 2023 in excess
of $120,000 and at a level consistent with that provided to employees in comparable positions and tenure.
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Audit Committee Report
The Audit Committee of the Board of AutoZone, Inc. has reviewed and discussed AutoZone’s audited financial
statements for the year ended August 26, 2023, with AutoZone’s management. In addition, we have discussed
with Ernst & Young LLP, AutoZone’s independent registered public accounting firm, the matters required to be
discussed by the Statement on Auditing Standards No.1301, Communications with Audit Committees, as
amended and as adopted by the Public Company Accounting Oversight Board (“PCAOB”) in Rule 3200T, the
Sarbanes-Oxley Act of 2002, and the charter of the Audit Committee.
The Audit Committee also has received the written disclosures and letter from Ernst & Young LLP required by
the applicable requirements of the PCAOB regarding the firm’s communications with the Audit Committee
concerning independence, and we have discussed with Ernst & Young LLP their independence from the
Company and its management. The Audit Committee has discussed with AutoZone’s management and the
auditing firm such other matters and received such assurances from them as the Committee deemed
appropriate.
As a result of our review and discussions, we have recommended to the Board the inclusion of AutoZone’s
audited financial statements in the Annual Report on Form 10-K for the fiscal year ended August 26, 2023 for
filing with the SEC.
While the Audit Committee has the responsibilities and powers set forth in its charter, the Audit Committee does
not have the duty to plan or conduct audits or to determine that AutoZone’s financial statements are complete,
accurate, or in accordance with generally accepted accounting principles (GAAP); AutoZone’s management and
the independent auditor have this responsibility. Nor does the Audit Committee have the duty to assure
compliance with laws and regulations and the policies of the Board.
Audit Committee of the Board of Directors
D. Bryan Jordan (Chair)
Michael A. George
Linda A. Goodspeed
George R. Mrkonic, Jr.
2023 Proxy Statement
21
THE PROPOSALS
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PROPOSAL 1: Election of 10 Directors
DESCRIPTION OF PROPOSAL. Elect 10 director nominees. Each director shall serve for a 1-year term, until
the next annual meeting of shareholders, or until his or her successor is duly elected and qualified, or until the
director’s earlier resignation or removal.
VOTES REQUIRED. The election of directors at this 2023 Annual Meeting is an uncontested election. As such,
a director nominee is elected to the Board if the number of votes cast FOR such nominee exceeds the number
of votes cast AGAINST such nominee. Abstentions and broker non-votes are not considered votes cast or
shares entitled to vote with respect to such matter and therefore will have no effect on the outcome of Proposal
1. If the number of nominees were to exceed the number of directors to be elected, for example in a contested
election, directors would be elected by a plurality of the votes cast at the Annual Meeting.
IMPACT OF VOTE. Each of these nominees has consented to serve if elected. Should any nominee be
unavailable to serve, your proxy will be voted for a substitute nominee recommended by the Board, or the Board
may reduce the number of directors on the Board.
Pursuant to AutoZone’s Corporate Governance Principles, incumbent directors must agree to tender their
resignation if they fail to receive more votes for, than votes against, their re-election. In such event, the Board
will act within 90 days following certification of the shareholder vote to determine whether to accept the director’s
resignation. These procedures are described in more detail in our Corporate Governance Principles, which are
available on our corporate website at investors.autozone.com. The Board may consider any factors it deems
relevant in deciding whether to accept a director’s resignation. If a director’s resignation offer is not accepted by
the Board, that director will continue to serve until AutoZone’s next annual meeting of shareholders or until his or
her successor is duly elected and qualified, or until the director’s earlier death, resignation, or removal.
Any director nominee who is not an incumbent director and who does not receive a majority vote in an
uncontested election will not be elected as a director, and a vacancy will be left on the Board. The Board, in its
sole discretion, may either fill a vacancy resulting from a director nominee not receiving a majority vote pursuant
to the By-Laws or decrease the size of the Board to eliminate the vacancy.
In connection with the previously announced leadership transition plan, the Board intends to appoint Mr. Daniele
to the role of President and Chief Executive Officer and to serve on the Board of Directors effective January
2024. Mr. Daniele is not currently a director nominee, and this proposal does not pertain to such appointment.
BOARD RECOMMENDATION. Each of the nominees named below was elected as a director at the 2022
annual meeting, and all currently serve as directors. As part of the Board’s determination to nominate these
existing directors for reelection, the Board has determined that each of the directors have valuable experiences,
skills and qualifications necessary to carry out their responsibilities effectively.
The Board recommends that shareholders vote FOR each of
the director nominees.
22
2023 Proxy Statement
KEY SKILLS:
• CEO
• Retail
• Marketing
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Nominees
MICHAEL A. GEORGE
BIOGRAPHY:
Age: 62
Director Since: 2022
Independent: Yes
Committees:
• Audit
Mr. George served as President and Chief Executive Officer of Qurate
Retail, Inc. from March 2018 to September 2021, the parent company of
QVC, and as Chief Executive Officer of QVC from 2005 through July
2021. He previously held various positions with Dell, Inc. from 2001 to
2005, most notably as the Chief Marketing Officer and General Manager
of its U.S. consumer business. Prior to that, Mr. George was a senior
partner at McKinsey & Company and led the firm’s North American Retail
Industry Group.
QUALIFICATIONS:
• Significant experience in the retail industry due to extensive career as
Chief Executive Officer of QVC/Qurate and serving as leader of
McKinsey’s North American Retail Industry Group.
• Brings fresh perspective on issues of marketing, customer
experience and e-Commerce, given the unique nature of QVC’s
video-driven retail business.
• Having extensive experience as CEO and a public company director
enables him to be an effective and informed contributor to the Board.
PUBLIC DIRECTORSHIPS (last five years):
• Ralph Lauren Corp. (2018 – present)
• Qurate Retail, Inc. (2011 – 2021)
• Brinker International, Inc. (2013 – 2019)
KEY SKILLS:
•
Information
Technology
• Automotive
• Public Board
Experience
LINDA A. GOODSPEED
BIOGRAPHY:
Ms. Goodspeed served as the Chief Operating Officer and a Managing
Partner at WealthStrategies Financial Advisors from 2007 until her
retirement in 2017. She had served as Senior Vice President and Chief
Information Officer of ServiceMaster from 2011 to 2014. From 2008 to
September 2011, Ms. Goodspeed served as Vice President, Information
Systems and Chief Information Officer for Nissan North America, Inc., a
subsidiary of Nissan Motor Company, a global manufacturer of vehicles.
From 2001 to 2008, Ms. Goodspeed served as Executive Vice President
and Chief Technology Officer at Lennox International, Inc., a global
manufacturer of air conditioning, heating and commercial refrigeration
equipment.
QUALIFICATIONS:
• Deep experience with respect to information technology (IT) matters
gained from leading complex IT organizations while serving as Chief
Information Officer.
• Knowledge of automotive industry lends valuable insights into risks
and opportunities affecting aftermarket automotive industry.
• Experience serving on different public company boards enables her
to contribute and serve the Board in a highly effectively manner.
Age: 61
Director Since: 2013
Independent: Yes
Committees:
• Audit
• Compensation
2023 Proxy Statement
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PUBLIC DIRECTORSHIPS (last five years):
• American Electric Power Co., Inc. (2006 – present)
• Darling Ingredients Inc. (2017 – present)
• Williams Industrial Services Group Inc. (2021 – 2023)
• Global Power Equipment Group (2016 – 2018)
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EARL G. GRAVES, JR.
BIOGRAPHY:
Mr. Graves has been the President and Chief Executive Officer of
Black Enterprise, the premier business, investing and wealth-
building resource for African Americans providing valuable
business information across different content channels. He has
served in this role since January 2006 and served as its President
and Chief Operating Officer from 1998 to 2006. Mr. Graves has
been employed by the same company in various capacities since
1988.
QUALIFICATIONS:
• Significant expertise in marketing, customer insights and brand
awareness.
• Deep knowledge of human capital management matters
gained from extensive career leading Black Enterprise.
• Vast experience in overseeing and advising on matters of
digital strategy.
Age: 61
Director Since: 2002
Independent: Yes (Lead
Independent Director)
Committees:
• Nominating &
Corp Gov (Chair)
ENDERSON GUIMARAES
BIOGRAPHY:
Age: 64
Director Since: 2012
Independent: Yes
Committees:
• Nominating & Corp Gov
Mr. Guimaraes served as the President and Chief Operating
Officer for Laureate Education, Inc., positions he held from 2015
through his retirement in 2017. From 2011 to 2015, he was
President of Global Operations, CEO of Europe and Sub-Sahara
Africa and Head of Global Categories and Operations at PepsiCo.
Mr. Guimaraes previously had served as Executive Vice President
of Electrolux and Chief Executive Officer of its major appliances
business in Europe, Africa and the Middle East from 2008 to 2011.
Prior to this, Mr. Guimaraes held various leadership positions
during his 10 years at Philips Electronics and also worked in
various marketing positions at Johnson & Johnson.
QUALIFICATIONS:
• Deep expertise in international expansion and operations.
• Extensive experience leading the marketing and operations
functions of well-known consumer brands.
• Understands strategy and operational issues attendant with
growing customer loyalty and brand recognition.
PUBLIC DIRECTORSHIPS (last five years):
• Darling Ingredients Inc. (2021 – present)
• Refresco Group B.V. (2018 – 2022)
KEY SKILLS
• CEO
• Marketing
• Human Capital
Management:
KEY SKILLS:
•
International
• Strategy / Bus
Development
• Operations
• Marketing
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2023 Proxy Statement
KEY SKILLS:
• CEO
• Retail
• Operations
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KEY SKILLS:
• CEO
• Banking & Finance
• Strategy / Bus
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BRIAN P. HANNASCH
BIOGRAPHY:
Mr. Hannasch serves as President and Chief Executive Officer of
Alimentation Couche-Tard, which operates Circle K, a global fuel
and convenience retailer. Mr. Hannasch joined Couche-Tard in
2001 and was named President and CEO in September 2014.
Prior to his current role, he served as Chief Operating Officer,
Senior Vice President of U.S. Operations and Senior Vice
President of Western North America.
QUALIFICATIONS:
• Extensive knowledge of retail operations gained from serving
in operational leadership roles of increasing responsibility.
• Current CEO of a public, global, retail enterprise allowing him
to offer directly comparable experiences, learnings and
insights relating to AutoZone’s business as well as matters of
corporate governance.
PUBLIC DIRECTORSHIPS (last five years):
• Alimentation Couche-Tard (2014 – present)
Age: 57
Director Since: 2022
Independent: Yes
Committees:
• Compensation
D. BRYAN JORDAN
BIOGRAPHY:
Age: 61
Director Since: 2013
Independent: Yes
Committees:
• Audit (Chair)
• Nominating & Corp Gov
Mr. Jordan has served as President, Chief Executive Officer and a
director of First Horizon Corporation since 2008 and Chairman of
the Board for approximately nine of the past 11 years. From
May 2007 until September 2008, Mr. Jordan was Executive Vice
President and Chief Financial Officer of First Horizon and First
Tennessee Bank National Association, and prior to that he served
in various positions at Regions Financial Corporation and its
subsidiary Regions Bank, including (beginning in 2002) as Chief
Financial Officer. Mr. Jordan was also appointed by the Federal
Reserve Bank of St. Louis to serve on the Federal Advisory
Council from January 2020 to December 2022.
QUALIFICATIONS:
• Deep expertise of the banking and financial services industry
allowing him to offer thoughtful insights into macroeconomic
conditions impacting our business and our customers.
• Experience as a public company chief executive officer, chief
financial officer and board member provide him with broad-
based experiences and perspectives on strategy, corporate
governance, risk and compliance.
PUBLIC DIRECTORSHIPS (last five years):
•
First Horizon Corporation (2008 – present)
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KEY SKILLS:
• Human Resources
• Public Directorship
KEY SKILLS:
• Public Directorship
• Strategy / Bus
Development
• Retail
GALE V. KING
BIOGRAPHY:
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Age: 67
Director Since: 2018
Independent: Yes
Committees:
• Compensation
Ms. King served as the Executive Vice President—Chief
Administrative Officer of Nationwide Mutual Insurance Company, a
leading financial services company, from 2012 through her
retirement in July 2021. She previously served as their Executive
Vice President—Chief Human Resources Officer from 2009 to
2012.
QUALIFICATIONS:
• Extensive experience in human resources providing critical
insights into recruitment, retention, training and development
and other issues of human capital management.
• Served as chair of Board’s CEO succession planning
committee culminating in the recent announcement of CEO
successor.
• Experience serving on different public company boards
enables her to contribute and serve the Board in a highly
effective manner.
PUBLIC DIRECTORSHIPS (last five years):
J.B. Hunt Transport Services, Inc. (2020 – 2023)
•
• Unum Group (2022 – present)
GEORGE R. MRKONIC, JR.
BIOGRAPHY:
Mr. Mrkonic is the retired non-Executive Chairman of Maru Group,
a London, UK based research, insight and advisory services firm.
Previously, he was the Non-Executive Chairman of Paperchase
Products Limited, London, UK, a retailer of cards, stationery, wraps
and gifts in the UK, Europe and the Middle East, since 2005, and
had been a director since 1999. Prior to that, he was President of
Borders Group, Inc. from 1994 to 1997 and Vice Chairman from
1994 to 2002.
QUALIFICATIONS:
Age: 71
Director Since: 2006
Independent: Yes
Committees:
• Audit
• Compensation (Chair)
• Vast retail experience gained from serving as a senior
executive and board member at several retail companies.
• Extensive knowledge and understanding of corporate strategy,
finance, and governance.
• Served on multiple public company boards allowing for
relevant and informed insights and learnings.
PUBLIC DIRECTORSHIPS (last five years):
• Ulta Salon, Cosmetics & Fragrance, Inc. (2015 – present)
• Brinker International, Inc. (2003 – 2021)
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2023 Proxy Statement
KEY SKILLS:
• CEO
• Retail
• Strategy / Bus
Development
• Finance
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WILLIAM C. RHODES, III
BIOGRAPHY:
Age: 58
Director Since: 2005
Independent: No
Committees: None
Mr. Rhodes has served as AutoZone’s President and Chief
Executive Officer, and a director since 2005 and was named
Chairman in 2007. Prior to his appointment as President and Chief
Executive Officer, he served in various capacities of increasing
responsibility within the Company since 1994. Prior to 1994,
Mr. Rhodes was a manager with Ernst & Young LLP. As previously
announced, Mr. Rhodes has notified the Board of his intention to
relinquish his roles as President and Chief Executive Officer,
effective January 2024.
QUALIFICATIONS:
• Current Chairman, President and Chief Executive Officer with
over 25 years of AutoZone tenure in roles of increasing
responsibility.
• Extensive knowledge and understanding of the automotive
aftermarket industry domestically and internationally.
• Expertise of the retail industry gained from AutoZone tenure,
prior retail board experience and leadership experience at
retail industry trade group.
• Strong financial expertise to drive long-term profitable growth.
PUBLIC DIRECTORSHIPS (last five years):
• Dollar General Corp. (2009 – 2023)
JILL A. SOLTAU
BIOGRAPHY:
Ms. Soltau served as the Chief Executive Officer and a member of
the Board of Directors of the J.C. Penney Company, Inc., from
October 2018 to December 2020. She previously served as
President and Chief Executive Officer of JoAnn Stores Inc. from
February 2015 to October 2018. Prior to joining JoAnn, Ms. Soltau
served as President of Shopko Stores Operating Co. LLC and has
held senior level positions in national and regional retailers,
including Kohl’s and former Saks Inc. subsidiaries.
QUALIFICATIONS:
Age: 56
Director Since: 2018
Independent: Yes
Committees:
• Nominating & Corp Gov
• Critical experience serving as Chief Executive Officer at a
public, retailer providing significant knowledge of retail
operations and strategic planning.
• Expertise in merchandising gained from leading
merchandising functions at several retailers.
KEY SKILLS:
• CEO
• Retail
• Merchandising
PUBLIC DIRECTORSHIPS (last five years):
• Southwest Airlines Co. (2023 – present)
• Kirkland’s Inc. (2022 – present)
•
J.C. Penney Company, Inc. (2018 – 2020)
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PROPOSAL 2: Ratification of Independent
Registered Public Accounting Firm
DESCRIPTION OF PROPOSAL. Ratify the appointment of Ernst & Young LLP (“EY”) as AutoZone’s
independent registered public accounting firm.
VOTES REQUIRED. EY will be ratified as AutoZone’s independent registered public accounting firm if the
number of votes cast FOR the proposal exceeds the number of votes cast AGAINST the proposal. Abstentions
and broker non-votes are not considered votes cast or shares entitled to vote with respect to this matter and
therefore will have no effect on the outcome of Proposal 2.
IMPACT OF VOTE. The Audit Committee is not bound by a vote either for or against the firm but will consider
the votes cast by shareholders in selecting our independent registered public accounting firm in the future.
BOARD RECOMMENDATION. As part of its responsibility to evaluate and appoint the independent auditor
each year, the Audit Committee has selected EY as our independent registered public accounting firm for the
upcoming fiscal year. The Audit Committee considered a number of factors prior to making the determination to
re-engage EY, including the nature and quality of their performance, communications, expertise, objectivity,
professional judgement and tenure. As discussed below, the Audit Committee believes there are numerous
benefits associated with a long-tenured relationship. The Audit Committee also considered that shareholders
voted in favor of Ernst & Young with over 92% of the votes cast at last year’s annual meeting. Due to these
factors, among others, the Audit Committee has selected Ernst & Young to be AutoZone’s independent
registered public accounting firm for the 2024 fiscal year.
Representatives of Ernst & Young LLP will be present at the Annual Meeting to make a statement if they so
desire and to answer any appropriate questions.
The Board recommends that shareholders vote FOR the ratification
of Ernst & Young LLP as AutoZone’s independent registered public
accounting firm.
BENEFITS OF A LONG-TENURED AUDITOR
EY has served as our independent auditor for over thirty-five years. Before determining to engage them again
for the upcoming fiscal year, the Audit Committee considered how auditor tenure might impact the quality and
effectiveness of the independent audit and determined that a number of benefits exist:
• EY has developed a deeper understanding of AutoZone, its business, the industry in which it operates,
its accounting policies and practices and its internal controls over financial reporting;
• Efficiencies have been gained in the audit process, resulting in an efficient fee structure that is
competitive with our peer companies, while continuing to provide high quality of service; and
• Appointing a new audit firm would require a significant amount of management’s time for effective
onboarding and transitioning.
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2023 Proxy Statement
AUDIT AND NON-AUDIT FEES
The aggregate fees for professional services rendered by EY during the past two fiscal years for the annual
audit of our consolidated financial statements, the review of our quarterly interim consolidated financial
statements, and audit-related, tax, and all other services performed, are set forth in the table below. Amounts
reported for FY23 include estimates to be billed for services rendered.
Audit Fees
Audit-Related Fees
Tax Fees(1)
All Other Fees
2023
2022
35,000 $
$ 3,006,553 $ 2,368,719
$
34,246
$ 157,000 $ 478,612
—
— $
$
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(1) Relates to state, local and international tax services, including tax compliance and tax planning.
AUDIT COMMITTEE PRE-APPROVAL
The Audit Committee pre-approves all services performed by the independent registered public accounting firm
under the terms contained in the Audit Committee charter, a copy of which can be obtained at our website at
investors.autozone.com. The Audit Committee pre-approved 100% of the services provided by EY during the
2023 and 2022 fiscal years. The Audit Committee considers the services listed above to be compatible with
maintaining Ernst & Young LLP’s independence.
2023 Proxy Statement
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PROPOSAL 3: Advisory Vote on the
Compensation of Named Executive
Officers
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DESCRIPTION OF PROPOSAL. In accordance with Section 14A of the Exchange Act, we are asking
shareholders to approve the following advisory resolution on the compensation of our Principal Executive
Officer, our Principal Financial Officer and our other three most highly paid executive officers (collectively, the
“Named Executive Officers”) at the Annual Meeting:
“RESOLVED, that the compensation paid to AutoZone’s Named Executive Officers, as disclosed in this
Proxy Statement pursuant to the compensation disclosure rules of the Securities and Exchange
Commission, including the Compensation Discussion and Analysis, the accompanying compensation tables
and the related narrative discussion, is hereby APPROVED.”
VOTES REQUIRED. This matter will be approved if the number of votes cast FOR the proposal exceeds the
number of votes cast AGAINST the proposal. Abstentions and broker non-votes are not considered votes cast
or shares entitled to vote with respect to this proposal and therefore will have no effect on the outcome of
Proposal 3.
IMPACT OF VOTE. This advisory vote, commonly known as a “say-on-pay” proposal, gives our shareholders
the opportunity to endorse or express disapproval of our executive pay program. Because the vote on this
proposal is advisory in nature, it is not binding on AutoZone, the Board or the Compensation Committee. The
vote on this proposal will, therefore, not affect any compensation already paid or awarded to any Named
Executive Officer nor will it overrule any decisions made by the Board or the Compensation Committee.
Because we highly value the opinions of our shareholders, however, the Board and the Compensation
Committee will consider the results of this advisory vote when making future executive compensation decisions.
BOARD RECOMMENDATION. The Board believes that AutoZone’s executive compensation program, as
described in the Compensation Discussion and Analysis, is effective in achieving the Company’s goals of driving
superior performance, retention and shareholder value. Our Board and Compensation Committee believe that
there should be a strong relationship between pay and performance, and our executive compensation program
reflects this belief. We urge you to read the Compensation Discussion and Analysis, as well as the
compensation tables and narrative, beginning on the following page, which provide detailed information on our
compensation philosophy, policies and practices and the compensation of our Named Executive Officers.
The Board recommends that shareholders vote FOR the advisory
vote on executive compensation.
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2023 Proxy Statement
PROPOSAL 4: Frequency of Advisory Vote
on Named Executive Officer
Compensation
DESCRIPTION OF PROPOSAL. In accordance with Section 14A of the Exchange Act, we are asking
shareholders to approve the frequency of future advisory votes on the compensation of our Named Executive
Officers. Shareholders may elect to have such advisory votes every one year, two years or three years.
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VOTES REQUIRED. The choice that receives the most votes will be considered to be the recommendation
made by shareholders. Abstentions and broker non-votes are not considered votes cast or shares entitled to
vote with respect to this proposal and therefore will have no effect on the outcome of this Proposal 4.
IMPACT OF VOTE. This advisory vote, commonly known as a “say-on-frequency” proposal, gives our
shareholders the opportunity to express how frequently they would like to vote upon our executive pay program.
Because the vote on this proposal is advisory in nature, it is not binding on AutoZone, the Board or the
Compensation Committee. Because we highly value the opinions of our shareholders, however, the Board will
consider the results of this advisory vote.
BOARD RECOMMENDATION. The Board believes that shareholders should continue to have the opportunity
to vote upon AutoZone’s executive compensation program on an annual basis. Since “say-on-pay” was first
introduced in 2011, the Company’s shareholders have provided a strong level of support each year in favor of
our pay practices. Holding this vote annually allows the Compensation Committee to have regular and
immediate feedback on our compensation practices and disclosures which ultimately inform future
compensation decisions and shareholder engagement needs.
The Board recommends that shareholders vote to hold the advisory
vote on named executive officer compensation
every ONE YEAR.
Other Matters
We do not know of any matters to be presented at the Annual Meeting other than those discussed in this Proxy
Statement. If, however, other matters are properly brought before the Annual Meeting, your proxies will be able
to vote those matters in their discretion.
2023 Proxy Statement
31
COMPENSATION DISCUSSION
AND ANALYSIS
This Compensation Discussion & Analysis (“CD&A”) explains our compensation program for our named
executive officers (“NEOs”) for fiscal year 2023 (“FY23”). This CD&A also describes the Compensation
Committee’s process for making pay decisions, as well as its rationale for specific compensation-related
decisions.
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Table of Contents
Compensation Committee Report
Executive Summary
FY23 Year in Review
Shareholder Support and Engagement
Diversity, Equity and Inclusion
Compensation Framework
Guiding Principles
Compensation Elements and Mix
Target Compensation Mix
Compensation Governance
Compensation Committee Oversight
Roles and Responsibilities
Establishing Compensation Levels
Benchmarking
Compensation Program Details
Base Salary
Annual Incentive Plan
Long-Term Incentive Plan
One-Time Special Awards
Other Practices, Policies & Guidelines
Summary Compensation Table
Grants of Plan-Based Awards
Outstanding Equity Awards at Fiscal Year-
End
Option Exercises and Stock Vested
Nonqualified Deferred Compensation
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The Compensation Committee of the Board has
reviewed and discussed with management the
following CD&A. Based on such review and
discussions, the Committee recommended to the
Board of Directors that the CD&A be included in this
proxy statement.
Compensation Committee,
George R. Mrkonic, Jr. (Chair)
Brian P. Hannasch
Linda A. Goodspeed
Gale V. King
Named Executive Officers*
WILLIAM C. RHODES, III
Chairman, President and Chief Executive Officer
JAMERE JACKSON
Executive Vice President, Chief Financial Officer,
Finance & Store Development
THOMAS B. NEWBERN
Executive Vice President, Operations, Sales and
Technology
PHILIP B. DANIELE
Executive Vice President, Merchandising, Marketing,
Supply Chain and CEO-Elect
PRESTON B. FRAZER
Senior Vice President, Finance
*Reflects titles as of fiscal year-end.
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2023 Proxy Statement
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Executive Summary
FY23 YEAR-IN-REVIEW
Our operating theme for fiscal year 2023 was “Accelerate Together.” After an unprecedented period of
uncertainty and volatility impacting virtually every aspect of our business, processes, procedures, and people,
we worked aggressively to exit pandemic mode by re-anchoring ourselves to our historic standard of flawless
execution and Accelerate Together.
We Sustained Strong Growth and Continued to Deliver
Strong Results. In FY23, we built upon our exceptional
prior period performance by delivering $17.5 billion in sales,
domestic same store sales growth of 3.4%, international
same store sales growth (on a constant currency basis) of
17.5% and total company same store sales growth (on a
constant currency basis) of 4.6%. We sustained the
extraordinary sales and share gains we achieved since the
start of the pandemic and we proudly established new all-
time highs in sales, average sales per store, average
Commercial sales per program, earnings per share and
cash flow from operations.
We Continue to Navigate a Challenging Macroeconomic
Environment. We continue to navigate a complex and
unpredictable macroeconomic environment. FY23 has
been marked by continued challenges – rising interest rates
and labor costs are but a couple of those examples. After
the most significant product cost inflation we have seen in
decades, we are seeing those trends moderate. Labor costs
continue to rise, and we believe that trend will continue
albeit at a slower rate. We have clear, strong growth
initiatives in progress in our retail, commercial and
international businesses, and we are determined to move
with urgency to reaccelerate our sales and share growth.
While it was difficult to forecast our sales performance in
this environment, the company managed its costs
appropriately and slightly exceeded its target Earnings
Before Interest and Taxes and Return on Invested Capital
goals. The result of this focus was another year of solid
profitable growth. Our continuing strong results are a
testament to the organization’s ability to perform in all
economic environments.
Continue to Return Cash to our Shareholders. We
returned approximately $3.7 billion of cash to our
shareholders in the form of share repurchases during FY23.
Furthermore, since the inception of our share repurchase
program in 1998 and through the end of the fiscal year, we
have returned an aggregate $33.8 billion to shareholders.
Our long-standing and unwavering commitment to our
disciplined capital allocation strategy is clear.
We Challenge Our AutoZoners to Accelerate Growth in
Key Metrics. The Company delivered solid results,
executing amidst a challenging external environment. With
our focus on the future, we accelerated together and set
challenging performance target goals with EBIT target
increasing 4% over prior year record growth and ROIC
increasing to ensure the plan was appropriately rigorous
Diluted EPS
Earnings Before Interest and Taxes
and Return on Invested Capital
Total Shareholder Return
2023 Proxy Statement
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and management was incented to deliver the best results
possible for our shareholders.
SHAREHOLDER SUPPORT AND ENGAGEMENT
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We have historically received high levels of support for our compensation program as evidenced by the results
of our annual non-binding “Say-on-Pay” advisory vote regarding the compensation of our named executive
officers. We have never received less than 86% votes cast in favor of our pay practices since “Say-on-Pay” was
introduced in 2011. We consider this voting record to be a strong validation that our pay practices are firmly
aligned with our shareholders’ desires.
In addition to reviewing the results of our Say-on-Pay vote, we routinely engage directly with our shareholders
on executive compensation, among other topics, to ensure there is appropriate communication and dialog
between AutoZone and its shareholders. In the Summer and Fall of 2023, we invited shareholders to ask
questions and provide feedback on our executive compensation practices and made the Chair of our
Compensation Committee available to any of those shareholders who so requested. Shareholders continued to
be supportive of our compensation practices and also asked for expanded disclosure regarding compensation
determinations relating to the leadership transition.
DIVERSITY, EQUITY AND INCLUSION
AutoZone is committed to continuing to build a diverse
organization that represents our customers and the
communities in which we serve. This commitment to
diversity begins at the top with our Board of Directors and
our Executive Committee. We are proud of the quality,
strength, experience, racial and ethnic diversity, gender
diversity and tenure represented on our 15-person
Executive Committee. Additionally, six members of our
Executive Committee are Executive Sponsors of AutoZone
Business Resource Groups and six are on the DEI
Council. This leadership and advocacy serve to ensure we
remain dedicated in continuing to invest in and develop a
talented and diverse pipeline of AutoZoners.
AN AUTOZONER ALWAYS
EMBRACES DIVERSITY
Welcome each individuals’ heritage,
differences and unique qualities. Build
teams with diverse thoughts, skills,
knowledge and backgrounds. Value the
ideas and opinions of others.
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2023 Proxy Statement
Compensation Framework
GUIDING PRINCIPLES
As the leading retailer and distributor of automotive replacement parts and accessories in the Americas, we
believe an effective compensation program should be carefully designed to address the unique needs of our
company, taking into consideration the industry, our history and the employee population for which such
compensation program is designed. In particular, AutoZone’s executive compensation program is designed
around three, primary Guiding Principles.
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COMPENSATION GUIDING PRINCIPLES
Drive PERFORMANCE
Does the compensation program represent a pay-for-performance
philosophy by driving short-term and long-term performance? Are there
appropriate risk mitigation measures designed to prevent excessive risk
taking?
Drive RETENTION
Are we attracting and retaining effective leaders who can develop and
execute long-term strategic objectives? Are they appropriately incented to
ensure the long-term success of the organization, including after their
retirement? Are they encouraged to attract, retain and develop organizational
talent for the future?
Drive SHAREHOLDER VALUE
Are we investing in the profitable growth of the business by incenting
sustainable value creation? Is performance and retention achieved in a
manner that does not come at an excessive cost to shareholders?
These Guiding Principles have shaped our executive compensation framework for more than 20 years. By
referring to these Guiding Principles, the Compensation Committee has consistently evaluated our executive
compensation over the years to determine whether the program remains effective or whether changes in
compensation design are appropriate.
Drive Performance
Evaluating long-term performance is a necessary first step in evaluating executive compensation. At AutoZone,
we pay particular attention to Total Shareholder Return (TSR), Diluted Earnings per Share (EPS), Earnings
before Interest and Taxes (EBIT) and Return on Invested Capital (ROIC). We believe these metrics, when
viewed over a ten-year horizon, provide a strong indication of whether our compensation program embodies not
only a pay-for-performance incentive structure, but also a pay-for-long-term-performance incentive structure.
Furthermore, we are particularly proud that our TSR, over the past 20-years, has averaged approximately 20%,
materially exceeding both the S&P 500 and S&P Retail Index!
Drive Retention
Retention of key executive officers, combined with the ability to attract and recruit highly qualified, external
leaders, is an important goal of our compensation program as it promotes superior and consistent execution of
our operational and financial goals as well as more thoughtful succession planning and organizational
development. This ultimately serves the long-term benefit of our organization, our investors and our customers.
2023 Proxy Statement
35
Accordingly, the Compensation Committee regularly reviews the turnover of the Company’s executive officers
as well as the entire pool of equity-eligible employees to evaluate retention.
• During the past ten years, AutoZone has not lost a single executive officer to another business due to their
voluntary termination. To the contrary, our executive officers typically remain with AutoZone until their
permanent retirement which allows for a successful transition of responsibilities to their successor.
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• During fiscal year 2023, only 3% of equity-eligible AutoZoners left the Company due to voluntary
departures as the vast majority of turnover was due to retirements or performance-based terminations. We
believe this exceptionally low rate of turnover, well-below the market average rates, is a strong validation
of the retentive value of our compensation structure.
• We have also shown that our compensation structure allows us to effectively recruit externally as we have
added three highly qualified executive officers in the last three years.
Drive Shareholder Value
Investing in the profitable long-term growth of the business
is a basic tenet of AutoZone. We passionately pursue
opportunities that provide a strong return on investment and
exercise restraint when presented with opportunities that
we believe will not provide the returns that shareholders
have come to expect from us. While some refer to this
approach as our disciplined capital allocation strategy, at
AutoZone, we simply call it Living our Pledge and Values.
An AutoZoner always Strives for Exceptional Performance.
Our compensation programs are designed to incent
behaviors that stand true to this basic principle of driving
long-term shareholder value, by profitably investing in and
growing our business and returning excess cash to our
shareholders.
AN AUTOZONER ALWAYS STRIVES
FOR EXCEPTIONAL
PERFORMANCE
Be accountable and honor your commitments.
Act in a manner of the highest legal and
ethical standards. Use resources wisely and
promote a culture of thrift. Take strong
initiative, act quickly and do the job right the
first time.
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2023 Proxy Statement
COMPENSATION ELEMENTS AND MIX
The Compensation Committee aims to align the executive compensation program with the interests of our
shareholders and in a manner consistent with our Guiding Principles. The key elements of our executive
compensation program, as well as the primary Guiding Principles promoted by each such element, are
summarized below.
Additionally, the program is designed to include an appropriate mix of different types of compensation as
follows:
a mix of short-term and long-term incentive compensation to align pay outcomes to both the
achievement of our annual operating plan as well as our long-term strategy;
a mix of cash and equity compensation to align interests of our executives with those of our
shareholders; and
a mix of fixed and variable compensation, to promote the achievement of rigorous goals without
excessive risk taking.
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Compensation Components
Guiding Principles
BASE SALARY
• Fixed cash compensation
• Allows AutoZone to attract and retain highly qualified
ANNUAL
INCENTIVE
PLAN
LONG-TERM
INCENTIVE
PLAN
executives through the delivery of stable, cash compensation
• Salaries reflect individual’s level of responsibility and
experience, scope and complexity of position, market data
and internal pay equity
• Variable cash compensation
• Drives short-term Company performance
• Payout is based upon performance against pre-established,
realistic, team-based financial goals of EBIT and ROIC, as
drivers of economic profit
•
Incents exceptional individual performance due to individual
modifiers
• Variable equity compensation, subject to holding requirements
• Drives long-term performance
• Directly aligns executives’ interests with shareholders by
rewarding long-term value creation as measured by stock
price appreciation using stock options
• Due to the share buyback program, each year, we are
effectively reducing the number of stock options we grant as
the grant pool is based on a fixed percentage of shares
outstanding
BENEFITS
• Health, welfare and retirement benefit plans and programs,
including participation in stock purchase plans
PERQUISITES
• Helps attract and retain experienced executives
• Limited perquisites and personal benefits, such as airline club
memberships and home security systems, which allow
executives to devote more time to business while also
promoting health, wellness and safety
2023 Proxy Statement
37
For FY23, the vast majority of target compensation value was delivered in the form of variable or “at-risk”
performance-based compensation as shown below.
Chairman, President and CEO
Average of Other NEOs
Target Compensation Mix
P
P
r
r
o
o
x
x
y
y
38
2023 Proxy Statement
Compensation Governance
COMPENSATION COMMITTEE OVERSIGHT
The Company’s executive compensation program is administered and overseen by the Compensation
Committee. As set forth in its committee charter (which is available on the Investor Relations section of our
website), the Compensation Committee is made up entirely of independent directors appointed by the full Board
of Directors and is responsible for reviewing and approving AutoZone’s compensation philosophy, strategy and
objectives as well as its compensation programs, plans and awards for executive officers. In carrying out its
responsibilities, the Compensation Committee elicits feedback and support from members of management and
outside advisors as needed.
P
r
o
x
y
ROLE OF COMPENSATION COMMITTEE
• Reviews and approves executive
compensation philosophy, strategy and
objectives
• Evaluates performance against pre-
established performance goals
• Reviews regulatory and legal developments
• Reviews and approves compensation
on compensation matters
programs, plans and awards (including
salary, bonus and equity grants) for all
executive officers
• Determines the terms and conditions of
equity incentive awards for all award
recipients
• Reviews investor and key stakeholder
perspectives on executive compensation
practices
• Reviews and oversees risk management
practices relating to the design and operation
of compensation plans and programs
ROLE OF COMPENSATION CONSULTANT
ROLE OF MANAGEMENT
• Reports directly to the Compensation
• Conducts compensation-related research and
Committee, with regular communication
with the Compensation Committee Chair
data analysis based on peer group and
broader market surveys
• Provides recommendations regarding
compensation amount, mix, program
design and governance practices
• Feedback and recommendations are
primarily focused on CEO compensation
• Provides direct feedback regarding
compensation-related practices and
trends
• Provides recommendations regarding
compensation amount, mix, program design,
and governance practices
• Executives vigorously evaluate the performance
of each of their direct reports
• Evaluates market data for each executive
officer relative to the Company’s strategy and
business and inherent responsibilities of the
role
• Advises on relationship of other factors, such
as the Company’s annual operating plan,
long-term strategy, human capital
management strategy and internal pay equity,
to compensation design and outcomes.
Independent Compensation Consultant
In designing FY23 executive compensation programs, the Compensation Committee selected and retained
Pearl Meyer to serve as its independent compensation consultant as they have since 2017. Prior to its
engagement, the Committee re-assessed Pearl Meyer’s independence in light of applicable SEC rules and
NYSE listing standards and determined that no conflict of interest or independence concerns exist. Pearl Meyer
reports directly to the Compensation Committee and provides independent advice regarding executive and non-
employee director compensation programs and practices. Representatives from Pearl Meyer also regularly
attend meetings of the Compensation Committee and also executive sessions as may be requested by the
Committee from time to time.
2023 Proxy Statement
39
Management
P
P
r
r
o
o
x
x
y
y
Mr. Rhodes, in his capacity as President and Chief Executive Officer, attends most meetings of the
Compensation Committee and provides valuable input and perspectives to the Committee with respect to the
performance and compensation of the other members of our management team. He makes specific
recommendations to the Compensation Committee concerning the compensation of his direct reports and other
senior executives, including the executive officers. These recommendations generally relate to base salary
increases, internal promotions and compensation recommendations for newly hired executives. He also assists
the Compensation Committee by providing input regarding individual goals, performance and results as well as
scope and complexity of their positions. Our Senior Vice President, Human Resources, along with other key
members of our human resources team also attend the majority of Compensation Committee meetings and
provide the Committee with data, analyses and perspectives on relevant market and industry trends.
Compensation Planning Cycle
SEPTEMBER - NOVEMBER
DECEMBER – FEBRUARY
• Review company performance and
• Review year-to-date results against annual
individual performance for prior year and
approve annual incentive plan payouts
incentive plan targets
• Review Say-on-Pay results and proxy
• Review and approve compensation
advisory firm analyses
disclosures to appear in Proxy Statement
• Approve compensation levels, including
base salary, annual incentive plan target
and equity awards
• Review feedback from Compensation
Committee self-evaluation
• Review executive compliance
with stock ownership policy
• Review compliance with Compensation
Committee Charter
• Review director compensation (biennially)
• Review director compliance with
stock ownership policy
MARCH – MAY
JUNE - AUGUST
• Review year-to-date results
against annual incentive plan
targets
• Review composition of Peer Group and
approve any changes
• Review trends and best practices, due to
legislative and regulatory changes or
otherwise
• Discuss potential changes to compensation
plans or policies
• Review consultant independence and fees
• Review year-to-date results against
annual incentive plan targets
• Review share-based expense trend
• Discuss feedback from shareholder
engagement
• Review compensation plans and potential
changes for following year
• Review findings from compensation program
risk assessment.
• Discuss compensation levels for executive
officers for following year
40
2023 Proxy Statement
ESTABLISHING COMPENSATION LEVELS
Chief Executive Officer
The Compensation Committee annually reviews and establishes the compensation level for the Chairman,
President and Chief Executive Officer, in conjunction with a review of his individual performance by the non-
management directors. As part of this review, the Committee considers all forms of compensation, including
base salary, annual cash incentive, long-term equity incentives and other benefits provided. Mr. Rhodes is not a
party to the deliberations regarding his own compensation. Instead, the Compensation Committee receives
input from Pearl Meyer, as its independent compensation consultant, and discusses its recommendations
directly with the Senior Vice President, Human Resources.
P
r
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x
y
CEO Transition (Effective January 2024)
Executive Chairman. In determining compensation for Mr. Rhodes that will take effect when he is appointed
Executive Chairman in January 2024, the Compensation Committee reviewed peer group data and found great
variability in Executive Chairman pay, due to each Company’s unique facts and circumstances. The Committee
wanted total compensation to be aligned appropriately with other leadership levels within the organization
including the CEO successor, as well as incentivize Mr. Rhodes to remain focused on the overall health and
long-term performance of the Company. Following the transition date, Mr. Rhodes shall receive an annual base
salary of $150,000 with no annual bonus opportunity. Additionally, the Committee approved a long-term
incentive award consisting of non-qualified stock options granted on October 6, 2023, with a grant date fair
value of $4,850,000, based upon the Black-Scholes option pricing valuation model. Such award is scheduled to
cliff-vest on October 15, 2028, with 50% of such award granted at an exercise price equal to 110% of the closing
price of the Company’s common stock on the grant date and the remaining 50% granted at an exercise price
equal to 100% of the closing price of the Company’s common stock on the grant date. All other terms of the
long-term incentive award remain consistent with prior awards. In determining this compensation structure, the
Committee believes a five-year cliff vesting shows commitment to the Company and its shareholders and
reflects our philosophy of pay-for-long-term-performance. The premium-priced options were added to remain
focused on the long-term success of the enterprise, knowing that Mr. Rhodes continues to have a strong belief
in AutoZone and the future potential of this Company, which further aligns his interests with those of our
shareholders.
CEO Successor. In determining compensation for Mr. Daniele that will take effect when he is appointed our
Chief Executive Officer in January 2024, the Compensation Committee reviewed peer group data, Mr. Rhodes’
current compensation as CEO and Mr. Daniele’s specific experience. In particular, the Compensation
Committee considered that Mr. Daniele will be new-in-position as a first-time CEO but also brings with him many
years of relevant experience within AutoZone and the aftermarket automotive industry. Following such review,
the Compensation Committee determined to set Mr. Daniele’s total compensation at a competitive level but
below market median compared to the peer group. His base salary and target annual incentive compensation
are relatively consistent with that of Mr. Rhodes’s, but his long-term incentive compensation is significantly less
as Mr. Rhodes has served as CEO for more than 18 years. In connection with his appointment as Chief
Executive Officer in January 2024, Mr. Daniele’s annual base salary will be increased to $1,000,000 with a
bonus target of 130% of base salary. He is also expected to receive long-term incentive awards for fiscal year
2024 consisting of non-qualified stock options with an estimated grant date fair value of $7,200,000 with a
portion granted on October 6, 2023, and the remaining non-qualified stock options granted as of the transition
date. Consistent with existing practice, Mr. Daniele was not a party to the deliberations regarding his own
compensation, however, the Compensation Committee received input from Pearl Meyer and Mr. Rhodes in
establishing Mr. Daniele’s new compensation.
2023 Proxy Statement
41
P
P
r
r
o
o
x
x
y
y
Other Executive Officers
The Compensation Committee annually reviews and approves base salaries for AutoZone’s remaining
executive officers based on recommendations of the Chairman, President and Chief Executive Officer and
considerations of the various factors described above.
BENCHMARKING
AutoZone reviews publicly available data from a peer group of companies to help us ensure that our executive
compensation programs remain effective in carrying out our Guiding Principles.
Peer Group Composition
Our peer group is composed of direct competitors; companies with which we compete for talent, customers and
capital; and companies with a comparable range of key financial measures (e.g., revenues between 50% and
200% of AutoZone revenues, etc.) and business model (e.g. specialty retailer with retail and commercial
customers). Such companies are likely to have executive positions comparable in breadth, complexity and
scope of responsibility to ours. The peer group data we use is from proxy filings and other published sources – it
is not prepared or compiled especially for AutoZone. We annually review the appropriateness of this peer group.
It typically has changed when a peer company experiences events such as acquisitions and spin-offs, or in the
event a member company experiences significant performance challenges.
• Advance Auto Parts
• Bath and Body Works
• Darden Restaurants
• Dick’s Sporting Goods
• Dollar General
• Dollar Tree
FY23 Peer Group
• Foot Locker
• Gap Stores
• Genuine Parts
• LKQ Corporation
• O’Reilly Automotive
• Ross Stores
• Sherwin Williams
• Tractor Supply Company
• Ulta Beauty
• W.W. Grainger
• Yum! Brands
Changes for FY24 Peer Group. During fiscal 2023, recognizing the continued growth of the Company, the
Compensation Committee reviewed the peer group for fiscal 2024 compensation programs. The intent of such
review was to ensure our peer group consists of companies with a similar business model and face similar risks
and opportunities as the macroeconomic environment changes, while also selecting companies with
comparable financial metrics, market capitalizations and go-to market strategies. Management continues to
believe the business models of automotive retailers and petroleum distributors are too dissimilar for inclusion in
our peer group. Following such review, and upon the recommendation of management and Pearl Meyer, the
Compensation Committee approved the following changes for the fiscal year 2024 peer group:
• Removed: Darden Restaurants, Foot Locker, Gap Stores, Ross Stores and Yum! Brands
• Added: Costco Wholesale and Lowe’s
Use of Peer Group Data
Peer group data is an important tool in determining executive compensation levels. However, due to a number
of factors, executive compensation data is not perfectly comparable across companies. For example,
companies, like AutoZone, consider the scope, complexity and strategic contributions of each role in setting
executive compensation. These factors vary significantly across companies, even in the same industry. For this
reason, AutoZone does not engage in strict benchmarking of compensation levels, i.e., we do not use specific
data to support precise targeting of compensation, such as setting an executive’s base pay at the
50th percentile of an identified group of companies. Instead, we utilize peer group data to help determine
competitive base salaries and short-term incentive target amounts that support our ability to attract and retain
executive talent within our overall compensation philosophy.
42
2023 Proxy Statement
Survey Data
In addition to the use of peer group data, AutoZone uses broader compensation survey data submitted by
hundreds of companies, which may contain summary statistical information (e.g., mean, median,
25th percentile, etc.) related to base salaries, variable compensation, total annual cash compensation, long-term
incentive compensation and total direct compensation. In making decisions related to executive compensation,
the Compensation Committee uses the survey data as context in reviewing compensation levels, particularly for
salary ranges, and approving pay actions.
P
r
o
x
y
2023 Proxy Statement
43
Compensation Program Details
BASE SALARY
P
P
r
r
o
o
x
x
y
y
We provide base salaries to our executive officers as a means to deliver a stable amount of cash compensation
throughout the fiscal year. Base salaries are established by the Compensation Committee at a level that takes
into consideration the individual’s position, including scope and complexity of the role, as well as broad-based
market data, internal pay equity and total target cash compensation.
In general, base salaries for our executive officers are competitive but often below market median. For new
executive officers that are promoted from within the organization, the Company aims to set base salaries in the
bottom quartile of the market with the expectation of moving base salaries to the 30th percentile after the
third year in such position. For executive officers that are externally hired, the Company may be more
competitive in setting base salaries closer to median in order to successfully recruit and retain highly qualified
leaders that complement the strategic needs of the organization.
Over time, as the median pay levels in the competitive market change, as evidenced by the salary survey data,
AutoZone will make appropriate adjustments to its salary range midpoints so that on average, these midpoints
are positioned at market median for base salaries. We believe this positioning relative to the market allows for
competitive base salary levels while also delivering competitive total rewards at or above the market median
through our performance-based variable compensation. For additional information on the sources of market
data and how AutoZone uses such data, see “Benchmarking” within this CD&A.
The below table lists each of our named executive officer’s base salary for fiscal years 2022 and 2023,
the percent of increase from the prior year and the rationale for the change.
Name
William C. Rhodes, III
FY22
FY23
Increase
Rationale
$ 1,050,000 $ 1,050,000
0.0 % As CEO, Mr. Rhodes has not
Jamere Jackson
710,000
731,000
3.0 % Mr. Jackson received a smaller
typically received salary
increases. He has received one
$50,000 salary increase in the
past ten years.
Thomas B. Newbern
616,000
641,000
Philip B. Daniele
500,000
519,000
salary increase as his salary was
near market median.
4.1 % Mr. Newbern received a salary
increase aligned with the
approach for all AutoZoner's with
an average increase of 4.0%.
3.8 % Mr. Daniele received a salary
increase aligned with the
approach for all AutoZoner's with
an average increase of 4.0%.
Preston B. Frazer
500,000
449,000
(10.2)% Mr. Frazer received a salary
decrease aligned with the change
in the scope of his role and
responsibilities as he moved from
Operations and Sales into
Finance.
ANNUAL INCENTIVE PLAN
All executive officers were eligible to receive an annual cash incentive award under the FY23 Management
Incentive Plan (“MIP”), which is designed to motivate and reward executives for short-term performance
44
2023 Proxy Statement
measured against pre-established financial goals. The following graphic illustrates the general design and
structure of the MIP, or the annual incentive plan.
P
r
o
x
y
The Compensation Committee annually reviews the design and elements of our executive compensation
program to ensure it continues to reflect our Guiding Principles. In addition, the Committee periodically engages
in a deeper review as may be appropriate due to evolving best practices, macroeconomic circumstances or
otherwise. For example, during FY23, the Compensation Committee reviewed historical annual plan attainment
levels over the prior 20-year period to ensure plan design reflected the Guiding Principles of Drive Performance
and Drive Shareholder Value. In particular, the Compensation Committee reviewed incentive plan payout levels
and performance against planned targets. In the instances where the Company performed significantly greater
than plan and executive officers earned significant incentive plan payouts, the Committee reviewed underlying
factors driving the exceptional performance, the incremental cost to shareholders, the growth in AutoZone’s
market capitalization, industry performance and industry-wide compensation practices. Based on this review,
the Compensation Committee determined the MIP, or the annual incentive plan, is designed effectively and
furthers all three Guiding Principles. As a result, the Compensation Committee has not made any significant
changes to the plan design.
In FY23, the Compensation Committee established a maximum (above which no further bonus may be earned)
of 300%. Looking at historical performance, the addition of a maximum payout was appropriate in the current
environment.
Target Opportunity
As set forth in the table below, each executive officer’s annual incentive plan target opportunity is expressed as
a percentage of base salary, which percentage is based on the individual’s level of seniority within the
organization. As an individual’s level of seniority and management responsibility increases, his or her target
opportunity as a percentage of base salary increases and therefore the portion of his or her total performance-
based compensation similarly increases.
Role
Chairman, President and Chief Executive Officer
Executive Vice President
Senior Vice President
Performance Goals and Payout Matrix
Target
(% of Base Salary)
130.0 %
75.0 %
60.0 %
Actual payouts under our annual incentive plan are based upon performance against the matrix set forth on the
following page. In developing the matrix, the Compensation Committee began with Economic Profit because it
ensures that the Company is using capital to generate profitable earnings efficiently and in a manner that is
sustainable for the future. In other words, Economic Profit ensures that growth, as well as the cost of growth, are
balanced and achieved in a manner that maximizes the long-term interests of our shareholders. Furthermore,
Economic Profit allows us to align short-term compensation goals to long-term value creation.
Accordingly, target Economic Profit, calculated by reference to the FY23 operating plan EBIT and ROIC, would
result in target (or 100%) payout. Different levels of attainment of EBIT and ROIC result in varying levels of
Economic Profit and payout is based upon actual Economic Profit against target Economic Profit. Accordingly,
annual incentive payouts are driven by EBIT and ROIC and their corresponding impact to Economic
Profit against target. For these reasons, we do not apply straight-line interpolation of our EBIT and ROIC as
we focus on impact to Economic Profit instead.
The key metrics in developing the FY23 annual incentive plan are defined below. The Compensation Committee
may (but is not required to) adjust for the effect of one-time charges and extraordinary events such as asset
write-downs, litigation judgments or settlements, changes in tax laws, accounting principles or other laws or
2023 Proxy Statement
45
provisions affecting reported results, accruals for reorganization or restructuring, and any other extraordinary
non-recurring items, acquisitions or divestitures and any foreign exchange gains or losses on the calculation of
performance.
• Earnings before interest and taxes (“EBIT”) is defined as net income plus interest and taxes.
P
P
r
r
o
o
x
x
y
y
• Return on Invested Capital (“ROIC”) is defined as after-tax operating profit (excluding rent) divided by
average invested capital (which includes a factor to consider operating leases as financing leases).
• Economic Profit is calculated as net operating profit (including rent) after taxes, less the cost of capital
using a capital charge rate of 10.5%.
Additionally, the Payout Matrix is further adjusted to ensure the annual incentive plan embodies our Guiding
Principles—Drive Performance, Drive Retention and Drive Shareholder Value. These adjustments to the matrix
serve as “guardrails” and are described below.
• Performance Hurdle. The annual incentive plan is subject to a pre-established threshold or hurdle such
that no annual incentive awards are paid out unless the Company achieves 90% of target Economic Profit.
If the Company achieves 90% of target Economic Profit, payout is 50% of target MIP opportunity.
Achievement above 50% is paid by reference to the matrix. We believe this ensures goals are
appropriately rigorous to drive performance.
• Emphasize EBIT Growth. The matrix is also modified such that payout shall not exceed target (or 100%)
unless the EBIT target is exceeded. In other words, exceeding the ROIC target alone will not be sufficient
to result in an above-target payout. The rationale for this is that there must be “incremental EBIT” (or EBIT
in excess of target EBIT) to fund the additional incentive payout. This ensures that any excess payout
earned by, and paid to, management does not come at the expense of shareholders but rather is paid out
of the additional profit dollars generated by management’s efforts.
The payout matrix below reflects the targets for FY23, after giving effect to the Company’s actual effective tax
rate.
EBIT
(MMs)
I
C
O
R
51.23 %
51.73 %
52.23 %
52.73 %
53.23 %
53.73 %
54.23 %
54.73 %
55.23 %
55.73 %
56.23 %
56.73 %
57.23 %
57.73 %
58.23 %
58.73 %
59.23 %
$ 2,739.0 $ 2,910.1 $ 3,081.3 $ 3,252.5 $ 3,423.7 $ 3,457.9 $ 3,594.9 $ 3,766.1 $ 3,937.3
AutoZone FY23 Annual Incentive Plan Payout Matrix
80 %
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
85 %
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
90 %
— %
— %
— %
50 %
51 %
52 %
53 %
54 %
55 %
56 %
57 %
58 %
59 %
60 %
61 %
62 %
62 %
95 %
72 %
74 %
75 %
77 %
78 %
80 %
82 %
83 %
84 %
86 %
87 %
89 %
90 %
91 %
93 %
94 %
95 %
100 %
94 %
96 %
97 %
99 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
101 %
98 %
100 %
102 %
103 %
105 %
107 %
108 %
110 %
111 %
113 %
114 %
116 %
117 %
119 %
120 %
121 %
123 %
105 %
116 %
118 %
119 %
121 %
123 %
125 %
126 %
128 %
129 %
131 %
132 %
134 %
135 %
137 %
138 %
140 %
141 %
110 %
138 %
139 %
141 %
143 %
145 %
147 %
148 %
150 %
152 %
153 %
155 %
157 %
158 %
160 %
161 %
162 %
164 %
115 %
155 %
157 %
159 %
161 %
163 %
165 %
167 %
168 %
170 %
172 %
173 %
175 %
177 %
178 %
180 %
181 %
183 %
Note: Shaded areas on the matrix indicate levels of attainment in which EBIT and ROIC would result in Economic Profit that is less than
90% of target Economic Profit and therefore does not meet the specified hurdle and results in no payout.
46
2023 Proxy Statement
P
r
o
x
y
Attainment per Matrix
The Company’s results for fiscal year 2023 consisted of $2,432.0 million in Economic Profit, $3,523.5 million in
adjusted EBIT and 53.78% of adjusted ROIC, in each case, after removing the effects of non-cash charges
related to Last-In, First-Out (“LIFO”) inventory reserve adjustments and non-routine legal settlements. Also,
ROIC was calculated on a 14-point trailing fiscal period average to mitigate potential risk related to short-term
actions which could inflate calculations. Based on these results, the Company achieved a payout of 112.8% of
target under the FY23 Management Incentive Plan.
($in mill)
Economic Profit
EBIT
ROIC
Individual Modifier
MIP Attainment per Matrix (% of Target): 112.8%
55.23 %
53.78 %
Target
$
$
2,371.1
3,423.7
Actual
$ 2,432.0
$ 3,523.5
Our annual incentive plan includes an individual modifier, which can adjust payouts positively or negatively as
set forth below for all executives except for our CEO. The modifier serves to incent exceptional individual
performance against pre-established individual goals. The individual performance component is structured as a
modifier rather than a separate metric to ensure all executives are working collaboratively as one team in the
best interests of the Company as a whole, rather than have individual goals compete with the shared interests of
the organization. The pre-established individual goals for each of our executive officers support the attainment
of our enterprise-wide financial goals and strategic growth priorities. For fiscal year 2023, these goals were
focused on improving the customer experience across all channels, executing sales initiatives, expanding our
store footprint (including hub and mega hub stores), expanding inventory assortment, realizing operating
efficiencies and managing and developing a diverse and talented workforce.
Rating
Modification
1
2
3
4
5
Actual Payouts
0%
-20%
None
+ 20%
+ 30%
Description
Consistently did not meet expectations. No
incentive plan payout regardless of company
performance.
Did not meet expectations. Incentive plan
target payout is reduced by 20%.
Met expectations. No modification to payout.
Exceeded expectations. Incentive plan target
payout is increased by 20%.
Exceptional performance. Incentive plan target
payout is increased by 30%.
After giving effect to actual FY23 performance against pre-established financial goals and individual goals, each
named executive officer earned the following annual incentive plan payout.
Name
William C. Rhodes, III
Jamere Jackson
Thomas B. Newbern
Philip B. Daniele
Preston B. Frazer (1)
Base Salary
($)
$ 1,050,000
727,769
637,154
516,077
483,769
75.0 %
75.0 %
75.0 %
69.0 %
545,827
477,865
387,058
331,742
Individual Actual Payout
Modifier
($)
— $ 1,539,720
1,539,720
615,693
—
615,693
539,032
—
539,032
436,602
436,602
—
307,857
374,205 (66,348)
Target
(% of Base
Salary)
130.0 % $ 1,365,000 $
Target
($)
Payout
(112.8% of Target)
($)
(1)
Amounts shown reflect a blend of salary and target MIP opportunities based on Mr. Frazer's change in role during the fiscal year.
LONG-TERM INCENTIVE PLAN
For FY23, all executive officers were awarded long-term incentives under the 2020 AutoZone, Inc. Omnibus
Incentive Award Plan in the form of stock options. These long-term equity awards are granted to drive long-term
performance by rewarding long-term value creation in the form of stock price appreciation.
2023 Proxy Statement
47
As with other elements of executive compensation, the Compensation Committee annually reviews the design
of the long-term incentive plan to ensure it remains effective and in furtherance of the Guiding Principles. While
the Compensation Committee has traditionally granted long-term compensation in the form of stock options, the
Committee continues to evaluate the efficacy of stock options against other potential equity vehicles. The
Committee remains of the view that stock options are the most appropriate performance-based equity vehicle
for AutoZone’s executive officers because:
P
P
r
r
o
o
x
x
y
y
• Stock options directly align management’s interest with the long-term interests of shareholders by
awarding value upon stock price appreciation and long-term value creation.
• The 10-year term of stock options necessarily incents management to focus on a 7- to 10-year
performance period as options reach their greatest value, in contrast to performance share units which
typically carry a 3- or 4-year performance period.
• Retirement-eligible employees (as defined in the applicable plan) may continue to vest and can retain
vested and unvested options for the remainder of the option term; accordingly, executives are incented to
develop organizational talent, facilitate succession planning and transfer institutional knowledge. This
ensures the long-term stability and growth of the organization even after the individual’s retirement.
Also, when considering the efficacy of stock options, the Committee observed the following:
• Turnover of option-eligible employees, after excluding departures due to retirement or performance issues,
remain well below market.
• The Company’s burn rate remains at the median of the Peer Group.
• The Company’s long-term performance, as measured by TSR over the last ten years is in the top quartile
compared to its Peer Group.
• The average number of years stock options have been held before exercise is 6 years from the date of
grant, for current executive officers as a group (based upon the last ten years of activity).
Stock Options
The non-qualified stock options are typically granted in late September or early October at the first regularly
scheduled Compensation Committee meeting of the fiscal year. Awards of stock options may be granted outside
of this general time frame in the event of internal promotions, external hires or other unique circumstances.
Options have a term of ten years and become vested and are generally exercisable over a four-year period at
the rate of one-fourth per year. Beginning with the fiscal year 2021 grant, options vest on October 15 of each of
the four years following the grant date, which ensures the first vesting date occurs more than one full year after
the date of grant. The exercise price for such options is equal to the closing price of our common stock on the
grant date, as quoted on the NYSE. Under the terms of the AutoZone, Inc. 2020 Omnibus Incentive Award Plan,
we may not grant stock options with a strike price at a discount to fair market value. Unless otherwise
determined by the Compensation Committee, “fair market value” as of a given date is the closing price of our
common stock as quoted on the NYSE on such date or, if the shares were not traded on that date, the most
recent preceding date when such shares were traded.
FY23 Long-Term Incentive Plan Awards
Name
William C. Rhodes, III
Jamere Jackson
Thomas B. Newbern
Philip B. Daniele
Preston B. Frazer
(1) All Executive Vice Presidents received a similar grant in FY23
Options Granted (1)
(#)
($)
19,700 $ 15,877,386
4,223,223
4,223,223
4,223,223
4,223,223
5,240
5,240
5,240
5,240
48
2023 Proxy Statement
ONE-TIME SPECIAL AWARDS
As a general rule, the Company does not grant one-time special awards to executive officers. However, in
limited instances, the Company may grant a one-time special sign-on award for the sole purpose of recruiting
and attracting high-caliber candidates to the AutoZone Executive Committee. Over the past five years, the
Company has only issued one-time special awards to executive officers in four instances, all of which were sign-
on awards subject to our typical four-year vesting conditions. Consistent with historical practice, during FY23,
the Company granted a sign-on award to the newly hired SVP, General Counsel and Secretary. These sign-on
awards, consistent with market practice, serve to incentivize external candidates to accept our offer of
employment while also providing compensation for any unvested awards he or she may have left from their prior
employer. Furthermore, providing equity subject to multi-year vesting conditions immediately aligns external
hires’ interests with those of the balance of the management team and our shareholders.
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2023 Proxy Statement
49
Other Practices, Policies & Guidelines
STOCK OWNERSHIP GUIDELINES
In furtherance of our Guiding Principles—Drive Performance and Drive Retention, AutoZone maintains robust
stock ownership requirements for all executive officers. Without giving effect to recently elected directors or
recently hired or promoted executives who are each provided with a transition period to comply, all directors and
executive officers are in compliance with these stock ownership guidelines.
REQUIREMENT
DESCRIPTION
Ownership Requirement •
Independent Directors: 7x Cash portion of Annual Retainer
P
P
r
r
o
o
x
x
y
y
Eligible Equity
Transition Period
• Chief Executive Officer: 6x base salary
• Executive Vice President: 3x base salary
• Senior Vice President: 2x base salary
• All eligible equity is valued at the closing price of AutoZone common
stock as of the end of the fiscal year. Eligible equity includes shares
that are reportable as beneficially owned, whether direct or indirect.
• No portion of unvested awards or unexercised options are included for
purposes of determining compliance with these guidelines.
•
Independent Directors: Within 5 years of joining the Board
• Executive Officers: Within 5 years of becoming a member of the
Executive Committee; provided, any current Executive Committee
member promoted to another Executive Committee role shall have an
additional 3 years from promotion date to achieve higher requirement.
Holding Requirements
•
Individuals not in compliance will be required to hold 50% of the shares
acquired upon exercise of stock options (after permitting the sale of
shares to cover taxes due) and may not otherwise sell any shares of
AZO.
• Guidelines will no longer apply after an executive officer reaches age
62 in order to facilitate appropriate financial planning as potential
retirement approaches. The Compensation Committee may waive the
guidelines for any other executive at its discretion.
UNLAWFUL INSIDER TRADING AND ANTI-HEDGING POLICY
AutoZone has adopted policies and procedures designed to prohibit unlawful insider trading, hedging
transactions and related practices. Specifically, AutoZone’s employees, officers and directors are prohibited
from trading in AutoZone securities while in possession of material, nonpublic information, from pledging
AutoZone securities as collateral, holding AutoZone securities in a margin account and entering into
transactions that are designed to hedge or offset decreases in the market value of AutoZone securities.
Prohibited transactions include equity swaps, prepaid variable forward contracts, put or call options (other than
employee stock option grants), short sales or other derivative instruments. Additionally, certain employees and
officers are subject to routine and non-routine blackout periods during which times trading in our securities is not
permitted, as well as pre-clearance procedures to ensure compliance with applicable internal policies.
CLAWBACK POLICY
In fiscal year 2017, AutoZone adopted an incentive compensation recovery, or “Clawback Policy” that applied to
current and former members of the AutoZone Executive Committee. Consistent with the final rules adopted by
the SEC and NYSE, the Compensation Committee has adopted a revised Clawback Policy, which is
summarized below. The complete text of such Clawback Policy is filed as an exhibit to the FY23 Form 10-K.
50
2023 Proxy Statement
Non-Discretionary Clawback in the event of a Financial Restatement. In the event that AutoZone is required
to prepare an accounting restatement to correct an error that (x) is material to the previously issued financial
statements or (y) would result in a material misstatement if the error were corrected in the current period or left
uncorrected in the current period, the Company will seek to recover erroneously awarded incentive
compensation received by any current or former executive officer during the immediately preceding three fiscal
years. This is a “no fault” policy, meaning that it may be triggered in the absence of fraud or willful misconduct
by the executive. “Erroneous” compensation is the amount of compensation that is granted, earned or vested
based upon attainment of a financial reporting measure included in an accounting restatement above what
would have been received had the financial statements in question been accurate.
Discretionary Clawback in the event of Willful Misconduct. Additionally, the Board, in its sole discretion,
may seek to recover incentive compensation received by any current or former executive officer during the
immediately preceding three fiscal years in the event such executive officer willfully engaged in conduct which is
demonstrably or materially injurious to AutoZone, monetarily or otherwise.
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BENEFITS
Our executive officers participate in certain benefits on the same terms that are offered to all of our full-time U.S.
salaried employees. We also provide them with limited additional benefits and perquisites for retention and
recruiting purposes, to replace benefit opportunities lost due to regulatory limits, and to enhance their ability to
focus on our business. We do not provide tax gross-up payments for named executive officers on any benefits
and perquisites other than relocation-related items. The primary additional benefits and perquisites include the
following:
Benefit
Availability(1)(2)
Employee Stock Purchase Plan (ESPP)
• All U.S. AutoZoners
Executive Stock Purchase Plan (XSPP)
• Vice Presidents and above
401(k) Retirement Plan, with Match
• All U.S. AutoZoners
Executive Deferred Compensation Plan (EDCP), with Match
• Vice Presidents and above
Salary Continuation Death Benefit
• All U.S. AutoZoners
Matching Charitable Gift Program
Medical, Dental and Vision Plans
Executive Physical Program
Company-Paid Life Insurance Plans
• All U.S. AutoZoners; Executives
eligible to receive a larger match
• All U.S. AutoZoners
• Executive Officers
• All U.S. AutoZoners
Company-Paid Disability Insurance Plans
• Vice Presidents and above
(1) Benefits listed as available to all AutoZoners are excluded from “All Other Compensation” in the Summary
Compensation Table as permitted by applicable disclosure rules.
(2) This table is a summary only and does not describe specific benefit eligibility rules, such as minimum service,
among others. All U.S. AutoZoners refers to full-time, salaried employees.
2023 Proxy Statement
51
Stock Purchase Plans
ESPP
XSPP
Overview
Shares purchased at a discount
Shares purchased at Fair Market Value
(“FMV”) with a Company-provided “match” of
shares (the “Matched Shares”)
Eligibility
All U.S. AutoZoners with 6-months of
service
Vice Presidents and above with 6-months of
service
P
P
r
r
o
o
x
x
y
y
Contributions
After tax, limited to lower of 10% of
eligible compensation or $15,000
After tax, limited to 25% of eligible
compensation
Discount / Match
15% discount to FMV
Matched Shares provided, such that total
shares acquired are purchased at a 15%
discount to FMV
Fair Market Value
(FMV)
FMV is the lower of the closing price of a
share of AZO common stock on the first and
last trading day of the calendar quarter
FMV is the closing price of a share of AZO
common stock on the last trading day of the
calendar quarter
Vesting
Fully vested, but subject to one-year holding
period
Purchased shares are fully vested and subject
to one-year holding period. Matched Shares
vest after one year.
Employee Stock Purchase Plan. AutoZone maintains the Eighth Amended and Restated AutoZone, Inc.
Employee Stock Purchase Plan (“Employee Stock Purchase Plan” or “ESPP”) which enables all US.
AutoZoners, with six months of service, to purchase AutoZone common stock at a 15% discount to FMV,
subject to IRS-determined limitations. Based on IRS rules, annual purchases in the ESPP are limited to the
lower of $15,000 or 10% of eligible compensation.
Executive Stock Purchase Plan. To support and encourage greater stock ownership by our leadership,
AutoZone has also established a non-qualified stock purchase plan. The AutoZone, Inc. Sixth Amended and
Restated Executive Stock Purchase Plan (“Executive Stock Purchase Plan” or “XSPP”) operates in a similar
manner to the ESPP in that it allows executives to acquire shares of AutoZone common stock at a 15% discount
to FMV. Because the XSPP is not required to comply with the requirements of Section 423 of the Internal
Revenue Code of 1986, as amended (the “Internal Revenue Code”), it provides for a higher limit on
the percentage of a participant’s compensation that may be used to purchase shares and is limited to 25% of
the eligible compensation with respect to the plan year. Under the XSPP, shares of AutoZone common stock
are purchased at 100% of FMV (i.e., not at a discount), and a specified number of shares (the “Matched
Shares”) are issued by the Company at no cost to the participant such that the total number of shares received
is equivalent to acquiring the shares at 15% discount to FMV. The Matched Shares are unvested for one year
from the date of purchase and subject to forfeiture during that time.
Retirement Plans
401(k) Retirement Plan. AutoZoners based in the United States are eligible to participate in the AutoZone, Inc.
401(k) Plan after one year of employment. The 401(k) Plan is a qualified plan that meets the requirements of
Internal Revenue Code Section 401(a). The 401(k) Plan allows participants to make a pretax contribution of a
specified percentage of their annual pay, up to IRS-imposed maximums, into an investment account. The
Company provides a matching contribution that is calculated based on 100% of the first 3% of contributions and
50% of the next 2% of contributions into the 401(k) Plan.
Executive Deferred Compensation Plan. AutoZone officers based in the United States holding a role of Vice
President or higher are eligible to participate in the AutoZone, Inc. Executive Deferred Compensation Plan
(“Executive Deferred Compensation Plan” or “EDCP”) after their first year of employment. The EDCP is a
nonqualified plan that allows participants to make a pretax deferral of up to 25% base salary and/or up to 75% of
annual cash incentive compensation, with a Company-provided matching contribution that is calculated based
52
2023 Proxy Statement
on 100% of the first 3% of deferrals and 50% of the next 2% deferred, less the maximum value of the Company
match available generally to participants in AutoZone’s 401(k) Plan.
Taking Care of People
Salary Continuation Death Benefit. In the
unfortunate event an eligible full-time AutoZoner
passes away, AutoZone will provide up to 12
weeks of the deceased AutoZoner’s pay to their
named beneficiary. This new benefit was
implemented in fiscal year 2022 and reflects our
steadfast commitment to take care of our people,
because their family is our family.
AN AUTOZONER ALWAYS CARES
ABOUT PEOPLE
Treat people with dignity and respect. Recognize great
work and provide frequent feedback. Demonstrate
concern for others and your community. Create a safe
environment. Own your development and help develop
others.
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Matching Charitable Gift Program. At
AutoZone, we encourage our AutoZoners to be
active members of the communities in which they live, work and serve. Through our Matching Gift Program, we
commit to match AutoZoner donations dollar-for-dollar, up to $500 per AutoZoner per fiscal year, to qualified
charities of their choice. Our Matching Gift program is available to all full-time and part-time AutoZoners in the
United States. For Vice Presidents, AutoZone will match dollar-for-dollar up to $10,000, and for Executive
Officers, AutoZone will match dollar-for-dollar up to $50,000, in each case per individual per fiscal year to
qualified charities of their choice.
Limited Perquisites. The Company provides limited perquisites and personal benefits to its executives in order to
allow them to devote more time to their business responsibilities while also promoting health, wellness and safety.
• Company Aircraft. Senior executives may periodically use AutoZone’s private aircraft for personal travel
pursuant to an agreement with the Company. Under the agreement, the Company must be reimbursed for the
direct, incremental cost to the Company arising from the personal use of the aircraft. These expenses include
the cost of fuel, aircraft maintenance plan costs related to the trip, ramp fees, pilot expenses (if contract pilots
are used on the trip), any special insurance for the trip, and other direct costs to the Company. All of the fixed
costs related to the use of the private aircraft, such as regular insurance premiums, hangar fees, depreciation
and subscription costs, are paid by the Company, and reimbursement is not required for such costs.
• Other. The Company also provides its executive officers with home security system and/or monitoring services,
airline club memberships and status upgrades, Company-paid spouse business-related travel, and Company-
paid long-term disability insurance premiums.
RISK ASSESSMENT OF COMPENSATION PROGRAMS
Management has assessed our compensation programs and concluded that our compensation policies and practices
do not create risks that are reasonably likely to have a material adverse effect on AutoZone. This risk assessment
included reviewing the design and operation of our compensation programs, identifying and evaluating situations or
compensation elements that could raise more significant risks, and evaluating other controls and processes designed
to identify and manage risk. The Compensation Committee reviewed the risk assessment and concurred with
management’s conclusion.
TAX CONSIDERATIONS
Section 409A of the Code was created with the passage of the American Jobs Creation Act of 2004. These tax
regulations create strict rules related to non-qualified deferred compensation earned and vested on or after January 1,
2005. The Internal Revenue Service periodically releases Notices and other guidance related to Section 409A, and
AutoZone continues to take actions designed to comply with the Section’s applicable requirements.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee is composed solely of independent, non-employee directors. None of the members of
the Compensation Committee (i) was an officer or employee of the Company at any time during or prior to fiscal 2023
or (ii) is or was a participant in a “related person” transaction with the Company since the beginning of fiscal 2023. No
executive officer of the Company serves, or in the past fiscal year has served, on the compensation committee or
board of any company that has one or more of its executive officers serving as a member of the Company’s
Compensation Committee or Board.
2023 Proxy Statement
53
Summary Compensation Table
This table shows the compensation paid to the NEOs during the 2023, 2022 and 2021 fiscal years.
Non-Equity
P
P
r
r
o
o
x
x
y
y
Name and Principal Position
William C. Rhodes III
Chairman, President &
Chief Executive Officer
Jamere Jackson
Chief Financial Officer/Executive
Vice President,
Finance & Store Development
Thomas B. Newbern
Executive Vice President,
Operations, Sales & Technology
Philip B. Daniele
Executive Vice President,
Merchandising, Marketing, Supply
Chain & CEO-Elect
Preston B. Frazer
Senior Vice President,
Finance
2022
2021
2023
2022
2021
2023
2022
2021
2023
2022
2021
Salary
($)
Year
2023 1,050,000
2022 1,050,000
2021 1,050,000
727,769
2023
Bonus
($)(1)
Stock
Awards
($) (2)(3)
89,372
89,909
90,672
—
—
—
—
—
Option
Awards
($) (3)
15,877,386
10,280,340
9,495,777
4,223,223
708,462
—
673,077 1,200,000
—
637,154
—
612,923
—
593,538
—
516,077
—
500,000
—
—
—
—
—
28,354
7,988
2,736,529
3,037,480
4,223,223
3,284,813
2,141,205
4,223,223
2,736,529
Incentive Plan
All Other
Compensation Compensation
($) (4)
1,539,720
2,613,975
3,957,135
615,693
1,017,528
1,463,438
539,032
880,311
1,548,600
436,602
718,126
($) (5)
240,344
295,786
245,412
97,312
Total
($)
18,796,822
14,330,010
14,838,996
5,663,997
114,348
69,389
88,184
112,417
77,499
83,212
76,184
4,576,867
6,443,384
5,487,593
4,890,464
4,360,842
5,287,468
4,038,827
483,769
500,000
—
—
58,791
45,325
4,223,223
2,736,529
307,857
718,126
110,591
106,786
5,184,231
4,106,766
(1) Annual incentive awards were paid pursuant to the EICP and therefore appear in the “non-equity incentive plan
compensation” column of the table. In FY21, we provided Mr. Jackson with an initial $1.2 million cash sign-on bonus as
a make-whole award for the awards that were forfeited when he left his previous company.
(2) Represents shares acquired pursuant to the Executive Stock Purchase Plan. See “Compensation Discussion and
Analysis” on page 32 for more information about the Executive Stock Purchase Plan. See Note B, Share-Based
Payments, to our consolidated financial statements in our Annual Report for a description of the Executive Stock
Purchase Plan and the accounting and assumptions used in calculating expenses in accordance with FASB ASC Topic
718.
(3) The value of stock awards and option awards was determined as required by FASB ASC Topic 718. There is no
assurance that these values will be realized. See Note B, Share-Based Payments, to our consolidated financial
statements in our Annual Report for details on assumptions used in the valuation. To address compensation forfeited at
the former employer, in FY21 we provided Mr. Jackson with an initial long-term incentive grant of approximately $1.0
million in stock options.
(4)
Incentive amounts were earned for the 2023 fiscal year pursuant to the EICP and were paid in October 2023. See
“Compensation Discussion and Analysis” on page 32 for more information about this plan.
(5) All Other Compensation includes the following:
Company
Name
William C. Rhodes III
Jamere Jackson
Thomas B. Newbern
Philip B. Daniele
Preston B. Frazer
Perquisites and
Personal
Benefits
($)(A)
Imputed
Income
($)(C)
Contributions
to Defined
Contribution
Plans
($)(D)
2023
2023
2023
2023
2023
62,151 (B) 29,390
7,574
16,248
13,767
10,000
2,622
33,791 (B)
5,558
54,361 (B)
144,051
69,401
58,654
44,425
44,887
Life
Insurance
Premiums
($)
4,752
3,260
3,622
914
950
(A) Perquisites and personal benefits for all NEOs include matching charitable contributions under the AutoZone
Matching Gift Program, Company-provided home security system and/or monitoring services, airline club
memberships and status upgrades, Company-paid spouse business-related travel and Company-paid long-term
disability insurance premiums.
(B) The perquisites or personal benefits which exceeded the greater of $25,000 or 10% of the total amount of
perquisites and personal benefits for an executive officer, consisted of matching charitable contributions made
under the AutoZone Matching Gift program, under which executives may contribute to qualified charitable
organizations and AutoZone provides a matching contribution to the charities in an equal amount, up to $50,000 in
the aggregate for each executive officer annually, are as follows:
54
2023 Proxy Statement
Name
William C. Rhodes III
Philip B. Daniele
Preston B. Frazer
2023($)
50,000
22,100
45,681
(C) Represents amounts related to imputed earnings on company-paid, taxable life insurance and miscellaneous other
items.
(D) Represents employer contributions to the AutoZone, Inc. 401(k) Plan and the AutoZone, Inc. Executive Deferred
Compensation Plan.
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Grants of Plan-Based Awards
The following table sets forth information regarding plan-based awards granted to the Company’s NEOs during
the 2023 fiscal year.
All Other All Other
Stock
Awards:
Number of Number of
Shares of Securities
Stock or Underlying
Grant
Option
Date Fair
Awards: Exercise
Value of
or Base
Price of Stock and
Option
Options Awards
Option
Awards
($)
Equity Plans Threshold
Grant Date
Estimated Future Payments
Under Non-equity Incentive
Plans (1)
Target
($)
1,365,000
($)
682,500
($)
4,095,000
Maximum
Name
William C. Rhodes III
10/4/2022
9/30/2022
12/30/2022
3/31/2023
6/30/2023
Jamere Jackson
272,913
545,827
1,637,480
10/4/2022
Thomas B. Newbern
238,933
477,866
1,433,597
10/4/2022
Philip B. Daniele
193,529
387,058
1,161,173
10/4/2022
9/30/2022
12/30/2022
3/31/2023
6/30/2023
Preston B. Frazer
165,871
331,742
995,226
10/4/2022
9/30/2022
12/30/2022
3/31/2023
6/30/2023
Units
(#) (2)
6
22
5
4
4
2
3
3
2
18
2
1
(#) (3)
($)
19,700
2,205.03
5,240
2,205.03
5,240
2,205.03
5,240
2,205.03
5,240
2,205.03
15,877,386
12,852
54,256
12,291
9,973
15,966,758
4,223,223
4,223,223
4,223,223
4,223,223
4,223,223
8,568
4,932
7,374
7,480
4,251,577
4,223,223
4,284
44,391
4,916
2,493
4,279,307
(1) Represents potential threshold, target and maximum incentive compensation for the 2023 fiscal year under the EICP
based on the dollar value of the estimated target amount payable if the specified performance target is reached. The
amounts actually paid for the 2023 fiscal year are described in the “Non-Equity Incentive Plan Compensation” column in
the Summary Compensation Table. The “threshold” is the minimum payment level under the EICP which is 50% of the
target amount. The maximum is 300% of the target. See “Compensation Discussion and Analysis” at page 32.
(2) Represents shares awarded pursuant to the Executive Stock Purchase Plan. See “Compensation Discussion and
Analysis” at page 32 and the discussion following this table for more information on the Executive Stock Purchase Plan.
(3) Represents options awarded pursuant to the 2020 Omnibus Incentive Plan. See “Compensation Discussion and
Analysis” at page 32.
2023 Proxy Statement
55
Outstanding Equity Awards at Fiscal Year-
End
The following table sets forth information regarding outstanding stock option awards under the Amended 2011
Equity Plan, the 2011 Equity Plan, 2020 Omnibus Incentive Plan, other outstanding equity awards under the
Amended 2011 Equity Plan and the 2011 Equity Plan, and unvested shares under the Executive Stock
Purchase Plan for the Company’s NEOs as of August 26, 2023:
Option Awards
Shares
P
P
r
r
o
o
x
x
y
y
Number of Securities
Underlying Unexercised Options Option
(1)
have not
Unexercisable Price ($) (4) Expiration Date Vested (2)
Exercise
Option
Market
Value of
Number of
Shares of
Stock that Shares of Stock
that have not
Vested ($) (3)
Name
William C. Rhodes III
Totals
Jamere Jackson
Totals
Thomas B. Newbern
Totals
Philip B. Daniele
Totals
Preston B. Frazer
Grant Date Exercisable
9/23/2016
6,750
12,000
9/26/2017
26,500
9/25/2018
20,625
10/7/2019
15,300
10/7/2020
5,250
10/5/2021
—
10/4/2022
9/30/2022
12/30/2022
3/31/2023
6/30/2023
86,425
1,480
3,450
1,397
—
6,327
7,800
6,375
3,450
1,677
—
19,302
6,190
5,460
5,450
4,965
2,400
250
1,397
—
26,112
1,580
1,245
1,175
1,475
3,813
2,400
250
1,397
—
9/23/2020
10/7/2020
10/5/2021
10/4/2022
9/25/2018
10/7/2019
10/7/2020
10/5/2021
10/4/2022
9/23/2016
9/26/2017
9/25/2018
10/7/2019
10/7/2020
6/16/2021
10/5/2021
10/4/2022
9/30/2022
12/30/2022
3/31/2023
6/30/2023
10/6/2015
9/23/2016
9/26/2017
9/25/2018
10/7/2019
10/7/2020
6/16/2021
10/5/2021
10/4/2022
9/30/2022
12/30/2022
3/31/2023
6/30/2023
—
—
—
744.85
587.13
772.80
6,875 1,060.81
15,300 1,139.99
15,750 1,651.22
19,700 2,205.03
9/24/2026
9/27/2027
9/26/2028
10/8/2029
10/8/2030
10/5/2031
10/4/2032
57,625
1,482
3,450
4,193
1,128.95
1,139.99
1,651.22
2,205.03
9/24/2030
10/8/2030
10/5/2031
10/4/2032
5,240
14,365
—
772.80
2,125 1,060.81
3,450 1,139.99
5,033 1,651.22
5,240 2,205.03
15,848
—
—
—
744.85
587.13
772.80
1,655 1,060.81
2,400 1,139.99
250 1,390.47
4,193 1,651.22
2,205.03
5,240
9/26/2028
10/8/2029
10/8/2030
10/5/2031
10/4/2032
9/24/2026
9/27/2027
9/26/2028
10/8/2029
10/8/2030
6/16/2031
10/5/2031
10/4/2032
13,738
—
—
—
—
744.62
744.85
587.13
772.80
1,272 1,060.81
2,400 1,139.99
250 1,390.47
4,193 1,651.22
5,240 2,205.03
10/7/2025
9/24/2026
9/27/2027
9/26/2028
10/8/2029
10/8/2030
6/16/2031
10/5/2031
10/4/2032
6
22
5
4
37
14,720
53,975
12,267
9,814
90,776
—
—
—
—
4
2
3
3
12
9,814
4,907
7,360
7,360
29,441
2
18
2
1
23
4,907
44,161
4,907
2,453
56,428
Totals
13,335
13,355
(1) Unless indicated otherwise, stock options vest annually in one-fourth increments over a four-year period.
56
2023 Proxy Statement
(2) Represents shares acquired pursuant to unvested shares granted under the Executive Stock Purchase Plan. Such
shares vest on the first anniversary of the date the option was exercised under the plan and will vest immediately upon a
participant’s termination of employment without cause or the participant’s death or disability.
(3) Based on the closing price of AutoZone common stock on August 26, 2023 ($2,453.40 per share).
Option Exercises and Stock Vested
The following table sets forth information regarding stock option exercises and vested stock awards for the
Company’s NEOs during the fiscal year ended August 26, 2023:
P
r
o
x
y
Name
William C. Rhodes III
Jamere Jackson
Thomas B. Newbern
Philip B. Daniele
Preston B. Frazer
Option Awards
Stock Awards
Number
of Shares
Acquired
on Exercise
Number
Value
Realized
of Shares Value
Acquired Realized
on Exercise on Vesting on Vesting
(#)
54,892
—
—
6,670
1,730
($) (1)
88,408,766
—
—
10,583,952
3,486,434
(#) (2)
44
—
—
4
22
($) (3)
106,689
—
—
9,560
53,627
(1)
If the shares were sold immediately upon exercise, the value realized on exercise of the option is the difference between
the actual sales price and the exercise price of the option. Otherwise, the value realized is the difference between the
closing price of AutoZone common stock on the New York Stock Exchange on the date of exercise and the exercise
price of the option.
(2) Represents shares acquired pursuant to the Executive Stock Purchase Plan. See “Compensation Discussion and
Analysis” on page 32 for more information about this plan.
(3) Based on the closing price of AutoZone common stock on the vesting date.
Nonqualified Deferred Compensation
The following table sets forth information regarding nonqualified deferred compensation for the Company’s
NEOs as of and for the year ended August 26, 2023.
Name
William C. Rhodes III
Jamere Jackson
Thomas B. Newbern
Philip B. Daniele
Preston B. Frazer
Executive
Contributions Contributions Earnings/ Losses Withdrawals /
Distributions
Aggregate
Company
Aggregate
in Last FY
($) (1)
941,692
87,224
303,301
256,833
422,631
in Last FY
($) (2)
134,359
57,030
47,806
35,642
36,642
in Last FY
($) (3)
918,882
17,703
(164)
27,020
90,320
($)
—
—
(190,197)
(25,932)
—
Aggregate
Balance at
Last FYE
($)
18,811,342
349,337
2,495,684
1,005,939
1,086,079
(1) Represents contributions by the NEOs under the AutoZone, Inc. Executive Deferred Compensation Plan (the “EDCP”).
Such contributions are included under the appropriate “Salary” and “Non-Equity Incentive Plan Compensation” columns
for the NEOs in the Summary Compensation Table.
(2) Represents matching contributions by the Company under the EDCP. Such contributions are included under the “All
Other Compensation” column for the NEOs in the Summary Compensation Table.
(3) Represents the difference between the aggregate balance at end of fiscal 2023 and the end of fiscal 2022, excluding
(i) contributions made by the executive officer and the Company during fiscal 2023 and (ii) any withdrawals or
distributions during fiscal 2023. None of the losses in this column were included in the Summary Compensation Table
because they were not preferential or above market.
Officers of the Company with the title of vice president or higher based in the United States are eligible to
participate in the EDCP after their first year of employment with the Company. As of August 26, 2023, there
were 57 such officers of the Company. The EDCP is a nonqualified plan that allows officers to make a pretax
deferral of base salary and bonus compensation. Officers may defer up to 25% of base salary and up to 75% of
bonus compensation. The Company match is calculated based on 100% of the first 3% of deferred
2023 Proxy Statement
57
compensation and 50% of the next 2% deferred, less the maximum value of the Company match available
generally to participants in AutoZone’s 401(k) Plan. Participants may select among various mutual funds in
which to invest their deferral accounts. Participants may elect to receive distribution of their deferral accounts at
retirement or starting in a specific future year of choice before or after anticipated retirement (but not later than
the year in which the participant reaches age 75). If a participant’s employment with AutoZone terminates other
than by retirement or death, the account balance will be paid in a lump sum payment six months after
termination of employment. There are provisions in the EDCP for withdrawal of all or part of the deferral account
balance in the event of an extreme and unforeseen financial hardship.
Potential Payments Upon Termination Or
Change In Control
Our NEOs may receive certain benefits if their employment terminates under specified circumstances. These
benefits derive from Company policies, plans, agreements and arrangements described below.
P
P
r
r
o
o
x
x
y
y
Agreement with Mr. Rhodes
In 2008, Mr. Rhodes and AutoZone entered into an agreement (the “Agreement”) providing that if Mr. Rhodes’
employment is terminated by the Company without cause, he will receive severance benefits consisting of an
amount equal to 2.99 times his then-current base salary, a lump sum prorated share of any unpaid annual
bonus incentive for periods during which he was employed, and AutoZone will pay the cost of COBRA
premiums to continue his medical, dental and vision insurance benefits for up to 18 months to the extent such
premiums exceed the amount Mr. Rhodes had been paying for such coverage during his employment. The
Agreement further provides that Mr. Rhodes will not compete with AutoZone or solicit its employees for a three-
year period after his employment with AutoZone terminates.
Executive Officer Agreements (Messrs. Jackson, Newbern, Daniele and Frazer)
AutoZone’s executive officers who do not have written employment agreements, including Messrs. Jackson,
Newbern, Daniele and Frazer, have entered into agreements (“Severance and Non-Compete Agreements”) with
the Company providing that if their employment is involuntarily terminated without cause, and if they sign an
agreement waiving certain legal rights, they will receive severance benefits in the form of salary continuation for
a period of time ranging from 12 to 24 months, depending on their length of service at the time of termination.
Other than Mr. Jackson, the aforementioned executives all have greater than 5 years of service.
Years of Service
Less than 1
1 – less than 5
5 or more
Severance
Period
12 months
18 months
24 months
The executives will also receive a lump sum prorated share of their annual bonus incentive when such
incentives are paid to similarly-situated executives. Medical, dental and vision insurance benefits generally
continue through the severance period up to a maximum of 18 months, with the Company paying the cost of
COBRA premiums to the extent such premiums exceed the amount the executive had been paying for such
coverage. An appropriate level of outplacement services may be provided based on individual circumstances.
The Severance and Non-Compete Agreement further provides that the executive will not compete with
AutoZone or solicit its employees for a two-year period after his or her employment with AutoZone terminates.
Equity Plans
All outstanding, unvested stock options, including those held by the NEOs, will vest immediately upon the option
holder’s death pursuant to the terms of the stock option agreements.
Unvested shares under our Executive Stock Purchase Plan, which normally are subject to forfeiture if a
participant’s employment terminates prior to the first anniversary of their acquisition, will vest immediately if the
termination is by reason of the participant’s death, disability, termination by the Company without cause, or
retirement on or after the participant’s normal retirement date. The plan defines “disability,” “cause,” and “normal
retirement date.”
58
2023 Proxy Statement
Life Insurance
AutoZone provides all salaried employees in active full-time employment in the United States a company-paid
life insurance benefit in the amount of two times annual earnings. “Annual earnings” exclude stock
compensation and gains realized from stock option exercises but include salary and incentive compensation
received. Additionally, salaried employees are eligible to purchase additional life insurance subject to insurability
above certain amounts. The maximum benefit of the company-paid and the additional coverage combined is
$7,500,000. All the NEOs are eligible for this benefit.
Disability Insurance
All full-time officers at the level of vice president and above are eligible to participate in two executive long-term
disability plans, until age 65. Accordingly, AutoZone purchases individual disability policies for its executive
officers that pay 70% of the first $7,143 of insurable monthly earnings in the event of disability. Additionally, the
executive officers are eligible to receive an executive long-term disability plan benefit in the amount of 70% of
the next $35,714 of insurable monthly earnings to a maximum benefit of $25,000 per month. AutoZone
purchases insurance to cover this plan benefit. These two benefits combined provide a maximum benefit of
$30,000 per month. The benefit payment for these plans may be reduced by deductible sources of income and
disability earnings.
P
r
o
x
y
2023 Proxy Statement
59
The following table shows the amounts that the NEOs would have received if their employment had been
terminated under specified circumstances on August 26, 2023. This table does not include amounts related to
the NEOs’ vested benefits under our deferred compensation and pension plans or pursuant to stock option
awards, all of which are described in the tables above.
Voluntary
or For Cause
Termination Not For Cause
Involuntary
Termination Change in
Control
($)
Disability
($)
Death
($)
Normal
Retirement
($)
P
P
r
r
o
o
x
x
y
y
Name
William C. Rhodes, III (1)
Severance Pay
Annual Incentive
Benefits Continuation
Unvested Stock Options
Unvested Stock Awards
Disability Benefits
Life Insurance Benefits
Total
Jamere Jackson (2)
Severance Pay
Annual Incentive
Benefits Continuation
Unvested Stock Options
Unvested Stock Awards
Disability Benefits
Life Insurance Benefits
Total
Thomas B. Newbern (2)
Severance Pay
Annual Incentive
Benefits Continuation
Unvested Stock Options
Disability Benefits
Life Insurance Benefits
Total
Philip B. Daniele (2)
Severance Pay
Annual Incentive
Benefits Continuation
Unvested Stock Options
Unvested Stock Awards
Disability Benefits
Life Insurance Benefits
Total
Preston B. Frazer (2)
Severance Pay
Annual Incentive
Benefits Continuation
Unvested Stock Options
Unvested Stock Awards
Disability Benefits
Life Insurance Benefits
Total
($)
($)
3,139,500
—
1,445,535
—
—
54,453
7,780,909
—
101,400
—
—
—
—
—
— 12,521,797
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,091,654
578,031
28,448
—
—
—
—
1,698,133
1,274,308
506,059
33,732
2,069,643
—
—
3,883,742
1,032,154
409,894
13,818
—
26,000
—
—
1,481,866
967,538
351,315
32,250
—
59,800
—
—
1,410,903
--
--
--
--
--
--
--
—
--
--
--
--
--
--
--
—
--
--
--
--
--
--
—
--
--
--
--
—
--
--
—
--
--
--
--
--
--
--
—
—
1,445,535
—
—
101,400
2,400,000
—
3,946,935
242,308
1,445,535
4,447
55,644,278
101,400
—
5,000,000
62,437,968
—
1,445,535
—
7,780,909
—
—
—
9,226,444
—
578,031
—
—
—
3,780,000
—
4,358,031
167,947
578,031
3,322
13,265,008
—
—
3,462,000
17,476,307
—
578,031
—
—
—
—
—
578,031
—
506,059
—
—
1,410,000
—
1,916,059
147,036
506,059
4,112
15,152,666
—
3,002,000
18,811,873
—
506,059
—
2,069,643
—
—
2,575,702
—
409,894
—
—
26,000
3,780,000
—
4,215,894
119,095
409,894
3,322
12,552,835
26,000
—
2,444,000
15,555,145
—
351,315
—
—
59,800
6,480,000
—
6,891,115
111,639
351,315
3,263
11,963,325
59,800
—
2,444,000
14,933,342
—
409,894
—
—
—
—
—
409,894
—
351,315
—
—
—
—
—
351,315
(1) Severance Pay, Annual Incentive and Benefits Continuation amounts shown under the “Involuntary Termination Not for
Cause” column reflect the terms of Mr. Rhodes’ Agreement described above. Unvested stock options are those
outstanding, unvested stock options which will vest immediately upon the option holder’s death, as well as, under the
stock option agreement beginning in October 2022 which states under retirement which is when the Participant has (i)
attained age 55 and (ii) completed at least 15 years of service with the Company. In FY22, the company added 12
weeks of salary continuation for all full-time U.S. AutoZoners with one-year of service in the event of death. Unvested
stock awards are shares under the Executive Stock Purchase Plan, which vest upon involuntary termination not for
cause, disability, or death. Annual Incentive is shown at actual annual incentive amount for the 2023 fiscal year; it would
be prorated if the triggering event occurred other than on the last day of the fiscal year. Disability Benefits are benefits
60
2023 Proxy Statement
under a Company-paid individual long-term disability insurance policy. Life Insurance Benefits are benefits under a
Company-paid life insurance policy.
(2) Severance Pay, Annual Incentive and Benefits Continuation amounts shown under the “Involuntary Termination Not for
Cause” column reflect payments to Mr. Jackson, Mr. Newbern, Mr. Daniele and Mr. Frazer under the Severance and
Non-Compete Agreements described above. Annual Incentive is shown at actual annual incentive amount for the 2023
fiscal year; it would be prorated if the triggering event occurred other than on the last day of the fiscal year. Benefits
Continuation refers to medical, dental and vision benefits. In FY22, the company added 12 weeks of salary continuation
for all full-time U.S. AutoZoners with one-year of service in the event of death. Unvested stock options are those
outstanding, unvested stock options which will vest immediately upon the option holder’s death, as well as, under the
stock option agreement beginning in October 2022 which states under retirement which is when the Participant has (i)
attained age 55 and (ii) completed at least 15 years of service with the Company. Unvested stock awards are share
options under the Executive Stock Purchase Plan, which vest upon involuntary termination not for cause, disability, or
death. Disability Benefits are benefits under a Company-paid individual long-term disability insurance policy. Life
Insurance Benefits are benefits under a Company-paid life insurance policy.
P
r
o
x
y
PAY RATIO DISCLOSURE
Pursuant to Item 402(u) of Regulation S-K, we have conducted an analysis of our global employee population in
order to estimate and disclose the total compensation paid to our median paid employee, not including our CEO,
as well as the ratio of the total compensation paid to said median employee as compared to the total
compensation paid to our CEO. The analysis, which is described below, yielded the following results:
Total compensation for the median employee
for fiscal 2023 (not including the CEO):
Total compensation for the CEO:
Resulting CEO-to-median employee pay ratio:
$
26,669
$ 18,796,822
705:1
Measurement date. We identified the median employee from our population as of June 30, 2023.
Compensation measure. The regulations require us to use a “consistently applied compensation measure”, or
CACM, to identify the median employee. Based on an analysis of the AutoZone workforce, we determined that
fixed or guaranteed compensation, including overtime and earnings for paid time off, plus variable compensation
(e.g., bonus or commission pay) closely approximate the annual total direct compensation of our employees.
We converted the earnings paid in local (non-U.S.) currency to U.S. dollars using published exchange rates as
of June 30, 2023. We did not apply pay adjustments allowed by the rules in order to ensure a conservative
estimate (i.e., it is unlikely that the estimate could have been higher than that calculated).
Excluded population. We excluded from the analysis AutoZone employees in Brazil, Canada, China, Germany,
India, Taiwan, Turkey and the United Kingdom, pursuant to the de minimis exemption under the rules. The
1,250 employees in these locations represent less than 5% of the total employee population of 116,170 as of
June 30, 2023.
PAY VERSUS PERFORMANCE
The following table sets forth (i) total compensation paid to Mr. Rhodes, our principal executive officer (“PEO”)
for all three fiscal years presented, as set forth in our Summary Compensation Table (“SCT”), (ii) Compensation
Actually Paid (“CAP”) to our PEO, (iii) average total compensation paid to our other NEOs, excluding Mr.
Rhodes, as set forth in the SCT for such fiscal year, (iv) average CAP to our other NEOs, in each case as
calculated in accordance with Item 402(v) of Regulation S-K, and (v) certain Company and peer group
performance measures for the periods indicated. CAP does not reflect value actually realized by the applicable
executives or how the Compensation Committee evaluates compensation decisions.
2023 Proxy Statement
61
Summary
Compensation
Table Total for
PEO
$
18,796,822
14,330,010
14,838,996
Compensation
Actually Paid
to
PEO (1)(2)
37,562,328
53,183,213
33,457,070
$
Fiscal
Year
2023
2022
2021
P
P
r
r
o
o
x
x
y
y
Value of Initial Fixed $100
Average
Summary
Compensation
Table Total for
Non-
PEO NEOs (3)
5,404,080
4,403,231
3,943,435
$
Average
Compensation
Actually Paid
to Non-
PEO NEOs
(2)(3)(4)
10,077,359
12,895,019
6,034,162
$
Total
Shareholder
Return
$
206.32
181.90
130.22
Peer Group
Total
Shareholder
Return (5)
98.08
91.92
110.88
$
Net
Income
($s in
millions)
$ 2,528.4
2,429.6
2,170.3
Economic
Profit
($s in
millions)(6)
2,432.0
2,278.5
1,984.4
$
(1) Reconciliation of amounts shown in Summary Compensation Table to CAP to PEO.
Value of
Stock
Awards and
Option
Awards
Reported in
SCT
(deducted)
Year-End
Value
of Awards
Granted in
Fiscal Year
(1)
Summary
Compensation
Table Total
(SCT)
$
18,796,822
14,330,010
14,838,996
$ (15,966,758) $ 24,357,600
20,198,760
(10,370,249)
18,881,745
(9,586,448)
Fiscal
Year
2023
2022
2021
Change in
Fair Value
of Prior
Year
Awards-
Outstanding
and
Unvested
(2)
$ 9,772,375
26,351,061
10,972,210
Change in
Fair
Value
(from
Prior Year
End)
of Prior
Year
Awards-
Vested (2)
602,289
$
2,673,630
(1,649,432)
$
Prior Year
Fair
Value of
Prior
Year
Awards
that Failed
to
Vest (2)
Total
Adjustments
—
—
—
$ 18,765,506
38,853,203
18,618,074
CAP
$ 37,562,328
53,183,213
33,457,070
(2) Stock options are valued based on the Black-Scholes option pricing model as of the applicable measurement date.
Stock options valued on a date other than the grant date are valued using the stock price and updated assumptions
(i.e., term, volatility, interest rate) on such measurement date.
(3) The Non-PEO NEOs are comprised of: Messrs. Jackson, Newbern, Daniele and Frazer for fiscal years 2023 and 2022;
and Messrs. Jackson, Giles, Newbern and Finestone and Ms. Ohm for fiscal year 2021.
(4) Reconciliation of amounts shown in Summary Compensation Table to CAP to Non-PEO NEOs
Value of
Stock
Awards
and
Option
Awards
Reported
in SCT
(deducted)
Year-End
Value
of Awards
Granted
in
Fiscal
Year (1)
$ (4,245,009) $ 6,476,196
5,633,491
3,892,579
(2,886,928)
(1,967,903)
Change in
Fair Value
of Prior
Year
Awards-
Outstanding
and
Unvested
(2)
$ 2,317,977
5,210,600
1,413,531
Change in
Fair
Value (from
Prior Year
End)
of Prior
Year
Awards-
Vested (2)
124,116
$
534,626
(145,677)
Prior Year
Fair
Value of
Prior
Year
Awards
that Failed
to
Vest (2)
—
—
(1,101,803)
$
Total
Adjustments
$ 4,673,280
8,491,789
2,090,726
CAP
$ 10,077,359
12,895,019
6,034,162
Summary
Compensation
Table Total
(SCT)
5,404,080
4,403,231
3,943,435
$
Fiscal
Year
2023
2022
2021
(5) Represents the weighted peer group total shareholder return (“TSR”), weighted according to each of the companies’
respective market capitalizations at the beginning of each period for which a return is indicated. The Company's peer
group is the S&P Retail Index as reflected in our Annual Report on Form 10-K for fiscal year 2023.
(6) Economic Profit was selected by the Company as the “most important” financial performance measure (that is not
otherwise required to be disclosed in the table above) used to link CAP to Company performance for the most recently
completed fiscal year, or the Company-Selected Measure. See page 46 of “Compensation Discussion and Analysis” for
more information about how Economic Profit is calculated.
Aggregate change in the actuarial present value of the accumulated benefits (deducted)” and “Aggregate
service cost and prior service cost for pension benefits” intentionally omitted as such amounts are not
applicable.
Relationship between CAP and Performance Measures
As discussed below, the relationship between the CAP to the PEO and the Average CAP to the Other NEOs in
fiscal 2021, 2022 and 2023 (collectively, “NEO Compensation Actually Paid”) to each of (1) Net income, (2)
TSR, and (3) Economic Profit demonstrates that such compensation fluctuates in a manner that is consistent
62
2023 Proxy Statement
with the Company’s achievement of its goals and increasing value for stockholders in line with the Company’s
compensation philosophy and performance-based objectives.
P
r
o
x
y
The primary driver of CAP is TSR. CAP is also influenced to a lesser extent by the other Company selected
financial performance measures, but more as a function of their impact on TSR.
In fiscal year 2021, CAP was primarily driven by TSR which reflected the 30% increase in the Company’s stock
price from the prior year, which outpaced the S&P Retail Index. To a lesser extent, CAP was influenced by net
income as it was driven by earnings before interest and taxes (EBIT) which is a component of Economic Profit
for the year. The CAP of the Non-PEOs reflect a lower than expected increase in relation to the PEO due to
stock options no longer outstanding at year-end following the retirement of Mr. Giles.
For fiscal years 2022 and 2023, NEO CAP is significantly higher, as it was tied to the substantial increase in the
Company’s stock price reflected in the TSR calculation for the year, along with the increase in Net Income and
Economic Profit for the year. See “Compensation Discussion and Analysis” above for additional information
regarding our fiscal 2023 NEO compensation.
Below, in an unranked order, are the most important financial performance measures used to link executive
compensation actually paid to the Company's NEOs to the Company's performance for fiscal year 2023, as
further described in our CD&A within the sections titled "Annual Incentive Plan" and “Long-term Incentive Plan.”
Most Important Financial Performance Measures: Economic Profit; Return on Invested Capital; Adjusted
Earnings Before Interest and Taxes; and Stock Price.
2023 Proxy Statement
63
SHARE OWNERSHIP INFORMATION
Beneficial Ownership Tables
P
P
r
r
o
o
x
x
y
y
The tables below set forth certain information regarding the beneficial ownership of our common stock, as
determined in accordance with SEC rules, as of October 23, 2023. Under these rules, beneficial ownership
includes any shares as to which such individual or group has sole or shared voting power or investment power
and includes any shares of common stock which such individual or group has the right to acquire beneficial
ownership within 60 days of the specified date. As of October 23, 2023, we had 17,633,748 shares of common
stock outstanding. For purposes of computing the percentage and amount of outstanding shares of common
stock held by each individual or group, any shares which that individual or group had the right to acquire on or
before December 22, 2023 are deemed to be outstanding for the individual or entity but such shares are not
deemed to be outstanding for the purpose of computing the percentage ownership of any other individual or
group.
SHARE OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
This table shows the beneficial ownership of common stock by each director, each named executive officer and
all current directors and executive officers as a group. Unless stated otherwise in the notes to the table, each
person named below has sole authority to vote and invest the shares shown.
Name of Beneficial Owner
Michael George
Linda A. Goodspeed
Earl G. Graves, Jr.
Enderson Guimaraes
Brian Hannasch
D. Bryan Jordan
Gale King
George R. Mrkonic, Jr.
Jill A. Soltau
William C. Rhodes III (4)
Jamere Jackson
Thomas B. Newbern
Philip B. Daniele
Preston B. Frazer (5)
All current directors and executive
officers as a group (24) persons
Ownership
Percentage
Deferred
Stock
Option
Restricted
Stock
Shares Units (1) Awards (2) Units (3)
222
2,691
4,832
3,051
216
2,742
1,065
3,764
983
—
—
—
—
—
—
—
— 3,417
—
—
—
—
—
399
—
—
240
—
—
—
—
— 1,405
—
—
—
— 111,125
23,828
11,500
—
41
26,139
—
3,236
31,674
—
882
18,514
—
1,604
Total
(#)
222
2,691
8,249
3,051
615
2,982
1,065
5,169
983
— 134,953
11,541
—
29,375
—
32,556
—
20,118
—
*
*
*
*
*
*
*
*
*
*
*
*
*
*
60,361 4,822 347,293
19,686 432,162
2.5%
*
(1)
(2)
(3)
(4)
Less than 1%.
Includes shares that may be acquired immediately upon termination as a director by conversion of Stock Units.
Includes shares that may be acquired upon exercise of stock options either immediately or within sixty (60) days of
October 23, 2023.
Includes fully-vested Restricted Stock Units that may be settled within sixty (60) days, one or five years after grant date
or, termination of service as a director.
Includes 176 shares held as trustee of a trust for Mr. Rhodes’ son, 177 shares held as trustee of a trust for Mr. Rhodes’
daughter, 1,043 shares held as trustee of trusts for Mr. Rhodes’ nieces and nephews, 100 shares held as co-trustee of a
trust for one of Mr. Rhodes’ siblings and 1,936 shares owned by a trust for Mr. Rhodes’ family in which his wife is
trustee. Also includes 3,471 shares held by a charitable foundation for which Mr. Rhodes is president and a director and
for which he shares investment and voting power.
(5)
Includes 875 shares held as trustee of a family trust and 20 shares owned by his spouse.
64
2023 Proxy Statement
SHARE OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following entities are known by us to own more than five percent of our outstanding common stock:
Name and Address
of Beneficial Owner
Vanguard Group, Inc. (2)
100 Vanguard Blvd.
Malvern, PA 19355
BlackRock, Inc. (3)
50 Hudson Yards
New York, NY 10001
JPMorgan Chase & Co. (4)
383 Madison Avenue
New York, NY 10179
FMR LLC (5)
245 Summer Street
Boston, MA 02210
Ownership
Shares
1,797,920
Percentage (1)
10.20%
1,368,521
7.76%
958, 829
5.44%
922,447
5.23%
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(1) The ownership percentages are calculated based on the number of shares of AutoZone common stock outstanding as
of October 23, 2023.
(2) Amounts reported in the table are based on information contained in a Form 13F filed by Vanguard Group Inc. on
August 14, 2023 for the quarter ending June 30, 2023. Based on information contained in a Schedule 13G/A filed on
May 10, 2023 by The Vanguard Group (“Vanguard”), as of April 28, 2023, Vanguard beneficially owned 1,842,601
shares of common stock, including (a) 0 shares over which it had sole voting power, (b) 28,071 shares over which it had
shared voting power, (c) 1,762,228 shares over which it had sole dispositive power and (d) 80,373 shares over which it
had shared dispositive power.
(3) Amounts reported in the table are based on information contained in a Form 13F filed by BlackRock, Inc. (“BlackRock”)
on August 11, 2023 for the quarter ending June 30, 2023. Based on information contained in a Schedule 13G/A filed on
February 3, 2023 by BlackRock, as of December 31, 2022, BlackRock beneficially owned 1,537,903 shares of common
stock, including (a) 1,398,365 shares over which it had sole voting power and (b) 1,537,903 shares over which it had
sole dispositive power.
(4) Amounts reported in the table are based on information contained in a Form 13F filed by JPMorgan Chase & Co.
(“JPM”) on August 11, 2023 for the quarter ending June 30, 2023. Based on information contained in a Schedule 13G/A
filed on January 18, 2023 by JPM, as of December 30, 2022, JPM beneficially owned 1,202,506 shares of common
stock, including (a) 1,121,491 shares over which it had sole voting power, (b) 2,609 shares over which it had shared
voting power, (c) 1,201,204 shares over which it had sole dispositive power and (d) 778 shares over which it had shared
dispositive power.
(5) Amounts reported in the table are based on information contained in a Form 13F filed by FMR LLC (“FMR”) on August
11, 2023 for the quarter ending June 30, 2023. Based on information contained in a Schedule 13G filed on February 9,
2023 by FMR, as of December 30, 2022, FMR beneficially owned 1,036,942 shares of common stock, consisting
entirely of shares over which it had sole dispositive power.
DELINQUENT SECTION 16(A) REPORTS
Securities laws require our executive officers, directors, and beneficial owners of more than ten percent of our
common stock to file insider trading reports (Forms 3, 4, and 5) with the SEC and the NYSE relating to the
number of shares of common stock that they own, and any changes in their ownership. To our knowledge,
based solely on our records and certain written representations received from our executive officers and
directors, during the fiscal year ended August 26, 2023, all persons related to AutoZone that are required to file
these insider trading reports have filed them in a timely manner. Copies of the insider trading reports can be
found on the AutoZone corporate website at investors.autozone.com.
2023 Proxy Statement
65
Equity Compensation Plans
The following table sets forth certain information as of August 26, 2023, with respect to compensation plans
under which shares of AutoZone common stock may be issued.
P
P
r
r
o
o
x
x
y
y
Plan Category
Equity compensation plans approved by
security holders (1)
Equity compensation plans not approved
by security holders (2)
Total
Number of securities to
be issued upon exercise Weighted-average
of outstanding
options, warrants
and rights
exercise price of
outstanding options,
warrants and rights
Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected
in the first column)
1,027,588 $
1,175.87
1,543,721
438
1,028,026 $
74.21
1,175.40
—
1,543,721
(1) Consists of the Amended 2011 Equity Plan, 2020 Omnibus Incentive Plan, the Employee Stock Purchase Plan, the
Executive Stock Purchase Plan and the 2003 Director Compensation Plan. Column (a) consists of shares of common
stock issuable upon exercise of outstanding options and upon vesting and payment of outstanding restricted stock units,
stock appreciation rights and deferred shares under each of the foregoing plans. Restricted stock units and deferred
shares are settled for shares of common stock on a one-for-one basis and have no exercise price. Accordingly, they
have been excluded for purposes of computing the weighted-average exercise price in column (b). Column (c) consists
of shares available for issuance pursuant to the 2020 Omnibus Incentive Plan, the Employee Stock Purchase Plan and
the Executive Stock Purchase Plan.
(2) Consists of the AutoZone, Inc. Second Amended and Restated Director Compensation Plan, which was approved by
the Board but was not submitted for approval by the shareholders as then permitted under the rules of the NYSE. This
plan was terminated in December 2002. Any outstanding awards consist of stock appreciation rights that may be
converted into shares immediately upon termination as a director.
66
2023 Proxy Statement
GENERAL INFORMATION
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Attending and Voting Information
During the Annual Meeting, the Company intends to answer questions that are pertinent to the Company and
the official business of the Annual Meeting, subject to time constraints.
ELIGIBLE ATTENDEES OF THE ANNUAL MEETING. Only shareholders of record at the close of business on
October 23, 2023 (the “Record Date”), or holders of a validly issued proxy, are entitled to attend and vote at the
Annual Meeting. The only class of stock that can be voted at the Annual Meeting is our common stock, which is
the only class of stock of AutoZone that is issued and outstanding. Each share of common stock is entitled to
one vote on all matters that come before the Annual Meeting. At the close of business on the Record Date, we
had 17,633,748 shares of common stock outstanding.
ANNUAL MEETING LOCATION. The Annual Meeting will be held at the J. R. Hyde III Store Support Center
located at 123 S. Front St, Memphis, Tennessee 38103. You are encouraged to arrive early to allow sufficient
time to secure parking and complete admission verification procedures.
ADMISSION REQUIREMENTS. To be admitted, you must present a government-issued photo identification,
such as a driver’s license, state-issued ID card or passport, and proof of share ownership as of the Record
Date. To prove ownership, shareholders of record will be verified against our list of registered shareholders, and
beneficial shareholders, those who own their shares through an intermediary such as a bank or broker or other
nominee, must show: an account statement showing their share ownership as of the Record Date; a copy of the
voting instruction form or a valid legal proxy from the broker, trustee, bank or nominee holding the shares; a
letter from a broker, trustee, bank or nominee holding the shares confirming the beneficial owner’s ownership as
of the Record Date; or other similar evidence of ownership. We reserve the right to deny admittance to
anyone who does not comply with these requirements as determined in our sole discretion. If you hold
shares in a joint account, both owners can be admitted to the meeting if proof of joint ownership is provided and
you both provide identification.
LIVE WEBCAST. A live, audio-only webcast and audio recording of the Annual Meeting will be available at
investors.autozone.com for shareholders and interested guests.
HOW TO VOTE.
Prior to the Meeting: If you are a shareholder of record as of the record date, you can vote by telephone, on
the Internet or by mail. We encourage you to vote by telephone or Internet, both of which are convenient, cost-
effective, and reliable alternatives to returning your proxy card by mail.
On the Internet:
By Telephone:
By Mail:
You may vote on the
Internet by following
the instructions on the
Notice or proxy card. If
you vote on the
Internet, you do not
have to mail in your
proxy card.
You may vote by telephone
by following the instructions
on the Notice or proxy card.
If you submit your vote by
telephone, you do not have
to mail in your proxy card.
If you received printed
proxy materials, you
may vote by properly
completing and signing
the enclosed proxy
card and returning it in
the enclosed
envelope.
If your shares are held in a brokerage account, bank, trust or another nominee as custodian, you are considered
the “beneficial owner” of shares and will receive materials and voting instructions directly from your broker,
bank, trustee or other nominee.
During the Meeting: You may vote your shares in-person at the annual meeting. See above for important
information regarding who is eligible to attend the meeting and meeting admission requirements. Even if you
plan to attend the meeting, we recommend that you vote in advance so that your vote will be counted if you later
decide not to attend the meeting or fail to comply with the stated admission requirements.
2023 Proxy Statement
67
Multiple Notices and Voting Forms: If you hold shares in different formats (e.g. both as a “record holder” and
a “beneficial owner”) or in multiple brokerage accounts, you will receive multiple notices or voting instruction
forms. Please vote the shares represented by each notice, proxy card and/or voting instruction form you receive
to ensure that all your shares are voted.
P
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r
r
o
o
x
x
y
y
HOW VOTES ARE COUNTED. Your shares will be voted as you indicate on your proxy card. If you sign your
card without indicating how you wish to vote, your shares will be voted FOR our nominees for director, FOR
Ernst & Young LLP as independent registered public accounting firm, FOR the advisory vote on executive
compensation, for holding the advisory vote on named executive officer compensation every ONE YEAR and in
the proxies’ discretion on any other matter that may properly be brought before the Annual Meeting or any
adjournment of the Annual Meeting. The votes will be tabulated and certified by our transfer agent,
Computershare Inc. A representative of Computershare will serve as the inspector of election.
HOW TO CHANGE YOUR VOTE. You may revoke your proxy at any time before it is voted at the Annual
Meeting by giving written notice to our Secretary that you have revoked the proxy, providing a valid later-dated
proxy, providing a later-dated vote by telephone or Internet or by voting in person at the Annual Meeting. Any
written notice should be sent to the Secretary at 123 South Front Street, Dept. 8074, Memphis, Tennessee
38103 and received no later than 5:00 p.m. Central Time on December 19, 2023. If you are a beneficial owner
of shares, you may submit new voting instructions by contacting your bank, broker or other holder of record and
following the instructions they’ve provided.
QUORUM REQUIREMENTS. Holders of a majority of the shares of the voting power of the Company’s common
stock must be present in person or by proxy in order for a quorum to be present. Shares abstaining from voting
and shares as to which a broker non-vote occurs are considered present for purposes of determining whether a
quorum exists. If a quorum is not present at the scheduled time of the Annual Meeting, we may adjourn the
Meeting, without notice other than announcement at the Annual Meeting, until a quorum is present or
represented. Any business which could have been transacted at the Annual Meeting as originally scheduled can
be conducted at the adjourned meeting.
BROKER NON-VOTES. Broker non-votes occur when shares held by a brokerage firm are not voted with
respect to a proposal because the firm has not received voting instructions from the beneficial owner of the
shares and the firm does not have the authority to vote the shares in its discretion.
MATTERS TO BE VOTED UPON. At the Annual Meeting, shareholders will be asked to vote on the following
proposals:
Proposals
Board
Recommendation
Voting Approval
Standard
Abstentions
Broker Non-
Votes
1. Election of 10 directors
2. Ratification of the appointment of
Ernst & Young LLP as our independent
registered public accounting firm for the
2023 fiscal year
FOR
FOR
More votes For
than Against
More votes For
than Against
No effect
No effect
No effect
No effect
3. Approval of an advisory vote on the
FOR
compensation of our named executive
officers.
4. Approval of frequency of advisory vote
1 YEAR
on named executive officer
compensation
More votes For
than Against
No effect
No effect
Most votes for
frequency
No effect
No effect
Shareholders also will transact any other business that may be properly brought before the Annual Meeting.
68
2023 Proxy Statement
ANNUAL REPORT. A copy of our Annual Report on Form 10-K for the fiscal year ended August 26, 2023 (the
“FY23 Form 10-K”) has been posted online, along with this Proxy Statement, each of which is accessible by
following the instructions in the Notice. The FY23 Form 10-K is not incorporated into this Proxy Statement and is
not considered proxy-soliciting materials. We filed our FY23 Form 10-K with the SEC on October 23, 2023 and
will mail, without charge, a copy of such report, without exhibits to those who make a written request to our
Secretary at 123 South Front Street, Dept. 8074, Memphis, Tennessee 38103.
REVIEWING PROXY MATERIALS ONLINE. The rules of the SEC allow us to furnish proxy materials to our
shareholders on the Internet. We are pleased to take advantage of these rules and believe that they enable us
to provide our shareholders with the information that they need, while lowering the cost of delivery and reducing
the environmental impact of our Annual Meeting. Accordingly, this Proxy Statement and our annual report to
security holders are available on our website at investors.autozone.com. Additionally, you may access our proxy
materials at www.envisionreports.com/AZO.
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REQUESTING A PRINTED COPY OF PROXY MATERIALS. If you received a Notice by mail, you will not
receive a printed copy of the proxy materials unless you request one. The Notice will instruct you as to how you
may obtain a printed copy of our proxy materials at no charge. All requests for printed copies of proxy materials
must be received by December 11, 2023.
COSTS OF SOLICITATION. AutoZone will pay all expenses incurred in this proxy solicitation. We also may
make additional solicitations in person, by telephone, facsimile, e-mail, or other forms of communication.
Brokers, banks, and others who hold our stock for beneficial owners will be reimbursed by us for their expenses
related to forwarding our proxy materials to the beneficial owners.
2023 Proxy Statement
69
The 2024 Annual Meeting
Shareholders proposals and director nominations for consideration at the 2024 Annual Meeting of Shareholders
(the “2024 Annual Meeting”) must be submitted in writing and mailed to AutoZone, Inc., Attention: Secretary,
Post Office Box 2198, Dept. 8074, Memphis, Tennessee 38101-2198. The information provided below is a
summary. Additional detail as to requirements and other related matters can be found in our By-Laws and/or
certain rules adopted by the SEC, as applicable.
Shareholder Proposals for Inclusion in Proxy Statement. In order to propose an item of business to be
considered for inclusion in our proxy materials relating to the 2024 Annual Meeting, eligible shareholders must
submit proposals that comply with Rule 14a-8 under the Exchange Act. Such proposal must be received by our
Secretary by July 2, 2024.
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x
y
y
Director Nominations for Inclusion in the Proxy Statement. In order to nominate a director candidate for
inclusion in our proxy statement relating to the 2024 Annual Meeting, a shareholder or group of shareholders
must comply with the “proxy access” provision set forth in Article II, Section 10 of AutoZone’s By-Laws. This
section provides that an individual eligible shareholder, or group of up to 20 eligible shareholders, must own 3%
or more of AutoZone’s outstanding common stock continuously for at least the previous three years, and may
nominate up to the greater of two individuals or 20% of the Board for inclusion in our proxy statement. Requests
to include shareholder-nominated director candidates in our 2024 Proxy Statement must be received by our
Corporate Secretary not earlier than August 22, 2024, and not later than September 21, 2024. The nominating
shareholder(s) must provide certain information and meet the other specific requirements of our By-laws, and
each nominee must meet the qualifications required by our By-laws.
Business Not for Inclusion in the Proxy Statement. In accordance with Article II, Section 2 of AutoZone’s By-
Laws, shareholder proposals received after August 22, 2024, but before September 21, 2024, may be presented
at the Annual Meeting, but will not be included in the Proxy Statement. Any shareholder proposal received on or
after September 21, 2024, will not be eligible to be presented for a vote to the shareholders in accordance with
our By-Laws.
Universal Proxy Rules for Director Nominations
In addition to satisfying the foregoing requirements under AutoZone’s By-laws, to comply with the universal
proxy rules, shareholders who intend to solicit proxies in support of director nominees other than AutoZone’s
nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act.
Such notice must be postmarked or transmitted electronically no later than October 21, 2024 or not later than
the date that is 60 days prior to the one-year anniversary of the Annual Meeting if such meeting takes place on
any day other than December 20, 2023.
70
2023 Proxy Statement
Form 10-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
Annual Report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934
Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934
For the fiscal year ended August 26, 2023.
OR
☒☒
☐☐
For the transition period from ______ to ______.
Commission file number 1-10714
AUTOZONE, INC.
(Exact name of registrant as specified in its charter)
Nevada
(State or other jurisdiction of
incorporation or organization)
123 South Front Street, Memphis, Tennessee
(Address of principal executive offices)
62-1482048
(I.R.S. Employer Identification No.)
38103
(Zip Code)
Registrant’s telephone number, including area code: (901) 495-6500
Securities registered pursuant to Section 12(b) of the Act:
1
0
-
K
Title of Each Class
Common Stock ($0.01 par value)
Trading Symbol(s)
AZO
Name of Each Exchange on which Registered
New York Stock Exchange
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T
(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging
growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of
the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company ☐
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised
financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over
financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit
report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect
the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of
the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐
The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was
last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter was
$46,248,303,523.
No
The number of shares of Common Stock outstanding as of October 16, 2023, was 17,683,418.
Documents Incorporated By Reference
Portions of the definitive Proxy Statement to be filed within 120 days of August 26, 2023, pursuant to Regulation 14A under the Securities Exchange Act of 1934 for
the Annual Meeting of Stockholders to be held December 20, 2023, are incorporated by reference into Part III.
1
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TABLE OF CONTENTS
PART I
4
Item 1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
Human Capital Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
Store Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6
Commercial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7
Store Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8
8
Marketing and Merchandising Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchasing and Supply Chain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Government Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Trademarks and Patents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Seasonality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
AutoZone Websites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Information about our Executive Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Item 1A. Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Item 1B. Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Item 2. Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Item 3. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Item 4. Mine Safety Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
PART II
24
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Item 6. Reserved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . . 27
Item 7A. Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Item 8. Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure . . . . . . . . . 76
Item 9A. Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Item 9B. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
PART III
77
Item 10. Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Item 11. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Item 13. Certain Relationships and Related Transactions, and Director Independence . . . . . . . . . . . . . . . . . . . . . 77
Item 14. Principal Accounting Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
PART IV
78
Item 15. Exhibits and Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Item 16. Form 10-K Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
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Forward-Looking Statements
Certain statements contained in this annual report constitute forward-looking statements that are subject to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements typically use
words such as “believe,” “anticipate,” “should,” “intend,” “plan,” “will,” “expect,” “estimate,” “project,”
“positioned,” “strategy,” “seek,” “may,” “could” and similar expressions. These are based on assumptions and
assessments made by our management in light of experience and perception of historical trends, current conditions,
expected future developments and other factors that we believe to be appropriate. These forward-looking statements
are subject to a number of risks and uncertainties, including without limitation: product demand, due to changes in
fuel prices, miles driven or otherwise; energy prices; weather, including extreme temperatures, natural disasters and
general weather conditions; competition; credit market conditions; cash flows; access to available and feasible
financing on favorable terms; future stock repurchases; the impact of recessionary conditions; consumer debt levels;
changes in laws or regulations; risks associated with self-insurance; war and the prospect of war, including terrorist
activity; the impact of public health issues; inflation, including wage inflation; the ability to hire, train and retain
qualified employees, including members of management and other key personnel; construction delays; failure or
interruption of our information technology systems; issues relating to the confidentiality, integrity or availability of
information, including due to cyber-attacks; historic growth rate sustainability; downgrade of our credit ratings;
damage to our reputation; challenges associated with doing business in and expanding into international markets;
origin and raw material costs of suppliers; inventory availability; disruption in our supply chain; impact of tariffs;
impact of new accounting standards; our ability to execute our growth initiatives; and other business interruptions.
Certain of these risks and uncertainties are discussed in more detail in the “Risk Factors” section contained in Item
1A under Part 1 of this Annual Report on Form 10-K for the year ended August 26, 2023, and these Risk Factors
should be read carefully. Forward-looking statements are not guarantees of future performance and actual results,
developments and business decisions may differ from those contemplated by such forward-looking statements.
Events described above and in the “Risk Factors” could materially and adversely affect our business. However, it
should be understood that it is not possible to identify or predict all such risks and other factors that could affect
these forward-looking statements. Forward-looking statements speak only as of the date made. Except as required by
applicable law, we undertake no obligation to update publicly any forward-looking statements, whether as a result of
new information, future events or otherwise.
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Item 1. Business
Introduction
PART I
AutoZone, Inc. (“AutoZone,” the “Company,” “we,” “our” or “us”) is the leading retailer and distributor of
automotive replacement parts and accessories in the Americas. We began operations in 1979 and at August 26,
2023, operated 6,300 stores in the United States (“U.S.”), 740 stores in Mexico and 100 stores in Brazil. Each store
carries an extensive product line for cars, sport utility vehicles, vans and light duty trucks, including new and
remanufactured automotive hard parts, maintenance items, accessories and non-automotive products. At August 26,
2023, in 5,682 of our domestic stores as well as the vast majority of our stores in Mexico and Brazil, we had a
commercial sales program that provided commercial credit and prompt delivery of parts and other products to local,
regional and national repair garages, dealers, service stations, fleet owners and other accounts. We also sell
automotive hard parts, maintenance items, accessories and non-automotive products through www.autozone.com,
and our commercial customers can make purchases through www.autozonepro.com. Additionally, we sell the
ALLDATA brand of automotive diagnostic, repair, collision and shop management software through
www.alldata.com. We also provide product information on our Duralast branded products through
www.duralastparts.com. We do not derive revenue from automotive repair or installation services.
Human Capital Resources
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We believe the foundation of our success is our culture, which is rooted in our Pledge and Values and defines how
our employees (“AutoZoners”) take care of customers and fellow AutoZoners. Each AutoZoner works hard to Live
the Pledge, share their passion for WOW! Customer Service and Go the Extra Mile every day to continue building
and growing AutoZone for our customers.
We seek to be the employer of choice as we compete for talent in our retail stores, field supervision, distribution
centers, and store support functions. We focus heavily on retention by offering competitive compensation and
benefits packages, extensive training and development opportunities and leveraging our business resource groups to
support AutoZoners across the organization contribute their voices, time, and talent to helping other AutoZoners
succeed in their careers.
As of August 26, 2023, we employed approximately 119,000 AutoZoners, approximately 60 percent of whom were
employed full-time and the remaining 40 percent were employed part-time. About 91 percent of our AutoZoners
were employed in stores or in direct field supervision, approximately 6 percent in distribution centers and
approximately 3 percent in store support and other functions. Included in the above numbers are approximately
15,500 AutoZoners employed in our international operations. We have never experienced any material labor
disruption, do not have any collective bargaining agreements and believe that relations with our AutoZoners are
good.
Training & Development
We have a number of different types of jobs and career opportunities. While many of our AutoZoners follow more
traditional career paths (e.g., part-time to full-time sales, store manager, district manager, regional manager, vice
president), we encourage cross-functional development and support of AutoZoners as they expand their career into
other departments and fields of interest within the Company. Many members of our senior leadership team have
held positions in multiple areas of the business. We also invest in advanced leadership training in order to deepen
our bench strength and support succession planning. For additional information, see “Store Operations—Store
Personnel Training and Incentives” below. We believe these opportunities are important to attract, motivate and
retain high quality AutoZoners.
Recognition
The AutoZone Pledge and Values drive our success and foster a strong, unique culture of teamwork and customer
service. We encourage the recognition of AutoZoners for a variety of accomplishments, such as going above and
4
beyond to deliver Trustworthy Advice and WOW! Customer Service, taking initiative to prevent incidents and
injuries, making contributions to help detect or report internal or external theft or providing significant service to
help others. Whether they work in our stores, distribution centers, support centers or travel to support our customers
and business, we believe AutoZoners everywhere should be recognized for their efforts and outstanding
performance. We also recognize AutoZoners for their years of service to the organization and our customers.
Diversity, Equity and Inclusion (“DEI”)
“Embraces Diversity” is one of our Values, and we have made great strides in our DEI initiatives. With the oversight
and support of a cross-functional Diversity Council and DEI Steering Committee, our DEI efforts influence and
inform many parts of our human capital management efforts including talent acquisition, retention, professional
development and workforce management. Our first business resource group (“BRG”) was established in 2014
(AutoZone Women’s Initiative). Since then, five other BRGs now exist to help AutoZoners across the organization
grow and succeed in their careers.
Health and Safety
We are committed to providing a safe working and shopping environment for our AutoZoners and customers.
Aligned with our values, we strive to continually monitor our working and shopping environment to keep our
AutoZoners and customers as safe as possible.
Additional information about our human capital resources can be found in our most recent Environmental, Social &
Governance (“ESG”) Report, which is available on our website. Our ESG Report is not, and will not be deemed to
be, a part of this Annual Report on Form 10-K or incorporated by reference into this or any of our other filings with
the Securities and Exchange Commission (“the SEC”).
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Store Operations
At August 26, 2023 our stores were in the following locations:
Alabama . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Alaska . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Arizona . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Arkansas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
California . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Colorado . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Connecticut . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Delaware . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Florida . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Georgia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Hawaii . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Idaho . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Illinois . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Indiana . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Iowa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Kansas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Kentucky . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Louisiana . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Maine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Maryland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Massachusetts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Michigan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Minnesota . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mississippi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Missouri . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Montana . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nebraska . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nevada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
New Hampshire . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
New Jersey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
New Mexico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
New York . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
North Carolina . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
North Dakota . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ohio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Oklahoma . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Oregon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pennsylvania . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Puerto Rico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rhode Island . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Saint Thomas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
South Carolina . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
South Dakota . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tennessee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Texas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Utah . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Vermont . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Virginia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Washington . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Washington, DC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
West Virginia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wisconsin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wyoming . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Domestic stores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mexico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total stores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Store
Count
123
8
165
73
658
102
58
20
430
214
12
33
248
164
37
55
105
132
14
93
88
221
63
98
122
15
25
70
23
124
64
212
241
7
288
87
57
228
51
17
1
107
9
183
693
70
2
153
100
5
45
78
9
6,300
740
100
7,140
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Store Formats
Substantially all stores are based on standard store formats, resulting in generally consistent appearance,
merchandising and product mix. Approximately 90% to 99% of each store’s square footage is selling space. In our
satellite stores, approximately 40% to 50% of our space is dedicated to hard parts inventory, while our hub and mega
hub stores have 70% to 85% of their space utilized for hard parts. The hard parts inventory area is generally fronted
by counters or pods that run the depth or length of the store, dividing the hard parts area from the remainder of the
store. The remaining selling space contains displays of maintenance, accessories and non-automotive items.
Store Personnel Training and Incentives
We provide on-the-job training as well as formal training programs, including an annual national sales meeting with
related cascading meetings at our distribution centers, regional offices and stores; store meetings on specific sales
and product topics; standardized computer-based training to support culture, safety, salesmanship, compliance and
product and job knowledge; and several specialist, vendor and third-party programs to support learning and
development in areas requiring technical expertise and specific job knowledge. All domestic AutoZoners are
encouraged to complete our in-house product knowledge program and Parts Expert certification, which is developed
in partnership with our key suppliers. Training is supplemented with frequent store visits by management.
Additionally, store managers, commercial sales managers and managers at various levels across the organization
receive financial incentives through performance-based bonuses.
Store Support Centers
All store support functions are centralized in our store support centers located in Memphis, Tennessee; Monterrey,
Mexico; Chihuahua, Mexico and Sao Paulo, Brazil. We believe that this centralization enhances consistent
execution of our merchandising and marketing strategies at the store level, while reducing expenses and cost of
sales. In addition, we have offices in Shanghai, China and Haryana, India that provide sourcing, technology or other
support functions.
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Store Automation
All of our stores have Z-net, our proprietary electronic catalog that enables our AutoZoners to efficiently look up the
parts that our customers need and provide complete job solutions, advice and information for customer vehicles. Z-
net provides parts information based on year, make, model and engine type of a vehicle and also tracks inventory
availability at the store, at other nearby stores and through special order. The Z-net display screens are placed on the
hard parts counter or pods, where both the AutoZoner and customer can view the screen.
Our stores utilize our computerized proprietary Point-of-Sale System, which includes bar code scanning and point-
of-sale data collection terminals. Our proprietary Store Management System provides administrative assistance, as
well as enhanced merchandising information and improved inventory control. We believe the Point-of-Sale System
also enhances customer service, while the Store Management System provides simplified warranty and product
return procedures.
Commercial
Our commercial sales program operates in a highly fragmented market, and we are a leading distributor of
automotive parts and other products to local, regional and national repair garages, dealers, service stations, fleet
owners and other accounts in the Americas. As part of our program, we offer credit and delivery to our customers, as
well as online ordering through www.autozonepro.com or through the AutoZone Pro smartphone application.
Through our hub and mega hub stores, we offer a greater range than our satellite stores of parts and products desired
by professional technicians. We have dedicated sales teams focused on independent repair shops as well as national,
regional and fleet commercial accounts.
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Store Development
The following table reflects our store development during the past five fiscal years:
2023
2022
Fiscal Year
2021
2020
2019
Stores:
Beginning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
New . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Closed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net new . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Relocated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6,943
198
1
197
12
7,140
6,767
177
1
176
13
6,943
6,549
219
1
218
12
6,767
6,411
138
—
138
5
6,549
6,202
209
—
209
2
6,411
We believe expansion opportunities exist in markets we do not currently serve, as well as in markets where we can
achieve a larger presence. We undertake substantial research prior to entering new markets. The most important
criteria for opening a new store are the projected future profitability and the ability to achieve our required
investment hurdle rate. Key factors in selecting new site and market locations for stores include population,
demographics, vehicle profile, customer buying trends, commercial businesses, number and strength of competitors’
stores and the cost of real estate. In reviewing the vehicle profile, we also consider the number of vehicles that are
seven years old and older, or “our kind of vehicles”; these vehicles are generally no longer under the original
manufacturers’ warranties and require more maintenance and repair than newer vehicles. We seek to open new
stores in high visibility sites in high traffic locations within or contiguous to existing market areas and attempt to
cluster development in markets in a relatively short period of time. We believe our stores are “destination stores,”
generating their own traffic, therefore we situate most stores on major thoroughfares with easy access and good
parking. In addition to continuing to lease or develop our own locations, we evaluate and may make strategic
acquisitions.
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Marketing and Merchandising Strategy
We are dedicated to providing customers with superior service and trustworthy advice as well as quality automotive
parts and products at a great value in conveniently located, well-designed stores. Key elements of this strategy are:
Customer Service
Customer service is the most important element in our marketing and merchandising strategy, which is based upon
consumer marketing research. We emphasize that our AutoZoners should always put customers first by providing
prompt, courteous service and trustworthy advice. Our electronic parts catalog assists in the selection of parts as well
as identifying any associated warranties offered by us or our vendors. In addition to our in-store offerings, we sell
automotive hard parts, maintenance items, accessories and non-automotive parts through www.autozone.com, for
pick-up in store or to be shipped directly to a customer’s home or business, with next day or same day delivery
programs in most of our U.S. markets. Additionally, we offer a smartphone application that provides customers with
store locations, driving directions, operating hours, product availability, the ability to purchase products and other
information.
We also provide specialty tools through our suite of free services. Through our Loan-A-Tool program customers can
borrow a specialty tool, such as a steering wheel puller, for which a do-it-yourself (“DIY”) customer or a repair shop
would have little or no use other than for a single job. AutoZoners also provide free diagnostic and related services,
including check engine and anti-lock braking system light readings through our AutoZone Fix Finder service, testing
of starters, alternators and batteries, battery charging and the collection of used oil for recycling.
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Merchandising
The following tables show some of the types of products we sell by major category of items:
Maintenance
Discretionary
Air Fresheners
Antifreeze & Windshield Washer Fluid
Brake Drums, Rotors, Shoes & Pads
Chemicals, including Brake & Power
Steering Fluid, Oil & Fuel Additives
Oil & Transmission Fluid
Oil, Cabin, Air, Fuel & Transmission
Filters
Oxygen Sensors
Paint & Accessories
Refrigerant & Accessories
Shock Absorbers & Struts
Spark Plugs & Wires
Windshield Wipers
Cell Phone Accessories
Drinks & Snacks
Floor Mats & Seat Covers
Interior & Exterior Accessories
Mirrors
Performance Products
Protectants & Cleaners
Sealants & Adhesives
Steering Wheel Covers
Tools
Towing
Vehicle Entertainment Systems
Wash & Wax
Failure
A/C Compressors
Batteries & Accessories
Bearings
Belts & Hoses
Calipers
Chassis
Clutches
CV Axles
Engines
Fuel Pumps
Fuses
Ignition
Lighting
Mufflers
Radiators
Starters & Alternators
Thermostats
Tire Repair
Water Pumps
We believe customer satisfaction is often impacted by our ability to promptly provide specific automotive products
as requested. Each store carries the same basic products, but we tailor our hard parts inventory to the makes and
models of the vehicles in each store’s trade area, and our sales floor products are tailored to the local store’s
demographics. Our hub stores (including mega hubs, which carry an even broader assortment) carry a larger
assortment of products that are delivered to local satellite stores. We are continuously updating the products we offer
to ensure our inventory matches the products our customers need or desire.
Pricing
We want to be the value leader in our industry, by consistently providing quality merchandise at the right price,
backed by a satisfactory warranty and outstanding customer service. For many of our products, we offer multiple
value choices in a good/better/best assortment, with appropriate price and quality differences from the “good”
products to the “better” and “best” products. A key differentiating component versus our competitors is our
exclusive line of in-house brands, which includes Duralast and the family of Duralast brands, ProElite, ShopPro,
SureBilt, TotalPro, TruGrade and Valucraft. We believe that our overall value compares favorably to that of our
competitors.
Brand Marketing: Marketing and Loyalty
We believe that targeted advertising and promotions play important roles in succeeding in today’s environment. We
are constantly working to understand our customers’ wants and needs so we can build long-lasting, loyal
relationships. We utilize advertising, direct marketing, loyalty programs and promotions primarily to highlight our
great value, the availability of high quality parts and develop a relationship with an expanding base of customers.
Digital and broadcast media are our primary advertising methods of driving retail traffic, while we leverage a
dedicated sales force and our ProVantage loyalty program to drive commercial sales.
Store Design, Visual Merchandising and Promotional Execution
We design and build stores for high visual impact. The typical store utilizes colorful exterior and interior signage,
exposed beams and ductwork, finished floors and brightly lit interiors. Batteries, maintenance products, accessories
and non-automotive items are attractively displayed for easy browsing by customers. In-store signage and special
displays promote products on floor displays, end caps and shelves. We utilize in-store signage, creative product
placement and promotions to help educate customers about products that they may need.
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Purchasing and Supply Chain
Merchandise is selected and purchased for all stores through our store support centers located in Memphis,
Tennessee; Monterrey, Mexico and Sao Paulo, Brazil. Additionally, we have offices in Shanghai, China, Haryana,
India and Istanbul, Turkey to support our global sourcing efforts. In fiscal 2023, one class of similar products
accounted for approximately 14 percent of our total revenues. No other class of similar products accounted for
10 percent or more of our total revenues, and no individual vendor provided more than 10 percent of our total
purchases. We believe alternative sources of supply exist, at similar costs, for most types of product sold. Most of
our merchandise flows through our distribution centers to our stores by our fleet of tractors and trailers or by third-
party transportation firms. The distribution centers replenish our stores up to multiple times per week depending on
store sales volumes.
We ended fiscal 2023 with 308 domestic and 39 international hub stores, which have a larger assortment of products
as well as regular replenishment items that can be delivered to a store in its network within 24 hours. Hub stores are
generally replenished from distribution centers multiple times per week. Hub stores have increased our ability to
distribute products on a timely basis to many of our stores and to expand our product assortment.
As a subset of our domestic hub stores, we ended fiscal 2023 with 98 mega hubs, an increase of 20 since the end of
fiscal 2022. Additionally, we have two mega hubs in Mexico. Mega hubs work in concert with other hubs to drive
customer satisfaction through improved local parts availability and expanded product assortments. A mega hub
carries inventory of 80,000 to 110,000 unique SKUs, approximately twice what a hub store carries. Mega hubs
provide coverage to both surrounding stores and other hub stores multiple times a day or on an overnight basis.
Currently, we have over 6,000 domestic stores with access to mega hub inventory. A majority of these stores
currently receive mega hub service same day.
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Competition
The sale of automotive parts, accessories and maintenance items is highly competitive due to numerous factors,
including name recognition, product availability, customer service, store location and price. AutoZone competes in
the aftermarket auto parts industry, which includes both the retail DIY and commercial do-it-for-me (“DIFM”) auto
parts and products markets.
Our competitors include national, regional and local auto parts chains, independently owned parts stores, online
automotive parts stores or marketplaces, wholesale distributors, jobbers, repair shops, car washes and auto dealers,
in addition to discount and mass merchandise stores, hardware stores, supermarkets, drugstores, convenience stores,
home stores and other retailers that sell aftermarket vehicle parts and supplies, chemicals, accessories and tools.
AutoZone competes on the basis of customer service, including the knowledge and expertise of our AutoZoners and
our ability to provide prompt delivery to commercial customers; merchandise quality, selection and availability;
product warranty; store layouts, location and convenience; price; and the strength of our AutoZone brand name,
trademarks and service marks.
Government Relations
We are subject to numerous federal, state, and local laws and regulations, many of which are complex, frequently
changing and subject to varying interpretations. These laws and regulations relate to, among other things, the
marketing and sale of products; proper handling and disposal of hazardous materials, particularly in connection with
our used oil, oil filter and battery recycling programs; occupational health and safety; environmental matters; labor
and employment; employee wages and benefits; information security and data privacy; real property; financial
reporting and disclosure; antitrust and fair competition; international trade and transportation, logistics and delivery
operations.
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While compliance with the numerous laws and regulations applicable to our business, including environmental
regulations, has not had a material adverse effect on capital expenditures, earnings or our competitive position to
date, we can make no assurances as to the future costs of compliance. For more information, see the Risk Factors
titled “Legal and Regulatory Risks” and “Information Technology, Cybersecurity and Data Privacy Risks” in “Part
I. Item 1A, Risk Factors” in this report.
Trademarks and Patents
We regard our trademarks, service marks, patents, domain names, trade dress, trade secrets and other intellectual
property as critical to our success and important components of our marketing and merchandising strategies. We
have registered several trademarks and service marks in the U.S. Patent and Trademark Office as well as in certain
other countries, including without limitation: “AutoZone,” “Get in the Zone,” “Duralast,” “Econocraft,” “ProElite,”
“ShopPro,” “SureBilt,” “TotalPro,” “TruGrade,” “Valucraft,” and “ALLDATA,” along with variations of these
trademarks. Our trademark registrations have various expiration dates; however, assuming that the trademarks are
properly maintained and in use, such registrations may typically be renewed indefinitely.
Seasonality
Our business is somewhat seasonal in nature, with the highest sales typically occurring in the spring and summer
months of February through September, and the lowest sales in the months of December and January. During short
periods of time, a store’s sales can be affected by weather conditions. Extremely hot or extremely cold weather may
enhance sales by causing parts to fail; thereby increasing sales of seasonal products. Mild or rainy weather tends to
soften sales, as parts failure rates are lower in mild weather and elective maintenance is deferred during periods of
rainy weather. Over the longer term, we believe the effects of weather balance out, as we have stores throughout the
Americas.
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AutoZone Websites
Our primary website is www.autozone.com. We make available, free of charge, at www.autozone.com, by clicking
“Investor Relations” located at the bottom of the page, our Annual Reports on Form 10-K, Quarterly Reports
on Form 10-Q, Current Reports on Form 8-K, proxy statements, registration statements and amendments to those
reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities and Exchange Act of 1934, as
amended, as soon as reasonably feasible after we electronically file such material with, or furnish it to, the SEC. Our
websites and the information contained therein or linked thereto are not intended to be incorporated into this Annual
Report on Form 10-K.
Information about our Executive Officers
The following list describes our executive officers, which are elected by and serve at the discretion of the Board of
Directors. The title of each executive officer includes the words “Customer Satisfaction” which reflects our
commitment to customer service.
William C. Rhodes, III, 58—Chairman, President and Chief Executive Officer, Customer Satisfaction
William C. Rhodes, III has served as AutoZone’s President and Chief Executive Officer, and a director since 2005
and was named Chairman in 2007. Prior to his appointment as President and Chief Executive Officer, Mr. Rhodes
served in various capacities within the Company since 1994. Prior to 1994, Mr. Rhodes was a manager with Ernst &
Young LLP. As previously announced, Mr. Rhodes has notified the Board of his intention to relinquish his roles as
President and Chief Executive Officer, effective January 2024, and the Board intends to appoint Mr. Rhodes to the
role of Executive Chairman at such time.
Philip B. Daniele III, 54—CEO-Elect, Customer Satisfaction
Philip B. Daniele III was named CEO-Elect in June 2023. Previously Mr. Daniele had served as Executive Vice
President – Merchandising, Marketing and Supply Chain from June 2021 to September 2023. The Board of
Directors intends to appoint Mr. Daniele to the role of Chief Executive Officer and also appoint him to serve on the
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Board in January 2024. Previously, Mr. Daniele served as Senior Vice President – Commercial from 2015 to 2021,
Vice President – Commercial Support from 2013 to 2015 and Vice President – Merchandising from 2008 to 2013.
Mr. Daniele was also a Divisional Vice President – Store Operations from 2005 to 2008. Prior to 2005, Mr. Daniele
held several other key management positions with the Company.
Jamere Jackson, 54—Chief Financial Officer, Customer Satisfaction
Jamere Jackson was named Chief Financial Officer in January 2021 and, in that capacity, leads the Finance and
Store Development teams. Mr. Jackson also held the title of Executive Vice President from January 2021 until his
promotion in September 2023. Prior to joining AutoZone, Mr. Jackson served as Executive Vice President and Chief
Financial Officer of Hertz Global Holdings, Inc., a worldwide rental company, since 2018. From 2014 to 2018,
Mr. Jackson served as Chief Financial Officer of Nielsen Holdings plc, an information, data and measurement
company. Prior to 2014, Mr. Jackson held a variety of leadership roles at General Electric Company, including Vice
President and Chief Financial Officer of a division of General Electric Oil and Gas. Mr. Jackson serves on the Board
of Directors for Eli Lilly & Co.
Thomas B. Newbern, 61—Chief Operating Officer, Customer Satisfaction
Thomas B. Newbern was named Chief Operating Officer in September 2023. Since March 2023, Mr. Newbern
served as Executive Vice President Operations, Sales and Technology. From 2015 to March 2023, Mr. Newbern
served as Executive Vice President overseeing Store Operations, Commercial, International, Information
Technology, Loss Prevention and ALLDATA in different capacities. From 2007 to 2015, Mr. Newbern served as
Senior Vice President overseeing Store Operations and Commercial. From 1998 to 2007, Mr. Newbern was
Divisional Vice President – Store Operations. Mr. Newbern began his career with AutoZone in 1985.
William R. Hackney, 58—Executive Vice President – Merchandising, Marketing and Supply Chain, Customer
Satisfaction
William R. Hackney was named Executive Vice President – Merchandising, Marketing and Supply Chain in
September 2023. Previously, Mr. Hackney served as Senior Vice President, Merchandising, since rejoining the
Company in October 2022 after a brief retirement. Mr. Hackney’s career with AutoZone began in 1983, and he has
held several key management roles within the Company, including Senior Vice President, Merchandising, Vice
President, Store Operations Support and Vice President, Merchandising.
Jennifer M. Bedsole, 52—Senior Vice President, General Counsel & Secretary, Customer Satisfaction
Jenna M. Bedsole was named Senior Vice President, General Counsel & Secretary in April 2023. Prior to joining
AutoZone, Ms. Bedsole was a partner with the law firm of Baker, Donelson, Bearman, Caldwell and Berkowitz P.C.
since 2011, where she chaired the Labor and Employment practice group.
K. Michelle Borninkhof, 49—Senior Vice President and Chief Information Officer, Customer Satisfaction
K. Michelle Borninkhof was named Senior Vice President and Chief Information Officer in April 2021. Prior to
that, Ms. Borninkhof was Chief Information Officer and Vice President for U.S. Technology at McDonald’s since
2018. Prior to joining McDonald’s, Ms. Borninkhof spent 11 years with Walmart Stores holding various leadership
roles including Vice President – International Technology Delivery. Throughout her career, Ms. Borninkhof held
various roles in store retail, distribution center operations and process improvement.
Preston B. Frazer, 47—Senior Vice President – Finance, Store Development and Strategy, Customer Satisfaction
Preston B. Frazer was named Senior Vice President Finance, Store Development and Strategy in March 2023. From
2021 to 2023 Mr. Frazer served as Executive Vice President – Store Operations, Commercial and Loss Prevention.
From 2019 to 2021 Mr. Frazer served as Senior Vice President – Store Operations. Prior to that, Mr. Frazer was
Vice President – Store Operations Support. Mr. Frazer began his career with AutoZone in 2006 in Finance and has
held several key functional roles. Prior to joining AutoZone, Mr. Frazer was a senior manager with the accounting
firm of KPMG, LLP.
Eric S. Gould, 54—Senior Vice President – Supply Chain, Customer Satisfaction
Eric S. Gould was named Senior Vice President, Supply Chain in February 2021. From 2017 to 2021, Mr. Gould
served as Vice President, Supply Chain Replenishment. Prior to that, Mr. Gould held several key management
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positions with the Company, including Vice President of Commercial, Commercial Support and Merchandising
Pricing & Analysis.
Domingo J. Hurtado, 62—Senior Vice President – International, Customer Satisfaction
Domingo J. Hurtado Rodríguez was named Senior Vice President – International in September 2018. Prior to that,
Mr. Hurtado was President – AutoZone de México. Mr. Hurtado has served in various capacities within the
Company since 2001, which included leading the Company’s expansion in Mexico. Prior to 2001, Mr. Hurtado held
different positions with RadioShack including Director General in Mexico and General Manager in Venezuela.
Dennis W. LeRiche, 55—Senior Vice President – Store Operations, Customer Satisfaction
Dennis W. LeRiche was named Senior Vice President – Store Operations in June 2021. From 2015 to 2021,
Mr. LeRiche was a Divisional Vice President – Store Operations. Prior to 2015, Mr. LeRiche held several other key
management positions with the Company.
Grant E. McGee, 61—Senior Vice President – Commercial, Customer Satisfaction
Grant E. McGee was named Senior Vice President – Commercial in June 2021 and has notified the Company of his
intent to retire, effective around the end of the 2023 calendar year. From 2007 to 2021, Mr. McGee was a Divisional
Vice President – Store Operations. From 2004 to 2007, Mr. McGee was Vice President – Commercial. Prior to
2004, Mr. McGee held several other key positions with the Company.
Charlie Pleas, III, 58— Senior Vice President – Accounting and Finance, Customer Satisfaction
Charlie Pleas, III, became Senior Vice President, Finance and Accounting in December 2021 and has notified the
Company of his intent to retire, effective around the end of the 2023 calendar year. Mr. Pleas was named Senior
Vice President and Controller during 2007. Prior to that, Mr. Pleas held several key management positions within
the Company’s accounting department. Prior to joining AutoZone, Mr. Pleas was a Division Controller with
Fleming Companies, Inc. where he served in various capacities during his tenure from 1988 to 1996. Prior to 1988,
Mr. Pleas worked with Ernst & Young. Mr. Pleas is a member of the Board of Directors for Kirkland’s Inc.
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Albert Saltiel, 59—Senior Vice President – Marketing and E-Commerce, Customer Satisfaction
Albert Saltiel was named Senior Vice President – Marketing and E-Commerce during October 2014 and has notified
the Company of his intent to retire, effective around the end of the 2023 calendar year. Previously, Mr. Saltiel was
Senior Vice President – Marketing since 2013. Prior to that, Mr. Saltiel was Chief Marketing Officer and a key
member of the leadership team at Navistar International Corporation. Mr. Saltiel has also been with Sony
Electronics as General Manager, Marketing, and Ford Motor Company where he held multiple marketing roles.
Richard C. Smith, 59—Senior Vice President – Human Resources, Customer Satisfaction
Richard C. Smith was named Senior Vice President – Human Resources in December 2015. Mr. Smith has been an
AutoZoner since 1985, previously holding the position of Divisional Vice President – Store Operations since 1997.
Prior thereto, Mr. Smith served in various key positions within the Company.
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Item 1A. Risk Factors
Our business is subject to a variety of risks and uncertainties. The risks and uncertainties described below could
materially and adversely affect our business, financial condition, operating results, cash flows and stock price. The
following information should be read in conjunction with the other information contained in this report and other
filings that we make with the SEC. These risks and uncertainties are not the only ones we face. Our business could
also be affected by additional factors that are presently unknown to us or that we currently believe to be immaterial
to our business.
Strategic and Operational Risks
If demand for our products slows, then our business may be materially adversely affected.
Demand for the products we sell may be affected by a number of factors we cannot control, including:
•
•
•
•
•
•
•
•
•
the number of older vehicles in service. Vehicles seven years old or older are generally no longer under the
original vehicle manufacturers’ warranties and tend to need more maintenance and repair than newer vehicles.
the number of miles vehicles are driven. Higher vehicle mileage increases the need for maintenance and repair.
Mileage levels may be affected by gas prices, ride sharing, weather conditions, and other factors.
rising fuel and energy prices. Increases in fuel and energy prices may cause our customers to defer purchases of
certain of our products as they use a higher percentage of their income to pay for fuel and other energy costs
and may drive their vehicles less, resulting in less wear and tear and lower demand for repairs and maintenance.
the economy. In periods of declining economic conditions, including as a result of inflation, consumers may
reduce their discretionary spending by deferring vehicle maintenance or repair. Additionally, such conditions
may affect our customers’ ability to obtain credit. During periods of expansionary economic conditions, more of
our DIY customers may pay others to repair and maintain their vehicles instead of working on their own
vehicles, or they may purchase new vehicles.
the weather. Milder weather conditions may lower the failure rates of automotive parts, while extremely hot or
cold conditions may enhance demand for our products due to increased failure rates of our customers’
automotive parts. Extended periods of rain and winter precipitation may cause our customers to defer
maintenance and repair on their vehicles. Additionally, climate changes can create more variability in the short-
term or lead to other weather conditions that could impact our business.
technological advances. Advances in automotive technology, such as improved parts design, can result in cars
needing maintenance less frequently and parts lasting longer.
prevalence of electric vehicles. Increased prevalence of electric vehicles, whether due to changes in consumer
preferences or regulatory action incentivizing the purchase of electric vehicles, can result in less frequent parts
failures and reduced need for parts.
the quality of the vehicles manufactured by the original vehicle manufacturers and the length of the warranties
or maintenance offered on new vehicles.
restrictions on access to telematics and diagnostic tools and repair information imposed by the original vehicle
manufacturers or by governmental regulation. These restrictions may cause vehicle owners to rely on dealers to
perform maintenance and repairs.
These factors could result in a decline in the demand for our products, which could adversely affect our business and
overall financial condition.
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If we are unable to compete successfully against other businesses that sell the products that we sell, we could
lose customers and our sales and profits may decline.
The sale of automotive parts, accessories and maintenance items is highly competitive. See “Item 1. Business”
above for additional information regarding our competitive environment.
Although we believe we compete effectively, our competitors may have greater financial and marketing resources
allowing them to sell merchandise at lower prices, larger stores with more merchandise, longer operating histories
with deeper customer relationships, more frequent customer visits and more effective advertising. Online and multi-
channel retailers often have lower operating costs and focus on delivery services, thereby offering customers faster,
guaranteed delivery times and low-price or free shipping. In addition, because our business strategy is based on
offering superior levels of customer service to complement the products we offer, our cost structure is higher than
some of our competitors, which also puts pressure on our margins.
Consumers are embracing shopping online, including through mobile applications. With the increasing use of digital
tools and social media, and our competitors’ increased focus on optimizing customers’ online experience, our
customers are quickly able to compare prices, product assortment, product availability and feedback from other
customers before purchasing products.
If we are unable to continue to manage in-stock inventory and costs, provide competitive delivery options, develop
successful competitive strategies, including the maintenance of effective promotions, advertising and loyalty
programs, develop and execute effective digital and omni-channel strategies or otherwise compete effectively, or if
our competitors develop more effective strategies, we could lose customers and our sales and profits may decline.
We may not be able to sustain our historic rate of sales growth.
We have increased our store count in the past five fiscal years, growing from 6,202 stores at August 25, 2018, to
7,140 stores at August 26, 2023, a compounded annual growth rate of three percent. Additionally, we have increased
annual revenues in the past five fiscal years from $11.2 billion in fiscal 2018 to $17.5 billion in fiscal 2023, with a
compounded annual growth rate of nine percent. Annual revenue growth is driven by increases in same store sales,
the opening of new stores and the development of new commercial programs. See “Item 7, Management’s
Discussion and Analysis of Financial Condition and Results of Operations” for further discussion of same store
sales.
We open new stores only after evaluating customer buying trends and market demand/needs, all of which could be
adversely affected by persistent unemployment, wage cuts, small business failures, microeconomic conditions
unique to the automotive industry and our ability to expand into international markets. Same store sales are impacted
both by customer demand levels and by the prices we are able to charge for our products, which can also be
negatively impacted by economic pressures.
If we cannot profitably increase our market share in the commercial auto parts business, our sales growth
may be limited.
Although we are a leading distributor of automotive parts and other products in the commercial market, we must
effectively compete against national, regional and local auto parts chains, independently owned parts stores,
wholesalers, jobbers, repair shops, auto dealers, online retailers and others in order to increase our commercial
market share. Although we believe we compete effectively in the commercial market on the basis of customer
service, merchandise quality, selection and availability, price, delivery times, product warranty, distribution
locations and the strength of our AutoZone brand name, trademarks and service marks, some automotive aftermarket
participants have been in business for substantially longer periods of time than we have, and as a result have
developed long-term customer relationships and have large available inventories. If we are unable to profitably
develop new commercial customers, our sales growth may be limited.
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Our business depends upon hiring, training and retaining qualified employees, including members of
management and other key personnel.
We believe much of our brand value lies in the quality of the approximately 119,000 AutoZoners employed in our
stores, distribution centers, store support centers and ALLDATA. Our workforce costs represent our largest
operating expense, and our ability to meet our labor needs while controlling labor costs is subject to numerous
external factors, including market pressures with respect to prevailing wage rates and unemployment levels. Our
business is also subject to employment laws and regulations, including those related to minimum wage, benefits and
scheduling requirements. In addition, the implementation of potential regulatory changes relating to overtime
exemptions and benefits for certain employees under federal and state laws could result in increased labor costs to
our business and negatively impact our operating results.
We compete with other retail businesses for many of our associates in hourly positions, and these positions have
historically had high turnover rates, which can lead to increased training and retention costs, particularly in a
competitive labor market. We cannot be assured that we can continue to hire, train and retain qualified employees at
current wage rates since we operate in a competitive labor market, and there are currently significant inflationary
and other pressures on wages.
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In the U.S., there has been an increase in workers exercising their right to form or join a union, both generally and in
the retail industry. Further, the National Labor Relations Board (NLRB) has issued decisions making it easier for
employees to organize. Although none of our employees are currently covered by collective bargaining agreements,
there can be no assurance that our employees will not elect to be represented by labor unions in the future. If a
significant portion of our work force were to become unionized, our culture and operating model could be
challenged by inserting a third party between our current terrific relationships between our leaders and hourly
AutoZoners. Further, our labor costs could increase, and our business could be negatively affected by other
requirements and expectations that could change our company culture, decrease our flexibility and disrupt our
business. Further, our responses to any union organizing efforts could negatively impact how our brand is perceived
by customers and AutoZoners and have adverse effects on our business and financial results.
If we are unable to hire, properly train and retain qualified AutoZoners, we could experience higher employment
costs, reduced sales, losses of customers and diminution of our brand or company culture, which could adversely
affect our earnings. If we do not maintain competitive wages or benefit packages, our customer service could suffer
due to a declining quality of our workforce, or, alternatively, our earnings could decrease if we increase our wage
rates. A violation or change in employment and labor laws (including changes in existing employment benefit
programs such as health insurance) could have a material adverse effect on our results of operations, financial
condition and cash flows.
Our future success depends on the skills and experience of our management and other key personnel. The
unexpected loss of the services of any such persons could adversely affect our operations. There can be no assurance
that our succession planning, retention or hiring efforts will be successful. Failure to attract and retain qualified
personnel in key roles could adversely affect our operations.
Inability to acquire and provide quality merchandise at competitive prices could adversely affect our sales
and results of operations.
We are dependent upon our domestic and international vendors continuing to supply us with quality merchandise at
competitive prices and payment terms. If our merchandise offerings do not meet our customers’ expectations, or our
customers have a negative perception of our merchandise regarding quality, innovation and safety, we could
experience lost sales, increased costs and exposure to legal and reputational risk. In those circumstances, it may be
difficult and costly for us to rebuild our reputation and regain the confidence of our customers.
All of our vendors must comply with applicable product safety laws, and we are dependent on them to ensure that
the products we buy comply with all safety and quality standards. Events that give rise to actual, potential or
perceived product safety concerns could expose us to government enforcement action or private litigation, result in
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costly product recalls and other liabilities and lead to reputational harm and loss of customer confidence. To the
extent our suppliers are subject to added government regulation of their product design and/or manufacturing
processes, the cost of the merchandise we purchase may rise.
Furthermore, our vendors are impacted by global economic conditions which in turn impact our ability to source
merchandise at competitive prices. For example, inflation, rising interest rates and disruption to the global supply
chain have negatively impacted costs and inventory availability and may continue to have a negative impact on
future results and profitability. Credit market and other macroeconomic conditions could also have a material
adverse effect on the ability of our global and domestic suppliers to finance and operate their businesses.
If any of our significant vendors experience financial difficulties, business disruptions or are unable to deliver
merchandise to us on a timely basis, or at all, we could have product shortages in our stores that could adversely
affect customers’ perceptions of us and cause us to lose customers and sales.
Disruptions in our supply chain and other factors affecting the distribution of our merchandise could
adversely impact our business.
A disruption to our supply chain or distribution network could adversely affect our ability to receive and distribute
inventory in a timely manner, which could result in low inventory availability, lost sales, increased supply chain
costs and loss of customer loyalty, among other things. Such disruptions may result from damage or destruction of
our distribution centers, our ability to attract and retain qualified drivers, costs associated with maintaining or
operating our fleet or macroeconomic conditions impacting the broader supply chain industry at large. For example,
in recent years, ports, rails and domestic long-hauls in the U.S. and elsewhere have been negatively impacted by
capacity constraints, congestion and delays, periodic labor disputes, security issues, weather-related events, and
natural disasters, which have been further exacerbated by the COVID-19 pandemic and other factors beyond our
control. Our business and competitive position may be negatively impacted if we are unable to successfully mitigate
the impacts of such disruption to our supply chain or if we are unable to manage such disruptions more effectively
than our competitors.
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We are subject to risks associated with products sourced outside the U.S.
We directly imported approximately 16% of our purchases in fiscal 2023, but many of our domestic vendors directly
import their products or components of their products. Changes to the price or flow of these goods for any reason,
such as civil unrest or acts of war, currency fluctuations, disruptions in maritime lanes, port labor disputes, economic
conditions and instability in the countries in which foreign suppliers are located, the financial instability of suppliers,
suppliers’ failure to meet our standards, issues with labor practices of our suppliers or labor problems they may
experience (such as strikes, stoppages or slowdowns, which could also increase labor costs during and following the
disruption), the availability and cost of raw materials to suppliers, increased import duties or tariffs, merchandise
quality or safety issues, shipping and transport availability and cost, increases in wage rates and taxes, transport
security, foreign trade policies, trade sanctions, import limitations on certain types of goods or of goods containing
certain materials from other countries, port labor agreements, inflation and other factors relating to the suppliers and
the countries in which they are located or from which they import, often are beyond our control and could adversely
affect our operations and profitability. These and other factors affecting our suppliers and our access to products
could adversely affect our business and financial performance. As we or our domestic vendors increase the
importation of merchandise or components from foreign vendors, these risks are likely to increase.
Our ability to grow depends in part on new store openings, existing store remodels and expansions and
effective utilization of our existing supply chain and hub network.
Our continued growth and success will depend in part on our ability to open and operate new stores and expand and
remodel existing stores to meet customers’ needs on a timely and profitable basis. Accomplishing store development
and expansion goals will depend upon a number of factors, including the ability to identify and obtain suitable sites
for new and expanded stores in a timely manner and at acceptable costs, the hiring and training of qualified
personnel and the integration of new stores into existing operations. There can be no assurance we will be able to
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achieve our store expansion goals, manage our growth effectively, successfully integrate the planned new stores into
our operations or operate our new, remodeled and expanded stores profitably.
In addition, we extensively utilize our hub network, our supply chain and our logistics management techniques to
efficiently stock our stores. We have made, and plan to continue to make, significant investments in our supply
chain to improve product availability and product assortment, fulfill evolving consumer product demands and keep
up with our long-term store expansion goals. If we fail to effectively utilize our existing hubs and/or supply chains,
or if our investments in our supply chain initiatives, including directly sourcing some products from outside the
U.S., do not provide the anticipated benefits, we could experience sub-optimal inventory levels in our stores or
increases in our operating costs, which could adversely affect our sales volume and/or our margins.
Our success in international operations is dependent on our ability to manage the unique challenges
presented by international markets.
The various risks we face in our U.S. operations generally also exist when conducting operations in and sourcing
products and materials from outside of the U.S., in addition to the unique costs, risks and difficulties of managing
international operations. Our expansion into international markets may be adversely affected by local laws and
customs, U.S. laws applicable to foreign operations, and political and socio-economic conditions as well as our
general ability to compete effectively and provide superior customer service regardless of distance, language and
cultural differences.
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Risks inherent in international operations also include potential adverse tax consequences, potential changes to trade
policies and trade agreements, compliance with the Foreign Corrupt Practices Act and local anti-bribery and anti-
corruption laws, greater difficulty in obtaining and enforcing intellectual property rights, challenges to identify and
gain access to local suppliers, and possibly misjudging the response of consumers in foreign countries to our product
assortment and marketing strategy.
In addition, our operations in international markets are conducted primarily in the local currency of those countries.
Since our Consolidated Financial Statements are denominated in U.S. dollars, amounts of assets, liabilities, net sales,
and other revenues and expenses denominated in local currencies must be translated into U.S. dollars using
exchange rates for the current period. As a result, foreign currency exchange rates and fluctuations in those rates
may adversely impact our financial performance.
Business interruptions may negatively impact our operating hours, operability of our computer and other
systems, availability of merchandise and otherwise have a material negative effect on our sales and our
business.
Business interruptions including war or acts of terrorism, political or civil unrest, unusual or severe weather
conditions such as hurricanes, tornadoes, windstorms, fires, earthquakes and floods, public health crises and other
disasters or the threat of any of them, may negatively impact the hours and operations of our stores, distribution
centers, store support centers or sourcing offices; may negatively impact our supply chain and distribution network;
and may impede our ability to source quality merchandise domestically and outside of the U.S. on favorable terms.
In the event commercial transportation is curtailed or substantially delayed, we may have difficulty transporting
merchandise to our distribution centers and stores resulting in lost sales and/or a potential loss of customer loyalty.
Transportation issues could also cause us to cancel purchase orders if we are unable to receive merchandise in our
distribution centers.
It is not possible to predict all events or circumstances which may negatively disrupt our business in a significant
manner, and the near-term and long-term impacts of such disruptions on our business, demand for our products and
our growth initiatives will vary significantly based on the facts and circumstances of each such disruption.
Furthermore, such business interruptions could cause additional negative impacts of which we are not currently
aware or magnify other risks associated with our business and operations.
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Our failure to protect our brand and reputation could have an adverse effect on our relationships with our
customers, employees, suppliers, vendors and other stakeholders, thereby negatively impacting sales and
profitability.
We believe our continued strong sales growth is driven in significant part by our AutoZone and private label brand
names and our positive reputation with customers, employees, suppliers, vendors and other stakeholders. The value
in our brand names and reputation, and their continued effectiveness in driving our sales growth is dependent to a
significant degree on our ability to maintain our reputation for safety, high product quality, friendliness, WOW!
Customer service, trustworthy advice, integrity and business ethics. Negative incidents can erode trust and
confidence quickly, and adverse publicity about us could damage our brand and reputation, undermine our
customers’ confidence in us, reduce demand for our products and services, affect our ability to recruit and retain
employees, attract regulatory scrutiny, and impact our relationships with suppliers and vendors. Further, our actual
or perceived response or lack of response to social, political, environmental or other sensitive issues, whether or not
based in fact, could damage our reputation and may result in reduced demand for our merchandise. Customers are
also increasingly using social media to provide feedback and information about our Company, our products and
services in a manner that is rapidly and broadly disseminated. Our brand and reputation could be negatively
impacted if negative sentiment about the Company, whether or not based on fact, is shared and distributed in such a
manner.
Failure to comply with ethical, social, product, labor, environmental and anti-corruption standards could also
jeopardize our reputation and potentially lead to various adverse actions by consumer or environmental groups,
employees or regulatory bodies. Damage to our reputation or loss of consumer confidence for any of these or other
reasons could have a material adverse effect on our results of operations and financial condition, as well as require
additional resources to rebuild our reputation.
Information Technology, Cybersecurity and Data Privacy Risks
We rely heavily on information technology systems for our key business processes. Any damage to, failure of,
or interruption in these systems could have a material adverse impact on our business and operating results.
We rely extensively on information technology systems, some of which are managed or provided by third-party
service providers, to collect, analyze, process, store, manage, transmit and protect key business processes,
transactions and data, such as sales data, customer data, employee data, demand forecasting, merchandise ordering,
inventory replenishment, supply chain management, payment processing, order fulfillment and more. Delays in the
maintenance, updates, upgrading, or patching of these systems, applications or processes could adversely impact
their effectiveness or could expose us to security and other risks. Our systems and the third-party systems with
which we interact are subject to damage, failure or interruption due to various reasons such as: power or other
critical infrastructure outages, facility damage, physical theft, telecommunications failures, malware, security
incidents, malicious cyber-attacks, including the use of malicious codes, worms, phishing, spyware, denial of service
attacks and ransomware, natural disasters and catastrophic events, inadequate or ineffective redundancy measures;
and design or usage errors by AutoZoners, contractors or third-party service providers. Although we seek to
effectively maintain and safeguard our systems and our data and we seek to ensure our third-party service providers
effectively maintain and safeguard their systems and our data, such efforts are not always successful. As a result, we
or our service providers have experienced and are likely to again experience one or more errors, interruptions, delays
or cessations of service impacting the integrity or availability of our information technology infrastructure. While
such incidents have not been material to date, any future incident could significantly disrupt our operations and key
business processes, result in the impairment or loss of critical data, be costly and resource-intensive to remedy; harm
our reputation and relationship with customers, AutoZoners, vendors and other stakeholders; and have a material
adverse impact on our business and operating results.
In addition, our information technology systems, infrastructure and personnel require substantial investments, such
as replacing existing systems, some of which are older, legacy systems that are less flexible and efficient, with
successor systems; making changes to existing systems, including the migration of applications to the cloud;
maintaining or enhancing legacy systems that are not currently being replaced; or designing or cost-effectively
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acquiring new systems with new functionality. These efforts can result in significant potential risks, including failure
of the systems to operate as designed, potential loss or corruption of data, cost overruns, or implementation delays or
errors, and may result in operational challenges, security control failures, reputational harm, and increased costs that
could adversely affect our business operations and results of operations.
Failure to maintain the security of sensitive personal information or other confidential information in our
possession could subject us to litigation or regulatory enforcement action, cause reputational harm and cause
us to incur substantial costs or have a material adverse impact on our business and financial condition.
Our business, like that of most retailers, involves the collection, processing, storage and transmission of large
amounts of personal information relating to our customers, suppliers and AutoZoners and confidential business
information relating to AutoZone or other parties with which we do business. This information is handled by us as
well as third-party service providers and vendors that provide us with various technology, systems, services and
other resources that we use in connection with the handling of this information and in furtherance of our business
objectives. Furthermore, we accept payments using a variety of methods, including credit, debit, electronic payments
and gift cards, which present information security risks, and we may offer new payment options in the future
presenting new risks of which we are currently unaware.
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While addressing vulnerabilities is a priority for us, the methods used to obtain unauthorized access are constantly
evolving, increasing in frequency and sophistication, and can be difficult to anticipate or detect for long periods of
time. The security measures we or our third-party service providers and vendors have in place today in an effort to
keep up with growing and evolving risks do not always prevent or mitigate the impact of a cyber incident or provide
us with sufficient visibility to determine if a cyber incident has occurred, and there can be no assurance that such
measures we introduce in the future will be sufficiently effective either. Failure to maintain the security of the
personal and other confidential information to which we have access could lead to private litigation, regulatory
enforcement actions and reputational harm, all of which would require extensive time and financial resources to
resolve and could have a material adverse impact on our business and financial condition.
While we have not experienced a material breach of our information systems or data to date, unauthorized parties
have in the past gained access and exfiltrated data, and will continue to attempt to do so as the result of a cyber-
attack, employee misconduct, employee error, system vulnerabilities or compromises, fraud, hacking, phishing
attempts, malware, ransomware, other malicious codes or other intentional or unintentional acts. Furthermore,
hardware, software or other IT applications that we or a third party develop for our use have contained and may
contain exploitable vulnerabilities, bugs or design defects or may involve other problems that could unexpectedly
compromise information security.
The cost to remediate and respond to a cyber incident involving unauthorized use, access, damage or loss of
systems, data or other information could be significant. To the extent any cyber incident involving our or one of our
third-party service provider’s information systems results in the unauthorized access, loss, damage or
misappropriation of information, we may be required by law to notify impacted individuals and face substantial
liability due to claims arising from customers, financial institutions, regulatory authorities, payment card issuers and
others. We maintain insurance coverage that may protect us from losses or claims in connection with certain
incidents; however, our insurance coverage may not be sufficient to cover significant losses in any particular
situation.
We are subject to a complex and evolving body of laws and regulations regarding data privacy and may face
increased costs as a result of changes in, enforcement of, or the adoption of new laws and regulations. These
costs may have a material adverse impact on our business and results of operations.
The regulatory environment related to information security, data collection, processing and use, and data privacy is
becoming increasingly rigorous and complex. Multiple states in the U.S. have passed, and continue to pass, data
protection laws designed to provide new rights to consumers and, in some cases, employees. The potential effects of
the various laws regulating the collection, processing, transfer and use of personal or protected information are far-
reaching and may require significant time, resources and costs to comply, may require changes to our existing
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practices and processes that are not advantageous to our business, and otherwise limit our ability to use data to
provide a more personalized customer experience or as otherwise desired. In addition, failure to comply with
applicable requirements by us or our business partners or third-party service providers or vendors could subject us to
fines, sanctions, governmental investigations, lawsuits or reputational damage.
Additionally, while we seek to comply with these various laws as they take effect, many of the concepts are novel
and rulemaking is not finalized. Given the short amount of time between finalized rulemaking and the dates these
laws become effective and enforceable, there can be no assurance that compliance efforts taken by us in good faith
will be sufficient, and we may be the subject of an investigation or enforcement action instituted by a state agency or
other regulatory body.
Indebtedness, Financial and Market Risks
We are self-insured for certain costs associated with our operations and an increase in our insurance claims
and expenses may have a material negative impact on us.
We are self-insured up to certain limits for workers’ compensation, employee group medical, general liability,
product liability, property and automobile. The types and amounts of insurance may vary from time to time based on
our decisions with respect to risk retention and regulatory requirements. Our reserves are established using historical
trends and, where appropriate, using a third-party actuary to estimate costs to settle reported claims and claims
incurred but not yet reported. Estimated costs are subject to a variety of assumptions and other factors including the
severity, duration and frequency of claims, legal costs associated with claims, healthcare trends and projected
inflation of related factors. Material increases in the number of insurance claims, changes to healthcare costs,
accident frequency and severity, legal expenses and other factors could result in unfavorable difference between
actual self-insurance costs and our reserve estimates. As a result, our self-insurance costs could increase which may
adversely affect our business, results of operations, financial condition and cash flows.
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A downgrade in our credit ratings or a general disruption in the credit markets could make it more difficult
for us to access funds, refinance our debt, obtain new funding or issue debt securities.
Our short-term and long-term debt is rated investment grade by the major rating agencies. These investment-grade
credit ratings have historically allowed us to take advantage of lower interest rates and other favorable terms on our
short-term credit lines, in our senior debt offerings and in the commercial paper markets. To maintain our
investment-grade ratings, we are required to meet certain financial performance ratios. A change by the rating
agencies in these ratios, an increase in our debt, and/or a decline in our earnings could result in downgrades in our
credit ratings. A downgrade in our credit ratings could limit our access to public debt markets, limit the institutions
willing to provide credit facilities to us, result in more restrictive financial and other covenants in our public and
private debt and would likely significantly increase our overall borrowing costs and adversely affect our earnings.
Moreover, significant deterioration in the financial condition of large financial institutions during the Great
Recession resulted in a severe loss of liquidity and availability of credit in global credit markets and in more
stringent borrowing terms. We can provide no assurance that such similar events that occurred during the Great
Recession will not occur again in the foreseeable future. Conditions and events in the global credit markets could
have a material adverse effect on our access to short-term and long-term debt and the terms and cost of that debt.
Legal and Regulatory Risks
Our business, results of operations, financial condition and cash flows may be adversely affected by the
adoption of new laws, changes to existing laws, increased enforcement activity or other governmental actions.
We are subject to numerous federal, state and local laws and regulations, many of which are complex, frequently
revised and subject to varying interpretations. These include laws governing employment and labor, wage and hour,
environmental matters, proper handling and disposal of hazardous materials and waste, employee benefits, data
privacy, cybersecurity, safety, the pricing and sale of goods, import and export compliance, transportation and
logistics, consumer protection and advertising, among others. These laws may change over time and may differ
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substantially across the areas where we operate. Although we have implemented policies and procedures to help
ensure compliance with these laws, there can be no certainty that our employees and third parties with whom we do
business will not take actions in violation of our policies or applicable laws. If we fail to comply with these laws,
rules and regulations, or the manner in which they are interpreted or applied, we may be subject to governmental
enforcement action or private litigation resulting in restrictions on our business, monetary penalties, reputational
harm and increased costs of regulatory compliance. Any changes in regulations, the imposition of additional
regulations, or the enactment of any new legislation, including tax legislation, could have an adverse impact, directly
or indirectly, on our financial condition and results of operations. We may also be subject to investigations or audits
by governmental authorities and regulatory agencies as a result of enforcing existing laws and regulations or
changes in enforcement priorities, which can occur in the ordinary course of business or may result from increased
scrutiny from a particular agency or toward a particular industry.
We may be adversely affected by legal, regulatory or market responses to global climate change.
Climate change resulting from increased concentrations of carbon dioxide and other greenhouse gases in the
atmosphere could present risks to our operations. For example, we have significant operations in California, where
serious drought has made water less available and more costly and has increased the risk of wildfires. Changes
in climate patterns leading to extreme heat waves or unusual cold weather at some of our locations can lead to
increased energy usage and costs, or otherwise adversely impact our facilities and operations and disrupt our supply
chains and distribution systems. Growing concern over climate change has led policy makers in the U.S. to consider
the enactment of legislative and regulatory proposals that would impose mandatory requirements for reductions of
greenhouse gas (GHG) emissions. Such laws, if enacted, are likely to impact our business in a number of ways. For
example, significant increases in fuel economy requirements, new federal or state restrictions on emissions of carbon
dioxide or new federal or state incentive programs that may be imposed on vehicles and automobile fuels could
adversely affect demand for vehicles, annual miles driven or the products we sell. We may not be able to accurately
predict, prepare for and respond to new kinds of technological innovations with respect to electric vehicles and other
technologies that minimize emissions. Compliance with any new or more stringent laws or regulations, or stricter
interpretations of existing laws, could require additional expenditures by us or our suppliers. Our inability to
appropriately respond to such changes could adversely impact our business, financial condition, results of operations
or cash flows
We may be unable to achieve the goals and aspirations set forth in our environmental, social and governance
(ESG) report, particularly with respect to the reduction of greenhouse gas (GHG) emissions, or otherwise
meet the expectations of our stakeholders with respect to ESG matters.
Increasing governmental and societal attention to ESG matters, including expanding mandatory and voluntary
reporting, and disclosure topics such as climate change, sustainability, natural resources, waste reduction, energy,
human capital, and risk oversight could expand the nature, scope, and complexity of matters that we are required to
control, assess, and report. We strive to deliver shared value through our business and our diverse stakeholders
expect us to make progress in certain ESG priority issue areas. A failure or perceived failure to meet these
expectations could adversely affect public perception of our business, employee morale or customer or shareholder
support.
We have announced certain aspirations and goals related to ESG matters, such as plans to reduce certain GHG
emissions over time. Achievement of these aspirations, targets, plans and goals is subject to numerous risks and
uncertainties, many of which are outside of our control. These risks and uncertainties include, but are not limited to:
our ability to successfully identify and implement relevant strategies on a timely and cost-effective basis; our ability
to achieve the anticipated benefits and cost savings of such strategies and actions; and the availability and cost of
existing and future technologies, such as alternative fuel vehicles, off-site renewable energy, and other materials and
components. It is possible that we may be unsuccessful in the achievement of our ESG goals, on a timely basis or at
all, or that the costs to achieve those goals become prohibitively expensive. Furthermore, our stakeholders may not
be satisfied with our efforts or the speed at which we are progressing towards any such aspirations and goals. A
delay, failure or perceived failure or delay to meet our goals and aspirations could adversely affect public perception
of our business, or we may lose shareholder support. Certain challenges we face in the achievement of our ESG
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objectives are also captured within our ESG reporting, which is not incorporated by reference into and does not form
any part of this report.
Our business, financial condition, results of operations and cash flows may be affected by litigation.
We are involved in lawsuits, regulatory investigations, governmental and other legal proceedings arising out of the
ordinary course of business. Such matters involve significant expense and divert management’s attention and
resources from other matters. The damages sought against us in these proceedings may be material and may
adversely affect our business, results of operations, financial condition and cash flows.
General Risks
Significant changes in macroeconomic and geo-political factors could adversely affect our financial condition
and results of operations.
Macroeconomic conditions impact both our customers and our suppliers. Moreover, the U.S. government continues
to operate under historically large deficits and debt burden. Continued distress in global credit markets, business
failures, civil unrest, inflation, rising interest rates, foreign exchange rate fluctuations, significant geo-political
conflicts, proposed or additional tariffs, continued volatility in energy prices, the impact of a public health crisis or
pandemic (such as the COVID-19 pandemic), constraints on the global supply chain and other factors continue to
affect the global economy. Moreover, rising energy prices could impact our merchandise distribution, commercial
delivery, utility and product costs. It is unclear how such factors could impact our business in the short term. Over a
longer period of time, these macroeconomic and geo-political conditions could adversely affect our sales growth,
margins and overhead. These could adversely affect our financial condition and operations.
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Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
The following table reflects the square footage and number of leased and owned properties for our stores as of
August 26, 2023:
Leased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Owned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Store Square
No. of
Footage(1)
Stores
3,931 26,158,259
3,209 21,741,090
7,140 47,899,349
(1) Square footage excludes store support centers, regional offices, distribution centers and the areas that hold the
local mega hub and hub expanded assortment.
We have approximately 6.9 million square feet in distribution centers servicing our stores, of which approximately
2.0 million square feet is leased and the remainder is owned. We have 11 distribution centers located throughout the
U.S., two in Mexico, and one in Brazil. Our primary store support center is located in Memphis, Tennessee, and
consists of approximately 325,000 square feet. We also have three additional store support centers located in
Monterrey, Mexico; Chihuahua, Mexico and Sao Paulo, Brazil. Our primary International Sourcing Office is located
in Shanghai, China. The ALLDATA headquarters in Elk Grove, California is leased, and we also own or lease other
properties which are not material individually or in the aggregate.
23
Item 3. Legal Proceedings
We are involved in various other legal proceedings incidental to the conduct of our business, including, but not
limited to, claims and allegations related to wage and hour violations, unlawful termination, employment practices,
product liability, privacy and cybersecurity, environmental matters, intellectual property rights or regulatory
compliance. We do not currently believe that, either individually or in the aggregate, these matters will result in
liabilities material to our financial condition, results of operations or cash flows.
Additionally, we are not involved in any environmental proceeding in which a governmental authority is a party, and
such proceeding involves potential monetary sanctions that we reasonably believe will exceed an applied threshold
of $1 million.
Item 4. Mine Safety Disclosures
Not applicable.
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
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The principal market on which our common stock is traded is the New York Stock Exchange under the symbol
“AZO.” On October 16, 2023, there were 1,703 stockholders of record, which does not include the number of
beneficial owners whose shares were represented by security position listings.
We currently do not pay a dividend on our common stock. Any future payment of dividends would be dependent
upon our financial condition, capital requirements, earnings and cash flow.
During 1998, the Company announced a program permitting the Company to repurchase a portion of its outstanding
shares not to exceed a dollar maximum established by the Company’s Board of Directors. On June 14, 2023, the
Board of Directors authorized the repurchase of an additional $2.0 billion of the Company’s common stock,
bringing the total value of authorized share repurchases to $35.7 billion.
Shares of common stock repurchased by the Company during the quarter ended August 26, 2023 were as follows:
Period
May 7, 2023 to June 3, 2023 . . . . . . . . . . . . . . . . . . . . . . .
June 4, 2023 to July 1, 2023 . . . . . . . . . . . . . . . . . . . . . . .
July 2, 2023 to July 29, 2023 . . . . . . . . . . . . . . . . . . . . . . .
July 30, 2023 to August 26, 2023 . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Number
of Shares
Purchased
86,678
94,541
107,560
114,620
403,399
Average Price
Paid per Share
(1)
2,560.49
2,416.71
2,532.00
2,499.71
2,501.93
$
$
Total Number of
Shares
Purchased as
Part of Publicly
Announced Plans
or Programs
Maximum Dollar
Value that
May Yet Be
Purchased Under
the Plans or
Programs
86,678 $
94,541
107,560
114,620
403,399 $
621,625,545
2,393,147,061
2,120,805,558
1,834,288,894
1,834,288,894
(1) Average price per share includes excise tax assessed at one percent of the fair market value of net stock
repurchases.
24
The Company also repurchased, at market value, an additional 4,886 and 7,611 shares in fiscal years 2022 and 2021,
respectively, from employees electing to sell their stock under the Company’s Eighth Amended and Restated
Employee Stock Purchase Plan (as amended from time to time, the “Employee Plan”), qualified under Section 423
of the Internal Revenue Code, under which all eligible employees may purchase AutoZone’s common stock at 85%
of the lower of the market price of the common stock on the first day or last day of each calendar quarter through
payroll deductions. Maximum permitted annual purchases are $15,000 per employee or 10 percent of compensation,
whichever is less. Under the Employee Plan, 5,183, 6,238 and 8,479 shares were sold to employees in fiscal 2023,
2022 and 2021, respectively. At August 26, 2023, 122,341 shares of common stock were reserved for future
issuance under the Employee Plan.
Once executives have reached the maximum purchases under the Employee Plan, the Sixth Amended and Restated
Executive Stock Purchase Plan (the “Executive Plan”) permits all eligible executives to purchase AutoZone’s
common stock up to 25 percent of his or her annual salary and bonus. Purchases by executives under the Executive
Plan were 689, 709 and 997 shares in fiscal 2023, 2022 and 2021, respectively. At August 26, 2023, 232,966 shares
of common stock were reserved for future issuance under the Executive Plan.
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Stock Performance Graph
The graph below presents changes in the value of AutoZone’s stock as compared to Standard & Poor’s 500
Composite Index (“S&P 500”) and to Standard & Poor’s Retail Index (“S&P Retail Index”) for the five-year period
beginning August 25, 2018 and ending August 26, 2023.
250%
200%
150%
100%
50%
0%
-50%
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Aug-18
Aug-19
Aug-20
Aug-21
Aug-22
Aug-23
Item 6. Reserved
Not required.
AutoZone
S&P 500
S&P Retail Index
26
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
We are the leading retailer and distributor of automotive replacement parts and accessories in the Americas. We
began operations in 1979 and at August 26, 2023, operated 6,300 stores in the U.S., 740 stores in Mexico and 100
stores in Brazil. Each store carries an extensive product line for cars, sport utility vehicles, vans and light duty
trucks, including new and remanufactured automotive hard parts, maintenance items, accessories and non-
automotive products. At August 26, 2023, in 5,682 of our domestic stores as well as the vast majority of our stores
in Mexico and Brazil, we had a commercial sales program that provided commercial credit and prompt delivery of
parts and other products to local, regional and national repair garages, dealers, service stations, fleet owners and
other accounts. We also sell automotive hard parts, maintenance items, accessories and non-automotive products
through www.autozone.com, and our commercial customers can make purchases through www.autozonepro.com.
Additionally, we sell the ALLDATA brand of automotive diagnostic, repair, collision and shop management
software through www.alldata.com. We also provide product information on our Duralast branded products through
www.duralastparts.com. We do not derive revenue from automotive repair or installation services.
Executive Summary
For fiscal 2023, we achieved record net income of $2.5 billion, a 4.1% increase over the prior year, and sales growth
of $1.2 billion, a 7.4% increase over the prior year. Our retail sales and commercial sales in our domestic and
international markets grew this past year as we made progress on our initiatives aimed at improving our ability to
say “Yes” to our customers more frequently.
Our business is impacted by various factors within the economy that affect both our consumer and our industry,
including but not limited to inflation, fuel costs, wage rates, supply chain disruptions, hiring and other economic
conditions. Given the nature of these macroeconomic factors, we cannot predict whether or for how long certain
trends will continue, nor can we predict to what degree these trends will impact us in the future.
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One macroeconomic factor affecting our customers and our industry is gas prices. We believe fluctuations in gas
prices impact our customers’ level of disposable income. With approximately 11 billion gallons of unleaded gas
consumption each month across the U.S., each $1 increase at the pump reduces approximately $11 billion of
additional spending capacity to consumers each month. Given the unpredictability of gas prices, we cannot predict
whether gas prices will increase or decrease, nor can we predict how any future changes in gas prices will impact
our sales in future periods.
We have also experienced continued pressure on average hourly wages in the U.S. during fiscal 2023. Some of this
is attributed to regulatory changes in certain states and municipalities, while the larger portion is being driven by
general market pressures and some specific actions taken recently by other retailers. The regulatory changes are
expected to continue, as evidenced by the areas that have passed legislation to increase employees’ wages
substantially over the next few years.
During fiscal 2023, failure and maintenance related categories represented the largest portion of our sales mix, at
approximately 85% of total sales categories continuing to comprise our largest set of categories. While we have not
experienced any fundamental shifts in our category sales mix as compared to previous years, in our domestic stores
we see a slight decrease in mix of sales of the discretionary category and a slight increase in the maintenance
category compared to last year.
The two statistics we believe have the closest correlation to our market growth over the long-term are miles driven
and the number of seven year old or older vehicles on the road.
Miles Driven
We believe as the number of miles driven increases, consumers’ vehicles are more likely to need service and
maintenance, resulting in an increase in the need for automotive hard parts and maintenance items. While over the
long-term we have seen a close correlation between our net sales and the number of miles driven, we have also seen
certain time frames of minimal correlation in sales performance and miles driven. During the periods of minimal
27
correlation between net sales and miles driven, we believe net sales have been positively impacted by other factors,
including macroeconomic factors and the number of seven year old or older vehicles on the road. Since the
beginning of the fiscal year and through July 2023 miles driven in the U.S. increased by 1.3% compared to the same
period in the prior year based on the latest information available from the U.S. Department of Transportation.
Seven Year Old or Older Vehicles
As the number of seven year old or older vehicles on the road increases, we expect an increase in demand for the
products we sell. We expect the aging vehicle population to continue to increase as consumers keep their cars longer
in an effort to save money.
According to the U.S. Department of Transportation – Federal Highway Administration, vehicles are driven an
average of approximately 13,500 miles each year. In seven years, the average miles driven equates to approximately
94,500 miles. Our experience is that at this point in a vehicle’s life, most vehicles are not covered by warranties and
increased maintenance and repairs are needed to keep the vehicle operating.
According to the latest data provided by the Auto Care Association, as of January 1, 2023, the average age of light
vehicles on the road was 12.5 years and these vehicles account for more than 40% of U.S. vehicles. The average age
of light vehicles has exceeded 12 years since 2012.
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28
Results of Operations
The following table highlights selected financial information over the past 5 years:
(in thousands, except per share data, same store sales
and selected operating data)
Income Statement Data
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of sales, including warehouse and delivery
expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating, selling, general and administrative
expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense, net . . . . . . . . . . . . . . . . . . . . . . . . . .
Income before income taxes . . . . . . . . . . . . . . . . . . . .
Income tax expense(4) . . . . . . . . . . . . . . . . . . . . . . . . .
Net income(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted earnings per share(4) . . . . . . . . . . . . . . . . . . . .
Weighted average shares for diluted earnings per
share(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fiscal Year Ended August
2023
2022
2021(1)
2020(1)
2019(2)(3)
$ 17,457,209
$ 16,252,230
$ 14,629,585
$ 12,631,967
$ 11,863,743
8,386,787
9,070,422
7,779,580
8,472,650
6,911,800
7,717,785
5,861,214
6,770,753
5,498,742
6,365,001
5,596,436
3,473,986
306,372
3,167,614
639,188
$ 2,528,426
132.36
$
5,201,921
3,270,729
191,638
3,079,091
649,487
$ 2,429,604
117.19
$
4,773,258
2,944,527
195,337
2,749,190
578,876
$ 2,170,314
95.19
$
4,353,074
2,417,679
201,165
2,216,514
483,542
$ 1,732,972
71.93
$
4,148,864
2,216,137
184,804
2,031,333
414,112
$ 1,617,221
63.43
$
19,103
20,733
22,799
24,093
25,498
Same Store Sales
Increase in domestic comparable store net sales(5) . . . .
Increase in international comparable store net sales(5)
.
Increase in international comparable store net sales
(constant currency)(5) . . . . . . . . . . . . . . . . . . . . . . . .
Increase in total company comparable store net sales(5)
Increase in total company comparable store net sales
(constant currency)(5) . . . . . . . . . . . . . . . . . . . . . . . .
Balance Sheet Data
Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating lease right-of-use assets(6) . . . . . . . . . . . . . .
Working capital (deficit)(7) . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Finance lease liabilities, less current portion(6) . . . . . . .
Operating lease liabilities, less current portion(6) . . . . .
Stockholders’ deficit. . . . . . . . . . . . . . . . . . . . . . . . . .
Selected Operating Data
Number of stores at beginning of year . . . . . . . . . . . . .
New stores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Closed stores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net new stores . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Relocated stores . . . . . . . . . . . . . . . . . . . . . . . . . . .
Number of stores at end of year . . . . . . . . . . . . . . . . . . .
AutoZone domestic commercial programs . . . . . . . . . . .
Total Company Store Data
Inventory per store (in thousands) . . . . . . . . . . . . . .
Total AutoZone store square footage (in thousands) .
Average square footage per AutoZone store . . . . . . .
Increase in AutoZone store square footage . . . . . . . .
Average net sales per AutoZone store (in thousands)
Net sales per AutoZone store average square foot . . .
Total employees at end of year (in thousands) . . . . . . . .
Inventory turnover(8) . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable to inventory ratio . . . . . . . . . . . . . . . .
After-tax return on invested capital(9) . . . . . . . . . . . . . . .
Adjusted debt to EBITDAR(10) . . . . . . . . . . . . . . . . . . . .
Net cash provided by operating activities
(in thousands)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash flow before share repurchases and changes in
debt (in thousands)(11) . . . . . . . . . . . . . . . . . . . . . . . . .
Share repurchases (in thousands)(7)
. . . . . . . . . . . . . . . .
Number of shares repurchased (in thousands)(7) . . . . . . .
3.4 %
29.3 %
17.5 %
5.6 %
8.4 %
19.1 %
19.2 %
9.2 %
4.6 %
9.2 %
13.6 %
22.5 %
20.7 %
14.3 %
14.1 %
7.4 %
(2.8) %
4.7 %
6.6 %
7.2 %
3.0 %
4.6 %
7.2 %
3.2 %
3.4 %
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$ 6,779,426
2,998,097
(1,732,430)
15,985,878
8,511,856
7,668,549
200,702
2,917,046
(4,349,894)
$ 6,627,984
2,918,817
(1,960,409)
15,275,043
8,588,393
6,122,092
217,428
2,837,973
(3,538,913)
$ 6,415,303
2,718,712
(954,451)
14,516,199
7,369,754
5,269,820
186,122
2,632,842
(1,797,536)
$ 6,811,872
2,581,677
528,781
14,423,872
6,283,091
5,513,371
155,855
2,501,560
(877,977)
$ 5,028,685
—
(483,456)
9,895,913
5,512,141
5,206,344
123,659
—
(1,713,851)
6,943
198
1
197
12
7,140
5,682
807
47,899
6,709
3.2 %
2,435
363
119
1.5x
124.9 %
55.4 %
2.3
$
$
$
6,767
177
1
176
13
6,943
5,342
812
46,435
6,688
3.1 %
2,329
349
112
1.5x
129.5 %
52.9 %
2.1
$
$
$
6,549
219
1
218
12
6,767
5,179
6,411
138
—
138
5
6,549
5,007
$
686
45,057
6,658
3.6 %
$
$
2,160
325
105
1.5x
129.6 %
41.0 %
2.0
$
683
43,502
6,643
2.3 %
$
$
1,914
288
100
1.3x
115.3 %
35.7 %
2.4
6,202
209
—
209
2
6,411
4,893
674
42,526
6,633
3.6 %
1,847
279
96
1.3x
112.6 %
35.7 %
2.5
$
$
$
$ 2,940,788
$ 3,211,135
$ 3,518,543
$ 2,720,108
$ 2,128,513
$ 2,156,026
$ 3,723,289
1,524
$ 2,599,636
$ 4,359,991
2,220
$ 3,048,841
$ 3,378,321
2,592
$ 2,185,418
930,903
$
826
$ 1,758,672
$ 2,004,896
2,182
29
(1) The 52 weeks ended August 28, 2021 and August 29, 2020 were negatively impacted by pandemic related
expenses, including Emergency Time-Off of approximately $43.0 million (pre-tax) and $83.9 million (pre-tax),
respectively.
(2) The fiscal year ended August 31, 2019 consisted of 53 weeks.
(3) Fiscal 2019 includes a benefit to net income related to the Tax Cuts and Jobs Act of $6.3 million, net of
repatriation tax.
(4) Fiscal 2023, 2022, 2021, 2020 and 2019 include excess tax benefits from stock option exercises of $92.2 million,
$63.2 million, $56.4 million, $20.9 million, and $46.0 million, respectively.
(5) The domestic and international comparable sales increases are based on sales for all AutoZone stores open at
least one year. Constant currency same store sales exclude impacts from fluctuations of foreign exchange rates
by converting both the current year and prior year international results at the prior year foreign currency
exchange rate. Same store sales are computed on a 52-week basis. Relocated stores are included in the same
store sales computation based on the year the original store was opened. Closed store sales are included in the
same store sales computation up to the week it closes, and excluded from the computation for all periods
subsequent to closing. All sales through our www.autozone.com website, including consumer direct ship-to-
home sales, are also included in the computation.
(6) The Company adopted ASU 2016-02, Leases (Topic 842), beginning with its first quarter ended November 23,
2019 which resulted in the Company recognizing a right-of-use asset (“ROU asset”) and a corresponding lease
liability on the balance sheet.
(7) Inclusive of excise tax of $23.7 million for the year ended August 26, 2023. The excise tax is assessed at one
percent of the fair market value of net stock repurchases after December 31, 2022. During the third quarter of
fiscal 2020, the Company temporarily suspended share repurchases under the share repurchase program in
response to the COVID-19 pandemic which was restarted beginning in the first quarter of fiscal 2021.
(8) Inventory turnover is calculated as cost of sales divided by the average merchandise inventory balance over the
trailing 5 quarters.
(9) After-tax return on invested capital is defined as after-tax operating profit (excluding rent charges) divided by
invested capital (which includes a factor to capitalize leases). For fiscal 2019, after-tax operating profit was
adjusted for the impact of the average revaluation of deferred tax liabilities, net of repatriation tax. See
Reconciliation of Non-GAAP Financial Measures in Management’s Discussion and Analysis of Financial
Condition and Results of Operations.
(10) Adjusted debt to EBITDAR is defined as the sum of total debt, finance lease obligations and annual rents times
six; divided by net income plus interest, taxes, depreciation, amortization, rent and share-based compensation
expense. See Reconciliation of Non-GAAP Financial Measures in Management’s Discussion and Analysis of
Financial Condition and Results of Operations
(11) Cash flow before share repurchases and changes in debt is defined as the change in cash and cash equivalents
less the change in debt plus treasury stock purchases. See Reconciliation of Non-GAAP Financial Measures in
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
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Fiscal 2023 Compared with Fiscal 2022
For the fiscal year ended August 26, 2023, we reported net sales of $17.5 billion compared with $16.3 billion for
the year ended August 27, 2022, a 7.4% increase from fiscal 2022. This growth was driven primarily by a domestic
same store sales increase of 3.4% and net sales of $327.8 million from new domestic and international stores.
Domestic commercial sales increased $368.0 million, or 8.7%, over domestic commercial sales for fiscal 2022.
Same store sales, or sales for our domestic and international stores open at least one year, are as follows:
Fiscal Year Ended August
Constant Currency (1)
2023
2023
Constant Currency (1)
2022
2022
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
International . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Company . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.4 %
29.3 %
5.6 %
3.4 %
17.5 %
4.6 %
8.4 %
19.1 %
9.2 %
8.4 %
19.2 %
9.2 %
(1) Constant currency same store sales exclude impacts from fluctuations of foreign exchange rates by converting
both the current year and prior year international results at the prior year foreign currency exchange rate.
At August 26, 2023, we operated 6,300 domestic stores, 740 in Mexico and 100 in Brazil, compared with 6,168
domestic stores, 703 in Mexico and 72 in Brazil at August 27, 2022. We reported a total auto parts segment
(domestic, Mexico and Brazil) sales increase of 7.4% for fiscal 2023.
Gross profit for fiscal 2023 was $9.1 billion, or 52.0% of net sales, a 17 basis point decrease compared with $8.5
billion, or 52.1% of net sales for fiscal 2022. The deleverage in gross margin was impacted by a non-cash LIFO
charge of $44.0 million in fiscal 2023 versus a $15.0 million charge in fiscal 2022.
Operating, selling, general and administrative expenses for fiscal 2023 increased to $5.6 billion, or 32.1% of net
sales, from $5.2 billion, or 32.0% of net sales for fiscal 2022.
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Interest expense, net for fiscal 2023 was $306.4 million compared with $191.6 million during fiscal 2022. Average
borrowings for fiscal 2023 were $7.0 billion, compared with $5.8 billion for fiscal 2022. Weighted average
borrowing rates were 3.78% and 3.29% for fiscal 2023 and 2022, respectively.
Our effective income tax rate was 20.2% and 21.1% of pre-tax income for fiscal 2023 and fiscal 2022, respectively.
The benefit from stock options exercised in fiscal 2023 was $92.2 million compared to $63.2 million in fiscal 2022
(see “Note D – Income Taxes” in the Notes to Consolidated Financial Statements).
Net income for fiscal 2023 increased by 4.1% to $2.5 billion, and diluted earnings per share increased 12.9% to
$132.36 from $117.19 in fiscal 2022. The impact on the fiscal 2023 diluted earnings per share from stock
repurchases was an increase of $1.15.
Fiscal 2022 Compared with Fiscal 2021
A discussion of changes in our results of operations from fiscal 2022 to fiscal 2021 has been omitted from this
Annual Report on Form 10-K, but may be found in “Item 7. Management’s Discussion and Analysis of Financial
Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended August 27,
2022, filed with the SEC on October 24, 2022, which is available free of charge on the SECs website at
www.sec.gov and at www.autozone.com, by clicking “Investor Relations” located at the bottom of the page.
Quarterly Periods
Each of the first three quarters of our fiscal year consists of 12 weeks, and the fourth quarter consisted of 16 weeks
in 2023, 2022 and 2021. Because the fourth quarter contains seasonally high sales volume and consists of 16 or 17
weeks, compared with 12 weeks for each of the first three quarters, our fourth quarter represents a disproportionate
share of our annual net sales and net income. The fourth quarter of fiscal year 2023 represented 32.6% of annual
sales and 34.2% of net income; the fourth quarter of fiscal year 2022 represented 32.9% of annual sales and 33.3%
31
of net income; and the fourth quarter of fiscal year 2021 represented 33.6% of annual sales and 36.2% of net
income.
Liquidity and Capital Resources
The primary source of our liquidity is our cash flows realized through the sale of automotive parts, products and
accessories. Continued progress on our initiatives improved our operating performance for the fiscal year. We
believe that our cash generated from operating activities, available cash reserves and available credit, supplemented
with our long-term borrowings will provide ample liquidity to fund our operations while allowing us to make
strategic investments to support growth initiatives and return excess cash to shareholders in the form of share
repurchases. As of August 26, 2023, we held $277.1 million of cash and cash equivalents, as well as $2.2 billion in
undrawn capacity on our revolving credit facility, without giving effect to commercial paper borrowings. We believe
our sources of liquidity will continue to be adequate to fund our operations and investments to grow our business,
repay our debt as it becomes due and fund our share repurchases over the short-term and long-term. In addition, we
believe we have the ability to obtain alternative sources of financing, if necessary.
Net cash provided by operating activities was $2.9 billion in 2023, $3.2 billion in 2022 and $3.5 billion in 2021.
Cash flows from operations are below last year primarily due to unfavorable changes in accounts payable and
accrued expenses.
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Our net cash flows used in investing activities were $876.2 million, $648.1 million and $601.8 million in fiscal
2023, 2022 and 2021, respectively. The increase in net cash used in investing activities in fiscal 2023 was primarily
due to an increase in capital expenditures. We invested $796.7 million, $672.4 million and $621.8 million in capital
assets in fiscal 2023, 2022 and 2021, respectively. The increase in capital expenditures from fiscal 2022 to fiscal
2023 was primarily driven by our growth initiatives, including new stores, hub and mega hub expansion initiatives
and supply chain projects. We had net new store openings of 197, 176 and 218 for fiscal 2023, 2022 and 2021,
respectively. We invest a portion of our assets held by our wholly owned insurance captive in marketable debt
securities. We purchased marketable debt securities of $66.9 million, $56.0 million and $63.7 million in fiscal 2023,
2022 and 2021, respectively. We had proceeds from the sale of marketable debt securities of $58.4 million, $53.9
million and $95.4 million in fiscal 2023, 2022 and 2021, respectively.
Net cash used in financing activities was $2.1 billion in fiscal 2023 and $3.5 billion in fiscal 2022 and fiscal 2021.
The net cash used in financing activities reflected purchases of treasury stock, which totaled $3.7 billion, $4.4 billion
and $3.4 billion for fiscal 2023, 2022 and 2021, respectively. The treasury stock purchases in fiscal 2023, 2022 and
2021 were primarily funded by cash flows from operations. During the year ended August 26, 2023, we repaid our
$300 million 2.875% Senior Notes due January 2023 and our $500 million 3.125% Senior Notes due July 2023 and
issued $1.8 billion of new debt compared to $750 million in 2022 and none in 2021. In fiscal years 2023 and 2022
the proceeds from the issuance of debt were used for general corporate purposes.
The Company had net proceeds from the issuance of commercial paper and short term borrowing of $606.2 million
and $603.4 million during fiscal 2023 and fiscal 2022, respectively. We did not have any commercial paper or short-
term borrowing activity during fiscal 2021.
During fiscal 2024, we expect to increase the investment in our business as compared to fiscal 2023. Our
investments are expected to be directed primarily to our supply chain initiatives, which includes expanded hub and
mega hubs, as well as distribution center expansions and new stores. The amount of investments in our new stores is
impacted by different factors, including whether the building and land are purchased (requiring higher investment)
or leased (generally lower investment) and whether such buildings are located in the U.S., Mexico or Brazil, or
located in urban or rural areas.
During fiscal 2023, 2022 and 2021 our capital expenditures increased by approximately 18%, 8% and 36%,
respectively. Fiscal 2021 capital expenditures increased due to delays in capital spending for the third and fourth
quarter of fiscal 2020 related to the COVID-19 pandemic.
32
In addition to building and land costs, our new stores require working capital, predominantly for inventories.
Historically, we have negotiated extended payment terms from suppliers, reducing the working capital required and
resulting in a high accounts payable to inventory ratio. We plan to continue leveraging our inventory purchases;
however, our ability to do so may be limited by our vendors’ capacity to factor their receivables from us. Certain
vendors participate in arrangements with financial institutions whereby they factor their AutoZone receivables,
allowing them to receive early payment from the financial institution on our invoices at a discounted rate. The terms
of these agreements are between the vendor and the financial institution. Upon request from the vendor, we confirm
to the vendor’s financial institution the balances owed to the vendor, the due date and agree to waive any right of
offset to the confirmed balances. A downgrade in our credit or changes in the financial markets may limit the
financial institutions’ willingness to participate in these arrangements, which may result in the vendor wanting to
renegotiate payment terms. A reduction in payment terms would increase the working capital required to fund future
inventory investments. Extended payment terms from our vendors have allowed us to continue our high accounts
payable to inventory ratio. We had an accounts payable to inventory ratio of 124.9% at August 26, 2023 and 129.5%
at August 27, 2022.
Depending on the timing and magnitude of our future investments (either in the form of leased or purchased
properties or acquisitions), we anticipate that we will rely primarily on internally generated funds and available
borrowing capacity to support a majority of our capital expenditures, working capital requirements and stock
repurchases. The balance may be funded through new borrowings. We anticipate we will be able to obtain such
financing in view of our credit ratings and favorable experiences in the debt markets in the past.
Our cash balances are held in various locations around the world. As of August 26, 2023, and August 27, 2022, cash
and cash equivalents of $108.5 million and $86.8 million, respectively, were held outside of the U.S. and were
generally utilized to support the liquidity needs in our foreign operations.
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For the fiscal year ended August 26, 2023, our adjusted after-tax return on invested capital (“ROIC”), which is a
non-GAAP measure, was 55.4% as compared to 52.9% for the prior year. Adjusted ROIC is calculated as after-tax
operating profit (excluding rent charges) divided by invested capital (which includes a factor to capitalize operating
leases). We use adjusted ROIC to evaluate whether we are effectively using our capital resources and believe it is an
important indicator of our overall operating performance. Refer to the “Reconciliation of Non-GAAP Financial
Measures” section for further details of our calculation.
Debt Facilities
On November 15, 2021, we amended and restated our existing revolving credit facility (as amended from time to
time, the “Revolving Credit Agreement”) pursuant to which our borrowing capacity under the Revolving Credit
Agreement was increased from $2.0 billion to $2.25 billion, and the maximum borrowing under the Revolving
Credit Agreement may, at our option, subject to lenders approval, be increased from $2.25 billion to $3.25 billion.
On November 15, 2022, we amended the Revolving Credit Agreement, extending the termination date by one year.
As amended, the Revolving Credit Agreement will terminate, and all amounts borrowed will be due and payable, on
November 15, 2027, but we may make one additional request to extend the termination date for an additional period
of one year. Revolving borrowings under the Revolving Credit Agreement may be base rate loans, Term Secured
Overnight Financing Rate (“SOFR”) loans, or a combination of both, at our election. The Revolving Credit
Agreement includes (i) a $75 million sublimit for swingline loans, (ii) a $50 million individual issuer letter of credit
sublimit and (iii) a $250 million aggregate sublimit for all letters of credit.
Under our Revolving Credit Agreement, covenants include restrictions on liens, a maximum debt to earnings ratio, a
minimum fixed charge coverage ratio and a change of control provision that may require acceleration of the
repayment obligations under certain circumstances.
As of August 26, 2023, we had no outstanding borrowings and $1.8 million of outstanding letters of credit under the
Revolving Credit Agreement.
33
The Revolving Credit Agreement requires that our consolidated interest coverage ratio as of the last day of each
quarter shall be no less than 2.5:1. This ratio is defined as the ratio of (i) consolidated earnings before interest, taxes
and rents to (ii) consolidated interest expense plus consolidated rents. Our consolidated interest coverage ratio as of
August 26, 2023 was 6.3:1.
We also maintain a letter of credit facility that allows us to request the participating bank to issue letters of credit on
our behalf up to an aggregate amount of $25 million. The letter of credit facility is in addition to the letters of credit
that may be issued under the Revolving Credit Agreement and had an expiration in June 2022. On May 16, 2022, we
amended and restated the letter of credit facility to, among other things, extend the facility through June 2025. As of
August 26, 2023, we had $25 million in letters of credit outstanding under the letter of credit facility.
In addition to the outstanding letters of credit issued under the committed facility discussed above, we had $107.2
million in letters of credit outstanding as of August 26, 2023. These letters of credit have various maturity dates and
were issued on an uncommitted basis.
As of August 26, 2023, the $1.2 billion of commercial paper borrowings and the $300 million 3.125% Senior Notes
due April 2024 were classified as long-term in the Consolidated Balance Sheets as we have the current ability and
intent to refinance them on a long-term basis through available capacity in our revolving credit facility. As of
August 26, 2023, we had $2.2 billion of availability under our Revolving Credit Agreement, without giving effect to
commercial paper borrowings, which would allow us to replace these short-term obligations with a long-term
financing facility.
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On July 17, 2023, we repaid the $500 million 3.125% Senior Notes due July 2023.
On January 17, 2023, we repaid the $300 million 2.875% Senior Notes due January 2023.
On January 18, 2022, we repaid the $500 million 3.700% Senior Notes due April 2022, which were callable at par in
January 2022.
On March 15, 2021, we repaid the $250 million 2.500% Senior Notes due April 2021, which were callable at par in
March 2021.
On July 21, 2023, we issued $450 million in 5.050% Senior Notes due July 2026 and $300 million in 5.200% Senior
Notes due August 2033 under our automatic shelf registration statement on Form S-3, filed with the SEC on July 19,
2022 (File No. 333-266209) (the “2022 Shelf Registration Statement”). The 2022 Shelf Registration Statement
allows us to sell an indeterminate amount in debt securities to fund general corporate purposes, including repaying,
redeeming or repurchasing outstanding debt and for working capital, capital expenditures, new store or distribution
center openings, stock repurchases and acquisitions. Proceeds from the debt issuance were used for general
corporate purposes.
On January 27, 2023 we issued $450 million in 4.500% Senior Notes due February 2028 and $550 million in
4.750% Senior Notes due February 2033 under the 2022 Shelf Registration Statement. Proceeds from the debt
issuance were used to repay a portion of the Company’s outstanding commercial paper borrowings and for other
general corporate purposes.
On August 1, 2022, we issued $750 million in 4.750% Senior Notes due August 2032 under the 2022 Shelf
Registration Statement. Proceeds from the debt issuance were used for general corporate purposes.
The Senior Notes contain a provision that repayment may be accelerated if we experience a change in control (as
defined in the agreements). Our borrowings under our Senior Notes contain minimal covenants, primarily
restrictions on liens, sale and leaseback transactions and consolidations, mergers and the sale of assets. All of the
repayment obligations under our borrowing arrangements may be accelerated and come due prior to the applicable
scheduled payment date if covenants are breached or an event of default occurs. Interest is paid on a semi-annual
basis.
34
As of August 26, 2023, we were in compliance with all covenants and expect to remain in compliance with all
covenants under our borrowing arrangements.
For the fiscal year ended August 26, 2023, our adjusted debt to earnings before interest, taxes, depreciation,
amortization, rent and share-based compensation expense (“EBITDAR”) ratio was 2.3:1 as compared to 2.1:1 as of
the comparable prior year end. We calculate adjusted debt as the sum of total debt, finance lease liabilities and rent
times six; and we calculate adjusted EBITDAR by adding interest, taxes, depreciation, amortization, rent and share-
based compensation expense to net income. We target our debt levels to a specified ratio of adjusted debt to
EBITDAR in order to maintain our investment grade credit ratings and believe this is important information for the
management of our debt levels.
Management expects the ratio of adjusted debt to EBITDAR to return to pre-pandemic levels in the future,
increasing debt levels. Once the target ratio is achieved, to the extent adjusted EBITDAR increases, we expect our
debt levels to increase; conversely, if adjusted EBITDAR decreases, we would expect our debt levels to decrease.
Refer to the “Reconciliation of Non-GAAP Financial Measures” section for further details of our calculation.
Stock Repurchases
During 1998, we announced a program permitting us to repurchase a portion of our outstanding shares not to exceed
a dollar maximum established by our Board of Directors (the “Board”). The Board voted to increase the repurchase
authorization by $1.5 billion on October 5, 2021, $1.5 billion on December 15, 2021, $2.0 billion on March 22,
2022, $2.5 billion on October 4, 2022 and $2.0 billion on June 14, 2023, bringing the total authorization to $35.7
billion. From January 1998 to August 26, 2023, we have repurchased a total of 154.0 million shares at an aggregate
cost of $33.8 billion. We repurchased 1.5 million, 2.2 million and 2.6 million shares of common stock at an
aggregate cost of $3.7 billion (inclusive of excise tax of $23.7 million), $4.4 billion and $3.4 billion during fiscal
2023, 2022 and 2021, respectively. The excise tax is assessed at one percent of the fair market value of net stock
repurchases after December 31, 2022. Considering cumulative repurchases as of August 26, 2023 we had $1.8
billion remaining under the Board’s authorization to repurchase our common stock. We will continue to evaluate
current and expected business conditions and adjust the level of share repurchases under our share repurchase
program in a manner that is consistent with our capital allocation strategy or as we otherwise deem appropriate.
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Cash flow before share repurchases and changes in debt was $2.2 billion, $2.6 billion and $3.0 billion for the
fiscal year ended August 26, 2023, August 27, 2022 and August 28, 2021, respectively. Cash flow before share
repurchases and changes in debt is calculated as the net increase or decrease in cash and cash equivalents less net
increases or decreases in debt (excluding deferred financing costs) plus share repurchases. We use cash flow before
share repurchases and changes in debt to calculate the cash flows remaining and available. We believe this is
important information regarding our allocation of available capital where we prioritize investments in the business
and utilize the remaining funds to repurchase shares, while maintaining debt levels that support our investment grade
credit ratings. Refer to the “Reconciliation of Non-GAAP Financial Measures” section for further details of our
calculation.
Subsequent to August 26, 2023 and through October 16, 2023, we have repurchased 200,303 shares of common
stock at an aggregate cost of $512.4 million. Considering the cumulative repurchases through October 16, 2023, we
have $1.3 billion remaining under the Board’s authorization to repurchase its common stock.
35
Financial Commitments
The following table shows our significant contractual obligations as of August 26, 2023:
(in thousands)
Total
Contractual
Obligations
Payment Due by Period
Less than
1 year
Between
1‑3 years
Between
3‑5 years
Over
5 years
Debt(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7,709,600 $ 1,509,600 $ 1,750,000 $ 1,050,000 $ 3,400,000
Interest payments(2) . . . . . . . . . . . . . . . .
439,688
Operating leases(3) . . . . . . . . . . . . . . . . .
2,260,833
Finance leases(3) . . . . . . . . . . . . . . . . . . .
43,228
Self-insurance reserves(4) . . . . . . . . . . . .
48,567
—
Construction commitments . . . . . . . . . .
Other(5) . . . . . . . . . . . . . . . . . . . . . . . . . .
—
$ 2,136,615 $ 6,192,316
1,468,738
4,097,510
319,186
279,407
198,926
9,326
$ 14,082,693
252,600
372,849
88,284
96,795
198,926
9,326
$ 2,528,380
321,125
682,165
44,568
38,757
—
—
455,325
781,663
143,106
95,288
—
—
$ 3,225,382
(1) Debt balances represent principal maturities, excluding interest, discounts, and debt issuance costs.
(2) Represents obligations for interest payments on long-term debt.
(3) Operating and finance lease obligations include related interest in accordance with ASU 2016-02, Leases
(Topic 842).
(4) Self-insurance reserves reflect estimates based on actuarial calculations and are presented net of insurance
receivables. Although these obligations do not have scheduled maturities, the timing of future payments are
predictable based upon historical patterns. Accordingly, we reflect the net present value of these obligations in
our Consolidated Balance Sheets.
(5) Represents commitments to make additional capital contributions to certain tax credit equity investments upon
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achievement of project milestones.
Our tax liability for uncertain tax positions, including interest and penalties, was $51.0 million at August 26, 2023.
Approximately $11.2 million is classified as current liabilities and $39.8 million is classified as long-term liabilities.
We did not reflect these obligations in the table above as we are unable to make an estimate of the timing of
payments of the long-term liabilities due to uncertainties in the timing and amounts of the settlement of these tax
positions.
Off-Balance Sheet Arrangements
The following table reflects outstanding letters of credit and surety bonds as of August 26, 2023:
(in thousands)
Total
Other
Commitments
Standby letters of credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Surety bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
133,953
43,076
177,029
A substantial portion of the outstanding standby letters of credit (which are primarily renewed on an annual basis)
and surety bonds are used to cover reimbursement obligations to our workers’ compensation carriers.
There are no additional contingent liabilities associated with these instruments as the underlying liabilities are
already reflected in our Consolidated Balance Sheets. The standby letters of credit and surety bond arrangements
expire within one year but have automatic renewal clauses.
36
Reconciliation of Non-GAAP Financial Measures
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” includes certain
financial measures not derived in accordance with generally accepted accounting principles (“GAAP”). These non-
GAAP financial measures provide additional information for determining our optimum capital structure and are
used to assist management in evaluating performance and in making appropriate business decisions to maximize
stockholders’ value.
Non-GAAP financial measures should not be used as a substitute for GAAP financial measures, or considered in
isolation, for the purpose of analyzing our operating performance, financial position or cash flows. However, we
have presented the non-GAAP financial measures, as we believe they provide additional information that is useful to
investors as it indicates more clearly our comparative year-to-year operating results. Furthermore, our management
and Compensation Committee of the Board use the above-mentioned non-GAAP financial measures to analyze and
compare our underlying operating results and use select measurements to determine payments of performance-based
compensation. We have included a reconciliation of this information to the most comparable GAAP measures in the
following reconciliation tables.
Reconciliation of Non-GAAP Financial Measure: Cash Flow Before Share Repurchases and Changes in Debt
The following table reconciles net increase (decrease) in cash and cash equivalents to cash flow before share
repurchases and changes in debt, which is presented in “Management’s Discussion and Analysis of Financial
Condition and Results of Operations”:
(in thousands)
2023
Fiscal Year Ended August
2021
2022
2020
2019
Net cash provided by/(used in):
Operating activities . . . . . . . . . . . . . . . $ 2,940,788
(876,178)
Investing activities . . . . . . . . . . . . . . .
Financing activities . . . . . . . . . . . . . . .
(2,060,082)
Effect of exchange rate changes on
cash . . . . . . . . . . . . . . . . . . . . . . . . . .
8,146
Net (decrease)/increase in cash and
$ 3,211,135
(648,099)
(3,470,497)
$ 3,518,543
(601,778)
(3,500,417)
$ 2,720,108 $ 2,128,513
(491,846)
(497,875)
(1,674,088)
(643,636)
506
4,172
(4,082)
(4,103)
cash equivalents . . . . . . . . . . . . . . . . .
12,674
(906,955)
(579,480)
1,574,515
(41,524)
Less: increase/(decrease) in debt,
excluding deferred financing costs . .
Plus: Share repurchases . . . . . . . . . . . . .
Cash flow before share repurchases
1,556,200
3,699,552
853,400
4,359,991
(250,000)
3,378,321
320,000
930,903(1)
204,700
2,004,896
and changes in debt . . . . . . . . . . . . . . . $ 2,156,026
$ 2,599,636
$ 3,048,841
$ 2,185,418 $ 1,758,672
(1) During the third quarter of fiscal 2020, the Company temporarily suspended share repurchases under the share
repurchase program in response to the COVID-19 pandemic.
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Reconciliation of Non-GAAP Financial Measure: Adjusted After-tax ROIC
The following table calculates the percentage of ROIC. ROIC is calculated as after-tax operating profit (excluding
rent) divided by invested capital (which includes a factor to capitalize operating leases). The ROIC percentages are
presented in “Management’s Discussion and Analysis of Financial Condition and Results of Operations”:
(in thousands, except percentage)
2023
2022
Fiscal Year Ended August
2021
2020
2019(1)
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments:
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rent expense(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax effect(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liabilities, net of repatriation tax(4) . . . .
Adjusted after-tax return . . . . . . . . . . . . . . . . . . . . . .
Average debt(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Average stockholders’ deficit(5) . . . . . . . . . . . . . . . . .
Add: Rent x 6(2)(6) . . . . . . . . . . . . . . . . . . . . . . . . . . .
Average finance lease liabilities(5) . . . . . . . . . . . . . . .
Invested capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
2,528,426 $
2,429,604 $
2,170,314 $
1,732,972 $ 1,617,221
306,372
406,398
(143,980)
—
3,097,216
6,900,354
(4,042,495)
2,438,388
296,599
5,592,846
$
$
$
191,638
373,278
(119,197)
—
2,875,323
5,712,301
(2,797,181)
2,239,668
284,453
5,439,241
$
$
$
195,337
345,380
(114,091)
—
2,596,940
5,416,471
(1,397,892)
2,072,280
237,267
6,328,126
$
$
$
201,165
329,783
(115,747)
—
2,148,173
184,804
332,726
(105,576)
(6,340)
$ 2,022,835
5,375,356
(1,542,355)
1,978,696
203,998
6,015,695
$ 5,126,286
(1,615,339)
1,996,358
162,591
$ 5,669,896
$
$
$
Adjusted after-tax ROIC . . . . . . . . . . . . . . . . . . . . . .
55.4 %
52.9 %
41.0 %
35.7 %
35.7 %
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Reconciliation of Non-GAAP Financial Measure: Adjusted Debt to EBITDAR
The following table calculates the ratio of adjusted debt to EBITDAR. Adjusted debt to EBITDAR is calculated as
the sum of total debt, financing lease liabilities and annual rents times six; divided by net income plus interest, taxes,
depreciation, amortization, rent and share-based compensation expense. The adjusted debt to EBITDAR ratios are
presented in “Management’s Discussion and Analysis of Financial Condition and Results of Operations”:
(in thousands, except ratio)
2023
2022
2021
2020
2019(1)
Fiscal Year Ended August
2,429,604 $ 2,170,314 $ 1,732,972 $ 1,617,221
184,804
414,112
2,216,137
369,957
332,726
43,255
$ 3,189,763 $ 2,962,075
195,337
578,876
2,944,527
407,683
345,380
56,112
$ 3,753,702
201,165
483,542
2,417,679
397,466
329,783
44,835
191,638
649,487
3,270,729
442,223
373,278
70,612
4,156,842
6,122,092
310,305
2,239,668
8,672,065
2.1
$ 5,269,820
276,054
2,072,280
$ 7,618,154
2.0
223,353
1,978,696
$ 5,513,371 $ 5,206,344
179,905
1,996,358
$ 7,715,420 $ 7,382,607
2.5
2.4
$
$
$
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Add: Interest expense . . . . . . . . . . . . . . . . . . . . . . .
Income tax expense . . . . . . . . . . . . . . . . . . . .
EBIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Add: Depreciation and amortization expense . . . . . .
Rent expense(2) . . . . . . . . . . . . . . . . . . . . . . . .
Share-based expense . . . . . . . . . . . . . . . . . . . .
EBITDAR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
2,528,426 $
306,372
639,188
3,473,986
497,577
406,398
93,087
4,471,048
Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financing lease liabilities . . . . . . . . . . . . . . . . . . . .
Add: Rent x 6(2)(6) . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjusted debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjusted debt to EBITDAR . . . . . . . . . . . . . . . . . . .
$
$
7,668,549
287,618
2,438,388
10,394,555
2.3
38
(1) The fiscal year ended August 31, 2019 consisted of 53 weeks.
(2) Effective September 1, 2019, the Company adopted ASU 2016-02, Leases (Topic 842), the new lease accounting
standard that required the Company to recognize operating lease assets and liabilities in the balance sheet. 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 52 weeks ended, August 26, 2023,
August 27, 2022 and August 28, 2021.
(in thousands)
August 26, 2023
August 27, 2022
August 28, 2021
August 29, 2020
For the year ended
Total lease cost, per ASC 842 . . . . . . . . . . . . . . . . . . . . . . .
Less: Finance lease interest and amortization . . . . . . . . . . . .
Less: Variable operating lease components, related to
insurance and common area maintenance . . . . . . . . . . . .
Rent expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
524,283
(86,521)
(31,364)
406,398
$
$
470,563
(69,564)
(27,721)
373,278
$
$
427,443
(56,334)
(25,729)
345,380
$
$
415,505
(60,275)
(25,447)
329,783
(3) For fiscal 2023, 2022, 2021 and 2020, the effective tax rate was 20.2%, 21.1%, 21.1% and 21.8%, respectively.
(4) For fiscal 2019 after-tax operating profit was adjusted for the impact of the revaluation of deferred tax
liabilities, net of repatriation tax.
(5) All averages are computed based on trailing five quarters.
(6) Rent is multiplied by a factor of six to capitalize operating leases in the determination of pre-tax invested
capital.
Recent Accounting Pronouncements
See Note A of the Notes to Consolidated Financial Statements for a discussion on recent accounting
pronouncements.
Critical Accounting Policies and Estimates
Preparation of our Consolidated Financial Statements requires us to make estimates and assumptions affecting the
reported amounts of assets and liabilities at the date of the financial statements, reported amounts of revenues and
expenses during the reporting period and related disclosures of contingent liabilities. In the Notes to our
Consolidated Financial Statements, we describe our significant accounting policies used in preparing the
Consolidated Financial Statements. Our policies are evaluated on an ongoing basis and are drawn from historical
experience and other assumptions that we believe to be reasonable under the circumstances. Actual results could
differ under different assumptions or conditions. Our senior management has identified self-insurance reserves as a
critical accounting estimate that is materially impacted by assumptions while income taxes and valuation allowances
have been identified as critical accounting policies. These policies have been discussed with the Audit Committee of
our Board. The following items in our Consolidated Financial Statements represent our critical accounting policies
and estimates by management:
Self-Insurance Reserves
We retain a significant portion of the risks associated with workers’ compensation, general, product liability,
property and vehicle liability; and we obtain third party insurance to limit the exposure related to certain of these
risks. Our self-insurance reserve estimates totaled $268.8 million at August 26, 2023, and $264.3 million at
August 27, 2022. Where estimates are possible, losses covered by insurance are recognized on a gross basis with a
corresponding insurance receivable.
The assumptions made by management in estimating our self-insurance reserves include consideration of historical
cost experience, judgments about the present and expected levels of cost per claim and retention levels. We utilize
various methods, including analyses of historical trends and use of a specialist, to estimate the cost to settle reported
claims and claims incurred but not yet reported. The actuarial methods develop estimates of the future ultimate
claim costs based on the claims incurred as of the balance sheet date. When estimating these liabilities, we consider
factors, such as the severity, duration and frequency of claims, legal costs associated with claims, healthcare trends
and projected inflation of related factors. In recent history, our methods for determining our exposure have remained
39
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consistent, and our historical trends have been appropriately factored into our reserve estimates. As we obtain
additional information and refine our methods regarding the assumptions and estimates we use to recognize
liabilities incurred, we will adjust our reserves accordingly.
Management believes that the various assumptions developed and actuarial methods used to determine our self-
insurance reserves are reasonable and provide meaningful data and information that management uses to make its
best estimate of our exposure to these risks. Arriving at these estimates, however, requires a significant amount of
subjective judgment by management, and as a result these estimates are uncertain and our actual exposure may be
different from our estimates. For example, changes in our assumptions about healthcare costs, the severity of
accidents and the incidence of illness, the average size of claims and other factors could cause actual claim costs to
vary from our assumptions and estimates, causing our reserves to be overstated or understated. A 10% change in our
self-insurance liability would have affected net income by approximately $19.3 million for fiscal 2023.
Our liabilities for workers’ compensation, general and product liability, property and vehicle claims do not have
scheduled maturities; however, the timing of future payments is predictable based on historical patterns and is relied
upon in determining the current portion of these liabilities. Accordingly, we reflect the net present value of the
obligations we determine to be long-term using the risk-free interest rate as of the balance sheet date.
If the discount rate used to calculate the present value of these reserves changed by 25 basis points, net income
would have been affected by approximately $1.1 million for fiscal 2023.
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Income Taxes
Our income tax returns are audited by state, federal and foreign tax authorities, and we are typically engaged in
various tax examinations at any given time. Tax contingencies often arise due to uncertainty or differing
interpretations of the application of tax rules throughout the various jurisdictions in which we operate. The
contingencies are influenced by items such as tax audits, changes in tax laws, litigation, appeals and prior experience
with similar tax positions.
We regularly review our tax reserves for these items and assess the adequacy of the amount we have recorded. As of
August 26, 2023, we had approximately $51.0 million reserved for uncertain tax positions.
We evaluate exposures associated with our various tax filings by estimating a liability for uncertain tax positions
based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight
of available evidence indicates that it is more likely than not that the position will be sustained on audit, including
resolution of related appeals or litigation processes, if any. The second step requires us to estimate and measure the
tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement.
We believe our estimates to be reasonable and have not experienced material adjustments to our reserves in the
previous three years; however, actual results could differ from our estimates, and we may be exposed to gains or
losses. Specifically, management has used judgment and made assumptions to estimate the likely outcome of
uncertain tax positions. Additionally, to the extent we prevail in matters for which a liability has been established, or
must pay in excess of recognized reserves, our effective tax rate in any particular period could be affected.
Vendor Allowances
We receive various payments and allowances from our vendors through a variety of programs and arrangements,
including allowances for warranties, advertising and general promotion of vendor products. Vendor allowances are
treated as a reduction of the cost of inventory, unless they are provided as a reimbursement of specific, incremental,
identifiable costs incurred by the Company in selling the vendor’s products. Approximately 88% of the vendor funds
received during fiscal 2023 were recorded as a reduction of the cost of inventories and recognized as a reduction to
cost of sales as these inventories are sold.
Based on our vendor agreements, a significant portion of vendor funding we receive is earned as we purchase
inventory. Therefore, we record receivables for funding earned but not yet received as we purchase inventory.
During the year, we regularly review the receivables from vendors to ensure vendors are able to meet their
40
obligations. We generally have not recorded a reserve against these receivables as we have not experienced
significant losses and typically have a legal right of offset with our vendors for payments owed them. We have had
write-offs less than $1 million in each of the last three years.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
We are exposed to market risk from, among other things, changes in interest rates, foreign exchange rates and fuel
prices. From time to time, we use various derivative instruments to reduce interest rate and fuel price risks. To date,
based upon our current level of foreign operations, no derivative instruments have been utilized to reduce foreign
exchange rate risk. All of our hedging activities are governed by guidelines that are authorized by the Board.
Further, we do not buy or sell derivative instruments for trading purposes.
Interest Rate Risk
Our financial market risk results primarily from changes in interest rates. At times, we reduce our exposure to
changes in interest rates by entering into various interest rate hedge instruments such as interest rate swap contracts,
treasury lock agreements and forward-starting interest rate swaps.
We have historically utilized interest rate swaps to convert variable rate debt to fixed rate debt and to lock in fixed
rates on future debt issuances. We reflect the current fair value of all interest rate hedge instruments as a component
of either other current assets or accrued expenses and other. Our interest rate hedge instruments are designated as
cash flow hedges. As of August 26, 2023 and August 27, 2022, no such interest rate swaps were outstanding.
Unrealized gains and losses on interest rate hedges are deferred in stockholders’ deficit as a component of
Accumulated Other Comprehensive Loss. These deferred gains and losses are recognized in income as a decrease or
increase to interest expense in the period in which the related cash flows being hedged are recognized in expense.
However, to the extent that the change in value of an interest rate hedge instrument does not perfectly offset the
change in the value of the cash flow being hedged, that ineffective portion is immediately recognized in earnings.
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The fair value of our debt was estimated at $7.3 billion as of August 26, 2023, and $5.9 billion as of August 27,
2022, based on the quoted market prices for the same or similar debt issues or on the current rates available to us for
debt having the same remaining maturities. Such fair value is less than the carrying value of debt by $406.6 million
and $182.8 million at August 26, 2023 and August 27, 2022, respectively, which reflects its face amount, adjusted
for any unamortized debt issuance costs and discounts.
We had $1.2 billion in variable rate debt outstanding at August 26, 2023 and $603.4 million in August 27, 2022.
We had outstanding fixed rate debt of $6.5 billion, net of unamortized debt issuance costs of $41.1 million, at
August 26, 2023, and $5.5 billion, net of unamortized debt issuance costs of $31.3 million, at August 27, 2022. A
one percentage point increase in interest rates would have reduced the fair value of our fixed rate debt by
approximately $264.7 million at August 26, 2023.
Foreign Currency Risk
Foreign currency exposures arising from transactions include firm commitments and anticipated transactions
denominated in a currency other than our entities’ functional currencies. To minimize our risk, we generally enter
into transactions denominated in the respective functional currencies. We are exposed to Brazilian reals, Canadian
dollars, euros, Chinese yuan renminbi and British pounds, but our primary foreign currency exposure arises from
Mexican peso-denominated revenues and profits and their translation into U.S. dollars. Foreign currency exposures
arising from transactions denominated in currencies other than the functional currency are not material.
We view our investments in Mexican subsidiaries as long-term. As a result, we generally do not hedge these net
investments. The net asset exposure in the Mexican subsidiaries translated into U.S. dollars using the year-end
exchange rates was $409.8 million at August 26, 2023 and $270.2 million at August 27, 2022. The year-end
exchange rates with respect to the Mexican peso increased by 15.7% with respect to the U.S. dollar during fiscal
2023 and decreased by less than 1.0% with respect to the U.S. dollar during fiscal 2022. The potential loss in value
41
of our net assets in the Mexican subsidiaries resulting from a hypothetical 10 percent adverse change in quoted
foreign currency exchange rates at August 26, 2023 and August 27, 2022, would have been approximately $37.3
million and approximately $24.6 million, respectively. Any changes in our net assets in the Mexican subsidiaries
relating to foreign currency exchange rates would be reflected in the foreign currency translation component of
Accumulated Other Comprehensive Loss, unless the Mexican subsidiaries are sold or otherwise disposed. A
hypothetical 10 percent adverse change in average exchange rates would not have a material impact on our results of
operations.
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42
Item 8. Financial Statements and Supplementary Data
Index
Management’s Report on Internal Control Over Financial Reporting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Reports of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Consolidated Statements of Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Consolidated Statements of Comprehensive Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Consolidated Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Consolidated Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Consolidated Statements of Stockholders’ Deficit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
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43
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting
(as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended). Our internal
control over financial reporting includes, among other things, defined policies and procedures for conducting and
governing our business, sophisticated information systems for processing transactions and properly trained staff.
Mechanisms are in place to monitor the effectiveness of our internal control over financial reporting, including
regular testing performed by the Company’s internal audit team. Actions are taken to correct deficiencies as they are
identified. Our procedures for financial reporting include the active involvement of senior management, our Audit
Committee and a staff of highly qualified financial and legal professionals.
Management, with the participation of our principal executive and financial officers, assessed our internal control
over financial reporting as of August 26, 2023, the end of our fiscal year. Management based its assessment on
criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations
of the Treadway Commission 2013 framework.
Based on this assessment, management has concluded that our internal control over financial reporting was effective
as of August 26, 2023.
Our independent registered public accounting firm, Ernst & Young LLP (PCAOB ID: 42), audited the effectiveness
of our internal control over financial reporting. Ernst & Young LLP’s attestation report on the Company’s internal
control over financial reporting as of August 26, 2023 is included in this Annual Report on Form 10-K.
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Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of AutoZone, Inc.
Opinion on Internal Control Over Financial Reporting
We have audited AutoZone, Inc.’s internal control over financial reporting as of August 26, 2023, based on criteria
established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (2013 framework) (the COSO criteria). In our opinion, AutoZone, Inc. (the Company)
maintained, in all material respects, effective internal control over financial reporting as of August 26, 2023, based
on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the consolidated balance sheets of the Company as of August 26, 2023 and August 27, 2022, and
the related consolidated statements of income, comprehensive income, stockholders’ deficit, and cash flows for each
of the three years in the period ended August 26, 2023, and the related notes and our report dated October 24, 2023
expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and
for its assessment of the effectiveness of internal control over financial reporting included in the accompanying
Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on
the Company’s internal control over financial reporting based on our audit. We are a public accounting firm
registered with the PCAOB and are required to be independent with respect to the Company in accordance with the
U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and
the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting
was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a
material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on
the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We
believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.
Memphis, Tennessee
October 24, 2023
/s/ Ernst & Young LLP
45
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Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of AutoZone, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of AutoZone, Inc. (the Company) as of August 26,
2023 and August 27, 2022, the related consolidated statements of income, comprehensive income, stockholders'
deficit, and cash flows for each of the three years in the period ended August 26, 2023, and the related notes
(collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial
statements present fairly, in all material respects, the financial position of the Company at August 26, 2023 and
August 27, 2022, and the results of its operations and its cash flows for each of the three years in the period ended
August 26, 2023, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the Company's internal control over financial reporting as of August 26, 2023, based on criteria
established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (2013 framework) and our report dated October 24, 2023, expressed an unqualified opinion
thereon.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an
opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with
the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the
PCAOB.
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We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of
material misstatement of the financial statements, whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and
disclosures in the financial statements. Our audits also included evaluating the accounting principles used and
significant estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated
financial statements that was communicated or required to be communicated to the audit committee and that:
(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially
challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any
way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the
critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure
to which it relates.
46
Description of the
Matter
Valuation of Self-insurance Reserves
At August 26, 2023, the Company’s self-insurance reserve estimate was $268.8 million. As
more fully described in Note A of the consolidated financial statements, the Company retains a
significant portion of the risks associated with workers’ compensation, general liability, product
liability, property and vehicle insurance. Accordingly, the Company utilizes various methods,
including analyses of historical trends and actuarial methods, to estimate the costs of these
risks.
Auditing the self-insurance reserve is complex and required the involvement of specialists due
to the judgmental nature of estimating the costs to settle reported claims and claims incurred but
not yet reported. There are a number of factors and/or assumptions (e.g., severity, duration and
frequency of claims, projected inflation of related factors, and the risk-free rate) used in the
measurement process which have a significant effect on the estimated self-insurance reserve.
How We
Addressed the
Matter in Our
Audit
We evaluated the design and tested the operating effectiveness of the Company’s controls over
the self-insurance reserve process. For example, we tested controls over management’s review
of the self-insurance reserve calculations, the significant actuarial assumptions and the data
inputs provided to the actuary.
To evaluate the self-insurance reserve, our audit procedures included, among others, assessing
the methodologies used, evaluating the significant actuarial assumptions discussed above and
testing the completeness and the accuracy of the underlying claims data used by the Company.
We compared the actuarial assumptions used by management to historical trends and evaluated
the change in the self-insurance reserve from the prior year due to changes in these
assumptions. In addition, we involved our actuarial specialists to assist in assessing the
valuation methodologies and significant assumptions used in the valuation analysis, we
evaluated management’s methodology for determining the risk-free interest rate utilized in
measuring the net present value of the long-term portion of the self-insurance reserve, we
compared the significant assumptions used by management to industry accepted actuarial
assumptions and we compared the Company’s reserve to a range developed by our actuarial
specialists based on assumptions developed by the specialists.
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We have served as the Company’s auditor since 1988.
/s/ Ernst & Young LLP
Memphis, Tennessee
October 24, 2023
47
AutoZone, Inc. Consolidated Statements of Income
(in thousands, except per share data)
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of sales, including warehouse and delivery expenses. . . .
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating, selling, general and administrative expenses . . . . .
Operating profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
August 26,
2023
Year Ended
August 27,
2022
August 28,
2021
$ 17,457,209 $ 16,252,230 $ 14,629,585
6,911,800
7,779,580
7,717,785
8,472,650
4,773,258
5,201,921
2,944,527
3,270,729
195,337
191,638
2,749,190
3,079,091
578,876
649,487
2,429,604 $ 2,170,314
8,386,787
9,070,422
5,596,436
3,473,986
306,372
3,167,614
639,188
2,528,426
$
$
Weighted average shares for basic earnings per share . . . . . . .
Effect of dilutive stock equivalents . . . . . . . . . . . . . . . . . . . . . .
Weighted average shares for diluted earnings per share . . . . . .
18,510
593
19,103
20,107
626
20,733
Basic earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
136.60
132.36
$
$
120.83 $
117.19 $
22,237
562
22,799
97.60
95.19
See Notes to Consolidated Financial Statements.
AutoZone, Inc. Consolidated Statements of Comprehensive Income
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(in thousands)
August 26,
2023
Year Ended
August 27,
2022
August 28,
2021
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income:
Foreign currency translation adjustments . . . . . . . . . . . . . . . .
Unrealized gains (losses) on marketable debt securities, net
of taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net derivative activities, net of taxes . . . . . . . . . . . . . . . . . . . .
Total other comprehensive income . . . . . . . . . . . . . . . . . . . . . . .
Comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
2,528,426
$
2,429,604 $
2,170,314
103,633
7,448
44,683
320
5,747
109,700
2,638,126
$
(2,760)
2,762
7,450
2,437,054 $
(1,256)
2,839
46,266
2,216,580
$
See Notes to Consolidated Financial Statements.
48
AutoZone, Inc. Consolidated Balance Sheets
(in thousands)
Assets
Current assets:
August 26,
2023
August 27,
2022
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Merchandise inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
277,054 $
520,385
5,764,143
217,844
6,779,426
264,380
504,886
5,638,004
220,714
6,627,984
Property and equipment:
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Buildings and improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Leasehold improvements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Accumulated depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,367,391
4,860,216
2,972,879
831,508
305,896
10,337,890
(4,741,342)
5,596,548
1,299,981
4,486,676
2,650,831
724,095
291,588
9,453,171
(4,282,752)
5,170,419
Operating lease right-of-use assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other long-term assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total long-term assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,998,097
302,645
86,002
223,160
3,609,904
2,918,817
302,645
52,047
203,131
3,476,640
$ 15,985,878 $ 15,275,043
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Liabilities and Stockholders’ Deficit
Current liabilities:
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current portion of operating lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
7,201,281 $
257,256
1,000,841
52,478
8,511,856
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating lease liabilities, less current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7,668,549
2,917,046
536,278
702,043
7,301,347
243,407
1,008,701
34,938
8,588,393
6,122,092
2,837,973
533,884
731,614
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; 18,936 shares
issued and 17,857 shares outstanding as of August 26, 2023; 20,732 shares issued
and 19,126 shares outstanding as of August 27, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained deficit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Treasury stock, at cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total stockholders’ deficit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities and stockholders' deficit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
189
1,484,992
(2,959,278)
(190,836)
(2,684,961)
(4,349,894)
207
1,354,252
(1,330,067)
(300,536)
(3,262,769)
(3,538,913)
$ 15,985,878 $ 15,275,043
See Notes to Consolidated Financial Statements.
49
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AutoZone, Inc. Consolidated Statements of Cash Flows
(in thousands)
Cash flows from operating activities:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization of property and equipment . . . . . .
Other non-cash charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of debt origination fees . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Share-based compensation expense . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in operating assets and liabilities:
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Merchandise inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable and accrued expenses . . . . . . . . . . . . . . . . . . .
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash provided by operating activities . . . . . . . . . . . . . . . . .
Cash flows from investing activities:
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase of marketable debt securities . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sale of marketable debt securities . . . . . . . . . . . . . . .
Investment in tax credit equity investments . . . . . . . . . . . . . . . . . . .
Proceeds from disposal of capital assets and other, net . . . . . . . . . .
Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . .
Cash flows from financing activities:
Net proceeds from commercial paper . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from issuance of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repayment of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net proceeds from sale of common stock . . . . . . . . . . . . . . . . . . . . .
Purchase of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repayment of principal portion of finance lease liabilities . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash used in financing activities . . . . . . . . . . . . . . . . . . . . . .
August 26,
2023
Year Ended
August 27,
2022
August 28,
2021
$
2,528,426 $
2,429,604 $ 2,170,314
497,577
44,000
9,264
(25,707)
93,087
(6,674)
(89,180)
(183,679)
92,832
(19,158)
2,940,788
(796,657)
(66,917)
58,357
(98,003)
27,042
(876,178)
606,200
1,750,000
(800,000)
182,494
(3,699,552)
(81,055)
(18,169)
(2,060,082)
442,223
15,000
11,276
185,594
70,612
(125,732)
(1,005,686)
1,224,692
(10,517)
(25,931)
3,211,135
(672,391)
(56,040)
53,882
(31,537)
57,987
(648,099)
407,683
—
12,858
(34,432)
56,112
(11,039)
(138,517)
1,029,912
29,467
(3,815)
3,518,543
(621,767)
(63,676)
95,393
(41,712)
29,984
(601,778)
603,400
750,000
(500,000)
113,934
(4,359,991)
(67,182)
(10,658)
(3,470,497)
—
—
(250,000)
187,757
(3,378,321)
(59,853)
—
(3,500,417)
Effect of exchange rate changes on cash . . . . . . . . . . . . . . . . . . . . . . .
8,146
506
4,172
Net increase/(decrease) in cash and cash equivalents . . . . . . . . . . . . .
Cash and cash equivalents at beginning of period . . . . . . . . . . . . . . . .
Cash and cash equivalents at end of period . . . . . . . . . . . . . . . . . . . . .
Supplemental cash flow information:
Interest paid, net of interest cost capitalized . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Leased assets obtained in exchange for new finance lease liabilities . . . . .
Leased assets obtained in exchange for new operating lease liabilities . . . .
12,674
264,380
277,054
260,866
570,250
58,316
428,150
$
$
$
$
$
$
$
$
$
$
(906,955)
1,171,335
(579,480)
1,750,815
264,380 $ 1,171,335
178,561 $
461,232 $
100,711 $
527,966 $
187,948
574,854
112,095
444,626
See Notes to Consolidated Financial Statements.
50
AutoZone, Inc. Consolidated Statements of Stockholders’ Deficit
(in thousands)
Common
Shares Common
Issued
Stock
Additional
Paid-in
Capital
Retained
Deficit
Accumulated
Other
Comprehensive Treasury
Loss
Stock
Total
Balance at August 29, 2020 . . . 23,697 $
Net income . . . . . . . . . . . . . . .
Total other comprehensive
237
— —
income . . . . . . . . . . . . . . . . .
— —
Purchase of 2,592 shares of
treasury stock . . . . . . . . . . . .
— —
Retirement of treasury
—
—
—
$ 1,283,495 $ (1,450,970) $
(354,252) $ (356,487) $
2,170,314
—
(877,977)
— 2,170,314
—
—
46,266
—
46,266
— (3,378,321) (3,378,321)
shares . . . . . . . . . . . . . . . . . .
(1,044)
(10)
(60,005)
(1,139,173)
— 1,199,188
—
Issuance of common stock
under stock options and
stock purchase plans . . . . . . .
Share-based compensation
expense . . . . . . . . . . . . . . . . .
Balance at August 28, 2021 . . . 23,007
Net income . . . . . . . . . . . . . . .
Total other comprehensive
354
3
187,754
—
—
—
187,757
— —
230
— —
54,425
1,465,669
—
—
(419,829)
2,429,604
—
54,425
(307,986) (2,535,620) (1,797,536)
— 2,429,604
—
—
income . . . . . . . . . . . . . . . . .
— —
Purchase of 2,220 shares
of treasury stock . . . . . . . . . .
— —
Retirement of treasury
—
—
—
—
7,450
—
7,450
— (4,359,991) (4,359,991)
shares . . . . . . . . . . . . . . . . . .
(2,484)
(25)
(292,975)
(3,339,842)
— 3,632,842
—
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Issuance of common stock
under stock options and
stock purchase plans . . . . . . .
Share-based compensation
expense . . . . . . . . . . . . . . . . .
Balance at August 27, 2022 . . . 20,732
Net income . . . . . . . . . . . . . . .
Total other comprehensive
209
2
113,932
—
—
—
113,934
— —
207
— —
67,626
1,354,252
—
—
(1,330,067)
2,528,426
—
67,626
(300,536) (3,262,769) (3,538,913)
— 2,528,426
—
—
income . . . . . . . . . . . . . . . . .
— —
Purchase of 1,524 shares of
treasury stock(1) . . . . . . . . . .
— —
Retirement of treasury
—
—
—
—
109,700
—
109,700
— (3,723,289) (3,723,289)
shares . . . . . . . . . . . . . . . . . .
(2,051)
(20)
(143,440)
(4,157,637)
— 4,301,097
—
Issuance of common stock
under stock options and
stock purchase plans . . . . . . .
Share-based compensation
expense . . . . . . . . . . . . . . . . .
Balance at August 26, 2023 . . . 18,936 $
$ 1,484,992 $ (2,959,278) $
255
2
182,492
— —
189
91,688
—
—
—
—
182,494
—
91,688
(190,836) $ (2,684,961) $ (4,349,894)
—
(1) Inclusive of excise tax of $23.7 million for the year ended August 26, 2023. The excise tax is assessed at one
percent of the fair market value of net stock repurchases after December 31, 2022.
See Notes to Consolidated Financial Statements.
51
Notes to Consolidated Financial Statements
Note A – Significant Accounting Policies
Business: AutoZone, Inc. (“AutoZone” or the “Company”) is the leading retailer and distributor of automotive
replacement parts and accessories in the Americas. At the end of fiscal 2023, the Company operated 6,300 stores in
the U.S., 740 stores in Mexico and 100 stores in Brazil. Each store carries an extensive product line for cars, sport
utility vehicles, vans and light duty trucks, including new and remanufactured automotive hard parts, maintenance
items, accessories and non-automotive products. At the end of fiscal 2023, in 5,682 of the domestic stores as well as
the vast majority of our stores in Mexico and Brazil, we had a commercial sales program that provided commercial
credit and prompt delivery of parts and other products to local, regional and national repair garages, dealers, service
stations, fleet owners and other accounts. The Company also sells automotive hard parts, maintenance items,
accessories, and non-automotive products through www.autozone.com, and its commercial customers can make
purchases through www.autozonepro.com.Additionally, the Company sells the ALLDATA brand automotive
diagnostic, repair, collision and shop management software through www.alldata.com. The Company also provides
product information on its Duralast branded products through www.duralastparts.com. The Company does not
derive revenue from automotive repair or installation services.
Fiscal Year: The Company’s fiscal year consists of 52 or 53 weeks ending on the last Saturday in August. Fiscal
2023, 2022 and 2021 represented 52 weeks.
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Basis of Presentation: The Consolidated Financial Statements include the accounts of AutoZone, Inc. and its
wholly owned subsidiaries. All significant intercompany transactions and balances have been eliminated in
consolidation.
Variable Interest Entities: The Company invests in certain tax credit funds that promote renewable energy and
generate a return primarily through the realization of federal tax credits. The deferral method is used to account for
the tax attributes of these investments.
The Company considers its investment in these tax credit funds as an investment in a variable interest entity
(“VIE”). The Company evaluates the investment in any VIE to determine whether it is the primary beneficiary. The
Company considers a variety of factors in identifying the entity that holds the power to direct matters that most
significantly impact the VIE’s economic performance including, but not limited to, the ability to direct financing,
leasing, construction and other operating decisions and activities. As of August 26, 2023, the Company held tax
credit equity investments that were deemed to be VIE’s and determined that it was not the primary beneficiary of the
entities, as it did not have the power to direct the activities that most significantly impacted the entity and accounted
for this investment using the equity method. The Company’s maximum exposure to losses is generally limited to its
net investment, which was $29.6 million as of August 26, 2023 and $14.1 million as of August 27, 2022 and was
included within the Other long-term assets caption in the accompanying Consolidated Balance Sheets. As of
August 26, 2023, the Company had commitments to make certain additional capital contributions to one of its tax
credit funds totaling $9.3 million.
Use of Estimates: Management of the Company has made a number of estimates and assumptions relating to the
reporting of assets and liabilities and the disclosure of contingent liabilities to prepare these financial statements.
Actual results could differ from those estimates.
Cash and Cash Equivalents: Cash equivalents consist of investments with original maturities of 90 days or less.
Cash equivalents include proceeds due from credit and debit card transactions with settlement terms of less than
five days. Credit and debit card receivables included within cash and cash equivalents were $88.6 million at
August 26, 2023 and $78.4 million at August 27, 2022.
Cash balances are held in various locations around the world. Cash and cash equivalents of $108.5 million and $86.8
million were held outside of the U.S. as of August 26, 2023, and August 27, 2022, respectively, and were generally
utilized to support the liquidity needs in foreign operations.
52
Accounts Receivable: Effective in fiscal 2021, the Company adopted ASU 2016-13, Financial Instruments - Credit
Losses (Topic 326), which requires the Company to estimate all expected credit losses for financial assets measured
at amortized cost basis, including trade receivables, based on historical experience, current market conditions and
supportable forecasts. The Company’s accounts receivable primarily consists of receivables from commercial
customers. The Company routinely grants credit to certain commercial customers on a short-term basis consisting
primarily of daily, weekly or monthly terms. The risk of credit loss in its trade receivables is substantially mitigated
by the Company’s credit evaluation process, short collection terms and diversification of customers, as well as the
low dollar value for its typical sales transaction.
Receivables are presented net of an allowance for credit losses. Allowances for expected credit losses are
determined based on historical experience, the current economic environment, our expectations of future economic
conditions and the current evaluation of the composition of accounts receivable. The Company will apply
adjustments for specific factors and current economic conditions as needed at each reporting date. The Company’s
allowance for credit losses is included in “Accounts receivable” on the accompanying Consolidated Balance Sheets
as of August 26, 2023 and August 27, 2022. The balance of the allowance for credit losses was $7.7 million at
August 26, 2023, and $9.5 million at August 27, 2022.
Vendor Receivables: The Company’s vendor receivables primarily consist of balances arising from its vendors
through a variety of programs and arrangements, including rebates, allowances, promotional funds and
reimbursement of specific, incremental, identifiable costs incurred by the Company in selling the vendors’ products.
The amounts to be received are prescribed by the terms of the vendor agreements and therefore collection of such
amounts is generally not at risk. The Company regularly reviews vendor receivables for collectability and assesses
the need for an allowance for credit losses based on an evaluation of the vendors’ financial positions and
corresponding abilities to meet financial obligations. Management does not believe there is a reasonable likelihood
that the Company will be unable to collect the receivables from vendors and did not record a reserve for expected
credit losses from vendors in the Consolidated Financial Statements as of August 26, 2023 and August 27, 2022.
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Merchandise Inventories: Merchandise inventories include related purchasing, storage and handling costs.
Inventory cost has been determined using the last-in, first-out (“LIFO”) method stated at the lower of cost or market
for domestic inventories and the weighted average cost method stated at the lower of cost or net realizable value for
Mexico and Brazil inventories. Due to recent price inflation on the Company’s merchandise purchases, primarily
driven by increased freight costs, the Company’s LIFO credit reserve balance was $59.0 million at August 26, 2023
and $15.0 million at August 27, 2022. Increases to the Company’s LIFO credit reserve balance are recorded as a
non-cash charge to cost of sales and decreases are recorded as a non-cash benefit to cost of sales.
Marketable Debt Securities: The Company invests a portion of its assets held by the Company’s wholly owned
insurance captive in marketable debt securities and classifies them as available-for-sale. The Company includes
these marketable debt securities within the Other current assets and Other long-term assets captions in the
accompanying Consolidated Balance Sheets and records the amounts at fair market value, which is determined using
quoted market prices at the end of the reporting period. (Refer to “Note E – Fair Value Measurements” and
“Note F – Marketable Debt Securities” for a discussion of marketable debt securities.)
Property and Equipment: Property and equipment is stated at cost. Property consists of land, which includes
finance leases – real estate, buildings and improvements, equipment, which includes finance leases – vehicles, and
construction in progress. Depreciation and amortization are computed principally using the straight-line method over
the following estimated useful lives: buildings, 40 to 50 years; building improvements, 5 to 15 years; equipment,
including software, 3 to 10 years; and leasehold improvements, over the shorter of the asset’s estimated useful life or
the remaining lease term, which includes any reasonably assured renewal periods. Depreciation and amortization
include amortization of assets under finance leases.
53
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Impairment of Long-Lived Assets: The Company evaluates the recoverability of its long-lived assets whenever
events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. When such
an event occurs, the Company compares the sum of the undiscounted expected future cash flows of the asset (asset
group) with the carrying amounts of the asset. If the undiscounted expected future cash flows are less than the
carrying value of the assets, the Company measures the amount of impairment loss as the amount by which the
carrying amount of the assets exceeds the fair value of the assets.
Goodwill: The cost in excess of fair value of identifiable net assets of businesses acquired is recorded as goodwill.
Goodwill has not been amortized since fiscal 2001, but an analysis is performed at least annually to compare the fair
value of the reporting unit to the carrying amount to determine if any impairment exists. The Company had
approximately $302.6 million of goodwill, which is allocated to the Auto Parts Stores operating segment at
August 26, 2023 and August 27, 2022. The Company performs its annual impairment assessment in the fourth
quarter of each fiscal year, unless circumstances dictate more frequent assessments. In the fourth quarter of fiscal
2023 and 2022, the Company concluded its remaining goodwill was not impaired.
Derivative Instruments and Hedging Activities: AutoZone is exposed to market risk from, among other things,
changes in interest rates, foreign exchange rates and fuel prices. From time to time, the Company uses various
derivative instruments to reduce such risks. To date, based upon the Company’s current level of foreign operations,
no derivative instruments have been utilized to reduce foreign exchange rate risk. All of the Company’s hedging
activities are governed by guidelines that are authorized by AutoZone’s Board of Directors (the “Board”). Further,
the Company does not buy or sell derivative instruments for trading purposes.
AutoZone’s financial market risk results primarily from changes in interest rates. At times, AutoZone reduces its
exposure to changes in interest rates by entering into various interest rate hedge instruments such as interest rate
swap contracts, treasury lock agreements and forward-starting interest rate swaps. All of the Company’s interest rate
hedge instruments are designated as cash flow hedges. (Refer to “Note H – Derivative Financial Instruments” for
additional disclosures regarding the Company’s derivative instruments and hedging activities.) Cash flows related to
these instruments designated as qualifying hedges are reflected in the accompanying Consolidated Statements of
Cash Flows in the same categories as the cash flows from the items being hedged. The resulting gain or loss from
such settlement is deferred to Accumulated Other Comprehensive Loss and reclassified to interest expense over the
term of the underlying debt. This reclassification of the deferred gains and losses impacts the interest expense
recognized on the underlying debt that was hedged.
Foreign Currency: The Company accounts for its foreign operations using the local market currency and converts
its financial statements from these currencies to U.S. dollars. The cumulative loss on currency translation is recorded
as a component of Accumulated Other Comprehensive Loss (Refer to “Note G – Accumulated Other
Comprehensive Loss” for additional information regarding the Company’s Accumulated Other Comprehensive
Loss.)
Self-Insurance Reserves: The Company retains a significant portion of the risks associated with workers’
compensation, general liability, product liability, property and vehicle insurance. The Company obtains third party
insurance to limit the exposure related to certain of these risks. The reserve for the Company’s liability associated
with these risks totaled $268.8 million and $264.3 million at August 26, 2023 and August 27, 2022, respectively.
The assumptions made by management in estimating its self-insurance reserves include consideration of historical
cost experience, judgments about the present and expected levels of cost per claim and retention levels. The
Company utilizes various methods, including analyses of historical trends and use of a specialist, to estimate the
costs to settle reported claims and claims incurred but not yet reported. The actuarial methods develop estimates of
the future ultimate claim costs based on claims incurred as of the balance sheet date. When estimating these
liabilities, the Company considers factors, such as the severity, duration and frequency of claims, legal costs
associated with claims, healthcare trends and projected inflation of related factors.
The Company’s liabilities for workers’ compensation, general and product liability, property and vehicle claims do
not have scheduled maturities; however, the timing of future payments is predictable based on historical patterns and
54
is relied upon in determining the current portion of these liabilities. Accordingly, the Company reflects the net
present value of the obligations it determines to be long-term using the risk-free interest rate as of the balance sheet
date.
Leases: The Company leases certain retail stores, distribution centers and vehicles under various non-callable
leases. Leases are recorded on their commencement date, which is the date the Company takes possession or control
of the underlying asset. Most of the Company’s leases are operating leases; however, certain land and vehicles are
leased under finance leases. The leases have varying terms and expire at various dates through 2046. Retail leases
typically have initial terms between one and 20 years, with one to six optional renewal periods of one to five years
each. Finance leases for vehicles typically have original terms between one and five years, and finance leases for
real estate typically have terms of 20 or more years. The Company subleases certain properties that are not used in
its operations. Sublease income was not significant for the periods presented.
Lease-related assets and liabilities are recognized for all leases with an initial term of 12 months or greater. The
exercise of lease renewal options is at the Company’s sole discretion. The Company evaluates renewal options at
commencement and on an ongoing basis and includes options that are reasonably certain to exercise in its expected
lease terms when classifying leases and measuring lease liabilities.
Certain lease agreements require variable payments based upon actual costs of common-area maintenance, real
estate taxes and insurance. Lease components are not separated from the non-lease components (typically fixed
common-area maintenance costs at its retail store locations) for all classes of leased assets, except vehicles which
contain variable non-lease components that are expensed as incurred. The Company uses the stated borrowing rate
in determining the present value of the lease payments over the lease term for vehicles. The Company’s incremental
borrowing rate is used to determine the present value of the lease payments over the lease term for substantially all
the operating and financing leases for retail stores, distribution centers and other real estate, as these leases typically
do not have a stated borrowing rate. For operating leases that commenced prior to the date of adoption of ASU
2016-02 – Leases (Topic 842), the Company used the incremental borrowing rate that corresponded to the remaining
lease term as of the date of adoption. The Company’s lease agreements do not contain any material residual value
guarantees or material restrictive covenants. (Refer to “Note M – Leases” for additional disclosures regarding the
Company’s leases.)
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Financial Instruments: The Company has financial instruments, including cash and cash equivalents, accounts
receivable, other current assets and accounts payable. The carrying amounts of these financial instruments
approximate fair value because of their short maturities. (Refer to “Note I – Financing” for a discussion of the
carrying values and fair values of the Company’s debt, “Note F – Marketable Debt Securities” for additional
disclosures related to marketable debt securities and “Note H – Derivative Financial Instruments” for additional
information regarding derivatives.)
Income Taxes: The Company accounts for income taxes under the liability method. Deferred tax assets and
liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and
are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.
Our effective tax rate is based on income by tax jurisdiction, statutory rates and tax saving initiatives available to the
Company in the various jurisdictions in which we operate.
The Company recognizes liabilities for uncertain income tax positions based on a two-step process. The first step is
to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is
more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation
processes, if any. The second step requires the Company to estimate and measure the tax benefit as the largest
amount that is more than 50% likely to be realized upon ultimate settlement. The Company reevaluates these
uncertain tax positions on a quarterly basis or when new information becomes available to management. These
reevaluations are based on factors including, but not limited to, changes in facts or circumstances, changes in tax
law, successfully settled issues under audit, expirations due to statutes and new audit activity. Such a change in
recognition or measurement could result in the recognition of a tax benefit or an increase to the tax accrual.
55
The Company classifies interest related to income tax liabilities, and if applicable, penalties, as a component of
Income tax expense. The income tax liabilities and accrued interest and penalties are expected to be payable within
one year of the balance sheet date are presented within the Accrued expenses and other caption in the accompanying
Consolidated Balance Sheets. The remaining portion of the income tax liabilities and accrued interest and penalties
are presented within the Other long-term liabilities caption in the accompanying Consolidated Balance Sheets
because payment of cash is not anticipated within one year of the balance sheet date. (Refer to “Note D – Income
Taxes” for additional disclosures regarding the Company’s income taxes.)
Sales and Use Taxes: Governmental authorities assess sales and use taxes on the sale of goods and services. The
Company excludes taxes collected from customers in its reported sales results; such amounts are included within the
Accrued expenses and other caption until remitted to the taxing authorities.
Dividends: The Company currently does not pay a dividend on its common stock. The ability to pay dividends is
subject to limitations imposed by Nevada law. Under Nevada law, any future payment of dividends would be
dependent upon the Company’s financial condition, capital requirements, earnings and cash flow.
Revenue Recognition: The Company’s primary source of revenue is derived from the sale of automotive
aftermarket parts and merchandise to its retail and commercial customers. Revenue is recognized when performance
obligations under the terms of a contract with a customer are satisfied, in an amount representing the consideration
the Company expects to receive in exchange for selling products to its customers. Shipping and handling activities
are considered activities to fulfill the order, and therefore are not evaluated as a separate performance obligation.
Sales are recorded net of variable consideration in the period incurred, including discounts, sales incentives and
rebates, sales taxes and estimated sales returns. Sales returns are based on historical return rates. The Company may
enter into contracts that include multiple combinations of products and services, which are accounted for as separate
performance obligations and do not require significant judgment.
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The Company’s performance obligations are typically satisfied when the customer takes possession of the
merchandise. Revenue from retail customers is recognized when the customer leaves our store with the purchased
products, typically at the point of sale or for E-commerce orders when the product is shipped. Revenue from
commercial customers is recognized upon delivery, typically same-day. Payment from retail customers is at the
point of sale and payment terms for commercial customers are based on the Company’s pre-established credit
requirements and generally range from 1 to 30 days. Discounts, sales incentives and rebates are treated as separate
performance obligations, and revenue allocated to these performance obligations is recognized as the obligations to
the customer are satisfied. Additionally, the Company estimates and records gift card breakage as redemptions
occur. The Company offers diagnostic, repair, collision and shop management information software used in the
automotive repair industry through ALLDATA. This revenue is recognized as services are provided. Revenue from
these services is recognized over the life of the contract.
A portion of the Company’s transactions include the sale of auto parts that contain a core component. The core
component represents the recyclable portion of the auto part. Customers are not charged for the core component of
the new part if a used core is returned at the point of sale of the new part; otherwise the Company charges customers
a specified amount for the core component. The Company refunds that same amount in the event the customer
returns a used core to the store at a later date. The Company does not recognize sales or cost of sales for the core
component of these transactions when a used part is returned or expected to be returned from the customer.
There were no material contract assets, liabilities or deferred costs recorded on the Consolidated Balance Sheet as of
August 26, 2023 and August 27, 2022. Revenue related to unfulfilled performance obligations as of August 26, 2023
and August 27, 2022 is not significant. (Refer to “Note P – Segment Reporting” for additional information related to
revenue recognized during the period.)
Vendor Allowances and Advertising Costs: The Company receives various payments and allowances from its
vendors through a variety of programs and arrangements. Monies received from vendors include rebates, allowances
and promotional funds. The amounts to be received are subject to the terms of the vendor agreements, which
generally do not state an expiration date, but are subject to ongoing negotiations that may be impacted in the future
56
based on changes in market conditions, vendor marketing strategies and changes in the profitability or sell-through
of the related merchandise.
Rebates and other miscellaneous incentives are earned based on purchases or product sales and are accrued ratably
over the purchase or sale of the related product. These monies are generally recorded as a reduction of merchandise
inventories and are recognized as a reduction to cost of sales as the related inventories are sold.
For arrangements that provide for reimbursement of specific, incremental, identifiable costs incurred by the
Company in selling the vendors’ products, the vendor funds are recorded as a reduction to Operating, selling,
general and administrative expenses in the period in which the specific costs were incurred.
The Company expenses advertising costs as incurred. Advertising expense, net of vendor promotional funds, was
$99.5 million in fiscal 2023, $97.1 million in fiscal 2022 and $85.9 million in fiscal 2021. Vendor promotional
funds, which reduced advertising expense, amounted to $62.4 million in fiscal 2023, $52.1 million in fiscal 2022
and $53.2 million in fiscal 2021.
Cost of Sales and Operating, Selling, General and Administrative Expenses: The following illustrates the
primary costs classified in each major expense category:
Cost of Sales
• Total cost of merchandise sold, including:
o Freight expenses associated with moving merchandise inventories from the Company’s vendors to
the distribution centers;
o Vendor allowances that are not reimbursements for specific, incremental and identifiable costs
• Costs associated with operating the Company’s supply chain, including payroll and benefits, warehouse
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occupancy, transportation and depreciation; and
Inventory shrinkage
•
Operating, Selling, General and Administrative Expenses
• Payroll and benefits for store, field leadership and store support employees;
• Occupancy of store and store support facilities;
• Depreciation and amortization related to store and store support assets;
• Transportation associated with field leadership, commercial sales force and deliveries from stores;
• Advertising;
• Self-insurance; and
• Other administrative costs, such as credit card transaction fees, legal costs, supplies and travel and lodging
Warranty Costs: The Company or the vendors supplying its products provides the Company’s customers limited
warranties on certain products that range from 30 days to lifetime. In most cases, the Company’s vendors are
primarily responsible for warranty claims. Warranty costs relating to merchandise sold under warranty not covered
by vendors are estimated and recorded as warranty obligations at the time of sale based on each product’s historical
return rate. These obligations, which are often funded by vendor allowances, are recorded within the Accrued
expenses and other caption in the Consolidated Balance Sheets. For vendor allowances in excess of the related
estimated warranty expense for the vendor’s products, the excess is recorded in inventory and recognized as a
reduction to cost of sales as the related inventory is sold.
Pre-opening Expenses: Pre-opening expenses, which consist primarily of payroll and occupancy costs, are
expensed as incurred.
Earnings per Share: Basic earnings per share is based on the weighted average outstanding common shares.
Diluted earnings per share is based on the weighted average outstanding common shares adjusted for the effect of
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common stock equivalents, which are primarily stock options. There were 140,071, 142,887 and 171,652 stock
options excluded for the year ended August 26, 2023, August 27, 2022 and August 28, 2021, respectively, because
they would have been anti-dilutive.
Share-Based Payments: Share-based payments include stock option grants, restricted stock, restricted stock units,
stock appreciation rights and other transactions under the Company’s equity incentive plans. The Company
recognizes compensation expense for its share-based payments over the requisite service period based on the fair
value of the awards. The Company uses the Black-Scholes option pricing model to calculate the fair value of stock
options. The value of restricted stock is based on the stock price of the award on the grant date. (Refer to “Note B –
Share-Based Payments” for further discussion.)
Risk and Uncertainties: In fiscal 2023, one class of similar products accounted for approximately 14 percent of the
Company’s total revenues. No other class of similar products accounted for 10 percent or more of total revenues,
and no individual vendor provided more than 10 percent of total purchases.
Recently Adopted Accounting Pronouncements
In November 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update
(“ASU”) 2021-10, Government Assistance (Topic 832) – Disclosures by Business Entities about Government
Assistance, which requires annual disclosures for entities receiving governmental assistance to provide more
transparency. This ASU is effective for fiscal years beginning after December 15, 2021. The Company adopted this
ASU with its first quarter ended November 19, 2022 on a prospective basis. The adoption of this guidance did not
have a material impact on the Company's consolidated financial statements and related disclosures.
Recently Issued Accounting Pronouncements:
In September 2022, the FASB issued ASU 2022-04, Liabilities – Supplier Finance Programs (Subtopic 405-50).
This ASU requires buyers in a supplier finance program to disclose sufficient qualitative and quantitative
information about the program to allow a reader of the financial statements to understand the program’s nature,
activity during the period, changes from period to period and the program’s potential magnitude. This ASU is
effective for all companies for fiscal years beginning after December 15, 2022, including interim periods within
those years, and requires retrospective adoption. Early adoption is permitted. The Company expects to adopt this
standard beginning with its first quarter ending November 18, 2023. The Company is currently evaluating these new
disclosure requirements and does not expect the adoption to have a material impact.
Note B – Share-Based Payments
Overview of Share-Based Payment Plans
The Company has several active and inactive equity incentive plans under which the Company has been authorized
to grant share-based awards to key employees and non-employee directors. Awards under these plans have been in
the form of restricted stock, restricted stock units, stock options, stock appreciation rights and other awards as
defined by the plans. The Company also has an Employee Stock Purchase Plan that allows employees to purchase
Company shares at a discount subject to certain limitations. The Company also has an Executive Stock Purchase
Plan which permits all eligible executives to purchase AutoZone’s common stock using up to twenty-five percent of
his or her annual salary and bonus.
Amended and Restated AutoZone, Inc. 2011 Equity Incentive Award Plan
On December 15, 2010, the Company’s stockholders approved the 2011 Equity Incentive Award Plan (the “2011
Plan”), allowing the Company to provide equity-based compensation to non-employee directors and employees for
their service to AutoZone or its subsidiaries or affiliates. Prior to the Company’s adoption of the 2011 Plan, equity-
based compensation was provided to employees under the 2006 Stock Option Plan and to non-employee directors
under the 2003 Director Compensation Plan (the “2003 Comp Plan”).
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During fiscal 2016, the Company’s stockholders approved the Amended and Restated AutoZone, Inc. 2011 Equity
Incentive Award Plan (the “Amended 2011 Equity Plan”). The Amended 2011 Equity Plan imposes a maximum
limit on the compensation, measured as the sum of any cash compensation and the aggregate grant date fair value of
awards granted under the Amended 2011 Equity Plan, which may be paid to non-employee directors for such
service during any calendar year. The Amended 2011 Equity Plan also applies a ten-year term on the Amended 2011
Equity Plan through December 16, 2025 and extends the Company’s ability to grant incentive stock options under
the Amended 2011 Equity Plan through October 7, 2025.
AutoZone, Inc. 2020 Omnibus Incentive Award Plan
On December 16, 2020, the Company’s stockholders approved the AutoZone, Inc. 2020 Omnibus Incentive Award
Plan (the “2020 Omnibus Plan”), which serves as the successor to the Amended 2011 Equity Plan. The 2020
Omnibus Plan provides equity-based compensation to our non-employee directors and employees for their service to
AutoZone or our subsidiaries or affiliates. Under the 2020 Omnibus Plan, participants may receive equity-based
compensation in the form of stock options, stock appreciation rights, restricted stock, restricted stock units, dividend
equivalents, deferred stock, stock payments, performance based awards, cash based awards and other incentive
awards structured by the Compensation Committee and the Board within parameters set forth in the 2020 Omnibus
Plan.
AutoZone, Inc. Director Compensation Program
Under the Company’s Director Compensation Program (the “Program”), non-employee directors will receive their
compensation in awards of restricted stock units under the 2020 Omnibus Plan, with an option for a certain portion
of a director’s compensation to be paid in cash at the non-employee director’s election. Under the Program,
restricted stock units are granted on January 1 of each year (the “Grant Date”). The number of restricted stock units
is determined by dividing the amount of the annual retainer by the fair market value of the shares of common stock
as of the Grant Date. The restricted stock units are fully vested on the date of grant and are paid in shares of the
Company’s common stock on the first or the fifth anniversary of the Grant Date (at the Director’s election) or if
sooner, the date the non-employee director ceases to be a member of the Board (“Separation from Service”). The
cash portion of the award, if elected, is paid ratably over each calendar quarter.
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Total share-based compensation expense (a component of Operating, selling, general and administrative expenses)
was $93.1 million, $70.6 million and $56.1 million for fiscal 2023, 2022 and 2021, respectively.
General terms and methods of valuation for the Company’s share-based awards are as follows:
Stock Options
The Company grants options to purchase common stock to certain of its employees under the 2020 Omnibus Plan at
prices equal to the market value of the stock on the date of grant. Options have a term of ten years from grant date.
Employee options generally vest in equal annual installments on the first, second, third and fourth anniversaries of
the grant date and generally have 90 days after the service relationship ends, or one year after death, to exercise all
vested options, unless retirement provisions are met. The fair value of each option grant is separately estimated for
each vesting date. The fair value of each option is amortized into compensation expense on a straight-line basis
between the grant date for the award and each vesting date.
The Company has estimated the fair value of all stock option awards as of the date of the grant by applying the
Black-Scholes-Merton multiple-option pricing valuation model. The following table presents the weighted average
59
for key assumptions used in determining the fair value of options granted and the related share-based compensation
expense:
Year Ended
August 26, August 27, August 28,
2023
2022
2021
Expected price volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk-free interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted average expected lives (in years) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeiture rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividend yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
29 %
3.8 %
5.5
10 %
0 %
28 %
1.1 %
5.6
10 %
0 %
28 %
0.4 %
5.6
10 %
0 %
The following methodologies were applied in developing the assumptions used in determining the fair value of
options granted:
Expected price volatility – This is a measure of the amount by which a price has fluctuated or is expected to
fluctuate. The Company uses actual historical changes in the market value of its stock to calculate the
volatility assumption as it is management’s belief that this is the best indicator of future volatility. The
Company calculates daily market value changes from the date of grant over a past period representative of the
expected life of the options to determine volatility. An increase in the expected volatility will increase
compensation expense.
Risk-free interest rate – This is the U.S. Treasury rate for the week of the grant having a term equal to the
expected life of the option. An increase in the risk-free interest rate will increase compensation expense.
Expected lives – This is the period of time over which the options granted are expected to remain outstanding
and is based on historical experience. Separate groups of employees that have similar historical exercise
behavior are considered separately for valuation purposes. Options granted have a maximum term of ten years.
An increase in the expected life will increase compensation expense.
Forfeiture rate – This is the estimated percentage of options granted that are expected to be forfeited or
canceled before becoming fully vested. This estimate is based on historical experience at the time of valuation
and reduces expense ratably over the vesting period. An increase in the forfeiture rate will decrease
compensation expense. This estimate is evaluated periodically based on the extent to which actual forfeitures
differ, or are expected to differ, from the previous estimate.
Dividend yield – The Company has not made any dividend payments nor does it have plans to pay dividends
in the foreseeable future. An increase in the dividend yield will decrease compensation expense.
The weighted average grant date fair value per share of options granted was $764.68, $463.45 and $304.31 during
fiscal 2023, 2022 and 2021, respectively. The intrinsic value of options exercised was $424.6 million, $282.7
million and $280.1 million in fiscal 2023, 2022 and 2021, respectively. The total fair value of options vested was
$47.9 million, $39.3 million and $44.7 million in fiscal 2023, 2022 and 2021, respectively.
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The Company generally issues new shares when options are exercised. The following table summarizes information
about stock option activity for the year ended August 26, 2023:
Weighted
Average
Remaining
Contractual
Term
(in years)
Weighted
Average
Exercise Price
Aggregate
Intrinsic
Value
(in thousands)
Number
of Shares
Outstanding – August 27, 2022 . . . . . . . . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited/Cancelled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Outstanding – August 26, 2023 . . . . . . . . . . . . . . . . . . . . . . . . .
1,139,100
161,510
(242,920)
(30,102)
1,027,588
$
941.28
2,218.35
708.46
1,504.17
1,180.39
5.97 $ 1,308,493
Exercisable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected to vest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Available for future grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
651,032
359,109
862,178
862.98
1,719.64
4.71
8.13
1,035,417
263,838
As of August 26, 2023, total unrecognized share-based compensation expense related to stock options, net of
estimated forfeitures, was approximately $90.1 million, before income taxes, and will be recognized over an
estimated weighted average period of 2.9 years.
Restricted Stock Units
Restricted stock unit awards are valued at the market price of a share of the Company’s stock on the date of grant
and vest ratably on an annual basis over a four-year service period and are payable in shares of common stock on the
vesting date. Compensation expense for grants of employee restricted stock units is recognized on a straight-line
basis over the four-year service period, less estimated forfeitures, which are consistent with stock option forfeiture
assumptions.
As of August 26, 2023, total unrecognized stock-based compensation expense related to nonvested restricted stock
unit awards, net of estimated forfeitures, was approximately $8.2 million, before income taxes, which we expect to
recognize over an estimated weighted average period of 2.4 years.
Transactions related to restricted stock units for the fiscal year ended August 26, 2023 are as follows:
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Weighted-
Number
of Shares
Average Grant
Date Fair Value
Nonvested at August 27, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nonvested at August 26, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12,731 $
3,584
(6,643)
(1,539)
8,133 $
1,223.61
2,267.41
1,276.36
1,581.25
1,572.87
Stock Appreciation Rights
At August 26, 2023 and August 27, 2022, the Company had $11.8 million and $10.4 million, respectively of accrued
compensation expense. There were 4,822 outstanding units issued under the 2003 Comp Plan and prior plans. As
directors retire, this balance will be reduced. No additional shares of stock or units will be issued in future years
under the 2003 Comp Plan or prior plans.
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Employee Stock Purchase Plan and Executive Stock Purchase Plan
The Company recognized $2.5 million in compensation expense related to the discount on the selling of shares to
employees and executives under the various share purchase plans in fiscal 2023, $3.2 million in fiscal 2022 and
$2.5 million in fiscal 2021. Under the Employee Plan, 5,183, 6,238 and 8,479 shares were sold to employees in
fiscal 2023, 2022 and 2021, respectively. The Company repurchased 4,886 and 7,611 shares in fiscal 2022 and 2021,
respectively, all at market value from employees electing to sell their stock. Purchases under the Executive Plan
were 689, 709 and 997 shares in fiscal 2023, 2022 and 2021, respectively. Issuances of shares under the Employee
Plan are netted against repurchases and such repurchases are not included in share repurchases disclosed in
“Note K – Stock Repurchase Program.” At August 26, 2023, 122,341 shares of common stock were reserved for
future issuance under the Employee Plan, and 232,966 shares of common stock were reserved for future issuance
under the Executive Plan.
Note C – Accrued Expenses and Other
Accrued expenses and other consisted of the following:
(in thousands)
August 26,
2023
August 27,
2022
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Accrued compensation, related payroll taxes and benefits . . . . . . . . . . . . . . . . . . . . . .
Property, sales and other taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Medical and casualty insurance claims (current portion) . . . . . . . . . . . . . . . . . . . . . . .
Finance lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued gift cards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued sales and warranty returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
343,379 $
165,731
127,624
86,916
59,254
54,493
43,355
120,089
414,892
153,305
115,201
92,877
52,237
50,696
35,696
93,797
$ 1,000,841 $ 1,008,701
The Company retains a significant portion of the insurance risks associated with workers’ compensation, general,
product liability, property and vehicle insurance. A portion of these self-insured losses is managed through a wholly
owned insurance captive. The Company maintains certain levels for stop-loss coverage for each self-insured plan in
order to limit its liability for large claims. The retained limits per claim type are $2.0 million for workers’
compensation, $7.5 million for auto liability, $21.5 million for property and $2.0 million for general and product
liability.
Note D – Income Taxes
The components of income from continuing operations before income taxes are as follows:
(in thousands)
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
International . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
August 26,
2023
Year Ended
August 27,
2022
August 28,
2021
$ 2,621,714
545,900
$ 3,167,614
$ 2,429,262 $ 2,436,548
312,642
$ 3,079,091 $ 2,749,190
649,829
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The provision for income tax expense consisted of the following:
(in thousands)
Current:
Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
International . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Year Ended
August 26, August 27, August 28,
2023
2022
2021
$ 423,301 $ 293,022 $ 438,686
79,271
95,351
613,308
48,490
122,381
463,893
86,687
154,907
664,895
Deferred:
Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
International . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20,266
(21,847)
(24,126)
(25,707)
(21,366)
160,749
(1,707)
34,564
(11,359)
(9,719)
(34,432)
185,594
$ 639,188 $ 649,487 $ 578,876
A reconciliation of the provision for income taxes to the amount computed by applying the federal statutory tax rate
to income before income taxes is as follows:
(in thousands)
Year Ended
August 26, August 27, August 28,
2023
2022
2021
Federal tax at statutory U.S. income tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . .
State income taxes, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Share-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
US Tax on Non-U.S. Income (GILTI and Subpart F). . . . . . . . . . . . . . . . . . . .
Non-U.S. Permanent Differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign Tax Credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effective tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
21.0 %
1.6 %
(2.3)%
3.3 %
(1.4)%
(2.3)%
0.3 %
20.2 %
21.0 %
2.1 %
(1.6)%
3.1 %
(1.5)%
(1.9)%
(0.1)%
21.1 %
21.0 %
2.2 %
(1.7)%
2.8 %
(0.4)%
(1.7)%
(1.1)%
21.1 %
For the year ended August 26, 2023, August 27, 2022, and August 28, 2021, the Company recognized excess tax
benefits from stock option exercises of $92.2 million, $63.2 million, and $56.4 million, respectively.
The Company is subject to a tax on global intangible low-taxed income (“GILTI”) which is imposed on foreign
earnings. The Company has made the election to record this tax as a period cost, thus has not adjusted the deferred
tax assets or liabilities of its foreign subsidiaries for this tax.
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Significant components of the Company's deferred tax assets and liabilities were as follows:
(in thousands)
Deferred tax assets:
August 26,
August 27,
2023
2022
Net operating loss and credit carryforwards. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Valuation allowances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
45,081 $
82,318
698,728
90,897
917,024
(24,940)
892,084
33,924
60,561
692,730
79,850
867,065
(27,790)
839,275
Deferred tax liabilities:
Property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating lease assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(194,686)
(451,360)
(652,652)
(43,662)
(1,342,360)
(197,482)
(448,273)
(650,145)
(25,211)
(1,321,111)
Net deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ (450,276) $
(481,836)
For the year ended August 26, 2023, the Company asserts indefinite reinvestment for basis differences and
accumulated earnings through fiscal 2020 with respect to its foreign subsidiaries. The Company does not assert
permanent reinvestment of fiscal 2021 through current year earnings with respect to its Mexican subsidiaries while
maintaining its assertion of indefinite reinvestment of fiscal 2021 through current year earnings of other foreign
subsidiaries. Where necessary, taxes resulting from foreign distributions of current and accumulated earnings (e.g.,
withholding taxes) have been considered in the Company’s provision for income taxes.
As of August 26, 2023, we have not recorded incremental income taxes for outside basis differences of $383.7
million in our investments in foreign subsidiaries, as these amounts are indefinitely reinvested in foreign operations.
Determining the amount of unrecognized deferred tax liability related to the outside basis differences in these
entities is not practicable.
At August 26, 2023 and August 27, 2022, the Company had net operating loss (“NOL”) carryforwards totaling
approximately $314.6 million ($37.2 million tax effected) and $241.2 million ($28.9 million tax effected),
respectively. Certain NOLs have no expiration date and others will expire, if not utilized, in various years from
fiscal 2024 through 2043. At August 26, 2023 and August 27, 2022, the Company had deferred tax assets for income
tax credit carryforwards of $7.9 million and $5.0 million, respectively. Income tax credit carryforwards will expire,
if not utilized, in various years from fiscal 2024 through 2033.
At August 26, 2023 and August 27, 2022, the Company had a valuation allowance of $24.9 million and $27.8
million, respectively, on deferred tax assets associated with NOL and tax credit carryforwards for which
management has determined it is more likely than not that the deferred tax asset will not be realized. Management
believes it is more likely than not that the remaining deferred tax assets will be fully realized.
64
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
(in thousands)
August 26, August 27,
2023
2022
Beginning balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 49,316 $ 39,797
17,488
Additions based on tax positions related to the current year . . . . . . . . . . . . . . . . . . . . . . .
3,008
Additions for tax positions of prior years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(6,806)
Reductions for tax positions of prior years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1,539)
Reductions due to settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reductions due to statute of limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2,632)
Ending balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 49,487 $ 49,316
9,416
8,012
(5,336)
(6,800)
(5,121)
Included in the August 26, 2023 and the August 27, 2022 balances are $37.0 million and $32.4 million, respectively,
of unrecognized tax benefits that, if recognized, would reduce the Company’s effective tax rate. The balances above
also include amounts of $8.6 million and $11.5 million for August 26, 2023 and August 27, 2022, respectively, that
are accounted for as reductions to deferred tax assets for NOL carryforwards and tax credit carryforwards. It is
anticipated that in the event the associated uncertain tax positions are disallowed, the NOL carryforwards and tax
credit carryforwards would be utilized to settle the liability.
The Company accrues interest on unrecognized tax benefits as a component of income tax expense. Penalties, if
incurred, would be recognized as a component of income tax expense. The Company had $10.1 million and $5.7
million accrued for the payment of interest and penalties associated with unrecognized tax benefits at August 26,
2023 and August 27, 2022, respectively.
The Company files U.S. federal, U.S. state and local, and international income tax returns. With few exceptions, the
Company is no longer subject to U.S. federal, U.S. state and local, or Non-U.S. examinations by tax authorities for
fiscal year 2019 and prior. The Company is typically engaged in various tax examinations at any given time by U.S.
federal, U.S. state and local, and Non-U.S. taxing jurisdictions. As of August 26, 2023, the Company estimates that
the amount of unrecognized tax benefits could be reduced by approximately $6.2 million over the next twelve
months as a result of tax audit settlements. While the Company believes that it is adequately accrued for possible
audit adjustments, the final resolution of these examinations cannot be determined at this time and could result in
final settlements that differ from current estimates.
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Note E – Fair Value Measurements
The Company defines fair value as the price received to transfer an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. In accordance with ASC 820, Fair Value
Measurements and Disclosures, the Company uses the fair value hierarchy, which prioritizes the inputs used to
measure fair value. The hierarchy, as defined below, gives the highest priority to unadjusted quoted prices in active
markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three levels of the fair
value hierarchy are set forth below:
Level 1 inputs — unadjusted quoted prices in active markets for identical assets or liabilities that the Company
can access at the measurement date.
Level 2 inputs — inputs other than quoted market prices included within Level 1 that are observable, either
directly or indirectly, for the asset or liability.
Level 3 inputs — unobservable inputs for the asset or liability, which are based on the Company’s own
assumptions as there is little, if any, observable activity in identical assets or liabilities.
65
Marketable Debt Securities Measured at Fair Value on a Recurring Basis
The Company’s marketable debt securities measured at fair value on a recurring basis were as follows:
(in thousands)
Level 1
Level 2
Level 3
Fair Value
August 26, 2023
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . .
Other long-term assets . . . . . . . . . . . . . . . . . . . . . . .
(in thousands)
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . .
Other long-term assets . . . . . . . . . . . . . . . . . . . . . . .
$
$
$
$
35,349
71,028
106,377
Level 1
49,659
57,301
106,960
$
$
$
$
4,290
10,846
15,136
$
$
— $
—
— $
39,639
81,874
121,513
August 27, 2022
Level 2
Level 3
Fair Value
109
5,476
5,585
$
$
— $
—
— $
49,768
62,777
112,545
At August 26, 2023, the fair value measurement amounts for assets and liabilities recorded in the accompanying
Consolidated Balance Sheet consisted of short-term marketable debt securities of $39.6 million, which are included
within Other current assets and long-term marketable debt securities of $81.9 million, which are included within
Other long-term assets. The Company’s marketable debt securities are typically valued at the closing price in the
principal active market as of the last business day of the quarter or through the use of other market inputs relating to
the debt securities, including benchmark yields and reported trades.
A discussion on how the Company’s cash flow hedges are valued is included in “Note H – Derivative Financial
Instruments,” while the fair values of the marketable debt securities by asset class are described in “Note F –
Marketable Debt Securities.”
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Non-Financial Assets Measured at Fair Value on a Non-Recurring Basis
Certain non-financial assets and liabilities are required to be measured at fair value on a non-recurring basis in
certain circumstances, including the event of impairment. These non-financial assets and liabilities could include
assets and liabilities acquired in an acquisition as well as goodwill, intangible assets and property, plant and
equipment that are determined to be impaired. At August 26, 2023, the Company did not have any other
significant non-financial assets or liabilities that had been measured at fair value on a non-recurring basis subsequent
to initial recognition.
Financial Instruments not Recognized at Fair Value
The Company has financial instruments, including cash and cash equivalents, accounts receivable, other current
assets and accounts payable. The carrying amounts of these financial instruments approximate fair value because of
their short maturities. A discussion of the carrying values and fair values of the Company’s debt is included in
“Note I – Financing.”
66
Note F – Marketable Debt Securities
The Company’s basis for determining the cost of a security sold is the “Specific Identification Model.” Unrealized
gains (losses) on marketable debt securities are recorded in Accumulated Other Comprehensive Loss. The
Company’s available-for-sale marketable debt securities consisted of the following:
(in thousands)
Corporate debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Government bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mortgage-backed securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asset-backed securities and other . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(in thousands)
Amortized Gross
Gross
August 26, 2023
Cost
Basis
Unrealized Unrealized
Gains
Losses
Fair
Value
$ 31,683
63,747
3,215
25,242
$ 123,887
$
$
17 $
(504) $ 31,196
—
62,307
—
3,002
25,008
—
17 $ (2,391) $ 121,513
(1,440)
(213)
(234)
Amortized Gross
Gross
August 27, 2022
Cost
Basis
Unrealized Unrealized
Gains
Losses
Fair
Value
Corporate debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Government bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mortgage-backed securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asset-backed securities and other . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 15,293
88,903
4,600
6,531
$ 115,327
$
$
(298) $ 14,996
1 $
86,940
—
4,357
—
—
6,252
1 $ (2,783) $ 112,545
(1,963)
(243)
(279)
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The marketable debt securities held at August 26, 2023, had effective maturities ranging from less than one year to
approximately three years. At August 26, 2023, the Company held 75 securities that are in an unrealized loss
position of approximately $2.4 million. In evaluating whether a credit loss exists for the securities, the Company
considers factors such as the severity of the loss position, the credit worthiness of the investee, the term to maturity
and the intent and ability to hold the investments until maturity or until recovery of fair value. An allowance for
credit losses was deemed unnecessary given consideration of the factors above. The Company did not realize any
material gains or losses on its marketable debt securities during fiscal 2023, 2022 or 2021.
Included above in total marketable debt securities are $105.0 million and $91.1 million of marketable debt securities
transferred by the Company’s insurance captive to a trust account to secure its obligations to an insurance company
related to future workers’ compensation and casualty losses as of August 26, 2023 and August 27, 2022,
respectively.
67
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Note G – Accumulated Other Comprehensive Loss
Accumulated Other Comprehensive Loss includes certain adjustments to foreign currency translation adjustments,
certain activity for interest rate swaps and treasury rate locks that qualify as cash flow hedges and unrealized gains
(losses) on available-for-sale marketable debt securities. Changes in Accumulated Other Comprehensive Loss
consisted of the following:
(in thousands)
Net
Foreign
Currency(1)
Unrealized
Gain (Loss)
on Securities Derivatives
Total
Balance at August 28, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other Comprehensive Income (Loss) before reclassifications. . .
Amounts reclassified from Accumulated Other
Comprehensive Loss(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at August 27, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other Comprehensive Income before reclassifications . . . . . . . .
Amounts reclassified from Accumulated Other
Comprehensive Loss(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at August 26, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ (287,638)
7,448
$
589 $ (20,937) $ (307,986)
—
4,688
(2,760)
—
(280,190)
103,633
—
(2,171)
472
2,762
(18,175)
3,635
2,762
(300,536)
107,740
—
$ (176,557)
$
(152)
1,960
2,112
(1,851) $ (12,428) $ (190,836)
(1) Foreign currency is shown net of U.S. tax to account for foreign currency impacts of certain undistributed non-U.S.
subsidiaries earnings. Other foreign currency is not shown net of additional U.S. tax as other basis differences of non-U.S.
subsidiaries are intended to be permanently reinvested
(2) Amounts shown are net of taxes/tax benefits.
Note H – Derivative Financial Instruments
The Company periodically uses derivatives to hedge exposures to interest rates. The Company does not hold or issue
financial instruments for trading purposes. For transactions that meet the hedge accounting criteria, the Company
formally designates and documents the instrument as a hedge at inception and quarterly thereafter assesses the
hedges to ensure they are effective in offsetting changes in the cash flows of the underlying exposures. Derivatives
are recorded in the Company’s Consolidated Balance Sheet at fair value, determined using available market
information or other appropriate valuation methodologies. In accordance with ASC Topic 815, Derivatives and
Hedging, to the extent our derivatives are effective in offsetting the variability of the hedged cash flows, changes in
the derivatives’ fair value are not included in current earnings but are included in Accumulated Other
Comprehensive Loss, net of tax.
At August 26, 2023, the Company had $16.3 million (excluding the impact of deferred taxes) recorded in
Accumulated Other Comprehensive Loss related to net realized losses associated with terminated interest rate swap
and treasury rate lock derivatives which were designated as hedging instruments. Net losses are amortized into
Interest expense over the remaining life of the associated debt. During fiscal 2023, the Company reclassified $2.8
million of net losses from Accumulated Other Comprehensive Loss to Interest expense. During fiscal 2022, the
Company reclassified $3.6 million of net losses from Accumulated Other Comprehensive Loss to Interest expense.
The Company expects to reclassify $2.3 million of net losses from Accumulated Other Comprehensive Loss to
Interest expense over the next 12 months.
68
Note I – Financing
The Company’s debt consisted of the following:
(in thousands)
2.875% Senior Notes due January 2023, effective interest rate 3.21% . . . . . . . . . . . . . .
3.125% Senior Notes due July 2023, effective interest rate 3.26% . . . . . . . . . . . . . . . . .
3.125% Senior Notes due April 2024, effective interest rate 3.32% . . . . . . . . . . . . . . . .
3.250% Senior Notes due April 2025, effective interest rate 3.36% . . . . . . . . . . . . . . . .
3.625% Senior Notes due April 2025, effective interest rate 3.78% . . . . . . . . . . . . . . . .
3.125% Senior Notes due April 2026, effective interest rate 3.28% . . . . . . . . . . . . . . . .
5.050% Senior Notes due July 2026, effective interest rate 5.09% . . . . . . . . . . . . . . . . .
3.750% Senior Notes due June 2027, effective interest rate 3.83%. . . . . . . . . . . . . . . . .
4.500% Senior Notes due February 2028, effective interest rate 4.43% . . . . . . . . . . . . .
3.750% Senior Notes due April 2029, effective interest rate 3.86% . . . . . . . . . . . . . . . .
4.000% Senior Notes due April 2030, effective interest rate 4.09% . . . . . . . . . . . . . . . .
1.650% Senior Notes due January 2031, effective interest rate 2.19% . . . . . . . . . . . . . .
4.750% Senior Notes due August 2032, effective interest rate 4.76% . . . . . . . . . . . . . .
4.750% Senior Notes due February 2033, effective interest rate 4.70% . . . . . . . . . . . . .
5.200% Senior Notes due August 2033, effective interest rate 5.22% . . . . . . . . . . . . . .
Commercial paper, weighted average interest rate 5.43% and 2.43% at August 26,
2023 and August 27, 2022, respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total debt before discounts and debt issuance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Discounts and debt issuance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
August 26,
August 27,
2023
2022
$
— $
—
300,000
400,000
500,000
400,000
450,000
600,000
450,000
450,000
750,000
600,000
750,000
550,000
300,000
300,000
500,000
300,000
400,000
500,000
400,000
—
600,000
—
450,000
750,000
600,000
750,000
—
—
1,209,600
7,709,600
41,051
603,400
6,153,400
31,308
$ 7,668,549 $ 6,122,092
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On November 15, 2021, the Company amended and restated its existing revolving credit facility (the “Revolving
Credit Agreement”) pursuant to which the Company’s borrowing capacity was increased from $2.0 billion to
$2.25 billion and the maximum borrowing under the Revolving Credit Agreement may, at the Company’s option,
subject to lenders approval, be increased from $2.25 billion to $3.25 billion. On November 15, 2022, the Company
amended the Revolving Credit Agreement, extending the termination date by one year. As amended, the Revolving
Credit Agreement will terminate, and all amounts borrowed will be due and payable, on November 15, 2027, but the
Company may make one additional request to extend the termination date for an additional period of one year.
Revolving borrowings under the Revolving Credit Agreement may be base rate loans, SOFR loans, or a combination
of both, at AutoZone’s election. The Revolving Credit Agreement includes (i) a $75 million sublimit for swingline
loans, (ii) a $50 million individual issuer letter of credit sublimit and (iii) a $250 million aggregate sublimit for all
letters of credit.
Under the Company’s Revolving Credit Agreement, covenants include restrictions on liens, a maximum debt to
earnings ratio, a minimum fixed charge coverage ratio and a change of control provision that may require
acceleration of the repayment obligations under certain circumstances.
As of August 26, 2023, the Company had no outstanding borrowings and $1.8 million of outstanding letters of credit
under the Revolving Credit Agreement.
The Revolving Credit Agreement requires that the Company’s consolidated interest coverage ratio as of the last day
of each quarter shall be no less than 2.5:1. This ratio is defined as the ratio of (i) consolidated earnings before
interest, taxes and rents to (ii) consolidated interest expense plus consolidated rents. The Company’s consolidated
interest coverage ratio as of August 26, 2023 was 6.3:1.
As of August 26, 2023, the $1.2 billion of commercial paper borrowings and the $300 million 3.125% Senior Notes
due April 2024 were classified as long-term in the accompanying Consolidated Balance Sheets as the Company
currently has the ability and intent to refinance them on a long-term basis through available capacity in its Revolving
Credit Agreement. As of August 26, 2023, the Company had $2.2 billion of availability under its Revolving Credit
69
Agreement, without giving effect to commercial paper borrowings, which would allow the Company to replace
these short-term obligations with a long-term financing facility.
On July 17, 2023, the Company repaid its outstanding $500 million 3.125% Senior Notes due July 2023, which were
callable at par in April 2023.
On January 17, 2023, the Company repaid its outstanding $300 million 2.875% Senior Notes due January 2023,
which were callable at par in October 2022.
On January 18, 2022, the Company repaid the $500 million 3.700% Senior Notes due April 2022, which were
callable at par in January 2022.
On March 15, 2021, the Company repaid the $250 million 2.500% Senior Notes due April 2021, which were
callable at par in March 2021.
On July 21, 2023, the Company issued $450 million in 5.050% Senior Notes due July 2026 and $300 million
5.200% Senior Notes due August 2033 under the automatic shelf registration statement on Form S-3, filed with the
SEC on July 19, 2022 (File No. 333-266209) (the “2022 Shelf Registration Statement”). The 2022 Shelf
Registration Statement allows us to sell an indeterminate amount in debt securities to fund general corporate
purposes, including repaying, redeeming or repurchasing outstanding debt and for working capital, capital
expenditures, new store or distribution center openings, stock repurchases and acquisitions. Proceeds from the debt
issuance were used for general corporate purposes.
On January 27, 2023, the Company issued $450 million in 4.500% Senior Notes due February 2028 and $550
million in 4.750% Senior Notes due February 2033 under the 2022 Shelf Registration Statement. Proceeds from the
debt issuance were used to repay a portion of the Company’s outstanding commercial paper borrowings and for
other general corporate purposes.
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On August 1, 2022, the Company issued $750 million in 4.750% Senior Notes due August 2032 under the 2022
Shelf Registration Statement. Proceeds from the debt issuance were used to repay a portion of the outstanding
commercial paper borrowings and for other general corporate purposes.
The Senior Notes contain a provision that repayment of the Senior Notes may be accelerated if the Company
experiences a change in control (as defined in the agreements). The Company’s borrowings under its senior notes
contain minimal covenants, primarily restrictions on liens. All of the repayment obligations under its borrowing
arrangements may be accelerated and come due prior to the scheduled payment date if covenants are breached or an
event of default occurs. Interest for Senior Notes is paid on a semi-annual basis.
The Company also maintains a letter of credit facility that allows it to request the participating bank to issue letters
of credit on its behalf up to an aggregate amount of $25 million. The letter of credit facility is in addition to the
letters of credit that may be issued under the Revolving Credit Agreement and expired in June 2022. On May 16,
2022, the Company amended and restated the letter of credit facility to, among other things, extend the facility
through June 2025. As of August 26, 2023, the Company had $25 million in letters of credit outstanding under the
letter of credit facility.
In addition to the outstanding letters of credit issued under the committed facility discussed above, the Company had
$107.2 million in letters of credit outstanding as of August 26, 2023. These letters of credit have various maturity
dates and were issued on an uncommitted basis. As of August 26, 2023, the Company was in compliance with all
covenants related to its borrowing arrangements.
The fair value of the Company’s debt was estimated at $7.3 billion as of August 26, 2023, and $5.9 billion as of
August 27, 2022, based on the quoted market prices for the same or similar issues or on the current rates available to
the Company for debt of the same terms (Level 2). Such fair value is less than the carrying value of debt
by $406.6 million and $182.8 million at August 26, 2023 and August 27, 2022, respectively. This amount reflects
face amount, adjusted for any unamortized debt issuance costs and discounts.
70
All of the Company’s debt is unsecured. Scheduled maturities of debt are as follows:
(in thousands)
Scheduled
Maturities
2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,509,600
900,000
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
850,000
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
600,000
2027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
450,000
2028 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,400,000
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7,709,600
Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
41,051
Discount and debt issuance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7,668,549
Note J – Interest Expense
Net interest expense consisted of the following:
(in thousands)
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capitalized interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Note K – Stock Repurchase Program
August 26,
Year Ended
August 27,
August 28,
2023
2022
2021
$ 320,121
(12,054)
(1,695)
$ 306,372
$ 198,883 $ 202,326
(5,417)
(1,572)
$ 191,638 $ 195,337
(6,048)
(1,197)
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During 1998, the Company announced a program permitting the Company to repurchase a portion of its outstanding
shares not to exceed a dollar maximum established by the Company’s Board of Directors. The Board voted to
increase the repurchase authorization by $1.5 billion on October 5, 2021, $1.5 billion on December 15, 2021, $2.0
billion on March 22, 2022, $2.5 billion on October 4, 2022 and $2.0 billion on June 14, 2023 bringing the total
authorization to $35.7 billion. The Company has $1.8 billion remaining under the Board’s authorization to
repurchase its common stock.
The Company’s share repurchase activity consisted of the following:
(in thousands)
August 26,
Year Ended
August 27,
August 28,
2023
2022
2021
Amount(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 3,723,289
1,524
$ 4,359,991 $ 3,378,321
2,592
2,220
(1) Inclusive of excise tax of $23.7 million for the year ended August 26, 2023. The excise tax is assessed at one
percent of the fair market value of net stock repurchases after December 31, 2022.
71
During fiscal year 2023, the Company retired 2.1 million shares of treasury stock which had previously been
repurchased under the Company’s share repurchase program. The retirement increased Retained deficit by $4.2
billion and decreased Additional paid-in capital by $143.4 million. During the comparable prior year period, the
Company retired 2.5 million shares of treasury stock, which increased Retained deficit by $3.3 billion and decreased
Additional paid-in capital by $293.0 million.
Subsequent to August 26, 2023 and through October 16, 2023, the Company has repurchased 200,303 shares of
common stock at an aggregate cost of $512.4 million. Considering the cumulative repurchases through October 16,
2023, the Company has $1.3 billion remaining under the Board’s authorization to repurchase its common stock.
Note L – 401(k) Savings Plan
The Company has a 401(k) plan that covers all domestic employees who meet the plan’s participation requirements.
The plan features include Company matching contributions, immediate 100% vesting of Company contributions and
a savings option up to 25% of qualified earnings. The Company makes matching contributions, per pay period, up to
a specified percentage of employees’ contributions as approved by the Board. The Company made matching
contributions to employee accounts in connection with the 401(k) plan of $37.3 million in fiscal 2023, $37.9 million
in fiscal 2022 and $34.1 million in fiscal 2021.
Note M – Leases
Lease-related assets and liabilities recorded on the Consolidated Balance Sheets are as follows:
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(in thousands)
Assets:
Classification
August 26, 2023 August 27, 2022
Operating . . . . . . . . . . . . . . . . . . . . Operating lease right-of-use assets
Finance . . . . . . . . . . . . . . . . . . . . . Property and equipment
Total lease assets . . . . . . . . . . . . . . . .
Liabilities:
Current:
$ 2,998,097 $ 2,918,817
404,442
$ 3,417,344 $ 3,323,259
419,247
Operating . . . . . . . . . . . . . . . . . . . . Current portion of operating lease liabilities
Finance . . . . . . . . . . . . . . . . . . . . . Accrued expenses and other
$
257,256 $
86,916
243,407
92,877
Noncurrent:
Operating . . . . . . . . . . . . . . . . . . . . Operating lease liabilities, less current portion
Finance . . . . . . . . . . . . . . . . . . . . . Other long-term liabilities
Total lease liabilities . . . . . . . . . . . . .
2,917,046
200,702
2,837,973
217,428
$ 3,461,920 $ 3,391,685
Accumulated amortization related to finance lease assets was $132.5 million as of August 26, 2023 and $97.2
million as of August 27, 2022.
Lease costs for finance and operating leases for the 52 weeks ended August 26, 2023 and August 27, 2022 are as
follows:
(in thousands)
Finance lease cost:
Statement of Income Location
August 26, 2023 August 27, 2022
For the year ended
Amortization of lease assets . . . . . Depreciation and amortization
Interest on lease liabilities . . . . . . Interest expense, net
Operating lease cost(1) . . . . . . . . . . . .
Total lease cost . . . . . . . . . . . . . . . . . .
Selling, general and administrative
expenses
$
$
71,913 $
14,608
65,212
4,351
437,762
524,283 $
401,000
470,563
(1) Includes short-term leases, variable lease costs and sublease income, which are immaterial.
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The future rental payments, inclusive of renewal options that have been included in defining the expected lease term,
of our operating and finance lease obligations as of August 26, 2023 having initial or remaining lease terms in
excess of one year are as follows:
(in thousands)
Finance
Leases
Operating
Leases
Total
2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2028 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Present value of lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 88,284
81,535
61,571
34,159
10,409
43,228
319,186
(31,568)
$ 287,618
$
372,849 $
461,133
402,798
484,333
378,865
440,436
354,370
388,529
327,795
338,204
2,260,833
2,304,061
4,097,510
4,416,696
(954,776)
(923,208)
$ 3,174,302 $ 3,461,920
The following table summarizes the Company’s lease term and discount rate assumptions:
August 26, 2023
Weighted-average remaining lease term in years, inclusive of renewal options that are
reasonably certain to be exercised:
Finance leases – real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Finance leases – vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted-average discount rate:
Finance leases – real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Finance leases – vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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23
3
13
3.85 %
2.44 %
3.90 %
Cash paid for amounts included in the measurement of operating lease liabilities of $335.2 million and $316.0
million was reflected in cash flows from operating activities in the consolidated statement of cash flows for fiscal
years 2023 and 2022, respectively.
As of August 26, 2023, the Company has entered into additional leases which have not yet commenced and are
therefore not part of the right-of-use asset and liability. These leases have undiscounted future payments of
approximately $56.9 million for real estate and will commence when the Company obtains possession of the
underlying leased asset. Commencement dates are expected to be from fiscal 2024 to fiscal 2025.
Note N – Commitments and Contingencies
Construction commitments, primarily for new stores, totaled approximately $198.9 million at August 26, 2023.
The Company had $134.0 million in outstanding standby letters of credit and $43.1 million in surety bonds as of
August 26, 2023, which all have expiration periods of less than one year. A substantial portion of the outstanding
standby letters of credit (which are primarily renewed on an annual basis) and surety bonds are used to cover
reimbursement obligations to our workers’ compensation carriers. There are no additional contingent liabilities
associated with these instruments as the underlying liabilities are already reflected in the Consolidated Balance
Sheets. The standby letters of credit and surety bonds arrangements have automatic renewal clauses.
73
The Company has entered into agreements to make capital contributions to certain tax credit equity investments
upon the completion of project milestones. As of August 26, 2023, the Company had commitments to make certain
additional capital contributions to one of its tax credit funds totaling $9.3 million in fiscal 2024.
Note O – Litigation
The Company is involved in various legal proceedings incidental to the conduct of its business, including, but not
limited to, claims and allegations related to wage and hour violations, unlawful termination, employment practices,
product liability, privacy and cybersecurity, environmental matters, intellectual property rights or regulatory
compliance. The Company does not currently believe that, either individually or in the aggregate, these matters will
result in liabilities material to the Company’s financial condition, results of operations or cash flows.
Note P – Segment Reporting
The Company’s primary operating segments (Domestic Auto Parts, Mexico and Brazil) are aggregated as one
reportable segment: Auto Parts Stores. The criteria the Company used to identify the reportable segment are
primarily the nature of the products the Company sells and the operating results that are regularly reviewed by the
Company’s chief operating decision maker to make decisions about the resources to be allocated to the business
units and to assess performance. The accounting policies of the Company’s reportable segment are the same as those
described in “Note A – Significant Accounting Policies.”
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The Auto Parts Stores segment is the leading retailer and distributor of automotive parts and accessories through the
Company’s 7,140 stores in the U.S., Mexico and Brazil. Each store carries an extensive product line for cars, sport
utility vehicles, vans and light duty trucks, including new and remanufactured automotive hard parts, maintenance
items, accessories and non-automotive products.
The Other category reflects business activities of two operating segments that are not separately reportable due to
the materiality of these operating segments. The operating segments include ALLDATA, which produces, sells and
maintains diagnostic, repair, collision and shop management software used in the automotive repair industry and E-
commerce, which includes direct sales to customers through www.autozone.com for sales that are not fulfilled by
local stores.
74
The Company evaluates its reportable segment primarily on the basis of net sales and segment profit, which is
defined as gross profit. The following table shows segment results for the following fiscal years:
(in thousands)
August 26,
2023
Year Ended
August 27,
2022
August 28,
2021
Net Sales
Auto Parts Stores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 17,145,137
312,072
$ 17,457,209
$ 15,963,196
289,034
$ 16,252,230
$ 14,381,712
247,873
$ 14,629,585
Segment Profit
Auto Parts Stores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating, selling, general and administrative expenses . .
Interest expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
8,885,403
185,019
9,070,422
(5,596,436)
(306,372)
3,167,614
$
$
8,301,234
171,416
8,472,650
(5,201,921)
(191,638)
3,079,091
$
$
7,556,889
160,896
7,717,785
(4,773,258)
(195,337)
2,749,190
Segment Assets:
Auto Parts Stores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 15,664,891
320,987
$ 15,985,878
$ 15,060,704
214,339
$ 15,275,043
$ 14,398,581
117,618
$ 14,516,199
Capital Expenditures:
Auto Parts Stores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
775,601
21,056
796,657
$
$
650,495
21,896
672,391
$
$
602,329
19,438
621,767
Auto Parts Stores Sales by Product Grouping:
Failure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Maintenance items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Discretionary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Auto Parts Stores net sales . . . . . . . . . . . . . . . . . . . . . . . . . .
$
8,407,690
6,223,620
2,513,827
$ 17,145,137
$
7,801,155
5,670,278
2,491,763
$ 15,963,196
$
7,048,700
4,888,763
2,444,249
$ 14,381,712
The following table presents the Company’s net sales disaggregated by geographical area:
August 26,
2023
Year Ended
August 27,
2022
August 28,
2021
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mexico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Brazil and all other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
89 %
10 %
1 %
100 %
92 %
8 %
— %
100 %
93 %
7 %
— %
100 %
The Company’s long-lived assets, consisting primarily of property and equipment, net and operating lease right-of-
use assets, within the United States were 88%, 91% and 92% in fiscal years 2023, 2022 and 2021, respectively. No
individual country outside of the United States had long-lived assets that were material to the consolidated totals.
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Note Q – Subsequent Events
Subsequent to year end, the Company initiated the process of issuing Senior Notes under the 2022 Shelf Registration
Statement. Proceeds from the debt issuance are projected to be received at the end of October 2023 and will be used
for general corporate purposes.
Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure
Not applicable.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
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As of August 26, 2023, an evaluation was performed under the supervision and with the participation of AutoZone’s
management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the
design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under
the Exchange Act, as amended. Based on that evaluation, our management, including the Chief Executive Officer
and the Chief Financial Officer, concluded that our disclosure controls and procedures were effective as of
August 26, 2023.
Internal Control Over Financial Reporting
A report of AutoZone’s management on our internal control over financial reporting (as such term defined in Rule
13a-15(f) under the Exchange Act) and a report of Ernst & Young, LLP, an independent registered public
accounting firm, on the effectiveness of AutoZone’s internal control over financial reporting are included in Part I,
Item 8 of this document and is incorporated herein by reference.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during the quarter ended
August 26, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over
financial reporting.
Attestation Report of Registered Public Accounting Firm
Our internal control over financial reporting as of August 26, 2023 has been audited by Ernst & Young, LLP, an
independent registered public accounting firm, which also audited our Consolidated Financial Statements for the
year ended August 26, 2023, as stated in their report included herein, which expresses an unqualified opinion on the
effectiveness of our internal control over financial reporting as of August 26, 2023.
Item 9B. Other Information
None. Without limiting the generality of the foregoing, during the quarterly period ended August 26, 2023, no
officer or director of the Company adopted or terminated any “Rule 10b5-1 trading agreement” or any “non-Rule
10b5-1 trading arrangement,” as each item is defined in Item 408 of Regulation S-K.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
76
Item 10. Directors, Executive Officers and Corporate Governance
PART III
The information set forth in Part I, Item 1 of this document in the section entitled “Information about our Executive
Officers,” is incorporated herein by reference in response to this item. Additionally, the information contained in
AutoZone, Inc.’s Proxy Statement dated October 30, 2023, in the sections entitled “Corporate Governance Matters,”
“Proposal 1 – Election of Directors” and “Delinquent Section 16(a) Reports,” is incorporated herein by reference in
response to this item.
The Company has adopted a Code of Ethical Conduct for Financial Executives that applies to its chief executive
officer, chief financial officer, chief accounting officer and other financial executives. The Company has made the
Code of Ethical Conduct available at www.autozone.com, which can be accessed by clicking “Investor Relations”
located at the bottom of the page.
Item 11. Executive Compensation
The information contained in AutoZone, Inc.’s Proxy Statement dated October 30, 2023, in the section entitled
“Executive Compensation,” is incorporated herein by reference in response to this item.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
The information contained in AutoZone, Inc.’s Proxy Statement dated October 30, 2023, in the sections entitled
“Security Ownership of Management and Board of Directors,” “Security Ownership of Certain Beneficial Owners”
and “Equity Compensation Plans” is incorporated herein by reference in response to this item.
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Item 13. Certain Relationships and Related Transactions, and Director Independence
The information contained in AutoZone, Inc’s Proxy Statement dated October 30, 2023, in the sections entitled
“Related Party Transactions” and “Corporate Governance Matters – Independence” is incorporated herein by
reference in response to this item.
Item 14. Principal Accounting Fees and Services
The information contained in AutoZone, Inc.’s Proxy Statement dated October 30, 2023, in the section entitled
“Proposal 2 – Ratification of Independent Registered Public Accounting Firm,” is incorporated herein by reference
in response to this item.
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PART IV
Item 15. Exhibits and Financial Statement Schedules
The following information required under this item is filed as part of this report.
(a) Financial Statements
The following financial statements, related notes and reports of independent registered public accounting firm are
filed with this Annual Report on Form 10-K in Part II, Item 8:
Reports of Independent Registered Public Accounting Firm
Consolidated Statements of Income for the fiscal years ended August 26, 2023, August 27, 2022 and August 28,
2021
Consolidated Statements of Comprehensive Income for the fiscal years ended August 26, 2023, August 27, 2022
and August 28, 2021
Consolidated Balance Sheets as of August 26, 2023 and August 27, 2022
Consolidated Statements of Cash Flows for the fiscal years ended August 26, 2023, August 27, 2022
and August 28, 2021
Consolidated Statements of Stockholders’ Deficit for the fiscal years ended August 26, 2023, August 27, 2022
and August 28, 2021
Notes to Consolidated Financial Statements
(b) Exhibits
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The following exhibits are being filed herewith:
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.
4.1
Indenture dated as of August 8, 2003, between AutoZone, Inc. and Bank One Trust Company, N.A.
Incorporated by reference to Exhibit 4.1 to the Registration Statement on Form S-3 (No. 333-107828)
filed August 11, 2003.
4.2 Agreement of Resignation, Appointment and Acceptance by and among AutoZone, Inc., The Bank of
New York Mellon Trust Company, N.A., as prior Trustee, and Regions Bank, as successor Trustee,
dated January 29, 2019. Incorporated by reference to Exhibit 4.2 to the Registration Statement on
Form S-3 (No. 333-230719), filed April 4, 2019).
4.3 Officers’ Certificate dated April 29, 2015, pursuant to Section 3.2 of the Indenture dated August 8,
2003, setting forth the terms of the 3.250% Senior Notes due 2025. Incorporated by reference to Exhibit
4.2 to the Current Report on Form 8-K dated April 29, 2015.
4.4 Form of 3.250% Senior Notes due 2025. Incorporated by reference to Exhibit 4.4 to the Current Report
on Form 8-K dated April 29, 2015.
4.5 Officers’ Certificate dated April 21, 2016, pursuant to Section 3.2 of the Indenture dated August 8,
2003, setting forth the terms of the 3.125% Senior Notes due 2026. Incorporated by reference to Exhibit
4.2 to the Current Report on Form 8-K dated April 21, 2016.
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4.6 Form 3.125% Senior Notes due 2026. Incorporated by reference to Exhibit 4.4 to the Current Report on
Form 8-K dated April 21, 2016.
4.7 Officers’ Certificate dated April 18, 2017, pursuant to Section 3.2 of the Indenture dated August 8,
2003, setting forth the terms of the 3.750% Senior Notes due 2027. Incorporated by reference to
Exhibit 4.1 to the Current Report on Form 8-K dated April 18, 2017.
4.8 Form of 3.750% Senior Notes due 2027. Incorporated by reference to Exhibit 4.2 to the Current Report
on Form 8-K dated April 18, 2017.
4.9 Officers’ Certificate dated April 18, 2019, pursuant to Section 3.2 of the Indenture dated August 8,
2003, setting forth the terms of the 3.125% Senior Notes due 2024. Incorporated by reference to
Exhibit 4.1 to the Current Report on Form 8-K dated April 18, 2019.
4.10 Officers’ Certificate dated April 18, 2019, pursuant to Section 3.2 of the Indenture dated August 8,
2003, setting forth the terms of the 3.750% Senior Notes due 2029. Incorporated by reference to
Exhibit 4.2 to the Current Report on Form 8-K dated April 18, 2019.
4.11 Form of 3.125% Senior Notes due 2024. Incorporated by reference to Exhibit 4.3 to the Current Report
on Form 8-K dated April 18, 2019.
4.12 Form of 3.750% Senior Notes due 2029. Incorporated by reference to Exhibit 4.4 to the Current Report
on Form 8-K dated April 18, 2019.
4.13 Officers’ Certificate dated March 30, 2020, pursuant to Section 3.2 of the Indenture, dated August 8,
2003, setting forth the terms of the 3.625% Senior Notes due 2025. Incorporated by reference to Exhibit
4.1 to the Current Report on Form 8-K dated March 30, 2020.
4.14 Officers’ Certificate dated March 30, 2020, pursuant to Section 3.2 of the Indenture, dated August 8,
2003, setting forth the terms of the 4.000% Senior Notes due 2030. Incorporated by reference to Exhibit
4.2 to the Current Report on Form 8-K dated March 30, 2020.
4.15 Form of 3.625% Senior Notes due 2025. Incorporated by reference to Exhibit 4.3 to the Current Report
on Form 8-K dated March 30, 2020.
4.16 Form of 4.000% Senior Notes due 2030. Incorporated by reference to Exhibit 4.4 to the Current Report
on Form 8-K dated March 30, 2020.
4.17 Form of 4.000% Senior Notes due 2030. Incorporated by reference to Exhibit 4.5 to the Current Report
on Form 8-K dated March 30, 2020.
4.18 Form of 1.650% Senior Notes due 2031. Incorporated by reference to Exhibit 4.2 to the Current Report
on Form 8-K dated August 14, 2020.
4.19 Form of 1.650% Senior Notes due 2031. Incorporated by reference to Exhibit 4.3 to the Current Report
on Form 8-K dated August 14, 2020.
4.20 Officers’ Certificate dated August 14, 2020, pursuant to Section 3.2 of the Indenture, dated August 8,
2003, setting forth the terms of the 1.650% Senior Notes due 2031. Incorporated by reference to Exhibit
4.1 to the Current Report on Form 8-K dated August 14, 2020.
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4.21 Officers’ Certificate dated August 1, 2022, pursuant to Section 3.2 of the Indenture dated August 8,
2003, setting forth the terms of the 4.750% Senior Notes due 2032. Incorporated by reference to
Exhibit 4.1 to the Current Report on Form 8-K dated August 1, 2022.
4.22 Form of 4.750% Senior Notes due 2032. Incorporated by reference to Exhibit 4.2 to the Current Report
on Form 8-K dated August 1, 2022.
4.23 Officers’ Certificate dated January 27, 2023, pursuant to Section 3.2 of the Indenture dated August 8,
2003, setting forth the terms of the 4.500% Senior Notes due 2028. Incorporated by reference to Exhibit
4.1 to the Current Report on Form 8-K dated January 27, 2023.
4.24 Officers’ Certificate dated January 27, 2023, pursuant to Section 3.2 of the Indenture dated August 8,
2003, setting forth the terms of the 4.750% Senior Notes due 2033. Incorporated by reference to Exhibit
4.2 to the Current Report on Form 8-K dated January 27, 2023.
4.25 Form of 4.500% Senior Notes due 2028. Incorporated by reference to Exhibit 4.1 to the Current Report
on Form 8-K dated January 27, 2023.
4.26 Form of 4.750% Senior Notes due 2033. Incorporated by reference to Exhibit 4.2 to the Current Report
on Form 8-K dated January 27, 2023.
4.27 Officers’ Certificate dated July 21, 2023, pursuant to Section 3.2 of the Indenture dated August 8, 2003,
setting forth the terms of the 5.050% Senior Notes due 2026. Incorporated by reference to Exhibit 4.1 to
the Current Report on Form 8-K dated July 21, 2023.
4.28 Officers’ Certificate dated July 21, 2023, pursuant to Section 3.2 of the Indenture dated August 8, 2003,
setting forth the terms of the 5.200% Senior Notes due 2033. Incorporated by reference to Exhibit 4.2 to
the Current Report on Form 8-K dated July 21, 2023.
4.29 Form of 5.050% Note due 2026. Incorporated by reference to Exhibit 4.1 to the Current Report on
Form 8-K dated July 21, 2023.
4.30 Form of 5.200% Note due 2033. Incorporated by reference to Exhibit 4.2 to the Current Report on
Form 8-K dated July 21, 2023.
4.31 Description of Securities of AutoZone, Inc. Incorporated by reference to Exhibit 4.24 to the Annual
Report on Form 10-K dated October 28, 2019.
*10.1 Second Amended and Restated 1998 Director Compensation Plan. Incorporated by reference to
Exhibit 10.2 to the Annual Report on Form 10-K for the fiscal year ended August 26, 2000.
*10.2 AutoZone, Inc. 2003 Director Compensation Plan. Incorporated by reference to Appendix D to the
definitive proxy statement dated November 1, 2002, for the Annual Meeting of Stockholders held
December 12, 2002.
*10.3 Amended and Restated AutoZone, Inc. 2003 Director Compensation Plan. Incorporated by reference to
Exhibit 99.2 to the Current Report on Form 8-K dated January 4, 2008.
*10.4 Form of non-compete and non-solicitation agreement for Section 16 executive officers and by
AutoZone, Inc. Incorporated by reference to Exhibit 10.5 to the Annual Report on Form 10-K for the
fiscal year ended August 27, 2022.
80
*10.5 Agreement dated February 14, 2008, between AutoZone, Inc. and William C. Rhodes, III. Incorporated
by reference to Exhibit 99.4 to the Current Report on Form 8-K dated February 15, 2008.
*10.6
AutoZone, Inc. 2011 Equity Incentive Award Plan. Incorporated by reference to Exhibit A to the
definitive proxy statement dated October 25, 2010, for the Annual Meeting of Stockholders held
December 15, 2010.
*10.7 Form of Letter Agreement dated as of December 14, 2010, amending certain Stock Option Agreements
of executive officers. Incorporated by reference to Exhibit 10.4 to the Quarterly Report on Form 10-Q
dated December 16, 2010.
*10.8 Form of Stock Option Agreement under the 2011 Equity Incentive Award Plan. Incorporated by
reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q dated March 17, 2011.
*10.9 Form of Stock Option Agreement under the 2011 Equity Incentive Award Plan for officers effective
September 27, 2011. Incorporated by reference to Exhibit 10.37 to the Annual Report on Form 10-K for
the fiscal year ended August 27, 2011.
*10.10 AutoZone, Inc. Enhanced Severance Pay Plan. Incorporated by reference to Exhibit 10.12 to the Annual
Report on Form 10-K for the fiscal year ended August 27, 2022.
*10.11 Form of Stock Option Agreement under the 2011 Equity Incentive Award Plan for certain executive
officers effective September 27, 2011. Incorporated by reference to Exhibit 10.38 to the Annual Report
on Form 10-K for the fiscal year ended August 27, 2011.
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*10.12 Offer letter dated August 5, 2020, to Jamere Jackson. Incorporated by reference to Exhibit 10.1 on
Form 8-K dated September 14, 2020.
*10.13 Amended and Restated AutoZone, Inc. Executive Deferred Compensation Plan dated June 13, 2023.
*10.14 AutoZone, Inc. Director Compensation Program effective January 1, 2022. Incorporated by reference to
Exhibit 10.17 to the Annual Report on Form 10-K for the fiscal year ended August 27, 2022.
*10.15 Amended and Restated AutoZone, Inc. 2011 Equity Incentive Award Plan dated December 16, 2015.
Incorporated by reference to Exhibit A to the definitive proxy statement dated October 26, 2015, for the
Annual Meeting of Stockholders held December 16, 2015.
*10.16 AutoZone, Inc. Sixth Amended and Restated Executive Stock Purchase Plan. Incorporated by reference
to Exhibit A to the definitive proxy statement dated October 24, 2016, for the Annual Meeting of
Stockholders held December 14, 2016.
*10.17 Form of Restricted Stock Unit Grant Notice and Restricted Stock Unit Award Agreement under the
2011 Equity Incentive Award Plan for officers effective September 27, 2011. Incorporated by reference
to Exhibit 10.1 to the Quarterly Report on Form 10-Q dated December 17, 2018.
*10.18 AutoZone, Inc. 2020 Omnibus Incentive Award Plan. Incorporated by reference to Exhibit 10.1 to the
Current Report on Form 8-K dated December 17, 2020.
81
*10.19 Form of Grant Notice and Award Agreement for Stock Options granted to Officers under the AutoZone,
Inc. 2020 Omnibus Incentive Award Plan. Incorporated by reference to Exhibit 10.2 to the Current
Report on Form 8-K dated December 17, 2020.
*10.20 Form of Grant Notice and Award Agreement for Restricted Stock Units granted to Officers under the
AutoZone, Inc. 2020 Omnibus Incentive Award Plan. Incorporated by reference to Exhibit 10.3 to the
Current Report on Form 8-K dated December 17, 2020.
*10.21 Form of Grant Notice and Award Agreement for Restricted Stock Units granted to Directors under the
AutoZone, Inc. 2020 Omnibus Incentive Award Plan. Incorporated by reference to Exhibit 10.4 to the
Current Report on Form 8-K dated December 17, 2020.
10.22 Fourth Amended and Restated Credit Agreement dated as of November 15, 2021, among AutoZone,
Inc. as Borrower, the lenders party thereto and Bank of America, N.A. as Administrative Agent,
incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K dated November 16, 2021.
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10.23 First Amendment to Credit Agreement, dated as of November 15, 2022, among AutoZone, Inc. as
borrower, the lenders party thereto, Bank of America, N.A., as administrative agent, and JPMorgan
Chase Bank, N.A., as syndication agent, incorporated by reference to Exhibit 10.1 to the Quarterly
Report on Form 10-Q for the fiscal quarter ended November 19, 2022.
*10.24 Amendment No. 1 to the AutoZone, Inc. 2020 Omnibus Incentive Award Plan. Incorporated by
reference to Exhibit 10.34 to the Annual Report on Form 10-K for the fiscal year ended August 28,
2021.
*10.25 Form of Grant Notice and Award Agreement for Stock Options granted to Officers under the AutoZone,
Inc. 2020 Omnibus Incentive Award Plan. Incorporated by reference to Exhibit 10.27 to the Annual
Report on Form 10-K for the fiscal year ended August 27, 2022.
*10.26 Form of Grant Notice and Award Agreement for Restricted Stock Units granted to Officers under the
AutoZone, Inc. 2020 Omnibus Incentive Award Plan. Incorporated by reference to Exhibit 10.28 to the
Annual Report on Form 10-K for the fiscal year ended August 27, 2022.
21.1 Subsidiaries of the Registrant.
23.1 Consent of Independent Registered Public Accounting Firm.
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.
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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.
*97 AutoZone, Inc. Clawback Policy.
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 Document
101.LAB
Inline XBRL Taxonomy Extension Labels Document
101.PRE
Inline XBRL Taxonomy Extension Presentation Document
101.DEF
Inline XBRL Taxonomy Extension Definition Document
104 Cover Page Inline XBRL File
* Management contract or compensatory plan or arrangement.
c) Financial Statement Schedules
Schedules are omitted because the information is not required or because the information required is included in the
financial statements or notes thereto.
Item 16. Form 10-K Summary
None.
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Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
SIGNATURES
AUTOZONE, INC.
By:/s/ WILLIAM C. RHODES, III
William C. Rhodes, III
Chairman, President and
Chief Executive Officer
(Principal Executive Officer)
Dated: October 24, 2023
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84
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the dates indicated:
SIGNATURE
TITLE
DATE
/s/ WILLIAM C. RHODES, III
William C. Rhodes, III
Chairman, President and Chief Executive Officer
October 24, 2023
(Principal Executive Officer)
/s/ JAMERE JACKSON
Jamere Jackson
Chief Financial Officer
(Principal Financial Officer)
/s/ J. SCOTT MURPHY
J. Scott Murphy
Vice President and Controller
(Principal Accounting Officer)
/s/ MICHAEL A. GEORGE
Michael A. GEORGE
Director
/s/ LINDA A. GOODSPEED
Linda A. Goodspeed
Director
/s/ EARL G. GRAVES, JR.
Earl, G. Graves, Jr.
Director
/s/ ENDERSON GUIMARAES
Enderson Guimaraes
Director
/s/ BRIAN HANNASCH
Brian Hannasch
/s/ D. BRYAN JORDAN
D. Bryan Jordan
/s/ GALE V. KING
Gale V. King
Director
Director
Director
/s/ GEORGE R. MRKONIC, JR.
George R. Mrkonic, Jr.
Director
October 24, 2023
October 24, 2023
October 24, 2023
October 24, 2023
October 24, 2023
October 24, 2023
October 24, 2023
October 24, 2023
October 24, 2023
October 24, 2023
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/s/ JILL A. SOLTAU
Jill A. Soltau
Director
October 24, 2023
85
SUBSIDIARIES OF THE REGISTRANT
Exhibit 21.1
NAME
ALLDATA LLC
AutoZone de México, S. de R.L. de
C.V.
AutoZone Development LLC
AutoZone International Holdings,
Inc.
AutoZone IP LLC
AutoZone Latin America Holdings
LLC
AutoZone Northeast LLC
AutoZone Parts, Inc.
AutoZone Southeast, L.P.
AutoZone Stores LLC
AutoZone Texas LLC
AutoZone West LLC
AutoZoners, LLC
Riverside Captive Insurance
Company
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STATE OR COUNTRY OF
ORGANIZATION OR INCORPORATION
Nevada
Mexico
Nevada
Nevada
Nevada
Nevada
Nevada
Nevada
Nevada
Nevada
Nevada
Nevada
Nevada
Arizona
In addition, 34 subsidiaries organized in the United States and 26 subsidiaries organized outside of the United States
have been omitted as they would not, considered in the aggregate as a single subsidiary, constitute a significant
subsidiary as defined by Rule 1-02(w) of Regulation S-X.
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in the following Registration Statements:
Exhibit 23.1
Registration Statement (Form S-8 No. 333-139559) pertaining to the AutoZone, Inc. 2006 Stock Option
Plan
Registration Statement (Form S-8 No. 333-103665) pertaining to the AutoZone, Inc. 2003 Director
Compensation Award Plan
Registration Statement (Form S-8 No. 333-42797) pertaining to the AutoZone, Inc. Amended and Restated
Employee Stock Purchase Plan
Registration Statement (Form S-8 No. 333-88241) pertaining to the AutoZone, Inc. Amended and Restated
Director Compensation Plan
Registration Statement (Form S-8 No. 333-75140) pertaining to the AutoZone, Inc. Executive Stock
Purchase Plan
Registration Statement (Form S-3ASR No. 333-230719) pertaining to a shelf registration to sell debt
securities
Registration Statement (Form S-8 No. 333-251506) pertaining to the AutoZone, Inc. 2020 Omnibus
Incentive Award Plan
Registration Statement (Form S-8 No. 333-171186) pertaining to the AutoZone, Inc. 2011 Equity Incentive
Award Plan
Registration Statement (Form S-3 ASR No. 333-180768) pertaining to a shelf registration to sell debt
securities
Registration Statement (Form S-3 ASR No. 333-203439) pertaining to a shelf registration to sell debt
securities
Registration Statement (Form S-3 ASR No. 333-266209) pertaining to a shelf registration to sell debt
securities;
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of our reports dated October 24, 2023, with respect to the consolidated financial statements of AutoZone, Inc. and
the effectiveness of internal control over financial reporting of AutoZone, Inc., included in this Annual Report
(Form 10-K) of AutoZone, Inc. for the year ended August 26, 2023.
/s/ Ernst & Young LLP
Memphis, Tennessee
October 24, 2023
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CERTIFICATION 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
Exhibit 31.1
I, William C. Rhodes, III, certify that:
1.
I have reviewed this Annual Report on Form 10-K of AutoZone, Inc. (“registrant”);
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present
in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the
periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period
in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report
our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred
during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control
over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or
persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process,
summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role
in the registrant’s internal control over financial reporting.
October 24, 2023
/s/ WILLIAM C. RHODES, III
William C. Rhodes, III
Chairman, President and
Chief Executive Officer
(Principal Executive Officer)
Exhibit 31.2
CERTIFICATION 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
I, Jamere Jackson, certify that:
1.
I have reviewed this Annual Report on Form 10-K of AutoZone, Inc. (“registrant”);
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present
in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the
periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period
in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report
our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred
during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control
over financial reporting; and
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5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or
persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process,
summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role
in the registrant’s internal control over financial reporting.
October 24, 2023
/s/ JAMERE JACKSON
Jamere Jackson
Chief Financial Officer
(Principal Financial Officer)
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Exhibit 32.1
In connection with the Annual Report of AutoZone, Inc. (the “Company”) on Form 10-K for the fiscal year ended
August 26, 2023 as filed with the SEC on the date hereof (the “Report”), I, William C. Rhodes, III, certify, pursuant
to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(i)
(ii)
the Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934; and
the information contained in the Report fairly presents, in all material respects, the financial
condition and results of operations of the Company.
October 24, 2023
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/s/ WILLIAM C. RHODES, III
William C. Rhodes, III
Chairman, President and
Chief Executive Officer
(Principal Executive Officer)
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Exhibit 32.2
In connection with the Annual Report of AutoZone, Inc. (the “Company”) on Form 10-K for the fiscal year ended
August 26, 2023, as filed with the SEC on the date hereof (the “Report”), I, Jamere Jackson, certify, pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(i)
(ii)
the Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934; and
the information contained in the Report fairly presents, in all material respects, the financial
condition and results of operations of the Company.
October 24, 2023
/s/ JAMERE JACKSON
Jamere Jackson
Chief Financial Officer
(Principal Financial Officer)
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Corporate Information
Corporate Information
AutoZone’s CEO Team
Our CEO Team, made up of all AutoZone’s Officers, works tirelessly to support and continue to enhance the AutoZone that exists today. We lead
as a team and we win as a team. Through their support and guidance, but most importantly through the commitment and passion of 119,000
AutoZoners, the Company is well positioned for future growth and prosperity.
Officers
Customer Satisfaction
William C. Rhodes, III†
Chairman, President
and CEO
Senior Vice Presidents
Customer Satisfaction
Jennifer M. Bedsole†
General Counsel and
Secretary
K. Michelle Borninkhof†
Chief Information Officer
Vice Presidents
Customer Satisfaction
Curtis L. Allen
Stores
Jarvis D. Allen
Stores
Jennie E. Anderson
Loss Prevention
Doug E. Baldwin
Chief Information
Security Officer
Jerry D. Barton
Financial Planning
and Analysis
Edward Beltran
Stores
Charles D. Blank
Commercial
Mauricio Braz
Presidente
AutoZone do Brasil
Philip B. Daniele III†
CEO-Elect
Jamere Jackson†
Chief Financial Officer
Thomas B. Newbern†
Chief Operating Officer
Preston B. Frazer†
Finance, Store
Development and
Strategy
Eric S. Gould†
Supply Chain
Domingo J. Hurtado†
International
Dennis W. LeRiche†
Store Operations
Grant E. McGee†
Commercial
Charlie Pleas, III†
Accounting and
Finance
Albert Saltiel†
Marketing and
E-Commerce
William R. Hackney†
Executive Vice
President,
Merchandising
Marketing and
Supply Chain
Richard C. Smith†
Human Resources
Brian L. Campbell
Tax, Treasury and
Investor Relations
Bailey L. Childress
Merchandise Pricing
and Analysis
J. Christopher Coletta
Tax
Anthony J. Dudek
Information Technology
Robert A. Durkin
Distribution
Joseph Espinosa
Stores
Duane M. Findley
Merchandising
Priya A. Galante
Assistant General Counsel
and Assistant Secretary
Omar Gomez
Stores
Lindsay W. Lehman
Marketing
Nakul Sarraf
Information Technology
Jilynna J. Greene
Field Human Resources
S. Jamey Maki
E-Commerce
Joe L. Sellers, Jr.
Commercial
Andrew H. Harbin
Distribution
Satwinder S. Mangat
President ALLDATA
Brett L. Shanaman
Store Operations
Matthew C. Harmon
Benefits, Compensation
and HR Systems
Troy L. Hitchcock
Merchandising
Anna E. Hook
Replenishment
Joshua W. Hughes
Stores
Joyce L. Johns
Internal Audit
M. Denise McCullough
Transportation
Grace O. Sharpley
Strategy
David E. McKinney
Human Resources and
Public Affairs
Jason M. McNeil
Global Sourcing
J. Brett Mullis
Stores
J. Scott Murphy†
Controller
Michael P. Shipman
Information Technology
Steven M. Stoll
Merchandising
John M. Tippitt
Information Technology
Patrick D.B. Webb
Presidente
AutoZone de Mexico
Manoj Koratty
Chief Technology Officer
Ashley T. Prieto
Merchandising
Maria M. Leggett
Assistant General Counsel
and Assistant Secretary
Anthony D. Rose, Jr.
Visual Merchandising
and Content
† Required to file under Section 16 of the Securities and Exchange
Act of 1934.
Michael B. Campanaro
Information Technology
Timothy J. Goddard
Store Development
Board of Directors
Michael A. George (1)
Former President and CEO
Qurate Retail
Brian P. Hannasch (2)
President and CEO
Alimentation Couche-Tard
Linda A. Goodspeed (1,2)
Former Managing Partner and COO
WealthStrategies Financial Advisors
D. Bryan Jordan (1*,3)
Chairman, President and CEO
First Horizon Corporation
Earl G. Graves, Jr. (†,3*)
President and CEO
Black Enterprise
Enderson Guimaraes (3)
Former President and COO
Laureate Education Inc.
Gale V. King (2)
Former Executive Vice President &
Chief Administrative Officer
Nationwide Mutual Insurance
George R. Mrkonic, Jr. (1, 2*)
Former Non-Executive Chairman
MARU Group
William C. Rhodes, III
Chairman, President and CEO
AutoZone, Inc.
Jill A. Soltau (3)
Former CEO
J.C. Penney Company, Inc.
(1) Audit Committee, (2) Compensation Committee, (3) Nominating and Corporate Governance Committee, * Committee Chair, † Lead Director
In addition with the previously announced leadership transition plan, the Board intends to appoint Mr. Daniele to the role of President and Chief Executive Officer and to serve on the Board of Directors effective January 2024.
Transfer Agent and Registrar
Computershare Investor Services
P.O. Box 43069
Providence, RI 02940-3069
(877) 282-1168
(781) 575-2723
www.computershare.com
Annual Meeting
The Annual Meeting of Stockholders
of AutoZone, Inc. will be held on
Wednesday, December 20, 2023, 8:00
am Central Standard Time. The meeting
will be held at the J.R. Hyde III Store
Support Center located at 123 S. Front
St. Memphis, TN 38103. Instructions on
how shareholders can attend the annual
meeting are provided in the
Proxy Statement.
Investor Relations Website
Available at www.autozone.com and click
on “Investor Relations” at the bottom of
the page
Company Websites
www.autozone.com
www.autozonepro.com
www.alldata.com
www.duralastparts.com
Stock Exchange Listing
New York Stock Exchange
Ticker Symbol: AZO
Auditors
Ernst & Young, LLP
Memphis, Tennessee
Code of Ethical Conduct
Available at www.autozone.com and click
on “Investor Relations” at the bottom of
the page
Environmental, Social and
Governance Report
Available at www.autozone.com and click
on “ESG” at the bottom of the page
Form of 10-K / Quarterly Report
Stockholders may obtain, free of charge, a
copy of AutoZone’s annual report on Form
10-K, its quarterly reports on Form 10-Q
as filed with the Securities and Exchange
Commission and quarterly press releases
by contacting
• Investor Relations
P.O. Box 2198
Memphis, TN 38101
• Phoning (901) 495-7185 or
• Emailing investor.relations@autozone.com
Copies of all documents filed by AutoZone
with the Securities and Exchange
Commission, including Annual Reports on
Form 10-K and Quarterly Reports on Form
10-Q, are also available at the SEC’s EDGAR
server at www.sec.gov.
Stockholders of Record
As of October 23, 2023, there were 1,703
stockholders of record, excluding the
number of beneficial owners whose
shares were represented by security
position listing.
123 S. Front Street
Memphis, TN 38103-3607
(901) 495-6500
www.autozone.com