Segment Reporting

8 Months Ended

May 08, 2021

Segment Reporting

Segment Reporting

Note K – Segment Reporting

The Company’s 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” in its Annual Report on Form 10-K for the year ended August 29, 2020.

The Auto Parts Stores segment is a retailer and distributor of automotive parts and accessories through the Company’s 6,657 locations 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 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 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				Thirty-Six Weeks Ended
	May 8,		May 9,		May 8,		May 9,
(in thousands)	2021		2020		2021		2020
Net Sales
Auto Parts Stores	$	3,590,281	$	2,724,604	$	9,551,576	$	7,932,831
Other		60,742		54,695		164,525		153,168
Total	$	3,651,023	$	2,779,299	$	9,716,101	$	8,085,999
Segment Profit
Auto Parts Stores	$	1,877,240	$	1,454,705	$	5,042,124	$	4,252,136
Other		37,706		35,943		107,822		105,642
Gross profit		1,914,946		1,490,648		5,149,946		4,357,778
Operating, selling, general and administrative expenses		(1,111,441)		(998,975)		(3,249,449)		(2,958,144)
Interest expense, net		(45,026)		(47,450)		(137,217)		(135,528)
Income before income taxes	$	758,479	$	444,223	$	1,763,280	$	1,264,106