Segment Reporting

12 Months Ended

Aug. 27, 2022

Segment Reporting

Segment Reporting

Note P – Segment Reporting

The Company’s operating segments (Domestic Auto Parts, Mexico and Brazil) are aggregated as one reportable segment: Auto Parts Stores. The criteria the Company used to identify the reportable segment are primarily the nature of the products the Company sells and the operating results that are regularly reviewed by the Company’s chief operating decision maker to make decisions about the resources to be allocated to the business units and to assess performance. The accounting policies of the Company’s reportable segment are the same as those described in “Note A – Significant Accounting Policies.”

The Auto Parts Stores segment is the leading retailer and distributor of automotive parts and accessories through the Company’s 6,943 stores in the U.S., Mexico and Brazil. Each store carries an extensive product line for cars, sport utility vehicles, vans and light trucks, including new and remanufactured automotive hard parts, maintenance items, accessories and non-automotive products.

The Other category reflects business activities of two operating segments that are not separately reportable due to the materiality of these operating segments. The operating segments include ALLDATA, which produces, sells and maintains diagnostic, repair and shop management software used in the automotive repair industry and E-commerce, which includes direct sales to customers through www.autozone.com for sales that are not fulfilled by local stores.

The Company evaluates its reportable segment primarily on the basis of net sales and segment profit, which is defined as gross profit. The following table shows segment results for the following fiscal years:

	Year Ended
	August 27,		August 28,		August 29,
(in thousands)	2022		2021		2020
Net Sales
Auto Parts Stores	$	15,963,196	$	14,381,712	$	12,405,929
Other		289,034		247,873		226,038
Total	$	16,252,230	$	14,629,585	$	12,631,967
Segment Profit
Auto Parts Stores	$	8,301,234	$	7,556,889	$	6,617,508
Other		171,416		160,896		153,245
Gross profit		8,472,650		7,717,785		6,770,753
Operating, selling, general and administrative expenses		(5,201,921)		(4,773,258)		(4,353,074)
Interest expense, net		(191,638)		(195,337)		(201,165)
Income before income taxes	$	3,079,091	$	2,749,190	$	2,216,514
Segment Assets:
Auto Parts Stores	$	15,060,704	$	14,398,581	$	14,303,427
Other		214,339		117,618		120,445
Total	$	15,275,043	$	14,516,199	$	14,423,872
Capital Expenditures:
Auto Parts Stores	$	650,495	$	602,329	$	432,067
Other		21,896		19,438		25,669
Total	$	672,391	$	621,767	$	457,736
Auto Parts Stores Sales by Product Grouping:
Failure	$	7,801,155	$	7,048,700	$	6,088,859
Maintenance items		5,670,278		4,888,763		4,284,913
Discretionary		2,491,763		2,444,249		2,032,157
Auto Parts Stores net sales	$	15,963,196	$	14,381,712	$	12,405,929