10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the quarterly period ended November 20, 2021, or
☐	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the transition period from _______ to ________.
	Commission file number 1-10714

AUTOZONE, INC.

(Exact name of registrant as specified in its charter)

Nevada	62-1482048
(State or other jurisdiction of	(I.R.S. Employer Identification No.)
incorporation or organization)

123 South Front Street, Memphis, Tennessee	38103
(Address of principal executive offices)	(Zip Code)

(901) 495-6500

(Registrant’s telephone number, including area code)

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on which Registered
Common Stock ($0.01 par value)	AZO	New York Stock Exchange

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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common Stock, $.01 Par Value – 20,634,396 shares outstanding as of December 10, 2021.

TABLE OF CONTENTS

PART I.		FINANCIAL INFORMATION	3
	Item 1.	Financial Statements	3
		CONDENSED CONSOLIDATED BALANCE SHEETS	3
		CONDENSED CONSOLIDATED STATEMENTS OF INCOME	4
		CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME	4
		CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS	5
		CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT	6
		NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	7
		REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	15
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25
	Item 4.	Controls and Procedures	25
PART II.		OTHER INFORMATION	25
	Item 1.	Legal Proceedings	25
	Item 1A.	Risk Factors	25
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26
	Item 3.	Defaults Upon Senior Securities	26
	Item 4.	Mine Safety Disclosures	26
	Item 5.	Other Information	26
	Item 6.	Exhibits	26
SIGNATURES			28

2

PART I. FINANCIAL INFORMATION

Item 1.Financial Statements.

AUTOZONE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	November 20,		August 28,
(in thousands)	2021		2021
Assets
Current assets:
Cash and cash equivalents	$	961,125	$	1,171,335
Accounts receivable		379,276		378,392
Merchandise inventories		4,768,258		4,639,813
Other current assets		240,487		225,763
Total current assets		6,349,146		6,415,303
Property and equipment:
Property and equipment		8,854,872		8,807,178
Less: Accumulated depreciation and amortization		(3,996,944)		(3,950,287)
		4,857,928		4,856,891
Operating lease right-of-use assets		2,717,566		2,718,712
Goodwill		302,645		302,645
Deferred income taxes		40,164		41,043
Other long-term assets		193,500		181,605
		3,253,875		3,244,005
Total assets	$	14,460,949	$	14,516,199
Liabilities and Stockholders’ Deficit
Current liabilities:
Accounts payable	$	6,171,344	$	6,013,924
Current portion of operating lease liabilities		263,899		236,568
Current portion of debt		500,000		—
Accrued expenses and other		965,898		1,039,788
Income taxes payable		186,752		79,474
Total current liabilities		8,087,893		7,369,754
Debt, less current portion		4,771,266		5,269,820
Operating lease liabilities, less current portion		2,624,676		2,632,842
Deferred income taxes		355,310		337,125
Other long-term liabilities		746,554		704,194
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; 23,057 shares issued and 20,674 shares outstanding as of November 20, 2021; 23,007 shares issued and 21,138 shares outstanding as of August 28, 2021		231		230
Additional paid-in capital		1,499,557		1,465,669
Retained earnings (deficit)		135,406		(419,829)
Accumulated other comprehensive loss		(324,327)		(307,986)
Treasury stock, at cost		(3,435,617)		(2,535,620)
Total stockholders’ deficit		(2,124,750)		(1,797,536)
Total liabilities and stockholders' deficit	$	14,460,949	$	14,516,199

See Notes to Condensed Consolidated Financial Statements.

3

AUTOZONE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Twelve Weeks Ended
	November 20,		November 21,
(in thousands, except per share data)	2021		2020
Net sales	$	3,668,904	$	3,154,261
Cost of sales, including warehouse and delivery expenses		1,743,744		1,478,644
Gross profit		1,925,160		1,675,617
Operating, selling, general and administrative expenses		1,170,675		1,060,392
Operating profit		754,485		615,225
Interest expense, net		43,284		46,179
Income before income taxes		711,201		569,046
Income tax expense		155,966		126,613
Net income	$	555,235	$	442,433
Weighted average shares for basic earnings per share		20,988		23,223
Effect of dilutive stock equivalents		621		555
Weighted average shares for diluted earnings per share		21,609		23,778
Basic earnings per share	$	26.45	$	19.05
Diluted earnings per share	$	25.69	$	18.61

See Notes to Condensed Consolidated Financial Statements.

AUTOZONE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	Twelve Weeks Ended
	November 20,		November 21,
(in thousands)	2021		2020
Net income	$	555,235	$	442,433
Other comprehensive (loss) income:
Foreign currency translation adjustments		(16,566)		46,995
Unrealized losses on marketable debt securities, net of taxes		(430)		(309)
Net derivative activities, net of taxes		655		659
Total other comprehensive (loss) income		(16,341)		47,345
Comprehensive income	$	538,894	$	489,778

See Notes to Condensed Consolidated Financial Statements.

4

AUTOZONE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Twelve Weeks Ended
	November 20,		November 21,
(in thousands)	2021		2020
Cash flows from operating activities:
Net income	$	555,235	$	442,433
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property and equipment and intangibles		99,590		89,551
Amortization of debt origination fees		2,639		3,150
Deferred income taxes		18,096		10,295
Share-based compensation expense		14,295		10,508
Changes in operating assets and liabilities:
Accounts receivable		(1,576)		17,491
Merchandise inventories		(136,988)		(124,746)
Accounts payable and accrued expenses		89,268		56,273
Income taxes payable		107,411		79,558
Other, net		29,960		98,978
Net cash provided by operating activities		777,930		683,491
Cash flows from investing activities:
Capital expenditures		(102,269)		(113,036)
Purchase of marketable debt securities		(7,026)		(45,985)
Proceeds from sale of marketable debt securities		3,709		51,210
Proceeds (payments) from disposal of capital assets and other, net		14,625		(2,368)
Net cash used in investing activities		(90,961)		(110,179)
Cash flows from financing activities:
Net proceeds from sale of common stock		21,100		28,666
Purchase of treasury stock		(899,997)		(678,324)
Repayment of principal portion of finance lease liabilities		(13,687)		(13,786)
Other, net		(3,362)		—
Net cash used in financing activities		(895,946)		(663,444)
Effect of exchange rate changes on cash		(1,233)		3,322
Net decrease in cash and cash equivalents		(210,210)		(86,810)
Cash and cash equivalents at beginning of period		1,171,335		1,750,815
Cash and cash equivalents at end of period	$	961,125	$	1,664,005

See Notes to Condensed Consolidated Financial Statements.

5

AUTOZONE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

(Unaudited)

	Twelve Weeks Ended November 20, 2021
								Accumulated
	Common			Additional				Other
	Shares	Common		Paid-in		Retained		Comprehensive		Treasury
(in thousands)	Issued	Stock		Capital		(Deficit) Earnings		Loss		Stock		Total
Balance at August 28, 2021	23,007	$	230	$	1,465,669	$	(419,829)	$	(307,986)	$	(2,535,620)	$	(1,797,536)
Net income	—		—		—		555,235		—		—		555,235
Total other comprehensive income	—		—		—		—		(16,341)		—		(16,341)
Purchase of 515 shares of treasury stock	—		—		—		—		—		(899,997)		(899,997)
Issuance of common stock under stock options and stock purchase plans	50		1		21,100		—		—		—		21,101
Share-based compensation expense	—		—		12,788		—		—		—		12,788
Balance at November 20, 2021	23,057	$	231	$	1,499,557	$	135,406	$	(324,327)	$	(3,435,617)	$	(2,124,750)

	Twelve Weeks Ended November 21, 2020
								Accumulated
	Common			Additional				Other
	Shares	Common		Paid-in		Retained		Comprehensive		Treasury
(in thousands)	Issued	Stock		Capital		Deficit		Loss		Stock		Total
Balance at August 29, 2020	23,697	$	237	$	1,283,495	$	(1,450,970)	$	(354,252)	$	(356,487)	$	(877,977)
Net income	—		—		—		442,433		—		—		442,433
Total other comprehensive income	—		—		—		—		47,345		—		47,345
Purchase of 584 shares of treasury stock	—		—		—		—		—		(678,324)		(678,324)
Issuance of common stock under stock options and stock purchase plans	64		1		28,665		—		—		—		28,666
Share-based compensation expense	—		—		10,877		—		—		—		10,877
Balance at November 21, 2020	23,761	$	238	$	1,323,037	$	(1,008,537)	$	(306,907)	$	(1,034,811)	$	(1,026,980)

See Notes to Condensed Consolidated Financial Statements.

6

AUTOZONE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note A – General

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“U.S. GAAP”) for interim financial information and are presented in accordance with the requirements of Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission’s (the “SEC”) rules and regulations. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments, including normal recurring accruals, considered necessary for a fair presentation have been included. For further information, refer to the consolidated financial statements and related notes included in the AutoZone, Inc. (“AutoZone” or the “Company”) Annual Report on Form 10-K for the year ended August 28, 2021.

Operating results for the twelve weeks ended November 20, 2021 are not necessarily indicative of the results that may be expected for the full fiscal year ending August 27, 2022. Each of the first three quarters of AutoZone’s fiscal year consists of 12 weeks, and the fourth quarter consists of 16 or 17 weeks. The fourth quarters of fiscal 2022 and 2021 each have 16 weeks.

The Company does not expect any recently issued accounting pronouncements to have a material effect on the Company’s financial statements and related disclosures.

Note B – Share-Based Payments

AutoZone maintains several equity incentive plans, which provide equity-based compensation to non-employee directors and eligible employees for their service to AutoZone, its subsidiaries or affiliates. The Company recognizes compensation expense for share-based payments based on the fair value of the awards at the grant date. Share-based payments include stock option grants, restricted stock grants, restricted stock unit grants, stock appreciation rights, discounts on shares sold to employees under share purchase plans and other awards. Additionally, directors’ fees are paid in restricted stock units with value equivalent to the value of shares of common stock as of the grant date. The change in fair value of liability-based stock awards is also recognized in share-based compensation expense.

7

Stock Options:

The Company made stock option grants of 163,786 shares during the twelve week period ended November 20, 2021 and granted options to purchase 194,511 shares during the comparable prior year period. The Company grants options to purchase common stock to certain of its employees under its equity incentive plans at prices equal to the market value of the stock on the date of grant. 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 weighted average fair value of the stock option awards granted during the twelve week periods ended November 20, 2021 and November 21, 2020, using the Black-Scholes-Merton multiple-option pricing valuation model, was $462.80 and $299.48 per share, respectively, using the following weighted average key assumptions:

	Twelve Weeks Ended
	November 20,		November 21,
	2021		2020
Expected price volatility	28	%	28	%
Risk-free interest rate	1.1	%	0.4	%
Weighted average expected lives (in years)	5.6		5.6
Forfeiture rate	10	%	10	%
Dividend yield	0	%	0	%

During the twelve week period ended November 20, 2021, 47,705 stock options were exercised at a weighted average exercise price of $549.86. In the comparable prior year period, 59,990 stock options were exercised at a weighted average exercise price of $496.58.

As of November 20, 2021, total unrecognized share-based expense related to stock options, net of estimated forfeitures, was approximately $98.4 million, before income taxes, which we expect to recognize over an estimated weighted average period of 2.2 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. Grants of employee restricted stock units 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. Grants of non-employee director restricted stock units are made and expensed on January 1 of each year, as they vest immediately.

As of November 20, 2021, total unrecognized stock-based compensation expense related to nonvested restricted stock unit awards, net of estimated forfeitures, was approximately $15.6 million, before income taxes, which we expect to recognize over an estimated weighted average period of 2.9 years.

Transactions related to restricted stock units for the twelve weeks ended November 20, 2021 were as follows:

		Weighted-
	Number	Average Grant
	of Shares	Date Fair Value
Nonvested at August 28, 2021	15,751	$	1,005.41
Granted	4,352		1,651.22
Vested	(5,373)		957.89
Canceled or forfeited	(696)		1,023.97
Nonvested at November 20, 2021	14,034	$	1,222.96

8

Total share-based compensation expense (a component of Operating, selling, general and administrative expenses) was $14.3 million for the twelve week period ended November 20, 2021, and $10.5 million for the comparable prior year period.

For the twelve week period ended November 20, 2021, 97,942 stock options were excluded from the diluted earnings per share computation because they would have been anti-dilutive. For the comparable prior year period, 293,280 anti-dilutive stock options were excluded from the dilutive earnings per share computation.

See AutoZone’s Annual Report on Form 10-K for the year ended August 28, 2021 and other filings with the SEC, for a discussion regarding the methodology used in developing AutoZone’s assumptions to determine the fair value of the option awards and a description of AutoZone’s Amended and Restated 2011 Equity Incentive Award Plan, the AutoZone, Inc. 2020 Omnibus Incentive Award Plan and the 2020 Director Compensation Program.

Note C – 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.

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:

	November 20, 2021
(in thousands)	Level 1		Level 2		Level 3		Fair Value
Other current assets	$	55,414	$	106	$	—	$	55,520
Other long-term assets		48,272		12,894		—		61,166
	$	103,686	$	13,000	$	—	$	116,686

	August 28, 2021
(in thousands)	Level 1		Level 2		Level 3		Fair Value
Other current assets	$	46,007	$	—	$	—	$	46,007
Other long-term assets		54,105		13,806		—		67,911
	$	100,112	$	13,806	$	—	$	113,918

9

At November 20, 2021, the fair value measurement amounts for assets and liabilities recorded in the accompanying Condensed Consolidated Balance Sheets consisted of short-term marketable debt securities, which are included within Other current assets, and long-term marketable debt securities, which are included in 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 securities, including benchmark yields and reported trades. The fair values of the marketable debt securities, by asset class, are described in “Note D – Marketable Debt Securities.”

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 F – Financing.”

Note D – Marketable Debt Securities

Marketable debt securities are carried at fair value, with unrealized gains and losses, net of income taxes, recorded in Accumulated other comprehensive loss until realized, and any credit risk related losses are recognized in net income in the period incurred. The Company’s basis for determining the cost of a security sold is the “Specific Identification Model.”

The Company’s available-for-sale marketable debt securities consisted of the following:

	November 20, 2021
	Amortized		Gross		Gross
	Cost		Unrealized		Unrealized		Fair
(in thousands)	Basis		Gains		Losses		Value
Corporate debt securities	$	20,956	$	196	$	(26)	$	21,126
Government bonds		61,258		202		(151)		61,309
Mortgage-backed securities		6,047		35		(36)		6,046
Asset-backed securities and other		28,225		27		(47)		28,205
	$	116,486	$	460	$	(260)	$	116,686

	August 28, 2021
	Amortized		Gross		Gross
	Cost		Unrealized		Unrealized		Fair
(in thousands)	Basis		Gains		Losses		Value
Corporate debt securities	$	23,650	$	329	$	(2)	$	23,977
Government bonds		65,416		338		(2)		65,752
Mortgage-backed securities		6,552		58		(8)		6,602
Asset-backed securities and other		17,551		43		(7)		17,587
	$	113,169	$	768	$	(19)	$	113,918

10

The debt securities held at November 20, 2021, had effective maturities ranging from less than one year to approximately four years. At November 20, 2021, the Company held 20 securities that are in an unrealized loss position of approximately $260 thousand. 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.

Included above in total available-for-sale marketable debt securities are $92.8 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.

Note E – 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 net realizable value 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 historical price deflation on the Company’s merchandise purchases, the Company has exhausted its LIFO reserve balance. The Company’s policy is not to write up inventory in excess of replacement cost. The difference between LIFO cost and replacement cost, which will be reduced upon experiencing price inflation on the Company’s merchandise purchases, was $312.7 million at November 20, 2021 and $335.3 million at August 28, 2021.

Note F – Financing

The Company’s debt consisted of the following:

	November 20,		August 28,
(in thousands)	2021		2021
3.700% Senior Notes due April 2022, effective interest rate of 3.85%	$	500,000	$	500,000
2.875% Senior Notes due January 2023, effective interest rate of 3.21%		300,000		300,000
3.125% Senior Notes due July 2023, effective interest rate of 3.26%		500,000		500,000
3.125% Senior Notes due April 2024, effective interest rate 3.32%		300,000		300,000
3.250% Senior Notes due April 2025, effective interest rate 3.36%		400,000		400,000
3.625% Senior Notes due April 2025, effective interest rate 3.78%		500,000		500,000
3.125% Senior Notes due April 2026, effective interest rate of 3.28%		400,000		400,000
3.750% Senior Notes due June 2027, effective interest rate of 3.83%		600,000		600,000
3.750% Senior Notes due April 2029, effective interest rate of 3.86%		450,000		450,000
4.000% Senior Notes due April 2030, effective interest rate 4.09%		750,000		750,000
1.650% Senior Notes due January 2031, effective interest rate of 2.19%		600,000		600,000
Total debt before discounts and debt issuance costs		5,300,000		5,300,000
Less: Current portion of debt		500,000		—
Less: Discounts and debt issuance costs		28,734		30,180
Debt, less current portion	$	4,771,266	$	5,269,820

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. The Revolving Credit Agreement will terminate, and all amounts borrowed will be due and payable on November 15, 2026, but AutoZone may make up to two requests to extend the termination date for an additional period of one year each. Revolving borrowings under the Revolving Credit Agreement may be base rate loans, Eurodollar 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.

11

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 November 20, 2021, the Company had no outstanding borrowings, $1.8 million of outstanding letters of credit and $2.2 billion of availability under the Revolving Credit Agreement.

As of November 20, 2021, the $500 million 3.700% Senior Notes due April 2022 are classified as current in the accompanying Condensed Consolidated Balance Sheets as the Company has the intent to utilize operating cash to fund the payment.

All Senior Notes are subject to an interest rate adjustment if the debt ratings assigned are downgraded (as defined in the agreements). Further, the Senior Notes contain a provision that repayment 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, sale and leaseback transactions and consolidations, mergers and the sale of assets. 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.

The fair value of the Company’s debt was estimated at $5.6 billion as of November 20, 2021, and $5.7 billion as of August 28, 2021, 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 greater than the carrying value of debt by $306.0 million and $413.1 million at November 20, 2021 and August 28, 2021, respectively, which reflects their face amount, adjusted for any unamortized debt issuance costs and discounts.

As of November 20, 2021, the Company was in compliance with all covenants and expects to remain in compliance with all covenants under its borrowing arrangements.

Note G – Stock Repurchase Program

From January 1, 1998 to November 20, 2021, the Company has repurchased a total of 150.8 million shares of its common stock at an aggregate cost of $26.6 billion, including 514,534 shares of its common stock at an aggregate cost of $900.0 million during the twelve week period ended November 20, 2021.

On October 5, 2021, the Board voted to authorize the repurchase of an additional $1.5 billion of the Company’s common stock in connection with the Company’s ongoing share repurchase program. Since the inception of the repurchase program in 1998, the Board has authorized $27.7 billion in share repurchases. Considering the cumulative repurchases as of November 20, 2021, the Company had $1.0 billion remaining under the Board’s authorization to repurchase its common stock.

Subsequent to November 20, 2021 and through December 10, 2021, the Company has repurchased 63,909 shares of its common stock at an aggregate cost of $120.0 million. On December 14, 2021, the Board voted to increase the authorization by $1.5 billion to raise the cumulative share repurchase authorization to $29.2 billion. Considering the cumulative repurchases subsequent to November 20, 2021 and through December 10, 2021 and the December 14, 2021 additional authorization, the Company has $2.4 billion remaining under the Board’s authorization to repurchase its common stock.

Note H – Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss includes foreign currency translation adjustments, activity for interest rate swaps and treasury rate locks that qualify as cash flow hedges and unrealized gains (losses) on available-for-sale debt securities.

12

Changes in Accumulated other comprehensive loss for the twelve week periods ended November 20, 2021 and November 21, 2020 consisted of the following:

			Net
	Foreign		Unrealized
	Currency and		Gain (Loss)
(in thousands)	Other(1)		on Securities		Derivatives		Total
Balance at August 28, 2021	$	(287,638)	$	589	$	(20,937)	$	(307,986)
Other comprehensive (loss) before reclassifications(2)(3)		(16,566)		(430)		—		(16,996)
Amounts reclassified from Accumulated other comprehensive loss(2)(3)		—		—		655		655
Balance at November 20, 2021	$	(304,204)	$	159	$	(20,282)	$	(324,327)

			Net
	Foreign		Unrealized
	Currency and		Gain (Loss)
(in thousands)	Other(1)		on Securities		Derivatives		Total
Balance at August 29, 2020	$	(332,321)	$	1,845	$	(23,776)	$	(354,252)
Other comprehensive income (loss) before reclassifications(2)(3)		46,995		(322)		—		46,673
Amounts reclassified from Accumulated other comprehensive loss(2)(3)		—		13		659		672
Balance at November 21, 2020	$	(285,326)	$	1,536	$	(23,117)	$	(306,907)

(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 in parentheses indicate debits to Accumulated Other Comprehensive Loss.

(3) Amounts shown are net of tax.

Note I – Litigation

The Company is involved in various legal proceedings incidental to the conduct of its business, including, but not limited to, several lawsuits containing class-action allegations in which the plaintiffs are current and former hourly and salaried employees who allege various wage and hour violations and unlawful termination practices. While the resolution of these matters cannot be predicted with certainty, management does not currently believe that, either individually or in the aggregate, these matters will result in liabilities material to the Company’s Condensed Consolidated Statements of Income, Condensed Consolidated Balance Sheets or Condensed Consolidated Statements of Cash Flows.

Note J – 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 28, 2021.

The Auto Parts Stores segment is a retailer and distributor of automotive parts and accessories through the Company’s 6,785 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.

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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
	November 20,		November 21,
(in thousands)	2021		2020
Net Sales
Auto Parts Stores	$	3,605,508	$	3,101,597
Other		63,396		52,664
Total	$	3,668,904	$	3,154,261
Segment Profit
Auto Parts Stores	$	1,887,453	$	1,639,904
Other		37,707		35,713
Gross profit		1,925,160		1,675,617
Operating, selling, general and administrative expenses		(1,170,675)		(1,060,392)
Interest expense, net		(43,284)		(46,179)
Income before income taxes	$	711,201	$	569,046

14

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors of

AutoZone, Inc.

Results of Review of Interim Financial Statements

We have reviewed the accompanying condensed consolidated balance sheet of AutoZone, Inc. (the Company) as of November 20, 2021, the related condensed consolidated statements of income, comprehensive income, stockholders’ deficit and cash flows for the twelve week periods ended November 20, 2021 and November 21, 2020, and the related notes (collectively referred to as the “condensed consolidated interim financial statements”). Based on our reviews, we are not aware of any material modifications that should be made to the condensed consolidated interim financial statements for them to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of August 28, 2021, the related consolidated statements of income, comprehensive income, stockholders’ deficit and cash flows for the year then ended, and the related notes (not presented herein); and in our report dated October 25, 2021, we expressed an unqualified audit opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of August 28, 2021, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

These financial statements are the responsibility of the Company’s management. 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 SEC and the PCAOB. We conducted our review in accordance with the standards of the PCAOB. A review of interim financial statements consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

/s/ Ernst & Young LLP

Memphis, Tennessee

December 17, 2021

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

In Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), we provide a historical and prospective narrative of our general financial condition, results of operations, liquidity and certain other factors that may affect the future results of AutoZone, Inc. (“AutoZone” or the “Company”). The following MD&A discussion should be read in conjunction with our Condensed Consolidated Financial Statements, related notes to those statements and other financial information, including forward-looking statements and risk factors, that appear elsewhere in this Quarterly Report on Form 10-Q, our Annual Report on Form 10-K for the year ended August 28, 2021 and other filings we make with the SEC.

Forward-Looking Statements

Certain statements contained in this Quarterly Report on Form 10-Q 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; energy prices; weather; competition; credit market conditions; cash flows; access to available and feasible financing; 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, such as the ongoing global coronavirus (“COVID-19”) pandemic; inflation; the ability to hire, train and retain qualified employees; construction delays; the compromising of confidentiality, availability or integrity of information, including due to cyber-attacks; historic growth rate sustainability; downgrade of our credit ratings; damage to our reputation; challenges in international markets; failure or interruption of our information technology systems; origin and raw material costs of suppliers; inventory availability; disruption in our supply chain; impact of tariffs; anticipated impact of new accounting standards; and 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 our Annual Report on Form 10-K for the year ended August 28, 2021, and these Risk Factors should be read carefully. Forward-looking statements are not guarantees of future performance, actual results, developments and business decisions may differ from those contemplated by such forward-looking statements, and 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.

Overview

We are the leading retailer, and a leading distributor, of automotive replacement parts and accessories in the Americas. We began operations in 1979 and at November 20, 2021, operated 6,066 stores in the U.S., 666 stores in Mexico and 53 stores in 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. At November 20, 2021, in 5,211 of our domestic stores, we also had 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 and public sector accounts. We also have commercial programs in all stores in Mexico and Brazil. We sell the ALLDATA brand automotive diagnostic, repair and shop management software through www.alldata.com. Additionally, we 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. 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.

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Operating results for the twelve weeks ended November 20, 2021 are not necessarily indicative of the results that may be expected for the fiscal year ending August 27, 2022. Each of the first three quarters of our fiscal year consists of 12 weeks, and the fourth quarter consists of 16 or 17 weeks. The fourth quarters of fiscal 2022 and 2021 each have 16 weeks. Our business is somewhat seasonal in nature, with the highest sales generally occurring during the months of February through September, and the lowest sales generally occurring in the months of December and January.

COVID-19 Impact

The COVID-19 pandemic continues to impact the global economy and numerous aspects of our business including our customers, employees and suppliers. Our highest priority remains the safety and well-being of our customers and employees. Since the beginning of the COVID-19 pandemic, we have experienced strong same store sales growth and our sales have remained at all-time high volumes.

The long-term impact to our business remains unknown, may magnify risks associated with our business and operations and may continue to cause fluctuations in demand for our products, our store hours and our workforce availability. Other unknowns include the potential impact of any related vaccine mandates on our workforce.

Please refer to the “Risk Factors” section of our Annual report on Form 10-K for the year ended August 28, 2021 for additional information.

Executive Summary

Net sales increased 16.3% for the quarter ended November 20, 2021 compared to the prior year period, which was driven by an increase in domestic same store sales (sales from stores open at least one year) of 13.6%. Domestic commercial sales increased 29.4%, which represents approximately 25% of our total sales. Operating profit increased 22.6% to $754.5 million compared to $615.2 million. Net income for the quarter increased 25.5% to $555.2 million compared to $442.4 million. Diluted earnings per share increased 38.1% to $25.69 per share from $18.61 per share. The increase in net income for the quarter ended November 20, 2021 was driven by strong topline growth and operating expense leverage.

Our business is impacted by various factors within the economy that affect both our consumer and our industry, including but not limited to fuel costs, wage rates, supply chain disruptions, hiring and other economic conditions, including the effects of, and responses to, COVID-19. 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.

During the first quarter of fiscal 2022, failure and maintenance related categories represented the largest portion of our sales mix, at approximately 84% of total sales, which is consistent with the comparable prior year period, with failure related categories continuing to be the largest portion of our sales mix. We did not experience any fundamental shifts in our category sales mix as compared to the previous year. Our sales mix can be impacted by severe or unusual weather over a short-term period. Over the long-term, we believe the impact of the weather on our sales mix is not significant.

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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. 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 time frames of minimal correlation in sales performance and miles driven. During the periods of minimal 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. The average age of the U.S. light vehicle fleet continues to trend in our industry’s favor as the average age has exceeded 11 years since 2012, according to the latest data provided by the Auto Care Association. As of January 1, 2021, the average age of light vehicles on the road was 12.1 years. For September 2021 (latest publicly available information), miles driven in the U.S. increased 7.9% compared to the same period in the prior year. We believe the increase in miles driven is due to the nation beginning to return to pre-pandemic levels, but we are unable to predict if the increase will continue or the extent of the impact it will have on our business.

Twelve Weeks Ended November 20, 2021

Compared with Twelve Weeks Ended November 21, 2020

Net sales for the twelve weeks ended November 20, 2021 increased $514.6 million to $3.7 billion, or 16.3% over net sales of $3.2 billion for the comparable prior year period. Total auto parts sales increased by 16.2%, primarily driven by an increase in domestic same store sales of 13.6% and net sales of $68.7 million from new stores. Domestic commercial sales increased $204.6 million to $899.9 million, or 29.4%, over the comparable prior year period.

Gross profit for the twelve weeks ended November 20, 2021 was $1.9 billion, compared with $1.7 billion during the comparable prior year period. Gross profit, as a percentage of sales was 52.5% compared to 53.1% during the comparable prior year period. The decrease in gross margin was primarily driven by initiatives to accelerate commercial business growth.

Operating, selling, general and administrative expenses for the twelve weeks ended November 20, 2021 were $1.2 billion, or 31.9% of net sales, compared with $1.1 billion, or 33.6% of net sales during the comparable prior year period. The decrease in operating expenses, as a percentage of sales, was driven by strong sales growth.

Net interest expense for the twelve weeks ended November 20, 2021 was $43.3 million compared with $46.2 million during the comparable prior year period. Average borrowings for the twelve weeks ended November 20, 2021 were $5.3 billion, compared with $5.5 billion for the comparable prior year period. Weighted average borrowing rates were 3.30% and 3.27% for the quarter ended November 20, 2021 and November 21, 2020, respectively.

Our effective income tax rate was 21.9% of pretax income for the twelve weeks ended November 20, 2021, and 22.2% for the comparable prior year period. The decrease in the tax rate was primarily attributable to an increased benefit from stock options exercised during the twelve weeks ended November 20, 2021. The benefit of stock options exercised for the twelve weeks ended November 20, 2021 was $11.3 million compared to $7.6 million in the comparable prior year period.

Net income for the twelve week period ended November 20, 2021 increased by $112.8 million to $555.2 million from $442.4 million in the comparable prior year period, and diluted earnings per share increased by 38.1% to $25.69 from $18.61. The impact on current quarter diluted earnings per share from stock repurchases since the end of the comparable prior year period was an increase of $2.33.

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Liquidity and Capital Resources

The primary source of our liquidity is our cash flows realized through the sale of automotive parts, products and accessories. Our cash flow results benefitted from the quarters strong sales and continued progress on our initiatives. 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 long-term growth initiatives and return excess cash to shareholders in the form of share repurchases. As of November 20, 2021, we held $961.1 million of cash and cash equivalents, as well as $2.2 billion in undrawn capacity on our revolving credit facility. 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. However, decreased demand for our products or changes in customer buying patterns would negatively impact our ability to generate cash from operating activities. Decreased demand or changes in buying patterns could also impact our ability to meet our debt covenants of our credit agreements and, therefore, negatively impact the funds available under our revolving credit facility. In the event our liquidity is insufficient, we may be required to limit our spending.

For the twelve weeks ended November 20, 2021, our net cash flows from operating activities provided $777.9 million compared with $683.5 million provided during the comparable prior year period. The increase is primarily due to growth in net income due to accelerated sales growth and a result of favorable changes in accounts payable, driven by higher sustained inventory purchase volume in the current period as compared to the same period in the prior year. These favorable changes were partially offset by a smaller increase in accrued benefits and withholdings in the current period, as compared to the same period in the prior year due to the ability to defer certain payroll tax payments in the prior year under the Coronavirus Aid, Relief, and Economic Security Act.

Our net cash flows used in investing activities for the twelve weeks ended November 20, 2021 were $91.0 million as compared with $110.2 million in the comparable prior year period. Capital expenditures for the twelve weeks ended November 20, 2021 were $102.3 million compared to $113.0 million in the comparable prior year period. The decrease is primarily driven by decreased store openings. During the twelve week period ended November 20, 2021 and November 21, 2020, we opened 18 and 41 net new stores, respectively. Investing cash flows were impacted by our wholly owned captive, which purchased $7.0 million and sold $3.7 million in marketable debt securities during the twelve weeks ended November 20, 2021. During the comparable prior year period, the captive purchased $46.0 million in marketable debt securities and sold $51.2 million.

Our net cash flows used in financing activities for the twelve weeks ended November 20, 2021 were $895.9 million compared to $663.4 million in the comparable prior year period. Stock repurchases were $900.0 million in the current twelve week period as compared with $678.3 million in the prior year period. The treasury stock repurchases were primarily funded by cash flows from operations. Proceeds from the sale of common stock and exercises of stock options for the twelve weeks ended November 20, 2021 and November 21, 2020 provided $21.1 million and $28.7 million, respectively.

During fiscal 2022, we expect to increase the investment in our business as compared to fiscal 2021. Our investments are expected to be directed primarily to expansion of our store base and supply chain to fuel the growth of our domestic and international businesses, which includes new stores, including mega hubs, as well as distribution center expansions and remodels. 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.

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In addition to the 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. Accounts payable, as a percentage of gross inventory, was 129.4% at November 20, 2021, compared to 114.1% at November 21, 2020. The increase from the comparable prior year period was primarily due to increased purchases with favorable vendor terms and higher inventory turns.

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 that we will be able to obtain such financing based on our current credit ratings and favorable experiences in the debt markets in the past.

For the trailing four quarters ended November 20, 2021, our adjusted after-tax return on invested capital (“ROIC”), which is a non-GAAP measure, was 44.7% as compared to 36.0% for the comparable prior year period. 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 (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. The Revolving Credit Agreement will terminate, and all amounts borrowed will be due and payable, on November 15, 2026, but we may make up to two requests to extend the termination date for an additional period of one year each. Revolving borrowings under the Revolving Credit Agreement may be base rate loans, Eurodollar 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 November 20, 2021, we had no outstanding borrowings, $1.8 million of outstanding letters of credit and $2.2 billion of availability under our Revolving Credit Agreement.

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. As of November 20, 2021, we had $25.0 million in letters of credit outstanding under the letter of credit facility, which expires in June 2022.

20

In addition to the outstanding letters of credit issued under the committed facilities discussed above, we had $143.8 million in letters of credit outstanding as of November 20, 2021. These letters of credit have various maturity dates and were issued on an uncommitted basis.

As of November 20, 2021, the $500 million 3.700% Senior Notes due April 2022 are classified as current in the Consolidated Balance Sheets as the Company has the intent to utilize operating cash to fund the repayment. 

All Senior Notes are subject to an interest rate adjustment if the debt ratings assigned are downgraded (as defined in the agreements). Further, 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. As of November 20, 2021, we were in compliance with all covenants and expect to remain in compliance with all covenants under our borrowing arrangements.

Our adjusted debt to earnings before interest, taxes, depreciation, amortization, rent and share-based compensation expense (“EBITDAR”) ratio was 2.0:1 as of November 20, 2021 and was 2.3:1 as of November 21, 2020. We calculate adjusted debt as the sum of total debt, financing 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. Adjusted debt to EBITDAR is calculated on a trailing four quarter basis. We target our debt levels to a ratio of adjusted debt to EBITDAR in order to maintain our investment grade credit ratings. We 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

From January 1, 1998 to November 20, 2021, we have repurchased a total of 150.8 million shares of our common stock at an aggregate cost of $26.6 billion, including 514,534 shares of our common stock at an aggregate cost of $900.0 million during the twelve week period ended November 20, 2021.

On October 5, 2021, the Board voted to authorize the repurchase of an additional $1.5 billion of our common stock in connection with our ongoing share repurchase program. Since the inception of the repurchase program in 1998, the Board has authorized $27.7 billion in share repurchases. Considering the cumulative repurchases as of November 20, 2021, we had $1.0 billion remaining under the Board’s authorization to repurchase our common stock.

Subsequent to November 20, 2021 and through December 10, 2021, we have repurchased 63,909 shares of our common stock at an aggregate cost of $120.0 million. On December 14, 2021, the Board voted to increase the authorization by $1.5 billion to raise the cumulative share repurchase authorization to $29.2 billion. Considering the cumulative repurchases subsequent to November 20, 2021 and through December 10, 2021 and the December 14, 2021 additional authorization, we have $2.4 billion remaining under the Board’s authorization to repurchase our common stock.

Off-Balance Sheet Arrangements

Since our fiscal year end, we have canceled, issued and modified stand-by letters of credit that are primarily renewed on an annual basis to cover deductible payments to our casualty insurance carriers. Our total stand-by letters of credit commitment at November 20, 2021, was $170.6 million, compared with $162.4 million at August 28, 2021, and our total surety bonds commitment at November 20, 2021, was $36.8 million, compared with $35.4 million at August 28, 2021.

21

Financial Commitments

Except for the previously discussed Revolving Credit Agreement, as of November 20, 2021, there were no significant changes to our contractual obligations as described in our Annual Report on Form 10-K for the year ended August 28, 2021.

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 GAAP. These non-GAAP financial measures provide additional information for determining our optimal 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 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 the Compensation Committee of the Board use these 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.

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Reconciliation of Non-GAAP Financial Measure: Adjusted After-Tax ROIC

The following tables calculate the percentages of adjusted ROIC for the trailing four quarters ended November 20, 2021 and November 21, 2020.

	A		B		A-B=C		D		C+D
	Fiscal Year		Twelve		Forty		Twelve		Trailing Four
	Ended		Weeks Ended		Weeks Ended		Weeks Ended		Quarters Ended
	August 28,		November 21,		August 28,		November 20,		November 20,
(in thousands, except percentage)	2021		2020		2021		2021		2021
Net income	$	2,170,314	$	442,433	$	1,727,881	$	555,235	$	2,283,116
Adjustments:
Interest expense		195,337		46,179		149,158		43,284		192,442
Rent expense(1)		345,380		78,027		267,353		82,327		349,680
Tax effect(2)		(113,551)		(26,083)		(87,468)		(26,378)		(113,846)
Adjusted after-tax return	$	2,597,480	$	540,556	$	2,056,924	$	654,468	$	2,711,392
Average debt(3)									$	5,368,050
Average stockholders’ deficit(3)										(1,647,246)
Add: Rent x 6(1)										2,098,080
Average finance lease liabilities(3)										247,537
Invested capital									$	6,066,421
Adjusted after-tax ROIC										44.7	%

	A		B		A-B=C		D		C+D
	Fiscal Year		Twelve		Forty		Twelve		Trailing Four
	Ended		Weeks Ended		Weeks Ended		Weeks Ended		Quarters Ended
	August 29,		November 23,		August 29,		November 21,		November 21,
(in thousands, except percentage)	2020		2019		2020		2020		2020
Net income	$	1,732,972	$	350,338	$	1,382,634	$	442,433	$	1,825,067
Adjustments:
Interest expense		201,165		43,743		157,422		46,179		203,601
Rent expense(1)		329,783		75,592		254,191		78,027		332,218
Tax effect(2)		(114,685)		(25,776)		(88,909)		(26,828)		(115,737)
Adjusted after-tax return	$	2,149,235	$	443,897	$	1,705,338	$	539,811	$	2,245,149
Average debt(3)									$	5,437,062
Average stockholders' deficit(3)										(1,404,980)
Add: Rent x 6(1)										1,993,308
Average finance lease liabilities(3)										214,601
Invested capital									$	6,239,991
Adjusted after-tax ROIC										36.0	%

23

Reconciliation of Non-GAAP Financial Measure: Adjusted Debt to EBITDAR

The following tables calculate the ratio of adjusted debt to EBITDAR for the trailing four quarters ended November 20, 2021 and November 21, 2020.

	A		B		A-B=C		D		C+D
	Fiscal Year		Twelve		Forty		Twelve		Trailing Four
	Ended		Weeks Ended		Weeks Ended		Weeks Ended		Quarters Ended
	August 28,		November 21,		August 28,		November 20,		November 20,
(in thousands, except ratio)	2021		2020		2021		2021		2021
Net income	$	2,170,314	$	442,433	$	1,727,881	$	555,235	$	2,283,116
Add: Interest expense		195,337		46,179		149,158		43,284		192,442
Income tax expense		578,876		126,613		452,263		155,966		608,229
EBIT		2,944,527		615,225		2,329,302		754,485		3,083,787
Add: Depreciation and amortization expense		407,683		89,551		318,132		99,590		417,722
Rent expense(1)		345,380		78,027		267,353		82,327		349,680
Share-based expense		56,112		10,508		45,604		14,295		59,899
Adjusted EBITDAR	$	3,753,702	$	793,311	$	2,960,391	$	950,697	$	3,911,088
Debt									$	5,271,266
Financing lease liabilities										274,703
Add: Rent x 6(1)										2,098,080
Adjusted debt									$	7,644,049
Adjusted debt to EBITDAR
										2.0

	A		B		A-B=C		D		C+D
	Fiscal Year		Twelve		Forty		Twelve		Trailing Four
	Ended		Weeks Ended		Weeks Ended		Weeks Ended		Quarters Ended
	August 29,		November 23,		August 29,		November 21,		November 21,
(in thousands, except ratio)	2020		2019		2020		2020		2020
Net income	$	1,732,972	$	350,338	$	1,382,634	$	442,433	$	1,825,067
Add: Interest expense		201,165		43,743		157,422		46,179		203,601
Income tax expense		483,542		105,942		377,600		126,613		504,213
EBIT		2,417,679		500,023		1,917,656		615,225		2,532,881
Add: Depreciation and amortization expense		397,466		89,750		307,716		89,551		397,267
Rent expense(1)		329,783		75,592		254,191		78,027		332,218
Share-based expense		44,835		9,996		34,839		10,508		45,347
Adjusted EBITDAR	$	3,189,763	$	675,361	$	2,514,402	$	793,311	$	3,307,713
Debt									$	5,514,874
Financing lease liabilities										232,921
Add: Rent x 6(1)										1,993,308
Adjusted debt									$	7,741,103
Adjusted debt to EBITDAR										2.3

(1) The table below outlines the calculation of rent expense and reconciles rent expense to total lease cost, per ASC 842, the most directly comparable GAAP financial measure, for the trailing four quarters ended November 20, 2021 and November 21, 2020 (in thousands):

	Trailing Four Quarters Ended
(in thousands)	November 20, 2021		November 21,2020
Total lease cost, per ASC 842, for the trailing four quarters	$	436,488	$	413,790
Less: Finance lease interest and amortization		(61,102)		(56,256)
Less: Variable operating lease components, related to insurance and common area maintenance		(25,706)		(25,316)
Rent expense for the trailing four quarters	$	349,680	$	332,218

(2) Effective tax rate over trailing four quarters ended November 20, 2021 and November 21, 2020 is 21.0% and 21.6%, respectively.

(3) All averages are computed based on trailing five quarter balances.

24

Recent Accounting Pronouncements

Refer to Note A of the Notes to Condensed Consolidated Financial Statements for the discussion of recent accounting pronouncements.

Critical Accounting Policies and Estimates

Our critical accounting policies are described in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended August 28, 2021. There have been no significant changes to our critical accounting policies since the filing of our Annual Report on Form 10-K for the year ended August 28, 2021.

Item 3.Quantitative and Qualitative Disclosures about Market Risk

At November 20, 2021, the only material change to our instruments and positions that are sensitive to market risk since the disclosures in our Annual Report on Form 10-K for the year ended August 28, 2021 was our Revolving Credit Agreement, which was amended and restated on November 15, 2021, and increased our borrowing capacity from $2.0 billion to $2.25 billion.

The fair value of our debt was estimated at $5.6 billion as of November 20, 2021, and $5.7 billion as of August 28, 2021, 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 was greater than the carrying value of debt by $306.0 million and $413.1 million at November 20, 2021 and August 28, 2021, respectively. We did not have any variable rate debt outstanding at November 20, 2021. The carrying value of debt reflects its face amount adjusted for any unamortized debt issuance costs and discounts. We had outstanding fixed rate debt of $5.3 billion, net of unamortized debt issuance costs of $28.7 million at November 20, 2021 and $5.3 billion, net of unamortized debt issuance costs of $30.2 million at August 28, 2021. A one percentage point increase in interest rates would have reduced the fair value of our fixed rate debt by $239.1 million at November 20, 2021.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of November 20, 2021, an evaluation was performed under the supervision and with the participation of our management, including the Chief Executive Officer and 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 Chief Financial Officer, concluded that our disclosure controls and procedures were effective as of November 20, 2021.

Changes in Internal Controls

There were no changes in our internal control over financial reporting that occurred during the quarter ended November 20, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

As of the date of this filing, there have been no additional material legal proceedings or material developments in the legal proceedings disclosed in Part 1, Item 3, of our Annual Report in Form 10-K for the fiscal year ended August 28, 2021.

Item 1A. Risk Factors

As of the date of this filing, there have been no material changes in our risk factors from those disclosed in Part I, Item 1A, of our Annual Report on Form 10-K for the fiscal year ended August 28, 2021.

25

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Shares of common stock repurchased by the Company during the quarter ended November 20, 2021 were as follows:

Issuer Repurchases of Equity Securities

				Total Number of	Maximum Dollar
				Shares Purchased as	Value that May Yet
	Total Number	Average		Part of Publicly	Be Purchased Under
	of Shares	Price Paid		Announced Plans or	the Plans or
Period	Purchased	per Share		Programs	Programs
August 29, 2021 to September 25, 2021	71,993	$	1,562.62	71,993	$	305,071,261
September 26, 2021 to October 23, 2021	196,201		1,707.95	196,201		1,469,969,461
October 24, 2021 to November 20, 2021	246,340		1,836.48	246,340		1,017,572,023
Total	514,534	$	1,749.15	514,534	$	1,017,572,023

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. This program was most recently amended by the Board on October 5, 2021 to increase the repurchase authorization by $1.5 billion and again on December 14, 2021 to increase the repurchase authorization by an additional $1.5 billion. This brings the cumulative share repurchase authorization to $29.2 billion. All of the above repurchases were part of this program.

Subsequent to November 20, 2021 and through December 10, 2021, we have repurchased 63,909 shares of our common stock at an aggregate cost of $120.0 million.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

Item 6. Exhibits

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	Seventh 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 19, 2018.
10.1	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
15.1	Letter Regarding Unaudited Interim Financial Statements.

26

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.
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.
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 Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104.	The cover page for the Company’s Quarterly Report on Form 10-Q for the quarter ended November 20, 2021, has been formatted in Inline XBRL.

* Furnished herewith.

27

SIGNATURES

Pursuant to the requirements 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.

	AUTOZONE, INC.
	By:	/s/ JAMERE JACKSON
	Jamere Jackson
	Chief Financial Officer and Executive Vice President
	Finance and Store Development
	(Principal Financial Officer)
	By:	/s/ J. SCOTT MURPHY
	J. Scott Murphy
	Vice President, Controller (Principal Accounting Officer)
Dated: December 17, 2021

28

EX-15.1

Exhibit 15.1

To the Stockholders and Board of Directors of

AutoZone, Inc.

We are aware of the incorporation by reference in the following Registration Statements:

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-8 No. 333-171186) pertaining to the AutoZone, Inc. 2011 Equity Incentive Award Plan

Registration Statement (Form S-3ASR No. 333-180768) pertaining to a shelf registration to sell debt securities

Registration Statement (Form S-3ASR No. 333-203439) pertaining to a shelf registration to sell debt securities

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;

and in the related Prospectuses of our report dated December 17, 2021, relating to the unaudited condensed consolidated interim financial statements of AutoZone, Inc. that are included in its Form 10-Q for the quarter ended November 20, 2021.

/s/ Ernst & Young LLP

Memphis, Tennessee

December 17, 2021

EX-31.1

Exhibit 31.1

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, William C. Rhodes, III, certify that:

1.    I have reviewed this Quarterly Report on Form 10-Q 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.

December 17, 2021
	/s/ WILLIAM C. RHODES, III
	William C. Rhodes, III
	Chairman, President and Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

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 Quarterly Report on Form 10-Q 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.

une
December 17, 2021
	/s/ JAMERE JACKSON
	Jamere Jackson
	Chief Financial Officer and Executive Vice President
	Finance and Store Development
	(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of AutoZone, Inc. (the “Company”) on Form 10-Q for the period ended November 20, 2021, as filed with the Securities and Exchange Commission 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)           the Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and

(ii)          the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

December 17, 2021
	/s/ WILLIAM C. RHODES, III
	William C. Rhodes, III
	Chairman, President and Chief Executive Officer
	(Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of AutoZone, Inc. (the “Company”) on Form 10-Q for the period ended November 20, 2021 as filed with the Securities and Exchange Commission 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) the Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and

(ii)          the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

December 17, 2021
	/s/ JAMERE JACKSON
	Jamere Jackson
	Chief Financial Officer and Executive Vice President
	Finance and Store Development
	(Principal Financial Officer)

XML

Cover Page - shares	3 Months Ended
	Nov. 20, 2021	Dec. 10, 2021
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Nov. 20, 2021
Entity File Number	1-10714
Entity Registrant Name	AUTOZONE INC
Entity Incorporation, State or Country Code	NV
Entity Tax Identification Number	62-1482048
Entity Address, Address Line One	123 South Front Street
Entity Address, City or Town	Memphis
Entity Address, State or Province	TN
Entity Address, Postal Zip Code	38103
City Area Code	901
Local Phone Number	495-6500
Title of 12(b) Security	Common Stock
Trading Symbol	AZO
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		20,634,396
Current Fiscal Year End Date	--08-27
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q1
Entity Central Index Key	0000866787
Amendment Flag	false

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Nov. 20, 2021	Aug. 28, 2021
Current assets:
Cash and cash equivalents	$ 961,125	$ 1,171,335
Accounts receivable	379,276	378,392
Merchandise inventories	4,768,258	4,639,813
Other current assets	240,487	225,763
Total current assets	6,349,146	6,415,303
Property and equipment:
Property and equipment	8,854,872	8,807,178
Less: Accumulated depreciation and amortization	(3,996,944)	(3,950,287)
Property and equipment, net	4,857,928	4,856,891
Operating lease right-of-use assets	2,717,566	2,718,712
Goodwill	302,645	302,645
Deferred income taxes	40,164	41,043
Other long-term assets	193,500	181,605
Other long-term assets, total	3,253,875	3,244,005
Total assets	14,460,949	14,516,199
Current liabilities:
Accounts payable	6,171,344	6,013,924
Current portion of operating lease liabilities	263,899	236,568
Current portion of debt	500,000
Accrued expenses and other	965,898	1,039,788
Income taxes payable	186,752	79,474
Total current liabilities	8,087,893	7,369,754
Debt, less current portion	4,771,266	5,269,820
Operating lease liabilities, less current portion	2,624,676	2,632,842
Deferred income taxes	355,310	337,125
Other long-term liabilities	746,554	704,194
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; 23,057 shares issued and 20,674 shares outstanding as of November 20, 2021; 23,007 shares issued and 21,138 shares outstanding as of August 28, 2021	231	230
Additional paid-in capital	1,499,557	1,465,669
Retained earnings (deficit)	135,406	(419,829)
Accumulated other comprehensive loss	(324,327)	(307,986)
Treasury stock, at cost	(3,435,617)	(2,535,620)
Total stockholders' deficit	(2,124,750)	(1,797,536)
Total liabilities and stockholders' deficit	$ 14,460,949	$ 14,516,199

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands	Nov. 20, 2021	Aug. 28, 2021
Preferred Stock
Preferred stock, shares authorized	1,000	1,000
Preferred stock, shares issued	0	0
Common Stock
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	200,000	200,000
Common stock, shares issued	23,057	23,007
Common stock, shares outstanding	20,674	21,138

XML

CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Nov. 20, 2021	Nov. 21, 2020
Income Statement [Abstract]
Net sales	$ 3,668,904	$ 3,154,261
Cost of sales, including warehouse and delivery expenses	1,743,744	1,478,644
Gross profit	1,925,160	1,675,617
Operating, selling, general and administrative expenses	1,170,675	1,060,392
Operating profit	754,485	615,225
Interest expense, net	43,284	46,179
Income before income taxes	711,201	569,046
Income tax expense	155,966	126,613
Net income	$ 555,235	$ 442,433
Weighted average shares for basic earnings per share	20,988	23,223
Effect of dilutive stock equivalents	621	555
Weighted average shares for diluted earnings per share	21,609	23,778
Basic earnings per share	$ 26.45	$ 19.05
Diluted earnings per share	$ 25.69	$ 18.61

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended
	Nov. 20, 2021	Nov. 21, 2020
Statement of Comprehensive Income [Abstract]
Net income	$ 555,235	$ 442,433
Other comprehensive (loss) income:
Foreign currency translation adjustments	(16,566)	46,995
Unrealized losses on marketable debt securities, net of taxes	(430)	(309)
Net derivative activities, net of taxes	655	659
Total other comprehensive (loss) income	(16,341)	47,345
Comprehensive income	$ 538,894	$ 489,778

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended		287 Months Ended
	Nov. 20, 2021	Nov. 21, 2020	Nov. 20, 2021
Cash flows from operating activities:
Net income	$ 555,235	$ 442,433
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property and equipment and intangibles	99,590	89,551
Amortization of debt origination fees	2,639	3,150
Deferred income taxes	18,096	10,295
Share-based compensation expense	14,295	10,508
Changes in operating assets and liabilities:
Accounts receivable	(1,576)	17,491
Merchandise inventories	(136,988)	(124,746)
Accounts payable and accrued expenses	89,268	56,273
Income taxes payable	107,411	79,558
Other, net	29,960	98,978
Net cash provided by operating activities	777,930	683,491
Cash flows from investing activities:
Capital expenditures	(102,269)	(113,036)
Purchase of marketable debt securities	(7,026)	(45,985)
Proceeds from sale of marketable debt securities	3,709	51,210
Proceeds (payments) from disposal of capital assets and other, net	14,625	(2,368)
Net cash used in investing activities	(90,961)	(110,179)
Cash flows from financing activities:
Net proceeds from sale of common stock	21,100	28,666
Purchase of treasury stock	(899,997)	(678,324)	$ (26,600,000)
Repayment of principal portion of finance lease liabilities	(13,687)	(13,786)
Other, net	(3,362)
Net cash used in financing activities	(895,946)	(663,444)
Effect of exchange rate changes on cash	(1,233)	3,322
Net decrease in cash and cash equivalents	(210,210)	(86,810)
Cash and cash equivalents at beginning of period	1,171,335	1,750,815
Cash and cash equivalents at end of period	$ 961,125	$ 1,664,005	$ 961,125

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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT - USD ($) shares in Thousands, $ in Thousands	Common Stock	Additional Paid-In Capital	Retained (Deficit) Earnings	Accumulated Other Comprehensive Loss	Treasury Stock	Total
Balance at Aug. 29, 2020	$ 237	$ 1,283,495	$ (1,450,970)	$ (354,252)	$ (356,487)	$ (877,977)
Balance, Shares at Aug. 29, 2020	23,697
Net income			442,433			442,433
Total other comprehensive income				47,345		47,345
Purchase of treasury stock					(678,324)	(678,324)
Issuance of common stock under stock options and stock purchase plans	$ 1	28,665				28,666
Issuance of common stock under stock options and stock purchase plans (in shares)	64
Share-based compensation expense		10,877				10,877
Balance at Nov. 21, 2020	$ 238	1,323,037	(1,008,537)	(306,907)	(1,034,811)	(1,026,980)
Balance, shares at Nov. 21, 2020	23,761
Balance at Aug. 28, 2021	$ 230	1,465,669	(419,829)	(307,986)	(2,535,620)	(1,797,536)
Balance, Shares at Aug. 28, 2021	23,007
Net income			555,235			555,235
Total other comprehensive income				(16,341)		(16,341)
Purchase of treasury stock					(899,997)	(899,997)
Issuance of common stock under stock options and stock purchase plans	$ 1	21,100				21,101
Issuance of common stock under stock options and stock purchase plans (in shares)	50
Share-based compensation expense		12,788				12,788
Balance at Nov. 20, 2021	$ 231	$ 1,499,557	$ 135,406	$ (324,327)	$ (3,435,617)	$ (2,124,750)
Balance, shares at Nov. 20, 2021	23,057

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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT (Parenthetical) - shares	3 Months Ended		287 Months Ended
	Nov. 20, 2021	Nov. 21, 2020	Nov. 20, 2021
Statement of Stockholders' Deficit
Purchase of treasury stock, shares	514,534	584,000	150,800,000

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General

3 Months Ended

Nov. 20, 2021

General

General

Note A – General

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“U.S. GAAP”) for interim financial information and are presented in accordance with the requirements of Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission’s (the “SEC”) rules and regulations. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments, including normal recurring accruals, considered necessary for a fair presentation have been included. For further information, refer to the consolidated financial statements and related notes included in the AutoZone, Inc. (“AutoZone” or the “Company”) Annual Report on Form 10-K for the year ended August 28, 2021.

Operating results for the twelve weeks ended November 20, 2021 are not necessarily indicative of the results that may be expected for the full fiscal year ending August 27, 2022. Each of the first three quarters of AutoZone’s fiscal year consists of 12 weeks, and the fourth quarter consists of 16 or 17 weeks. The fourth quarters of fiscal 2022 and 2021 each have 16 weeks.

The Company does not expect any recently issued accounting pronouncements to have a material effect on the Company’s financial statements and related disclosures.

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Share-Based Payments

3 Months Ended

Nov. 20, 2021

Share-Based Payments

Share-Based Payments

Note B – Share-Based Payments

AutoZone maintains several equity incentive plans, which provide equity-based compensation to non-employee directors and eligible employees for their service to AutoZone, its subsidiaries or affiliates. The Company recognizes compensation expense for share-based payments based on the fair value of the awards at the grant date. Share-based payments include stock option grants, restricted stock grants, restricted stock unit grants, stock appreciation rights, discounts on shares sold to employees under share purchase plans and other awards. Additionally, directors’ fees are paid in restricted stock units with value equivalent to the value of shares of common stock as of the grant date. The change in fair value of liability-based stock awards is also recognized in share-based compensation expense.

Stock Options:

The Company made stock option grants of 163,786 shares during the twelve week period ended November 20, 2021 and granted options to purchase 194,511 shares during the comparable prior year period. The Company grants options to purchase common stock to certain of its employees under its equity incentive plans at prices equal to the market value of the stock on the date of grant. 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 weighted average fair value of the stock option awards granted during the twelve week periods ended November 20, 2021 and November 21, 2020, using the Black-Scholes-Merton multiple-option pricing valuation model, was $462.80 and $299.48 per share, respectively, using the following weighted average key assumptions:

	Twelve Weeks Ended
	November 20,		November 21,
	2021		2020
Expected price volatility	28	%	28	%
Risk-free interest rate	1.1	%	0.4	%
Weighted average expected lives (in years)	5.6		5.6
Forfeiture rate	10	%	10	%
Dividend yield	0	%	0	%

During the twelve week period ended November 20, 2021, 47,705 stock options were exercised at a weighted average exercise price of $549.86. In the comparable prior year period, 59,990 stock options were exercised at a weighted average exercise price of $496.58.

As of November 20, 2021, total unrecognized share-based expense related to stock options, net of estimated forfeitures, was approximately $98.4 million, before income taxes, which we expect to recognize over an estimated weighted average period of 2.2 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. Grants of employee restricted stock units 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. Grants of non-employee director restricted stock units are made and expensed on January 1 of each year, as they vest immediately.

As of November 20, 2021, total unrecognized stock-based compensation expense related to nonvested restricted stock unit awards, net of estimated forfeitures, was approximately $15.6 million, before income taxes, which we expect to recognize over an estimated weighted average period of 2.9 years.

Transactions related to restricted stock units for the twelve weeks ended November 20, 2021 were as follows:

		Weighted-
	Number	Average Grant
	of Shares	Date Fair Value
Nonvested at August 28, 2021	15,751	$	1,005.41
Granted	4,352		1,651.22
Vested	(5,373)		957.89
Canceled or forfeited	(696)		1,023.97
Nonvested at November 20, 2021	14,034	$	1,222.96

Total share-based compensation expense (a component of Operating, selling, general and administrative expenses) was $14.3 million for the twelve week period ended November 20, 2021, and $10.5 million for the comparable prior year period.

For the twelve week period ended November 20, 2021, 97,942 stock options were excluded from the diluted earnings per share computation because they would have been anti-dilutive. For the comparable prior year period, 293,280 anti-dilutive stock options were excluded from the dilutive earnings per share computation.

See AutoZone’s Annual Report on Form 10-K for the year ended August 28, 2021 and other filings with the SEC, for a discussion regarding the methodology used in developing AutoZone’s assumptions to determine the fair value of the option awards and a description of AutoZone’s Amended and Restated 2011 Equity Incentive Award Plan, the AutoZone, Inc. 2020 Omnibus Incentive Award Plan and the 2020 Director Compensation Program.

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Fair Value Measurements

3 Months Ended

Nov. 20, 2021

Fair Value Measurements

Fair Value Measurements

Note C – 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.

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:

	November 20, 2021
(in thousands)	Level 1		Level 2		Level 3		Fair Value
Other current assets	$	55,414	$	106	$	—	$	55,520
Other long-term assets		48,272		12,894		—		61,166
	$	103,686	$	13,000	$	—	$	116,686

	August 28, 2021
(in thousands)	Level 1		Level 2		Level 3		Fair Value
Other current assets	$	46,007	$	—	$	—	$	46,007
Other long-term assets		54,105		13,806		—		67,911
	$	100,112	$	13,806	$	—	$	113,918

At November 20, 2021, the fair value measurement amounts for assets and liabilities recorded in the accompanying Condensed Consolidated Balance Sheets consisted of short-term marketable debt securities, which are included within Other current assets, and long-term marketable debt securities, which are included in 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 securities, including benchmark yields and reported trades. The fair values of the marketable debt securities, by asset class, are described in “Note D – Marketable Debt Securities.”

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 F – Financing.”

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Marketable Debt Securities

3 Months Ended

Nov. 20, 2021

Marketable Debt Securities

Marketable Debt Securities

Note D – Marketable Debt Securities

Marketable debt securities are carried at fair value, with unrealized gains and losses, net of income taxes, recorded in Accumulated other comprehensive loss until realized, and any credit risk related losses are recognized in net income in the period incurred. The Company’s basis for determining the cost of a security sold is the “Specific Identification Model.”

The Company’s available-for-sale marketable debt securities consisted of the following:

	November 20, 2021
	Amortized		Gross		Gross
	Cost		Unrealized		Unrealized		Fair
(in thousands)	Basis		Gains		Losses		Value
Corporate debt securities	$	20,956	$	196	$	(26)	$	21,126
Government bonds		61,258		202		(151)		61,309
Mortgage-backed securities		6,047		35		(36)		6,046
Asset-backed securities and other		28,225		27		(47)		28,205
	$	116,486	$	460	$	(260)	$	116,686

	August 28, 2021
	Amortized		Gross		Gross
	Cost		Unrealized		Unrealized		Fair
(in thousands)	Basis		Gains		Losses		Value
Corporate debt securities	$	23,650	$	329	$	(2)	$	23,977
Government bonds		65,416		338		(2)		65,752
Mortgage-backed securities		6,552		58		(8)		6,602
Asset-backed securities and other		17,551		43		(7)		17,587
	$	113,169	$	768	$	(19)	$	113,918

The debt securities held at November 20, 2021, had effective maturities ranging from less than one year to approximately four years. At November 20, 2021, the Company held 20 securities that are in an unrealized loss position of approximately $260 thousand. 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.

Included above in total available-for-sale marketable debt securities are $92.8 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.

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Merchandise Inventories

3 Months Ended

Nov. 20, 2021

Merchandise Inventories

Merchandise Inventories

Note E – 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 net realizable value 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 historical price deflation on the Company’s merchandise purchases, the Company has exhausted its LIFO reserve balance. The Company’s policy is not to write up inventory in excess of replacement cost. The difference between LIFO cost and replacement cost, which will be reduced upon experiencing price inflation on the Company’s merchandise purchases, was $312.7 million at November 20, 2021 and $335.3 million at August 28, 2021.

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Financing

3 Months Ended

Nov. 20, 2021

Financing

Financing

Note F – Financing

The Company’s debt consisted of the following:

	November 20,		August 28,
(in thousands)	2021		2021
3.700% Senior Notes due April 2022, effective interest rate of 3.85%	$	500,000	$	500,000
2.875% Senior Notes due January 2023, effective interest rate of 3.21%		300,000		300,000
3.125% Senior Notes due July 2023, effective interest rate of 3.26%		500,000		500,000
3.125% Senior Notes due April 2024, effective interest rate 3.32%		300,000		300,000
3.250% Senior Notes due April 2025, effective interest rate 3.36%		400,000		400,000
3.625% Senior Notes due April 2025, effective interest rate 3.78%		500,000		500,000
3.125% Senior Notes due April 2026, effective interest rate of 3.28%		400,000		400,000
3.750% Senior Notes due June 2027, effective interest rate of 3.83%		600,000		600,000
3.750% Senior Notes due April 2029, effective interest rate of 3.86%		450,000		450,000
4.000% Senior Notes due April 2030, effective interest rate 4.09%		750,000		750,000
1.650% Senior Notes due January 2031, effective interest rate of 2.19%		600,000		600,000
Total debt before discounts and debt issuance costs		5,300,000		5,300,000
Less: Current portion of debt		500,000		—
Less: Discounts and debt issuance costs		28,734		30,180
Debt, less current portion	$	4,771,266	$	5,269,820

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. The Revolving Credit Agreement will terminate, and all amounts borrowed will be due and payable on November 15, 2026, but AutoZone may make up to two requests to extend the termination date for an additional period of one year each. Revolving borrowings under the Revolving Credit Agreement may be base rate loans, Eurodollar 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 November 20, 2021, the Company had no outstanding borrowings, $1.8 million of outstanding letters of credit and $2.2 billion of availability under the Revolving Credit Agreement.

As of November 20, 2021, the $500 million 3.700% Senior Notes due April 2022 are classified as current in the accompanying Condensed Consolidated Balance Sheets as the Company has the intent to utilize operating cash to fund the payment.

All Senior Notes are subject to an interest rate adjustment if the debt ratings assigned are downgraded (as defined in the agreements). Further, the Senior Notes contain a provision that repayment 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, sale and leaseback transactions and consolidations, mergers and the sale of assets. 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.

The fair value of the Company’s debt was estimated at $5.6 billion as of November 20, 2021, and $5.7 billion as of August 28, 2021, 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 greater than the carrying value of debt by $306.0 million and $413.1 million at November 20, 2021 and August 28, 2021, respectively, which reflects their face amount, adjusted for any unamortized debt issuance costs and discounts.

As of November 20, 2021, the Company was in compliance with all covenants and expects to remain in compliance with all covenants under its borrowing arrangements.

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Stock Repurchase Program

3 Months Ended

Nov. 20, 2021

Equity

Stock Repurchase Program

Note G – Stock Repurchase Program

From January 1, 1998 to November 20, 2021, the Company has repurchased a total of 150.8 million shares of its common stock at an aggregate cost of $26.6 billion, including 514,534 shares of its common stock at an aggregate cost of $900.0 million during the twelve week period ended November 20, 2021.

On October 5, 2021, the Board voted to authorize the repurchase of an additional $1.5 billion of the Company’s common stock in connection with the Company’s ongoing share repurchase program. Since the inception of the repurchase program in 1998, the Board has authorized $27.7 billion in share repurchases. Considering the cumulative repurchases as of November 20, 2021, the Company had $1.0 billion remaining under the Board’s authorization to repurchase its common stock.

Subsequent to November 20, 2021 and through December 10, 2021, the Company has repurchased 63,909 shares of its common stock at an aggregate cost of $120.0 million. On December 14, 2021, the Board voted to increase the authorization by $1.5 billion to raise the cumulative share repurchase authorization to $29.2 billion. Considering the cumulative repurchases subsequent to November 20, 2021 and through December 10, 2021 and the December 14, 2021 additional authorization, the Company has $2.4 billion remaining under the Board’s authorization to repurchase its common stock.

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Accumulated Other Comprehensive Loss

3 Months Ended

Nov. 20, 2021

Equity

Accumulated Other Comprehensive Loss

Note H – Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss includes foreign currency translation adjustments, activity for interest rate swaps and treasury rate locks that qualify as cash flow hedges and unrealized gains (losses) on available-for-sale debt securities.

Changes in Accumulated other comprehensive loss for the twelve week periods ended November 20, 2021 and November 21, 2020 consisted of the following:

			Net
	Foreign		Unrealized
	Currency and		Gain (Loss)
(in thousands)	Other(1)		on Securities		Derivatives		Total
Balance at August 28, 2021	$	(287,638)	$	589	$	(20,937)	$	(307,986)
Other comprehensive (loss) before reclassifications(2)(3)		(16,566)		(430)		—		(16,996)
Amounts reclassified from Accumulated other comprehensive loss(2)(3)		—		—		655		655
Balance at November 20, 2021	$	(304,204)	$	159	$	(20,282)	$	(324,327)

			Net
	Foreign		Unrealized
	Currency and		Gain (Loss)
(in thousands)	Other(1)		on Securities		Derivatives		Total
Balance at August 29, 2020	$	(332,321)	$	1,845	$	(23,776)	$	(354,252)
Other comprehensive income (loss) before reclassifications(2)(3)		46,995		(322)		—		46,673
Amounts reclassified from Accumulated other comprehensive loss(2)(3)		—		13		659		672
Balance at November 21, 2020	$	(285,326)	$	1,536	$	(23,117)	$	(306,907)

(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 in parentheses indicate debits to Accumulated Other Comprehensive Loss.

(3) Amounts shown are net of tax.

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Litigation

3 Months Ended

Nov. 20, 2021

Litigation

Litigation

Note I – Litigation

The Company is involved in various legal proceedings incidental to the conduct of its business, including, but not limited to, several lawsuits containing class-action allegations in which the plaintiffs are current and former hourly and salaried employees who allege various wage and hour violations and unlawful termination practices. While the resolution of these matters cannot be predicted with certainty, management does not currently believe that, either individually or in the aggregate, these matters will result in liabilities material to the Company’s Condensed Consolidated Statements of Income, Condensed Consolidated Balance Sheets or Condensed Consolidated Statements of Cash Flows.

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Segment Reporting

3 Months Ended

Nov. 20, 2021

Segment Reporting

Segment Reporting

Note J – 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 28, 2021.

The Auto Parts Stores segment is a retailer and distributor of automotive parts and accessories through the Company’s 6,785 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
	November 20,		November 21,
(in thousands)	2021		2020
Net Sales
Auto Parts Stores	$	3,605,508	$	3,101,597
Other		63,396		52,664
Total	$	3,668,904	$	3,154,261
Segment Profit
Auto Parts Stores	$	1,887,453	$	1,639,904
Other		37,707		35,713
Gross profit		1,925,160		1,675,617
Operating, selling, general and administrative expenses		(1,170,675)		(1,060,392)
Interest expense, net		(43,284)		(46,179)
Income before income taxes	$	711,201	$	569,046

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General (Policies)

3 Months Ended

Nov. 20, 2021

General

Fiscal Period

Operating results for the twelve weeks ended November 20, 2021 are not necessarily indicative of the results that may be expected for the full fiscal year ending August 27, 2022. Each of the first three quarters of AutoZone’s fiscal year consists of 12 weeks, and the fourth quarter consists of 16 or 17 weeks. The fourth quarters of fiscal 2022 and 2021 each have 16 weeks.

Recent Accounting Pronouncements

The Company does not expect any recently issued accounting pronouncements to have a material effect on the Company’s financial statements and related disclosures

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Share-Based Payments (Tables)

3 Months Ended

Nov. 20, 2021

Share-Based Payments

Schedule of Weighted Average for Key Assumptions Used in Determining Fair Value of Options Granted and Related Share-Based Compensation Expense

The weighted average fair value of the stock option awards granted during the twelve week periods ended November 20, 2021 and November 21, 2020, using the Black-Scholes-Merton multiple-option pricing valuation model, was $462.80 and $299.48 per share, respectively, using the following weighted average key assumptions:

	Twelve Weeks Ended
	November 20,		November 21,
	2021		2020
Expected price volatility	28	%	28	%
Risk-free interest rate	1.1	%	0.4	%
Weighted average expected lives (in years)	5.6		5.6
Forfeiture rate	10	%	10	%
Dividend yield	0	%	0	%

Schedule of Nonvested Restricted Stock Units Activity

Transactions related to restricted stock units for the twelve weeks ended November 20, 2021 were as follows:

		Weighted-
	Number	Average Grant
	of Shares	Date Fair Value
Nonvested at August 28, 2021	15,751	$	1,005.41
Granted	4,352		1,651.22
Vested	(5,373)		957.89
Canceled or forfeited	(696)		1,023.97
Nonvested at November 20, 2021	14,034	$	1,222.96

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Fair Value Measurements (Tables)

3 Months Ended

Nov. 20, 2021

Fair Value Measurements

Company's marketable debt securities measured at Fair Value on Recurring Basis

The Company’s marketable debt securities measured at fair value on a recurring basis were as follows:

	November 20, 2021
(in thousands)	Level 1		Level 2		Level 3		Fair Value
Other current assets	$	55,414	$	106	$	—	$	55,520
Other long-term assets		48,272		12,894		—		61,166
	$	103,686	$	13,000	$	—	$	116,686

	August 28, 2021
(in thousands)	Level 1		Level 2		Level 3		Fair Value
Other current assets	$	46,007	$	—	$	—	$	46,007
Other long-term assets		54,105		13,806		—		67,911
	$	100,112	$	13,806	$	—	$	113,918

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Marketable Debt Securities (Tables)

3 Months Ended

Nov. 20, 2021

Marketable Debt Securities

Available-for-Sale Marketable Securities

The Company’s available-for-sale marketable debt securities consisted of the following:

	November 20, 2021
	Amortized		Gross		Gross
	Cost		Unrealized		Unrealized		Fair
(in thousands)	Basis		Gains		Losses		Value
Corporate debt securities	$	20,956	$	196	$	(26)	$	21,126
Government bonds		61,258		202		(151)		61,309
Mortgage-backed securities		6,047		35		(36)		6,046
Asset-backed securities and other		28,225		27		(47)		28,205
	$	116,486	$	460	$	(260)	$	116,686

	August 28, 2021
	Amortized		Gross		Gross
	Cost		Unrealized		Unrealized		Fair
(in thousands)	Basis		Gains		Losses		Value
Corporate debt securities	$	23,650	$	329	$	(2)	$	23,977
Government bonds		65,416		338		(2)		65,752
Mortgage-backed securities		6,552		58		(8)		6,602
Asset-backed securities and other		17,551		43		(7)		17,587
	$	113,169	$	768	$	(19)	$	113,918

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Financing (Tables)

3 Months Ended

Nov. 20, 2021

Financing

Schedule of Debt

The Company’s debt consisted of the following:

	November 20,		August 28,
(in thousands)	2021		2021
3.700% Senior Notes due April 2022, effective interest rate of 3.85%	$	500,000	$	500,000
2.875% Senior Notes due January 2023, effective interest rate of 3.21%		300,000		300,000
3.125% Senior Notes due July 2023, effective interest rate of 3.26%		500,000		500,000
3.125% Senior Notes due April 2024, effective interest rate 3.32%		300,000		300,000
3.250% Senior Notes due April 2025, effective interest rate 3.36%		400,000		400,000
3.625% Senior Notes due April 2025, effective interest rate 3.78%		500,000		500,000
3.125% Senior Notes due April 2026, effective interest rate of 3.28%		400,000		400,000
3.750% Senior Notes due June 2027, effective interest rate of 3.83%		600,000		600,000
3.750% Senior Notes due April 2029, effective interest rate of 3.86%		450,000		450,000
4.000% Senior Notes due April 2030, effective interest rate 4.09%		750,000		750,000
1.650% Senior Notes due January 2031, effective interest rate of 2.19%		600,000		600,000
Total debt before discounts and debt issuance costs		5,300,000		5,300,000
Less: Current portion of debt		500,000		—
Less: Discounts and debt issuance costs		28,734		30,180
Debt, less current portion	$	4,771,266	$	5,269,820

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Accumulated Other Comprehensive Loss (Tables)

3 Months Ended

Nov. 20, 2021

Equity

Changes in Accumulated Other Comprehensive Loss

Changes in Accumulated other comprehensive loss for the twelve week periods ended November 20, 2021 and November 21, 2020 consisted of the following:

			Net
	Foreign		Unrealized
	Currency and		Gain (Loss)
(in thousands)	Other(1)		on Securities		Derivatives		Total
Balance at August 28, 2021	$	(287,638)	$	589	$	(20,937)	$	(307,986)
Other comprehensive (loss) before reclassifications(2)(3)		(16,566)		(430)		—		(16,996)
Amounts reclassified from Accumulated other comprehensive loss(2)(3)		—		—		655		655
Balance at November 20, 2021	$	(304,204)	$	159	$	(20,282)	$	(324,327)

			Net
	Foreign		Unrealized
	Currency and		Gain (Loss)
(in thousands)	Other(1)		on Securities		Derivatives		Total
Balance at August 29, 2020	$	(332,321)	$	1,845	$	(23,776)	$	(354,252)
Other comprehensive income (loss) before reclassifications(2)(3)		46,995		(322)		—		46,673
Amounts reclassified from Accumulated other comprehensive loss(2)(3)		—		13		659		672
Balance at November 21, 2020	$	(285,326)	$	1,536	$	(23,117)	$	(306,907)

(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 in parentheses indicate debits to Accumulated Other Comprehensive Loss.

(3) Amounts shown are net of tax.

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Segment Reporting (Tables)

3 Months Ended

Nov. 20, 2021

Segment Reporting

Segment Results

	Twelve Weeks Ended
	November 20,		November 21,
(in thousands)	2021		2020
Net Sales
Auto Parts Stores	$	3,605,508	$	3,101,597
Other		63,396		52,664
Total	$	3,668,904	$	3,154,261
Segment Profit
Auto Parts Stores	$	1,887,453	$	1,639,904
Other		37,707		35,713
Gross profit		1,925,160		1,675,617
Operating, selling, general and administrative expenses		(1,170,675)		(1,060,392)
Interest expense, net		(43,284)		(46,179)
Income before income taxes	$	711,201	$	569,046

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Share-Based Payments - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Nov. 20, 2021	Nov. 21, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options granted	163,786	194,511
Weighted average grant date fair value of options granted	$ 462.80	$ 299.48
Stock options exercised - shares	47,705	59,990
Stock options exercised - weighted average exercise price	$ 549.86	$ 496.58
Estimated weighted average period	2 years 2 months 12 days
Share-based compensation expense	$ 14.3	$ 10.5
Unrecognized share-based compensation expense related to stock options, net of forfeitures	$ 98.4
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Service period	4 years
Non vested restricted stock unit award	$ 15.6
Estimated weighted average period	2 years 10 months 24 days
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Anti-dilutive shares excluded from the computation of earnings per share	97,942	293,280

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Share-Based Payments - Weighted Average for Key Assumptions Used in Determining Fair Value of Options Granted and Related Share-Based Compensation Expense (Detail)	3 Months Ended
	Nov. 20, 2021	Nov. 21, 2020
Share-Based Payments
Expected price volatility	28.00%	28.00%
Risk-free interest rate	1.10%	0.40%
Weighted average expected lives (in years)	5 years 7 months 6 days	5 years 7 months 6 days
Forfeiture rate	10.00%	10.00%
Dividend yield	0.00%	0.00%

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Share-Based Payments - Schedule of Nonvested Restricted Stock Units Activity (Detail)	3 Months Ended
	Nov. 20, 2021 $ / shares shares
Share-Based Payments
Nonvested, Beginning balance, Number of Shares | shares	15,751
Granted, Number of Shares | shares	4,352
Vested, Number of Shares | shares	(5,373)
Canceled or forfeited, Number of Shares | shares	(696)
Nonvested, Ending balance, Number of Shares | shares	14,034
Nonvested, Beginning balance, Weighted Average Grant Date Fair Value | $ / shares	$ 1,005.41
Granted, Weighted Average Grant Date Fair Value | $ / shares	1,651.22
Vested, Weighted Average Grant Date Fair Value | $ / shares	957.89
Canceled or forfeited, Weighted Average Grant Date Fair Value | $ / shares	1,023.97
Nonvested, Ending balance, Weighted Average Grant Date Fair Value | $ / shares	$ 1,222.96

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Fair Value Measurements - Company's marketable debt securities measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands	Nov. 20, 2021	Aug. 28, 2021
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	$ 116,686	$ 113,918
Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other current assets	55,520	46,007
Other long-term assets	61,166	67,911
Total	116,686	113,918
Level 1 | Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other current assets	55,414	46,007
Other long-term assets	48,272	54,105
Total	103,686	100,112
Level 2 | Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other current assets	106
Other long-term assets	12,894	13,806
Total	$ 13,000	$ 13,806

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Marketable Debt Securities - Available-for-Sale Marketable Securities (Detail) - USD ($) $ in Thousands	Nov. 20, 2021	Aug. 28, 2021
Schedule of Available-for-sale Securities [Line Items]
Available-For-Sale Marketable Securities, Amortized Cost Basis	$ 116,486	$ 113,169
Available-For-Sale Marketable Securities, Gross Unrealized Gains	460	768
Available-For-Sale Marketable Securities, Gross Unrealized Losses	(260)	(19)
Available-For-Sale Marketable Securities, Fair Value	116,686	113,918
Corporate debt securities
Schedule of Available-for-sale Securities [Line Items]
Available-For-Sale Marketable Securities, Amortized Cost Basis	20,956	23,650
Available-For-Sale Marketable Securities, Gross Unrealized Gains	196	329
Available-For-Sale Marketable Securities, Gross Unrealized Losses	(26)	(2)
Available-For-Sale Marketable Securities, Fair Value	21,126	23,977
Government bonds
Schedule of Available-for-sale Securities [Line Items]
Available-For-Sale Marketable Securities, Amortized Cost Basis	61,258	65,416
Available-For-Sale Marketable Securities, Gross Unrealized Gains	202	338
Available-For-Sale Marketable Securities, Gross Unrealized Losses	(151)	(2)
Available-For-Sale Marketable Securities, Fair Value	61,309	65,752
Mortgage-backed securities
Schedule of Available-for-sale Securities [Line Items]
Available-For-Sale Marketable Securities, Amortized Cost Basis	6,047	6,552
Available-For-Sale Marketable Securities, Gross Unrealized Gains	35	58
Available-For-Sale Marketable Securities, Gross Unrealized Losses	(36)	(8)
Available-For-Sale Marketable Securities, Fair Value	6,046	6,602
Asset-backed securities and other
Schedule of Available-for-sale Securities [Line Items]
Available-For-Sale Marketable Securities, Amortized Cost Basis	28,225	17,551
Available-For-Sale Marketable Securities, Gross Unrealized Gains	27	43
Available-For-Sale Marketable Securities, Gross Unrealized Losses	(47)	(7)
Available-For-Sale Marketable Securities, Fair Value	$ 28,205	$ 17,587

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Marketable Debt Securities - Additional Information (Detail) $ in Thousands	Nov. 20, 2021 USD ($) security	Aug. 28, 2021 USD ($)
Marketable Debt Securities
Available for sale securities debt maturity period range	less than one year to approximately four years
Number of securities available for sale loss position | security	20
Unrealized loss on securities	$ 260	$ 19
Marketable securities transferred	$ 92,800

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Merchandise Inventories - (Detail) - USD ($) $ in Millions	Nov. 20, 2021	Aug. 28, 2021
Merchandise Inventories
Unrecorded adjustment for LIFO value in excess of replacement value	$ 312.7	$ 335.3

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Financing - Schedule of Debt (Detail) - USD ($) $ in Thousands	Nov. 20, 2021	Aug. 28, 2021
Debt Instrument [Line Items]
Total debt before discounts and debt issuance costs	$ 5,300,000	$ 5,300,000
Less: Current portion of debt	500,000
Less: Discounts and debt issuance costs	28,734	30,180
Long-term debt	4,771,266	5,269,820
3.700% Senior Notes due April 2022, effective interest rate of 3.85%
Debt Instrument [Line Items]
Senior notes	500,000	500,000
2.875% Senior Notes due January 2023, effective interest rate of 3.21%
Debt Instrument [Line Items]
Senior notes	300,000	300,000
3.125% Senior Notes due July 2023, effective interest rate of 3.26%
Debt Instrument [Line Items]
Senior notes	500,000	500,000
3.125% Senior Notes due April 2024, effective interest rate 3.32%
Debt Instrument [Line Items]
Senior notes	300,000	300,000
3.250% Senior Notes due April 2025, effective interest rate 3.36%
Debt Instrument [Line Items]
Senior notes	400,000	400,000
3.625% Senior Notes due April 2025, effective interest rate 3.78%
Debt Instrument [Line Items]
Senior notes	500,000	500,000
3.125% Senior Notes due April 2026, effective interest rate of 3.28%
Debt Instrument [Line Items]
Senior notes	400,000	400,000
3.750% Senior Notes due June 2027, effective interest rate of 3.83%
Debt Instrument [Line Items]
Senior notes	600,000	600,000
3.750% Senior Notes due April 2029, effective interest rate of 3.86%
Debt Instrument [Line Items]
Senior notes	450,000	450,000
4.000% Senior Notes due April 2030, effective interest rate 4.09%
Debt Instrument [Line Items]
Senior notes	750,000	750,000
1.650% Senior Notes due January 2031, effective interest rate of 2.19%
Debt Instrument [Line Items]
Senior notes	$ 600,000	$ 600,000

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Financing - Schedule of Debt - Interest Rates And Maturity (Details)	3 Months Ended	12 Months Ended
	Nov. 20, 2021	Aug. 28, 2021
3.700% Senior Notes due April 2022, effective interest rate of 3.85%
Debt Instrument [Line Items]
Stated interest rate percentage	3.70%	3.70%
Debt instrument maturity, month and year	2022-04	2022-04
Effective interest rate	3.85%	3.85%
2.875% Senior Notes due January 2023, effective interest rate of 3.21%
Debt Instrument [Line Items]
Stated interest rate percentage	2.875%	2.875%
Debt instrument maturity, month and year	2023-01	2023-01
Effective interest rate	3.21%	3.21%
3.125% Senior Notes due July 2023, effective interest rate of 3.26%
Debt Instrument [Line Items]
Stated interest rate percentage	3.125%	3.125%
Debt instrument maturity, month and year	2023-07	2023-07
Effective interest rate	3.26%	3.26%
3.125% Senior Notes due April 2024, effective interest rate 3.32%
Debt Instrument [Line Items]
Stated interest rate percentage	3.125%	3.125%
Debt instrument maturity, month and year	2024-04	2024-04
Effective interest rate	3.32%	3.32%
3.250% Senior Notes due April 2025, effective interest rate 3.36%
Debt Instrument [Line Items]
Stated interest rate percentage	3.25%	3.25%
Debt instrument maturity, month and year	2025-04	2025-04
Effective interest rate	3.36%	3.36%
3.625% Senior Notes due April 2025, effective interest rate 3.78%
Debt Instrument [Line Items]
Stated interest rate percentage	3.625%	3.625%
Debt instrument maturity, month and year	2025-04	2025-04
Effective interest rate	3.78%	3.78%
3.125% Senior Notes due April 2026, effective interest rate of 3.28%
Debt Instrument [Line Items]
Stated interest rate percentage	3.125%	3.125%
Debt instrument maturity, month and year	2026-04	2026-04
Effective interest rate	3.28%	3.28%
3.750% Senior Notes due June 2027, effective interest rate of 3.83%
Debt Instrument [Line Items]
Stated interest rate percentage	3.75%	3.75%
Debt instrument maturity, month and year	2027-06	2027-06
Effective interest rate	3.83%	3.83%
3.750% Senior Notes due April 2029, effective interest rate of 3.86%
Debt Instrument [Line Items]
Stated interest rate percentage	3.75%	3.75%
Debt instrument maturity, month and year	2029-04	2029-04
Effective interest rate	3.86%	3.86%
4.000% Senior Notes due April 2030, effective interest rate 4.09%
Debt Instrument [Line Items]
Stated interest rate percentage	4.00%	4.00%
Debt instrument maturity, month and year	2030-04	2030-04
Effective interest rate	4.09%	4.09%
1.650% Senior Notes due January 2031, effective interest rate of 2.19%
Debt Instrument [Line Items]
Stated interest rate percentage	1.65%	1.65%
Debt instrument maturity, month and year	2031-01	2031-01
Effective interest rate	2.19%	2.19%

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Financing - Additional Information (Detail) - USD ($) $ in Thousands	Nov. 15, 2021	Nov. 20, 2021	Nov. 14, 2021	Aug. 28, 2021
Debt Instrument [Line Items]
Fair value of the Company's debt		$ 5,600,000		$ 5,700,000
Excess (shortfall) of fair value of debt over (from) carrying value		306,000		413,100
Revolving Credit Agreement
Debt Instrument [Line Items]
Amount available under credit facility	$ 2,250,000		$ 2,000,000
Maximum amount available under credit facility	$ 3,250,000		$ 2,250,000
Additional amount of year(s) to extend termination date of agreement	1 year
Borrowings, outstanding		0
Letters of credit, outstanding		1,800
Revolving credit agreement, available additional borrowing capacity		2,200,000
Swingline Loans
Debt Instrument [Line Items]
Maximum amount available under credit facility	$ 75,000
Individual Issuer, Letter of Credit
Debt Instrument [Line Items]
Maximum amount available under credit facility	50,000
Letter of Credit
Debt Instrument [Line Items]
Maximum amount available under credit facility	$ 250,000
Master Extension Agreement
Debt Instrument [Line Items]
Credit facility expiration date	Nov. 15, 2026
3.700% Senior Notes due April 2022, effective interest rate of 3.85%
Debt Instrument [Line Items]
Senior notes		$ 500,000		$ 500,000
Stated interest rate percentage		3.70%		3.70%

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Stock Repurchase Program (Detail) - USD ($) $ in Thousands		1 Months Ended	3 Months Ended		287 Months Ended
	Dec. 14, 2021	Dec. 10, 2021	Nov. 20, 2021	Nov. 21, 2020	Nov. 20, 2021	Oct. 05, 2021
Equity, Class of Treasury Stock [Line Items]
Purchase of treasury stock, shares			514,534	584,000	150,800,000
Purchase of treasury stock			$ 899,997	$ 678,324	$ 26,600,000
Remaining value authorized for share repurchases			1,000,000		1,000,000
Stock Repurchase Program 1998
Equity, Class of Treasury Stock [Line Items]
Stock repurchase authorized			$ 27,700,000		$ 27,700,000
Common Stock
Equity, Class of Treasury Stock [Line Items]
Stock repurchase authorized						$ 1,500,000
Subsequent Events [Member]
Equity, Class of Treasury Stock [Line Items]
Purchase of treasury stock, shares		63,909
Purchase of treasury stock		$ 120,000
Increase in authorization of stock repurchase, value	$ 1,500,000
Stock repurchase authorized	$ 29,200,000
Remaining value authorized for share repurchases		$ 2,400,000

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Accumulated Other Comprehensive Loss - Changes in Accumulated Other Comprehensive Loss (Detail) - USD ($) $ in Thousands	3 Months Ended
	Nov. 20, 2021	Nov. 21, 2020
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance	$ (1,797,536)	$ (877,977)
Balance	(2,124,750)	(1,026,980)
Foreign Currency and Other
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance	(287,638)	(332,321)
Other comprehensive income (loss) before reclassifications	(16,566)	46,995
Balance	(304,204)	(285,326)
Net Unrealized Gain (Loss) on Securities
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance	589	1,845
Other comprehensive income (loss) before reclassifications	(430)	(322)
Amounts reclassified from Accumulated other comprehensive income (loss)		13
Balance	159	1,536
Derivatives
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance	(20,937)	(23,776)
Amounts reclassified from Accumulated other comprehensive income (loss)	655	659
Balance	(20,282)	(23,117)
Accumulated Other Comprehensive Loss
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance	(307,986)	(354,252)
Other comprehensive income (loss) before reclassifications	(16,996)	46,673
Amounts reclassified from Accumulated other comprehensive income (loss)	655	672
Balance	$ (324,327)	$ (306,907)

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Segment Reporting - Additional Information (Detail)	3 Months Ended
	Nov. 20, 2021 store segment
Segment Reporting
Number of reportable segments	1
Number of automotive parts and accessories locations in the United States, Mexico, and Brazil | store	6,785
Number of operating segments	2

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Segment Reporting - Segment Results (Detail) - USD ($) $ in Thousands	3 Months Ended
	Nov. 20, 2021	Nov. 21, 2020
Segment Reporting Information [Line Items]
Net sales	$ 3,668,904	$ 3,154,261
Gross profit	1,925,160	1,675,617
Operating, selling, general and administrative expenses	(1,170,675)	(1,060,392)
Interest expense, net	(43,284)	(46,179)
Income before income taxes	711,201	569,046
Auto Parts Stores
Segment Reporting Information [Line Items]
Net sales	3,605,508	3,101,597
Gross profit	1,887,453	1,639,904
Other
Segment Reporting Information [Line Items]
Net sales	63,396	52,664
Gross profit	$ 37,707	$ 35,713