Segment Reporting

12 Months Ended

Aug. 28, 2021

Segment Reporting

Segment Reporting

Note P – 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.”

The Auto Parts Stores segment is a retailer and distributor of automotive parts and accessories through the Company’s 6,767 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 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. The following table shows segment results for the following fiscal years:

	Year Ended
	August 28,		August 29,		August 31,
(in thousands)	2021		2020		2019
Net Sales
Auto Parts Stores	$	14,381,712	$	12,405,929	$	11,645,235
Other		247,873		226,038		218,508
Total	$	14,629,585	$	12,631,967	$	11,863,743
Segment Profit
Auto Parts Stores	$	7,556,889	$	6,617,508	$	6,209,229
Other		160,896		153,245		155,772
Gross profit		7,717,785		6,770,753		6,365,001
Operating, selling, general and administrative expenses		(4,773,258)		(4,353,074)		(4,148,864)
Interest expense, net		(195,337)		(201,165)		(184,804)
Income before income taxes	$	2,749,190	$	2,216,514	$	2,031,333
Segment Assets:
Auto Parts Stores	$	14,398,581	$	14,303,427	$	9,781,926
Other		117,618		120,445		113,987
Total	$	14,516,199	$	14,423,872	$	9,895,913
Capital Expenditures:
Auto Parts Stores	$	602,329	$	432,067	$	479,120
Other		19,438		25,669		16,930
Total	$	621,767	$	457,736	$	496,050
Auto Parts Stores Sales by Product Grouping:
Failure	$	7,048,700	$	6,088,859	$	5,728,294
Maintenance items		4,888,763		4,284,913		4,140,987
Discretionary		2,444,249		2,032,157		1,775,954
Auto Parts Stores net sales	$	14,381,712	$	12,405,929	$	11,645,235