Segment Reporting

3 Months Ended

Nov. 23, 2019

Segment Reporting

Note M – Segment Reporting

The Company’s operating segments (Do

estic Auto Parts, Mexico and Brazil) are aggregated as

one

reportable segment: Auto Parts

Store

. 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” in its Annual Report on Form

10-K

for the year ended August 31, 2019.

The Auto Parts

Stores

segment is a retailer and distributor of automotive part

and accessories through the Company’s 6,433

stores in the U.S., Mexico and Brazil. Each store carries an extensive product line for cars, sport utility vehicles, vans and light trucks, including new and remanufactured automotive hard parts, maintenance items, accessories and non-automotive product

The Other category reflects business activities of t

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 and repair information 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

The Company evaluates its reportable segment primarily on the basis of net sales and segment profit, which is defined as gross profit. Segment results for the periods presented were as follows:


	Twelve Weeks Ended
(in thousands)	November 23, 2019				November 17, 2018

Net Sales
Auto Parts Stores		$	2,743,239			$	2,593,440
Other			49,799				48,293

Total		$	2,793,038			$	2,641,733


Segment Profit
Auto Parts Stores		$	1,466,161			$	1,383,564
Other			34,907				33,910

Gross profit			1,501,068				1,417,474
Operating, selling, general and administrative expenses			(1,001,045	)			(929,656	)
Interest expense, net			(43,743	)			(39,006	)

Income before income taxes		$	456,280			$	448,812