AUTOZONE INC 10-K

Item 8. Financial Statements and Supplementary Data Index Management’s Report on Internal Control Over Financial Reporting 44 Reports of Independent Registered Public Accounting Firm 45 Consolidated Statements of Income 48 Consolidated Statements of Comprehensive Income 48 Consolidated Balance Sheets 49 Consolidated Statements of Cash Flows 50 Consolidated Statements of Stockholders’ Deficit 51 Notes to Consolidated Financial Statements 52 ​ ​ ​ 43 Table of Contents ​ Management’s Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended). Our internal control over financial reporting includes, among other things, defined policies and procedures for conducting and governing our business, sophisticated information systems for processing transactions and properly trained staff. Mechanisms are in place to monitor the effectiveness of our internal control over financial reporting, including regular testing performed by the Company’s internal audit team. Actions are taken to correct deficiencies as they are identified. Our procedures for financial reporting include the active involvement of senior management, our Audit Committee and a staff of highly qualified financial and legal professionals. Management, with the participation of our principal executive and financial officers, assessed our internal control over financial reporting as of August 30, 2025, the end of our fiscal year. Management based its assessment on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission 2013 framework. Based on this assessment, management has concluded that our internal control over financial reporting was effective as of August 30, 2025. Our independent registered public accounting firm, Ernst & Young LLP (PCAOB ID: 42 ), audited the effectiveness of our internal control over financial reporting. Ernst & Young LLP’s attestation report on the Company’s internal control over financial reporting as of August 30, 2025, is included in this Annual Report on Form 10-K. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 44 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of AutoZone, Inc. Opinion on Internal Control Over Financial Reporting We have audited AutoZone, Inc.’s internal control over financial reporting as of August 30, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, AutoZone, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of August 30, 2025, based on the COSO criteria. ​ We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of August 30, 2025 and August 31, 2024, the related consolidated statements of income, comprehensive income, stockholders’ deficit and cash flows for each of the three years in the period ended August 30, 2025, and the related notes and our report dated October 27, 2025 expressed an unqualified opinion thereon. ​ Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. 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 Securities and Exchange Commission and the PCAOB. ​ We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. ​ Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. ​ Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. ​ Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. ​ /s/ Ernst & Young LLP Memphis, Tennessee October 27, 2025 45 Table of Contents ​ Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of AutoZone, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of AutoZone, Inc. (the Company) as of August 30, 2025 and August 31, 2024, the related consolidated statements of income, comprehensive income, stockholders' deficit and cash flows for each of the three years in the period ended August 30, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at August 30, 2025 and August 31, 2024, and the results of its operations and its cash flows for each of the three years in the period ended August 30, 2025, in conformity with U.S. generally accepted accounting principles. ​ We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of August 30, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated October 27, 2025 expressed an unqualified opinion thereon. ​ Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. 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 Securities and Exchange Commission and the PCAOB. ​ We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. ​ Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates. ​ Valuation of Self-insurance Reserves Description of the Matter At August 30, 2025, the Company’s self-insurance reserve estimate was $268.8 million. As more fully described in Note A of the consolidated financial statements, the Company retains a significant portion of the risks associated with workers’ compensation, general and product liability, property and vehicle insurance. The self-insurance reserves are accrued based upon discounted estimates of the liability for claims incurred and for events that have occurred but have not been reported using certain third-party actuarial projections and the Company’s claim loss experience. ​ 46 Table of Contents ​ ​ ​ How We Addressed the Matter in Our Audit Auditing the insurance reserve was complex and judgmental due to the actuarial valuation methods and assumptions related to the loss development factors and loss trends. ​ We obtained an understanding, evaluated the design and tested the operating effectiveness of controls that address the valuation of the self-insurance reserve. This included management’s review of the actuarial valuation methods and the assumptions related to the loss development factors and loss trends. To test the valuation of the Company’s self-insurance reserve, we performed audit procedures that included, among others, assessing the appropriateness of the actuarial valuation methods and testing the significant assumptions discussed above. We also developed an independent range of reserves for comparison to the Company’s recorded amounts, using standard actuarial methods. We involved our actuarial specialists to assist with our audit procedures. ​ ​ /s/ Ernst & Young LLP We have served as the Company’s auditor since 1988. ​ Memphis, Tennessee October 27, 2025 ​ 47 Table of Contents AutoZone, Inc. Consolidated Statements of Income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ August 30, ​ August 31, ​ August 26, ​ ​ 2025 ​ 2024 ​ 2023 (in thousands, except per share data) ​ (52 weeks) ​ (53 weeks) ​ (52 weeks) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net sales $ 18,938,717 $ 18,490,268 $ 17,457,209 Cost of sales, including warehouse and delivery expenses ​ ​ 8,972,243 ​ ​ 8,673,216 ​ ​ 8,386,787 Gross profit ​ ​ 9,966,474 ​ 9,817,052 ​ 9,070,422 Operating, selling, general and administrative expenses ​ ​ 6,356,318 ​ ​ 6,028,344 ​ ​ 5,596,436 Operating profit ​ ​ 3,610,156 ​ ​ 3,788,708 ​ ​ 3,473,986 Interest expense, net ​ ​ 475,824 ​ ​ 451,578 ​ ​ 306,372 Income before income taxes ​ ​ 3,134,332 ​ 3,337,130 ​ 3,167,614 Income tax expense ​ ​ 636,085 ​ ​ 674,703 ​ ​ 639,188 Net income ​ $ 2,498,247 ​ $ 2,662,427 ​ $ 2,528,426 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average shares for basic earnings per share ​ 16,789 ​ 17,309 ​ 18,510 Effect of dilutive stock equivalents ​ ​ 456 ​ ​ 494 ​ ​ 593 Weighted average shares for diluted earnings per share ​ 17,245 ​ 17,803 ​ 19,103 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic earnings per share ​ $ 148.80 ​ $ 153.82 ​ $ 136.60 Diluted earnings per share ​ $ 144.87 ​ $ 149.55 ​ $ 132.36 ​ See Notes to Consolidated Financial Statements. AutoZone, Inc. Consolidated Statements of Comprehensive Income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ August 30, ​ August 31, ​ August 26, ​ 2025 ​ 2024 ​ 2023 (in thousands) ​ (52 weeks) ​ (53 weeks) ​ (52 weeks) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 2,498,247 ​ $ 2,662,427 ​ $ 2,528,426 Other comprehensive income (loss): ​ ​ ​ Foreign currency translation adjustments ​ 74,236 ​ ( 174,715 ) ​ 103,633 Unrealized gains on marketable debt securities, net of taxes ​ 618 ​ 2,151 ​ 320 Net derivative activities, net of taxes ​ 1,754 ​ 1,782 ​ 5,747 Total other comprehensive income (loss) ​ 76,608 ​ ( 170,782 ) ​ 109,700 Comprehensive income ​ $ 2,574,855 ​ $ 2,491,645 ​ $ 2,638,126 ​ (1) See Notes to Consolidated Financial Statements. ​ ​ 48 Table of Contents AutoZone, Inc. Consolidated Balance Sheets ​ ​ ​ ​ ​ ​ ​ ​ ​ August 30, ​ August 31, (in thousands) ​ 2025 ​ 2024 ​ ​ ​ ​ ​ ​ ​ Assets ​ ​ ​ ​ Current assets: ​ ​ ​ ​ Cash and cash equivalents ​ $ 271,803 ​ $ 298,172 Accounts receivable ​ 670,137 ​ 545,575 Merchandise inventories ​ 7,025,688 ​ 6,155,218 Other current assets ​ 373,751 ​ 307,794 Total current assets ​ 8,341,379 ​ 7,306,759 ​ ​ ​ ​ ​ ​ ​ Property and equipment: ​ ​ ​ ​ ​ ​ Land ​ 1,474,433 ​ 1,390,713 Buildings and improvements ​ 5,793,043 ​ 5,124,448 Equipment ​ 3,558,814 ​ 3,308,967 Leasehold improvements ​ 1,082,339 ​ 922,466 Construction in progress ​ 643,699 ​ 558,531 Property and equipment ​ 12,552,328 ​ 11,305,125 Less: Accumulated depreciation and amortization ​ ( 5,489,819 ) ​ ( 5,121,586 ) ​ ​ 7,062,509 ​ 6,183,539 ​ ​ ​ ​ ​ ​ ​ Operating lease right-of-use assets ​ ​ 3,194,666 ​ ​ 3,057,780 Goodwill ​ 302,645 ​ 302,645 Deferred income taxes ​ 118,433 ​ 83,689 Other long-term assets ​ 335,692 ​ 242,126 Total long-term assets ​ 3,951,436 ​ 3,686,240 Total assets ​ $ 19,355,324 ​ $ 17,176,538 ​ ​ ​ ​ ​ ​ ​ Liabilities and Stockholders’ Deficit ​ ​ ​ ​ ​ ​ Current liabilities: ​ ​ ​ ​ ​ ​ Accounts payable ​ $ 8,025,590 ​ $ 7,355,701 Current portion of operating lease liabilities ​ ​ 283,564 ​ ​ 266,855 Accrued expenses and other ​ 1,151,536 ​ 1,060,746 Income taxes payable ​ 58,707 ​ 30,941 Total current liabilities ​ 9,519,397 ​ 8,714,243 ​ ​ ​ ​ ​ ​ ​ Long-term debt ​ 8,799,775 ​ 9,024,381 Operating lease liabilities, less current portion ​ ​ 3,093,936 ​ ​ 2,960,174 Deferred income taxes ​ 520,510 ​ 447,067 Other long-term liabilities ​ 836,019 ​ 780,287 ​ ​ ​ ​ ​ ​ ​ 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; 16,927 shares issued and 16,665 shares outstanding as of August 30, 2025; 17,451 shares issued and 16,926 shares outstanding as of August 31, 2024 ​ 169 ​ 175 Additional paid-in capital ​ 1,843,779 ​ 1,621,553 Retained deficit ​ ( 3,975,852 ) ​ ( 4,424,982 ) Accumulated other comprehensive loss ​ ( 285,010 ) ​ ( 361,618 ) Treasury stock, at cost ​ ( 997,399 ) ​ ( 1,584,742 ) Total stockholders’ deficit ​ ( 3,414,313 ) ​ ( 4,749,614 ) Total liabilities and stockholders' deficit ​ $ 19,355,324 ​ $ 17,176,538 ​ See Notes to Consolidated Financial Statements. 49 Table of Contents AutoZone, Inc. Consolidated Statements of Cash Flows ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ August 30, ​ August 31, ​ August 26, ​ ​ ​ 2025 ​ 2024 ​ 2023 (in thousands) ​ ​ (52 weeks) ​ (53 weeks) ​ (52 weeks) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from operating activities: ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 2,498,247 ​ $ 2,662,427 ​ $ 2,528,426 Adjustments to reconcile net income to net cash provided by operating activities: ​ ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization of property and equipment ​ ​ 613,199 ​ ​ 549,755 ​ 497,577 Other non-cash charges (income) ​ ​ 64,000 ​ ​ ( 40,000 ) ​ 44,000 Amortization of debt origination fees ​ ​ 12,840 ​ ​ 11,988 ​ 9,264 Deferred income taxes ​ ​ 115,389 ​ ​ ( 254,393 ) ​ ( 25,707 ) Share-based compensation expense ​ ​ 124,717 ​ ​ 106,246 ​ 93,087 Changes in operating assets and liabilities: ​ ​ ​ ​ ​ ​ ​ ​ Accounts receivable ​ ​ ( 118,606 ) ​ ​ ( 38,282 ) ​ ( 6,674 ) Merchandise inventories ​ ​ ( 893,908 ) ​ ​ ( 453,101 ) ​ ( 89,180 ) Accounts payable and accrued expenses ​ ​ 657,408 ​ ​ 244,134 ​ ( 183,679 ) Income taxes ​ ​ 68,447 ​ ​ 296,398 ​ 92,832 Other, net ​ ​ ( 24,396 ) ​ ​ ( 81,056 ) ​ ( 19,158 ) Net cash provided by operating activities ​ ​ 3,117,337 ​ ​ 3,004,116 ​ 2,940,788 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from investing activities: ​ ​ ​ ​ ​ ​ ​ ​ Capital expenditures ​ ​ ( 1,327,257 ) ​ ​ ( 1,072,696 ) ​ ( 796,657 ) Purchase of marketable debt securities ​ ​ ( 64,504 ) ​ ​ ( 38,757 ) ​ ( 66,917 ) Proceeds from sale of marketable debt securities ​ ​ 63,326 ​ ​ 40,849 ​ 58,357 Investment in tax credit equity investments ​ ​ ( 111,815 ) ​ ​ ( 227,494 ) ​ ​ ( 98,003 ) Other, net ​ ​ 39,820 ​ ​ 11,592 ​ 27,042 Net cash used in investing activities ​ ​ ( 1,400,430 ) ​ ​ ( 1,286,506 ) ​ ( 876,178 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from financing activities: ​ ​ ​ ​ ​ ​ ​ ​ Net proceeds from (payments of) commercial paper ​ ​ 168,600 ​ ​ ( 629,600 ) ​ 606,200 Proceeds from issuance of debt ​ ​ 500,000 ​ ​ 2,300,000 ​ 1,750,000 Repayment of debt ​ ​ ( 900,000 ) ​ ​ ( 300,000 ) ​ ​ ( 800,000 ) Net proceeds from sale of common stock ​ ​ 172,297 ​ ​ 176,236 ​ 182,494 Purchase of treasury stock ​ ​ ( 1,578,186 ) ​ ​ ( 3,140,917 ) ​ ( 3,699,552 ) Repayment of principal portion of finance lease liabilities ​ ​ ( 96,154 ) ​ ​ ( 85,258 ) ​ ( 81,055 ) Other, net ​ ​ ( 13,376 ) ​ ​ ( 4,197 ) ​ ( 18,169 ) Net cash used in financing activities ​ ​ ( 1,746,819 ) ​ ​ ( 1,683,736 ) ​ ( 2,060,082 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Effect of exchange rate changes on cash ​ ​ 3,543 ​ ​ ( 12,756 ) ​ 8,146 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net (decrease) increase in cash and cash equivalents ​ ​ ( 26,369 ) ​ ​ 21,118 ​ 12,674 Cash and cash equivalents at beginning of period ​ ​ 298,172 ​ ​ 277,054 ​ 264,380 Cash and cash equivalents at end of period ​ $ 271,803 ​ $ 298,172 ​ $ 277,054 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Supplemental cash flow information: ​ ​ ​ ​ ​ ​ ​ Interest paid, net of interest cost capitalized ​ $ 413,026 ​ $ 353,819 ​ $ 260,866 Income taxes paid ​ $ 313,488 ​ $ 437,552 ​ $ 570,250 Leased assets obtained in exchange for new finance lease liabilities ​ $ 95,759 ​ $ 196,112 ​ $ 58,316 Leased assets obtained in exchange for new operating lease liabilities ​ $ 533,197 ​ $ 415,212 ​ $ 428,150 ​ See Notes to Consolidated Financial Statements. 50 Table of Contents AutoZone, Inc. Consolidated Statements of Stockholders’ Deficit ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ Common ​ ​ ​ ​ Additional ​ ​ ​ ​ Other ​ ​ ​ ​ ​ ​ ​ Shares Common Paid-in Retained Comprehensive Treasury ​ ​ (in thousands) ​ Issued ​ Stock ​ Capital ​ Deficit ​ Loss ​ Stock ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at August 27, 2022 20,732 ​ $ 207 ​ $ 1,354,252 ​ $ ( 1,330,067 ) ​ $ ( 300,536 ) ​ $ ( 3,262,769 ) ​ $ ( 3,538,913 ) Net income — ​ — ​ — ​ 2,528,426 ​ — ​ — ​ 2,528,426 Total other comprehensive income — ​ — ​ — ​ — ​ 109,700 ​ — ​ 109,700 Purchase of 1,524 shares of treasury stock — ​ — ​ — ​ — ​ — ​ ( 3,723,289 ) ​ ( 3,723,289 ) Retirement of treasury shares ( 2,051 ) ​ ( 20 ) ​ ( 143,440 ) ​ ( 4,157,637 ) ​ — ​ 4,301,097 ​ — Issuance of common stock under stock options and stock purchase plans 255 ​ 2 ​ 182,492 ​ ​ — ​ ​ — ​ ​ — ​ 182,494 Share-based compensation expense — ​ — ​ 91,688 ​ — ​ — ​ — ​ 91,688 Balance at August 26, 2023 18,936 ​ 189 ​ 1,484,992 ​ ( 2,959,278 ) ​ ( 190,836 ) ​ ( 2,684,961 ) ​ ( 4,349,894 ) Net income — ​ — ​ — ​ 2,662,427 ​ — ​ — ​ 2,662,427 Total other comprehensive loss — ​ — ​ — ​ — ​ ( 170,782 ) ​ — ​ ( 170,782 ) Purchase of 1,149 shares of treasury stock — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 3,170,320 ) ​ ( 3,170,320 ) Retirement of treasury shares ( 1,703 ) ​ ( 17 ) ​ ( 142,391 ) ​ ( 4,128,131 ) ​ — ​ 4,270,539 ​ — Issuance of common stock under stock options and stock purchase plans 218 ​ 3 ​ 176,233 ​ ​ — ​ ​ — ​ ​ — ​ 176,236 Share-based compensation expense — ​ — ​ 102,719 ​ — ​ — ​ — ​ 102,719 Balance at August 31, 2024 17,451 ​ 175 ​ 1,621,553 ​ ( 4,424,982 ) ​ ( 361,618 ) ​ ( 1,584,742 ) ​ ( 4,749,614 ) Net income — ​ — ​ — ​ 2,498,247 ​ — ​ — ​ 2,498,247 Total other comprehensive income — ​ — ​ — ​ — ​ 76,608 ​ — ​ 76,608 Purchase of 447 shares of treasury stock — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 1,531,659 ) ​ ( 1,531,659 ) Retirement of treasury shares ( 710 ) ​ ( 7 ) ​ ( 69,878 ) ​ ( 2,049,117 ) ​ — ​ 2,119,002 ​ — Issuance of common stock under stock options and stock purchase plans 186 ​ 1 ​ 172,295 ​ ​ — ​ ​ — ​ ​ — ​ 172,296 Share-based compensation expense — ​ — ​ 119,809 ​ — ​ — ​ — ​ 119,809 Balance at August 30, 2025 16,927 ​ $ 169 ​ $ 1,843,779 ​ $ ( 3,975,852 ) ​ $ ( 285,010 ) ​ $ ( 997,399 ) ​ $ ( 3,414,313 ) ​ See Notes to Consolidated Financial Statements. ​ 51 Table of Contents Notes to Consolidated Financial Statements Note A – Significant Accounting Policies Business: AutoZone, Inc. (“AutoZone” or the “Company”) is a leading retailer and distributor of automotive replacement parts and accessories in the Americas. At the end of fiscal 2025, the Company operated 6,627 stores in the U.S., 883 stores in Mexico and 147 stores in Brazil. Each store carries an extensive product line for cars, sport utility vehicles, vans and light duty trucks, including new and remanufactured automotive hard parts, maintenance items, accessories and non-automotive products. At the end of fiscal 2025, in 6,098 of the domestic stores as well as the vast majority of our stores in Mexico and Brazil, we had a commercial sales program that provided prompt delivery of parts and other products and commercial credit to local, regional and national repair garages, dealers, service stations, fleet owners and other accounts. We also 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. Additionally, the Company sells the ALLDATA brand automotive diagnostic, repair, collision and shop management software through www.alldata.com. The Company also provides product information on its Duralast branded products through www.duralastparts.com. The Company does not derive revenue from automotive repair or installation services. Fiscal Year: The Company’s fiscal year consists of 52 or 53 weeks ending on the last Saturday in August. Fiscal 2025 and 2023 represented 52 weeks. Fiscal 2024 represented 53 weeks. Basis of Presentation: The Consolidated Financial Statements include the accounts of AutoZone, Inc. and its wholly owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. Variable Interest Entities: The Company invests in certain tax credit funds that promote renewable energy and generate a return primarily through the realization of federal tax credits. The deferral method is used to account for the tax attributes of these investments. ​ The Company considers its investments in these tax credit funds as investments in variable interest entities (“VIEs”). The Company evaluates the investment in any VIE to determine whether it is the primary beneficiary. The Company considers a variety of factors in identifying the entity that holds the power to direct matters that most significantly impact the VIE’s economic performance including, but not limited to, the ability to direct financing, leasing, construction and other operating decisions and activities. As of August 30, 2025, the Company held tax credit equity investments that were deemed to be VIEs and determined that it was not the primary beneficiary of the entities, as it did not have the power to direct the activities that most significantly impacted the entities and accounted for these investments using the equity method. The Company’s maximum exposure to losses is generally limited to its net investment, which was $ 60.8 million as of August 30, 2025, and $ 53.9 million as of August 31, 2024 and was included within the Other long-term assets caption in the accompanying Consolidated Balance Sheets. Use of Estimates: Management of the Company has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent liabilities to prepare these financial statements. Actual results could differ from those estimates. Cash and Cash Equivalents: Cash equivalents consist of investments with original maturities of 90 days or less . Cash equivalents include proceeds due from credit and debit card transactions with settlement terms of less than five days . Credit and debit card receivables included within cash and cash equivalents were $ 105.0 million at August 30, 2025, and $ 91.5 million at August 31, 2024. Cash balances are held in various locations around the world. Cash and cash equivalents of $ 79.1 million and $ 99.8 million were held outside of the U.S. as of August 30, 2025, and August 31, 2024, respectively, and were generally utilized to support the liquidity needs in foreign operations. 52 Table of Contents Accounts Receivable: In accordance with ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) , the Company estimates all expected credit losses for financial assets measured at amortized cost basis, including trade receivables, based on historical experience, current market conditions and supportable forecasts. The Company’s accounts receivable primarily consists of receivables from commercial customers. The Company routinely grants credit to certain commercial customers on a short-term basis consisting primarily of daily, weekly or monthly terms. The risk of credit loss in its trade receivables is substantially mitigated by the Company’s credit evaluation process, short collection terms and diversification of customers, as well as the low dollar value for its typical sales transaction. Receivables are presented net of an allowance for credit losses. Allowances for expected credit losses are determined based on historical experience, the current economic environment, our expectations of future economic conditions and the current evaluation of the composition of accounts receivable. The Company will apply adjustments for specific factors and current economic conditions as needed at each reporting date. The Company’s allowance for credit losses is included in “Accounts receivable” on the accompanying Consolidated Balance Sheets as of August 30, 2025, and August 31, 2024. The balance of the allowance for credit losses was $ 11.7 million at August 30, 2025, and $ 10.3 million at August 31, 2024. Vendor Receivables: The Company’s vendor receivables primarily consist of balances arising from its vendors through a variety of programs and arrangements, including rebates, allowances, promotional funds and reimbursement of specific, incremental, identifiable costs incurred by the Company in selling the vendors’ products. The amounts to be received are prescribed by the terms of the vendor agreements and therefore collection of such amounts is generally not at risk. The Company regularly reviews vendor receivables for collectability and assesses the need for an allowance for credit losses based on an evaluation of the vendors’ financial positions and corresponding abilities to meet financial obligations. Management does not believe there is a reasonable likelihood that the Company will be unable to collect the receivables from vendors and did not record a reserve for expected credit losses from vendors in the Consolidated Financial Statements as of August 30, 2025, and August 31, 2024. Vendor receivables are included in “Accounts receivable” on the accompanying Consolidated Balance Sheets as of August 30, 2025, and August 31, 2024. 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 market for domestic inventories and the weighted average cost method stated at the lower of cost or net realizable value for Mexico and Brazil inventories. The Company’s policy is not to write up inventory in excess of replacement cost. Due to recent price changes on the Company’s merchandise purchases, primarily due to inflation driven by tariffs, the Company’s LIFO credit reserve balance was $ 83.0 million at August 30, 2025, and $ 19.0 million at August 31, 2024. Increases to the Company’s LIFO credit reserve balance are recorded as a non-cash charge to cost of sales and decreases are recorded as a non-cash benefit to cost of sales. Marketable Debt Securities: The Company invests a portion of its assets held by the Company’s wholly owned insurance captive in marketable debt securities and classifies them as available-for-sale. The Company includes these marketable debt securities within the Other current assets and Other long-term assets captions in the accompanying Consolidated Balance Sheets and records the amounts at fair market value, which is determined using quoted market prices at the end of the reporting period. (Refer to “Note B – Fair Value Measurements” and “Note C – Marketable Debt Securities” for a discussion of marketable debt securities.) Property and Equipment: Property and equipment is stated at cost. Property consists of land, which includes finance leases – real estate, buildings and improvements, equipment, which includes finance leases – vehicles, and construction in progress (CIP). CIP represents costs incurred for the construction of retail store locations, renovations of existing stores, and the development of distribution centers. Assets recorded as CIP are not depreciated until the assets are placed in service. Depreciation and amortization are computed principally using the straight-line method over the following estimated useful lives: buildings, 40 to 50 years ; building improvements, 5 to 15 years ; equipment, including software, 3 to 10 years ; and leasehold improvements, over the shorter of the asset’s estimated useful life or the remaining lease term, which includes any reasonably assured renewal periods. Depreciation and amortization include amortization of assets under finance leases. 53 Table of Contents Cloud Computing Arrangements: The Company capitalizes implementation costs associated with its cloud computing arrangements when incurred, consistent with the treatment of costs capitalized for internal use software. These costs begin amortization once the related software is placed in service and will be amortized over the remaining non-cancellable term of the hosting agreement, plus any renewal periods that are reasonably certain to be exercised, and are recorded within Operating, selling, general and administrative expenses in the Company’s Consolidated Statements of Income, the same line item as the related hosting fees. No amortization expenses have been recorded in the year ended August 30, 2025, or the comparable prior year periods. At August 30, 2025, capitalized cloud-based enterprise resource planning (ERP) software implementation costs were $ 1.6 million recorded within Other current assets and $ 29.6 million recorded within Other long-term assets on the Company's Condensed Consolidated Balance Sheets. No cloud-based software implementation costs were recorded at August 31, 2024. Cloud computing arrangement implementation costs are classified within operating activities in the Company’s Statements of Cash Flows. Impairment of Long-Lived Assets: The Company evaluates the recoverability of its long-lived assets whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. When such an event occurs, the Company compares the sum of the undiscounted expected future cash flows of the asset (asset group) with the carrying amounts of the asset. If the undiscounted expected future cash flows are less than the carrying value of the assets, the Company measures the amount of impairment loss as the amount by which the carrying amount of the assets exceeds the fair value of the assets. Goodwill: The cost in excess of fair value of identifiable net assets of businesses acquired is recorded as goodwill. In accordance with ASC 350, Intangibles – Goodwill and Other , an analysis is performed at least annually to compare the fair value of the reporting unit to the carrying amount to determine if any impairment exists. The Company had approximately $ 302.6 million of goodwill at August 30, 2025, and August 31, 2024. The Company performs its annual impairment assessment in the fourth quarter of each fiscal year, unless circumstances dictate more frequent assessments. In the fourth quarter of fiscal 2025 and 2024, the Company concluded its remaining goodwill was not impaired. Derivative Instruments and Hedging Activities: AutoZone is exposed to market risk from, among other things, changes in interest rates, foreign exchange rates and fuel prices. From time to time, the Company uses various derivative instruments to reduce such risks. To date, based upon the Company’s current level of foreign operations, no derivative instruments have been utilized to reduce foreign exchange rate risk. All of the Company’s hedging activities are governed by guidelines that are authorized by AutoZone’s Board of Directors (the “Board”). Further, the Company does not buy or sell derivative instruments for trading purposes. AutoZone’s financial market risk results primarily from changes in interest rates. At times, AutoZone reduces its exposure to changes in interest rates by entering into various interest rate hedge instruments such as interest rate swap contracts, treasury lock agreements and forward-starting interest rate swaps. All of the Company’s interest rate hedge instruments are designated as cash flow hedges. Cash flows related to these instruments designated as qualifying hedges are reflected in the accompanying Consolidated Statements of Cash Flows in the same categories as the cash flows from the items being hedged. The resulting gain or loss from such settlement is deferred to Accumulated Other Comprehensive Loss and reclassified to interest expense over the term of the underlying debt. This reclassification of the deferred gains and losses impacts the interest expense recognized on the underlying debt that was hedged. Foreign Currency: The Company accounts for its foreign operations using the local market currency and converts its financial statements from these currencies to U.S. dollars. The cumulative loss on currency translation is recorded as a component of Accumulated Other Comprehensive Loss (Refer to “Note L – Accumulated Other Comprehensive Loss” for additional information regarding the Company’s Accumulated Other Comprehensive Loss.) Self-Insurance Reserves: The Company retains a significant portion of the risks associated with workers’ compensation, general and product liability, property and vehicle insurance. The Company obtains third party insurance to limit the exposure related to certain of these risks. The reserve for the Company’s liability associated with these risks totaled $ 268.8 million and $ 257.7 million at August 30, 2025, and August 31, 2024, respectively. 54 Table of Contents The assumptions made by management in estimating its self-insurance reserves include consideration of historical cost experience, judgments about the present and expected levels of cost per claim and retention levels. The Company utilizes various methods, including analyses of historical trends and use of a specialist, to estimate the costs to settle reported claims and claims incurred but not yet reported. The actuarial methods develop estimates of the future ultimate claim costs based on claims incurred as of the balance sheet date. When estimating these liabilities, the Company considers factors, such as the severity, duration and frequency of claims, legal costs associated with claims, healthcare trends and projected inflation of related factors. The Company’s liabilities for workers’ compensation, general and product liability, property and vehicle claims do not have scheduled maturities; however, the timing of future payments is predictable based on historical patterns and is relied upon in determining the current portion of these liabilities. Accordingly, the Company reflects the net present value of the obligations it determines to be long-term using the risk-free interest rate as of the balance sheet dates. Leases: The Company leases certain real estate and vehicles under various non-callable leases. Leases are recorded on their commencement date, which is the date the Company takes possession or control of the underlying asset. Most of the Company’s leases are operating leases; however, certain land and vehicles are leased under finance leases. The leases have varying terms and expire at various dates through 2045. Real estate operating leases typically have initial terms between one and 20 years, and real estate finance leases typically have terms of 20 or more years, with multiple optional renewal periods of one to five years each. Vehicle finance leases typically have original terms between one and five years . The Company subleases certain properties that are not used in its operations. Sublease income was not significant for the periods presented. Lease-related assets and liabilities are recognized for all leases with an initial term of 12 months or greater. The exercise of lease renewal options is at the Company’s sole discretion. The Company evaluates renewal options at commencement and on an ongoing basis and includes options that are reasonably certain to exercise in its expected lease terms when classifying leases and measuring lease liabilities. Certain lease agreements require variable payments based upon actual costs of common-area maintenance, real estate taxes and insurance. Lease components are not separated from the non-lease components (typically fixed common-area maintenance costs at its retail store locations) for all classes of leased assets, except vehicles which contain variable non-lease components that are expensed as incurred. The Company uses the stated borrowing rate in determining the present value of the lease payments over the lease term for vehicles. The Company’s incremental borrowing rate is used to determine the present value of the lease payments over the lease term for substantially all the operating and financing leases for retail stores, distribution centers and other real estate, as these leases typically do not have a stated borrowing rate. For operating leases that commenced prior to the date of adoption of ASU 2016-02 – Leases (Topic 842), the Company used the incremental borrowing rate that corresponded to the remaining lease term as of the date of adoption. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. (Refer to “Note D – Leases” for additional disclosures regarding the Company’s leases.) Financial Instruments: 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. (Refer to “Note I – Financing” for a discussion of the carrying values and fair values of the Company’s debt and “Note C – Marketable Debt Securities” for additional disclosures related to marketable debt securities.) Income Taxes: The Company accounts for income taxes under the liability method. Deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Our effective tax rate is based on income by tax jurisdiction, statutory rates and tax saving initiatives available to the Company in the various jurisdictions in which we operate. 55 Table of Contents The Company recognizes liabilities for uncertain income tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step requires the Company to estimate and measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. The Company reevaluates these uncertain tax positions on a quarterly basis or when new information becomes available to management. These reevaluations are based on factors including, but not limited to, changes in facts or circumstances, changes in tax law, successfully settled issues under audit, expirations due to statutes and new audit activity. Such a change in recognition or measurement could result in the recognition of a tax benefit or an increase to the tax accrual. The Company classifies interest related to income tax liabilities, and if applicable, penalties, as a component of Income tax expense. The income tax liabilities and accrued interest and penalties that are expected to be payable within one year of the balance sheet date are presented within the Accrued expenses and other caption in the accompanying Consolidated Balance Sheets. The remaining portion of the income tax liabilities and accrued interest and penalties are presented within the Other long-term liabilities caption in the accompanying Consolidated Balance Sheets because payment of cash is not anticipated within one year of the balance sheet date. (Refer to “Note E – Income Taxes” for additional disclosures regarding the Company’s income taxes.) Sales and Use Taxes: Governmental authorities assess sales and use taxes on the sale of goods and services. The Company excludes taxes collected from customers in its reported sales results; such amounts are included within the Accrued expenses and other caption until remitted to the taxing authorities. Dividends: The Company currently does not pay a dividend on its common stock. The ability to pay dividends is subject to limitations imposed by Nevada law. Under Nevada law, any future payment of dividends would be dependent upon the Company’s financial condition, capital requirements, earnings and cash flow. Revenue Recognition: The Company’s primary source of revenue is derived from the sale of automotive aftermarket parts and merchandise to its retail and commercial customers. Revenue is recognized when performance obligations under the terms of a contract with a customer are satisfied, in an amount representing the consideration the Company expects to receive in exchange for selling products to its customers. Shipping and handling activities are considered activities to fulfill the order, and therefore are not evaluated as a separate performance obligation. Sales are recorded net of variable consideration in the period incurred, including discounts, sales incentives and rebates, sales taxes and estimated sales returns. Sales returns are based on historical return rates. The Company may enter into contracts that include multiple combinations of products and services, which are accounted for as separate performance obligations and do not require significant judgment. The Company’s performance obligations are typically satisfied when the customer takes possession of the merchandise. Revenue from retail customers is recognized when the customer leaves our store with the purchased products, typically at the point of sale or for E-commerce orders when the product is shipped. Revenue from commercial customers is recognized upon delivery, typically same-day. Payment from retail customers is at the point of sale and payment terms for commercial customers are based on the Company’s pre-established credit requirements and generally range from 1 to 30 days. Discounts, sales incentives and rebates are treated as separate performance obligations, and revenue allocated to these performance obligations is recognized as the obligations to the customer are satisfied. Additionally, the Company estimates and records gift card breakage as redemptions occur. The Company offers diagnostic, repair, collision and shop management information software used in the automotive repair industry through ALLDATA. This revenue is recognized as services are provided. Revenue from these services is recognized over the life of the contract. A portion of the Company’s transactions include the sale of auto parts that contain a core component. The core component represents the recyclable portion of the auto part. Customers are not charged for the core component of the new part if a used core is returned at the point of sale of the new part; otherwise the Company charges customers a specified amount for the core component. The Company refunds that same amount in the event the customer returns a used core to the store at a later date. The Company does not recognize sales or cost of sales for the core component of these transactions when a used part is returned or expected to be returned from the customer. 56 Table of Contents There were no material contract assets, liabilities or deferred costs recorded on the Consolidated Balance Sheet as of August 30, 2025, and August 31, 2024. Revenue related to unfulfilled performance obligations as of August 30, 2025, and August 31, 2024 is not significant. (Refer to “Note P – Segment Reporting” for additional information related to revenue recognized during the period.) Vendor Allowances and Advertising Costs: The Company receives various payments and allowances from its vendors through a variety of programs and arrangements. Monies received from vendors include rebates, allowances and promotional funds. The amounts to be received are subject to the terms of the vendor agreements, which generally do not state an expiration date, but are subject to ongoing negotiations that may be impacted in the future based on changes in market conditions, vendor marketing strategies and changes in the profitability or sell-through of the related merchandise. Rebates and other miscellaneous incentives are earned based on purchases or product sales and are accrued ratably over the purchase or sale of the related product. These monies are generally recorded as a reduction of merchandise inventories and are recognized as a reduction to cost of sales as the related inventories are sold. For arrangements that provide for reimbursement of specific, incremental, identifiable costs incurred by the Company in selling the vendors’ products, the vendor funds are recorded as a reduction to Operating, selling, general and administrative expenses in the period in which the specific costs were incurred. The Company expenses advertising costs as incurred. Advertising expense, net of vendor promotional funds, was $ 109.5 million in fiscal 2025, $ 102.7 million in fiscal 2024 and $ 99.5 million in fiscal 2023. Vendor promotional funds, which reduced advertising expense, amounted to $ 65.7 million in fiscal 2025, $ 67.8 million in fiscal 2024 and $ 62.4 million in fiscal 2023. Cost of Sales and Operating, Selling, General and Administrative Expenses: The following illustrates the primary costs classified in each major expense category: Cost of Sales ● Total cost of merchandise sold, including: o Freight expenses associated with moving merchandise inventories from the Company’s vendors to the distribution centers; o Vendor allowances that are not reimbursements for specific, incremental and identifiable costs ● Costs associated with operating the Company’s supply chain, including payroll and benefits, warehouse and delivery expenses, transportation, depreciation and amortization; and ● Inventory shrinkage Operating, Selling, General and Administrative Expenses ● Payroll and benefits for store, field leadership and store support employees; ● Occupancy of store and store support facilities; ● Depreciation and amortization related to store and store support assets; ● Transportation associated with field leadership, commercial sales force and deliveries from stores; ● Advertising; ● Self-insurance; ● Technology; and ● Other administrative costs, such as credit card transaction fees, legal costs, supplies and travel and lodging 57 Table of Contents Warranty Costs: The Company or the vendors supplying its products provides the Company’s customers limited warranties on certain products that range from 30 days to lifetime. In most cases, the Company’s vendors are primarily responsible for warranty claims. Warranty costs relating to merchandise sold under warranty not covered by vendors are estimated and recorded as warranty obligations at the time of sale based on each product’s historical return rate. These obligations, which are often funded by vendor allowances, are recorded within the Accrued expenses and other caption in the Consolidated Balance Sheets. For vendor allowances in excess of the related estimated warranty expense for the vendor’s products, the excess is recorded in inventory and recognized as a reduction to cost of sales as the related inventory is sold. Pre-opening Expenses: Pre-opening expenses, which consist primarily of payroll and occupancy costs, are expensed as incurred. Earnings per Share : Basic earnings per share is based on the weighted average outstanding common shares. Diluted earnings per share is based on the weighted average outstanding common shares adjusted for the effect of common stock equivalents, which are primarily stock options. There were 115,475 , 118,771 and 140,071 stock options excluded for the year ended August 30, 2025, August 31, 2024 and August 26, 2023, respectively, because they would have been anti-dilutive. Share-Based Payments: Share-based payments include stock option grants, restricted stock, restricted stock units, stock appreciation rights and other transactions under the Company’s equity incentive plans. The Company recognizes compensation expense for its share-based payments over the requisite service period based on the fair value of the awards. The Company uses the Black-Scholes-Merton multiple-option pricing model to calculate the fair value of stock options. The value of restricted stock is based on the stock price of the award on the grant date. (Refer to “Note N – Share-Based Plans” for further discussion.) Risk and Uncertainties: In fiscal 2025, one class of similar products accounted for approximately 14 percent of the Company’s total revenues, and one individual vendor provided 13 percent of our total purchases. No other class of similar products accounted for 10 percent or more of total revenues, and no other individual vendor provided more than 10 percent of total purchases. Recently Adopted Accounting Pronouncements In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) . The amendments in this ASU require disclosures, on an annual and interim basis, of significant segment expenses that are regularly provided to the chief operating decision maker (CODM), as well as the aggregate amount of other segment items included in the reported measure of segment profit or loss. This ASU requires that a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss. Public entities will be required to provide all annual disclosures currently required by Topic 280 in interim periods, and entities with a single reportable segment are required to provide all the disclosures required by the amendments in the update and existing segment disclosures in Topic 280. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and requires retrospective adoption. Early adoption is permitted. The Company adopted this standard in the fourth quarter ended August 30, 2025. The adoption of this guidance resulted in incremental disclosures in the Company’s financial statements, but did not have any impact on its consolidated financial statements. (Refer to “Note P – Segment Reporting” for additional information.) Recently Issued Accounting Pronouncements In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) . The amendments in this ASU are intended to enhance the transparency of income tax information by updating income tax disclosure requirements. The guidance is effective for public entities for annual periods beginning after December 15, 2024, and early adoption is permitted. The amendments in this ASU should be applied on a prospective basis; however, retrospective application is permitted. The Company will adopt this standard with our fiscal 2026 annual filing. The 58 Table of Contents Company is currently evaluating these new disclosure requirements and does not expect the adoption to have a material impact. In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40) . This ASU requires disclosure in the notes to the financial statements, at each interim and annual reporting period, of specified information about certain costs and expenses including purchases of inventory, employee compensation, depreciation and intangible asset amortization included in each relevant expense caption. Also required is a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated. This ASU is effective for all public entities for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, and early adoption is permitted. This ASU should be applied either prospectively to financial statements issued after the effective date of this update or retrospectively to all prior periods presented in the financial statements. The Company will adopt this standard with its fiscal 2028 annual filing. The Company is currently evaluating these new disclosure requirements and the impact of adoption. Note B – 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: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ August 30, 2025 (in thousands) Level 1 Level 2 Level 3 Fair Value ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other current assets ​ $ 13,667 ​ $ 4,994 ​ $ — ​ $ 18,661 Other long-term assets ​ 52,278 ​ ​ 53,201 ​ — ​ 105,479 ​ ​ $ 65,945 ​ $ 58,195 ​ $ — ​ $ 124,140 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ August 31, 2024 (in thousands) Level 1 Level 2 Level 3 Fair Value ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other current assets ​ $ 26,697 ​ $ 11,734 ​ $ — ​ $ 38,431 Other long-term assets ​ 27,031 ​ 56,696 ​ — ​ 83,727 ​ ​ $ 53,728 ​ $ 68,430 ​ $ — ​ $ 122,158 ​ 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 debt securities, including benchmark yields and reported trades. 59 Table of Contents Additionally, the Company has deferred compensation plan assets which are recorded at fair value on a recurring basis using Level 1 inputs. These assets consisted of investments in various mutual and money markets funds of which $ 2.7 million is recorded in Other current assets and $ 68.2 million is recorded in Other long-term assets at August 30, 2025, and $ 3.1 million was recorded in Other current assets and $ 62.3 million was recorded in Other long-term assets at August 31, 2024. The Company’s liability under the plan included $ 2.7 million recorded in Accrued expenses and other and $ 68.2 million recorded in Other long-term liabilities at August 30, 2025, and $ 3.1 million recorded in Accrued expenses and other and $ 62.3 million recorded in Other long-term liabilities at August 31, 2024. ​ Fair values of the marketable debt securities by asset class are described in “Note C – Marketable Debt Securities.” Non-Financial Assets Measured at Fair Value on a Non-Recurring Basis Certain non-financial assets and liabilities are required to be measured at fair value on a non-recurring basis in certain circumstances, including the event of impairment. These non-financial assets and liabilities could include assets and liabilities acquired in an acquisition as well as goodwill, intangible assets and property, plant and equipment that are determined to be impaired. At August 30, 2025, the Company did not have any other significant non-financial assets or liabilities that had been measured at fair value on a non-recurring basis subsequent to initial recognition. 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 I – Financing.” Note C – Marketable Debt Securities The Company’s basis for determining the cost of a security sold is the “Specific Identification Model.” Unrealized gains (losses) on marketable debt securities are recorded in Accumulated Other Comprehensive Loss. The Company’s available-for-sale marketable debt securities consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ August 30, 2025 ​ Amortized Gross Gross ​ ​ ​ Cost ​ Unrealized ​ Unrealized ​ Fair (in thousands) ​ Basis ​ Gains ​ Losses ​ Value ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Corporate debt securities ​ $ 23,441 ​ $ 270 ​ $ ( 33 ) ​ $ 23,678 Government bonds ​ 63,053 ​ 910 ​ ( 201 ) ​ 63,762 Mortgage-backed securities ​ 21,433 ​ 227 ​ ( 81 ) ​ 21,579 Asset-backed securities and other ​ 15,043 ​ 81 ​ ( 3 ) ​ 15,121 ​ ​ $ 122,970 ​ $ 1,488 ​ $ ( 318 ) ​ $ 124,140 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ August 31, 2024 ​ Amortized Gross Gross ​ ​ ​ Cost ​ Unrealized ​ Unrealized ​ Fair (in thousands) ​ Basis ​ Gains ​ Losses ​ Value ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Corporate debt securities ​ $ 32,355 ​ $ 183 ​ $ ( 78 ) ​ $ 32,460 Government bonds ​ 50,251 ​ 483 ​ ( 493 ) ​ 50,241 Mortgage-backed securities ​ 22,859 ​ 326 ​ ( 95 ) ​ 23,090 Asset-backed securities and other ​ 16,327 ​ 66 ​ ( 26 ) ​ 16,367 ​ ​ $ 121,792 ​ $ 1,058 ​ $ ( 692 ) ​ $ 122,158 ​ 60 Table of Contents The contractual maturities of the Company’s available for sale marketable debt securities are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ August 30, 2025 ​ ​ Amortized ​ Fair (in thousands) ​ Cost Basis ​ Value ​ ​ ​ ​ ​ ​ ​ Due within one year ​ $ 19,966 ​ $ 18,662 Due after one year through five years ​ ​ 56,262 ​ ​ 58,277 Due after five years through ten years ​ ​ 31,619 ​ ​ 31,993 Due after ten years ​ ​ 15,123 ​ ​ 15,208 ​ ​ $ 122,970 ​ $ 124,140 ​ The marketable debt securities held at August 30, 2025, had effective maturities ranging from less than one year to approximately twenty-eight years . At August 30, 2025, the Company held 29 securities that are in an unrealized loss position of approximately $ 0.3 million. 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. The Company did not realize any material gains or losses on its marketable debt securities during fiscal 2025, 2024 or 2023. Included above in total marketable debt securities are $ 117.4 million and $ 111.5 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 as of August 30, 2025, and August 31, 2024, respectively. Note D – Leases Lease-related assets and liabilities recorded on the Consolidated Balance Sheets are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (in thousands) Classification August 30, 2025 ​ August 31, 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ Assets: ​ ​ ​ ​ Operating Operating lease right-of-use assets ​ $ 3,194,666 ​ $ 3,057,780 Finance Property and equipment ​ 528,760 ​ 528,482 Total lease assets ​ $ 3,723,426 ​ $ 3,586,262 Liabilities: ​ ​ ​ Current: ​ ​ ​ ​ ​ ​ ​ ​ Operating Current portion of operating lease liabilities ​ $ 283,564 ​ $ 266,855 Finance Accrued expenses and other ​ 111,521 ​ 115,559 Noncurrent: ​ ​ Operating Operating lease liabilities, less current portion ​ 3,093,936 ​ 2,960,174 Finance Other long-term liabilities ​ 288,419 ​ 283,882 Total lease liabilities ​ $ 3,777,440 ​ $ 3,626,470 ​ Accumulated amortization related to finance lease assets was $ 139.6 million as of August 30, 2025, and $ 132.1 million as of August 31, 2024. ​ 61 Table of Contents Lease costs for finance and operating leases for the 52 weeks ended August 30, 2025, and 53 weeks ended August 31, 2024 are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended (in thousands) ​ Statement of Income Location ​ August 30, 2025 ​ August 31, 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ Finance lease cost: ​ ​ ​ Amortization of lease assets Depreciation and amortization ​ $ 98,597 ​ $ 84,392 Interest on lease liabilities Interest expense, net ​ 21,204 ​ 19,279 Operating lease cost (1) Selling, general and administrative expenses ​ 506,824 ​ 485,164 Total lease cost ​ ​ ​ $ 626,625 ​ $ 588,835 (1) Includes short-term leases, variable lease costs and sublease income, which are immaterial. The future rental payments, inclusive of renewal options that have been included in defining the expected lease term, of our operating and finance lease obligations as of August 30, 2025, having initial or remaining lease terms in excess of one year are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Finance Operating ​ (in thousands) ​ Leases ​ Leases ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2026 ​ $ 112,918 ​ $ 424,466 ​ $ 537,384 2027 ​ 121,123 ​ ​ 458,397 ​ ​ 579,520 2028 ​ 102,182 ​ ​ 433,574 ​ ​ 535,756 2029 ​ 70,538 ​ ​ 403,213 ​ ​ 473,751 2030 ​ 18,447 ​ ​ 376,721 ​ ​ 395,168 Thereafter ​ 39,779 ​ ​ 2,286,397 ​ ​ 2,326,176 Total lease payments ​ ​ 464,987 ​ ​ 4,382,768 ​ 4,847,755 Less: Interest ​ ( 65,047 ) ​ ​ ( 1,005,268 ) ​ ​ ( 1,070,315 ) Present value of lease liabilities ​ $ 399,940 ​ $ 3,377,500 ​ $ 3,777,440 ​ The following table summarizes the Company’s lease term and discount rate assumptions: ​ ​ ​ ​ ​ ​ ​ August 30, 2025 ​ ​ ​ ​ ​ Weighted-average remaining lease term in years, inclusive of renewal options that are reasonably certain to be exercised: ​ Finance leases – real estate 20 ​ Finance leases – vehicles 4 ​ Operating leases 12 ​ Weighted-average discount rate: ​ ​ Finance leases – real estate 3.89 % Finance leases – vehicles 5.71 % Operating leases 4.41 % ​ Cash paid for amounts included in the measurement of operating lease liabilities of $ 382.7 million and $ 362.5 million was reflected in Other, net in Net cash provided by operating activities on the Consolidated Statements of Cash Flows for fiscal years 2025 and 2024, respectively. As of August 30, 2025, the Company has entered into additional leases which have not yet commenced and are therefore not part of the right-of-use asset and liability. These leases have undiscounted future payments of approximately $ 83.8 million and $ 2.3 million for real estate and vehicles, respectively, and will commence when the 62 Table of Contents Company obtains possession of the underlying leased asset. Commencement dates are expected to be from fiscal 2026 to fiscal 2027 . Note E – Income Taxes The components of operating income before income taxes are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ August 30, ​ August 31, ​ August 26, (in thousands) ​ 2025 ​ 2024 ​ 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Domestic ​ $ 2,499,120 ​ $ 2,663,148 ​ $ 2,621,714 International ​ 635,212 ​ 673,982 ​ 545,900 ​ ​ $ 3,134,332 ​ $ 3,337,130 $ 3,167,614 ​ The provision for income tax expense consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ August 30, ​ August 31, ​ August 26, (in thousands) 2025 ​ 2024 ​ 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current tax provision (benefit): ​ ​ ​ Federal ​ $ 610,076 ​ $ 846,176 ​ $ 491,338 State ​ 68,312 ​ 54,837 ​ 86,687 International ​ 182,148 ​ 193,794 ​ 154,907 Purchased tax credits ​ ​ ( 250,698 ) ​ ​ ( 368,870 ) ​ ​ ( 68,037 ) ​ ​ 609,838 ​ 725,937 ​ 664,895 Deferred tax provision (benefit): ​ ​ ​ Federal ​ 77,770 ​ ( 163,775 ) ​ 26,858 State ​ ( 4,463 ) ​ 12,264 ​ ( 21,847 ) International ​ ( 28,217 ) ​ ( 10,616 ) ​ ( 24,126 ) Purchased tax credits ​ ​ ( 18,843 ) ​ ​ 110,893 ​ ​ ( 6,592 ) ​ ​ 26,247 ​ ( 51,234 ) ​ ( 25,707 ) Income tax expense ​ $ 636,085 ​ $ 674,703 ​ $ 639,188 ​ A reconciliation of the provision for income taxes to the amount computed by applying the federal statutory tax rate to income before income taxes is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ August 30, ​ August 31, ​ August 26, ​ ​ ​ 2025 ​ 2024 ​ 2023 ​ ​ ​ ​ ​ ​ ​ ​ Federal tax at statutory U.S. income tax rate 21.0 % 21.0 % 21.0 % State income taxes, net 1.6 % 1.6 % 1.6 % Share-based compensation ( 1.5 ) % ( 1.9 ) % ( 2.3 ) % U.S. Tax on Non-U.S. Income (Subpart F) ​ 2.0 % 2.9 % 2.5 % U.S. Tax on Non-U.S. Income (GILTI) ​ 1.0 % 1.2 % 0.8 % Non-U.S. Permanent Differences ​ ( 0.8 ) % ( 1.3 ) % ( 1.4 ) % Non-U.S. Rate Differences ​ 1.1 % 1.1 % 0.4 % Foreign Tax Credits ​ ( 2.8 ) % ( 2.9 ) % ( 2.3 ) % Other ( 1.3 ) % ( 1.5 ) % ( 0.1 ) % Effective tax rate 20.3 % 20.2 % 20.2 % ​ For the year ended August 30, 2025, August 31, 2024, and August 26, 2023, the Company recognized excess tax benefits from stock option exercises of $ 58.2 million, $ 81.4 million, and $ 92.2 million, respectively. 63 Table of Contents The Company is subject to a tax on global intangible low-taxed income (“GILTI”) which is imposed on foreign earnings. The Company has made the election to record this tax as a period cost, thus has not adjusted the deferred tax assets or liabilities of its foreign subsidiaries for this tax. ​ Significant components of the Company's deferred tax assets and liabilities were as follows: ​ ​ ​ ​ ​ ​ ​ ​ August 30, August 31, (in thousands) ​ 2025 ​ 2024 ​ ​ ​ ​ ​ ​ ​ Deferred tax assets: ​ ​ Net operating loss and credit carryforwards ​ $ 44,815 ​ $ 47,030 Accrued benefits ​ 99,628 ​ 86,119 Operating lease liabilities ​ ​ 753,928 ​ ​ 722,156 Federal credit carryforwards ​ ​ 123,465 ​ ​ 131,895 Other ​ 79,399 ​ 102,820 Total deferred tax assets ​ 1,101,235 ​ 1,090,020 Valuation allowances ​ ( 11,331 ) ​ ( 26,922 ) Net deferred tax assets ​ 1,089,904 ​ 1,063,098 ​ ​ ​ ​ ​ ​ ​ Deferred tax liabilities: ​ ​ Property and equipment ​ ( 257,900 ) ​ ( 228,184 ) Inventory ​ ( 510,242 ) ​ ( 499,022 ) Operating lease assets ​ ​ ( 682,685 ) ​ ​ ( 660,949 ) Other ​ ( 41,154 ) ​ ( 38,320 ) Deferred tax liabilities ​ ( 1,491,981 ) ​ ( 1,426,475 ) ​ ​ ​ ​ ​ ​ ​ Net deferred tax liabilities ​ $ ( 402,077 ) ​ $ ( 363,377 ) ​ ​ ​ ​ ​ ​ ​ ​ At August 30, 2025, and August 31, 2024, the Company had net operating loss (“NOL”) carryforwards available to reduce future taxable income totaling approximately $ 338.6 million ($ 33.2 million tax effected) and $ 309.8 million ($ 37.2 million tax effected), respectively. Certain NOLs have no expiration date and others will expire, if not utilized, in various years from fiscal 2026 through 2044 . At August 30, 2025, and August 31, 2024, the Company had deferred tax assets for federal and state income tax credit carryforwards of $ 135.1 million and $ 141.7 million, respectively. Income tax credit carryforwards will expire, if not utilized, in various years from fiscal 2026 through 2051 . ​ At August 30, 2025, and August 31, 2024, the Company had a valuation allowance of $ 11.3 million and $ 26.9 million, respectively, on deferred tax assets associated with NOL and tax credit carryforwards for which management has determined it is more likely than not that the deferred tax asset will not be realized. Management believes it is more likely than not that the remaining deferred tax assets will be fully realized given the extended carryforward periods referenced. ​ For the year ended August 30, 2025, the Company asserts indefinite reinvestment for basis differences and accumulated earnings through fiscal 2020 with respect to its foreign subsidiaries. The Company does not assert permanent reinvestment of fiscal 2021 through current year earnings with respect to its Mexican subsidiaries while maintaining its assertion of indefinite reinvestment of fiscal 2021 through current year earnings of other foreign subsidiaries. Where necessary, taxes resulting from foreign distributions of current and accumulated earnings (e.g., withholding taxes) have been considered in the Company’s provision for income taxes. ​ As of August 30, 2025, we have not recorded incremental income taxes for outside basis differences of $ 389.6 million in our investments in foreign subsidiaries, as these amounts are indefinitely reinvested in foreign operations. Determining the amount of unrecognized deferred tax liability related to the outside basis differences in these entities is not practicable. ​ 64 Table of Contents Several countries where the Company operates have adopted the Organization for Economic Cooperation and Development ("OECD") framework implementing a 15 % global minimum tax. This OECD framework, commonly referred to as Pillar Two, did not have a material impact on the Company’s income tax provision for the year ended August 30, 2025. ​ Pursuant to provisions under the Inflation Reduction Act, enacted in August of 2022, the Company purchased transferable federal tax credits during fiscal year 2025 from various counterparties. Such federal tax credits were purchased at negotiated discounts, resulting in an income tax benefit recorded during the year ended August 30, 2025. Receivables associated with transferable federal tax credits are recorded (netted) within taxes payable and deferred tax liabilities. ​ On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was signed into law. The OBBBA creates new provisions that are applicable to the Company, including 100% bonus depreciation for qualifying assets placed in service after January 19, 2025, and full expensing of domestic research and experimental expenditures incurred in taxable years beginning after December 31, 2024. The Company does not expect any material impact from these provisions. ​ A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: ​ ​ ​ ​ ​ ​ ​ ​ August 30, August 31, (in thousands) ​ 2025 ​ 2024 ​ ​ ​ ​ ​ ​ ​ Beginning balance ​ $ 37,986 ​ $ 49,487 Additions based on tax positions related to the current year ​ 4,482 ​ 5,386 Additions for tax positions of prior years ​ 3,643 ​ 5,373 Reductions for tax positions of prior years ​ ( 5,118 ) ​ ( 8,595 ) Reductions due to settlements ​ ( 13,150 ) ​ ( 8,600 ) Reductions due to statute of limitations ​ ( 5,054 ) ​ ( 5,065 ) Ending balance ​ $ 22,789 ​ $ 37,986 ​ Included in the August 30, 2025, and August 31, 2024, balances are $ 17.5 million and $ 32.1 million, respectively, of unrecognized tax benefits that, if recognized, would reduce the Company’s effective tax rate. The balances above also include amounts of $ 4.3 million and $ 3.8 million for August 30, 2025, and August 31, 2024, respectively, that are accounted for as reductions to deferred tax assets for NOL carryforwards and tax credit carryforwards. It is anticipated that in the event the associated uncertain tax positions are disallowed, the NOL carryforwards and tax credit carryforwards would be utilized to settle the liability. ​ The Company accrues interest on unrecognized tax benefits as a component of income tax expense. Penalties, if incurred, would be recognized as a component of income tax expense. The Company had $ 3.8 million and $ 11.2 million accrued for the payment of interest and penalties associated with unrecognized tax benefits at August 30, 2025, and August 31, 2024, respectively. ​ The Company files U.S. federal, U.S. state and local, and international income tax returns. With few exceptions, the Company is no longer subject to U.S. federal, U.S. state and local, or Non-U.S. examinations by tax authorities for fiscal year 2020 and prior. The Company is typically engaged in various tax examinations at any given time by U.S. federal, U.S. state and local, and Non-U.S. taxing jurisdictions. As of August 30, 2025, the Company estimates that the amount of unrecognized tax benefits could be reduced by approximately $ 0.9 million over the next twelve months as a result of tax audit settlements. While the Company believes that it is adequately accrued for possible audit adjustments, the final resolution of these examinations cannot be determined at this time and could result in final settlements that differ from current estimates. ​ 65 Table of Contents Note F – Supplier Financing Programs The Company has arrangements with third-party financial institutions to confirm invoice balances owed by the Company to certain suppliers and pay the financial institutions the confirmed amounts on the invoice due dates. These arrangements allow the Company’s inventory suppliers, at their sole discretion, to enter into agreements directly with these financial institutions to finance the Company’s obligations to the suppliers at terms negotiated between the suppliers and the financial institutions. Supplier participation is optional and our obligations to our suppliers, including the amount and dates due, are not impacted by our suppliers’ decision to enter into an agreement with a third-party financial institution. As of August 30, 2025, and August 31, 2024, the Company had supplier obligations outstanding that had been confirmed under these arrangements of $ 5.4 billion and $ 4.9 billion, respectively, which are included in Accounts payable and $ 264.9 million and $ 226.7 million, respectively, which are included in Other long-term liabilities in the Consolidated Balance Sheets. Changes in the Company’s supplier obligations are as follows: ​ ​ ​ ​ ​ ​ Fiscal Year Ended (in thousands) ​ August 30, 2025 ​ ​ ​ ​ Confirmed obligations outstanding at the beginning of the year ​ $ 5,175,016 Obligations confirmed during the year ​ ​ 5,467,705 Confirmed obligations paid during the year ​ ​ ( 4,943,761 ) Confirmed obligations outstanding at the end of the year ​ $ 5,698,960 ​ Note G – Accrued Expenses and Other Accrued expenses and other consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ August 30, August 31, (in thousands) ​ 2025 ​ 2024 ​ ​ ​ ​ ​ ​ ​ Accrued compensation, related payroll taxes and benefits ​ $ 385,414 ​ $ 291,728 Property, sales and other taxes ​ 163,321 ​ 190,317 Finance lease liabilities ​ 111,521 ​ 115,559 Medical and casualty insurance claims (current portion) ​ 95,231 ​ 107,877 Accrued interest ​ 82,654 ​ 88,590 Accrued gift cards ​ 60,451 ​ 58,529 Accrued sales and warranty returns ​ 45,112 ​ 46,794 Other ​ 207,832 ​ 161,352 ​ ​ $ 1,151,536 ​ $ 1,060,746 ​ ​ ​ ​ ​ ​ ​ ​ The Company retains a significant portion of the insurance risks associated with workers’ compensation, general and product liability, property and vehicle insurance. A portion of these self-insured losses is managed through a wholly owned insurance captive. The Company maintains certain levels for stop-loss coverage for each self-insured plan in order to limit its liability for large claims. The retained limits per claim type are $ 2.0 million for workers’ compensation, $ 8.0 million for auto liability, $ 21.5 million for property and $ 4.0 million for general and product liability. Note H – Litigation The Company is involved in various legal proceedings incidental to the conduct of its business, including, but not limited to, claims and allegations related to wage and hour violations, unlawful termination, employment practices, product liability, privacy and cybersecurity, environmental matters, intellectual property rights or regulatory compliance. The Company does not currently believe that, either individually or in the aggregate, these matters will result in liabilities material to the Company’s financial condition, results of operations or cash flows. ​ 66 Table of Contents Note I – Financing ​ The Company’s debt consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ August 30, August 31, (in thousands) ​ 2025 ​ 2024 ​ ​ ​ ​ ​ ​ ​ 3.250 % Senior Notes due April 2025 , effective interest rate 3.36 % ​ $ — ​ $ 400,000 3.625 % Senior Notes due April 2025 , effective interest rate 3.78 % ​ ​ — ​ ​ 500,000 3.125 % Senior Notes due April 2026 , effective interest rate 3.28 % ​ 400,000 ​ 400,000 5.050 % Senior Notes due July 2026 , effective interest rate 5.09 % ​ ​ 450,000 ​ ​ 450,000 3.750 % Senior Notes due June 2027 , effective interest rate 3.83 % ​ 600,000 ​ 600,000 4.500 % Senior Notes due February 2028 , effective interest rate 4.43 % ​ ​ 450,000 ​ ​ 450,000 6.250 % Senior Notes due November 2028 , effective interest rate 6.46 % ​ ​ 500,000 ​ ​ 500,000 3.750 % Senior Notes due April 2029 , effective interest rate 3.86 % ​ 450,000 ​ 450,000 5.100 % Senior Notes due July 2029 , effective interest rate 5.30 % ​ ​ 600,000 ​ ​ 600,000 4.000 % Senior Notes due April 2030 , effective interest rate 4.09 % ​ ​ 750,000 ​ ​ 750,000 5.125 % Senior Notes due June 2030 , effective interest rate 5.14 % ​ ​ 500,000 ​ ​ — 1.650 % Senior Notes due January 2031 , effective interest rate 2.19 % ​ ​ 600,000 ​ ​ 600,000 4.750 % Senior Notes due August 2032 , effective interest rate 4.76 % ​ ​ 750,000 ​ ​ 750,000 4.750 % Senior Notes due February 2033 , effective interest rate 4.70 % ​ ​ 550,000 ​ ​ 550,000 5.200 % Senior Notes due August 2033 , effective interest rate 5.22 % ​ ​ 300,000 ​ ​ 300,000 6.550 % Senior Notes due November 2033 , effective interest rate 6.71 % ​ ​ 500,000 ​ ​ 500,000 5.400 % Senior Notes due July 2034 , effective interest rate 5.54 % ​ ​ 700,000 ​ ​ 700,000 Commercial paper, weighted average interest rate 4.46 % at August 30, 2025 and 5.40 % at August 31, 2024 ​ 748,600 ​ 580,000 Total debt before discounts and debt issuance costs ​ 8,848,600 ​ 9,080,000 Less: Discounts and debt issuance costs ​ ​ 48,825 ​ 55,619 Long-term debt ​ $ 8,799,775 ​ $ 9,024,381 ​ The Company maintains a revolving credit facility (as amended from time to time, the “Revolving Credit Agreement”) with a borrowing capacity of $ 2.25 billion. The maximum borrowing under the Revolving Credit Agreement may, at the Company’s option, subject to the lenders’ approval, be increased from $ 2.25 billion to $ 3.25 billion. On November 15, 2024, the Company amended the Revolving Credit Agreement to extend the termination date by one year . As amended, the Revolving Credit Agreement will terminate, and all amounts borrowed will be due and payable, on November 15, 2028 . Revolving borrowings under the Revolving Credit Agreement may be base rate loans, SOFR 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. Covenants under the Company’s Revolving Credit Agreement 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 August 30, 2025, the Company had no outstanding borrowings and $ 1.7 million of outstanding letters of credit under the Revolving Credit Agreement. The Revolving Credit Agreement requires that the Company’s consolidated interest coverage ratio as of the last day of each quarter shall be no less than 2.5 :1. This ratio is defined as the ratio of (i) consolidated earnings before interest, taxes and rents to (ii) consolidated interest expense plus consolidated rents. The Company’s consolidated interest coverage ratio as of August 30, 2025, was 5.1 :1. As of August 30, 2025, the $ 748.6 million of commercial paper borrowings, the $ 400 million 3.125 % Senior Notes due April 2026 and the $ 450 million 5.050 % Senior Notes due July 2026 were classified as long-term in the accompanying Consolidated Balance Sheets as the Company currently has the ability and intent to refinance them 67 Table of Contents on a long-term basis through available capacity in its Revolving Credit Agreement. As of August 30, 2025, the Company had $ 2.2 billion of availability under its Revolving Credit Agreement, which would allow the Company to replace these short-term obligations with a long-term financing facility. On April 15, 2025, the Company repaid its outstanding $ 400 million 3.250 % Senior Notes due April 2025 and its $ 500 million 3.625 % Senior Notes due April 2025. On April 18, 2024, the Company repaid its outstanding $ 300 million 3.125 % Senior Notes due April 2024. On July 17, 2023, the Company repaid its outstanding $ 500 million 3.125 % Senior Notes due July 2023. On January 17, 2023, the Company repaid its outstanding $ 300 million 2.875 % Senior Notes due January 2023. On April 14, 2025, the Company issued $ 500 million 5.125 % Senior Notes due June 2030, under the automatic shelf registration statement on Form S-3, filed with the SEC on July 19, 2022 (File No. 333-266209) (the “2022 Shelf Registration Statement”). The 2022 Shelf Registration Statement allowed the Company to sell an indeterminate amount in debt securities to fund general corporate purposes, including repaying, redeeming or repurchasing outstanding debt and for working capital, capital expenditures, new store or distribution center openings, stock repurchases and acquisitions. Proceeds from the debt issuance were for general corporate purposes. On June 28, 2024, the Company issued $ 600 million in 5.100 % Senior Notes due July 2029 and $ 700 million 5.400 % Senior Notes due July 2034 under the 2022 Shelf Registration Statement. Proceeds from the debt issuance were used to repay a portion of the Company’s outstanding commercial paper borrowings and for other general corporate purposes. On October 25, 2023, the Company issued $ 500 million in 6.250 % Senior Notes due November 2028 and $ 500 million 6.550 % Senior Notes due November 2033 under the 2022 Shelf Registration Statement. Proceeds from the debt issuance were used for general corporate purposes. On July 21, 2023, the Company issued $ 450 million in 5.050 % Senior Notes due July 2026 and $ 300 million in 5.200 % Senior Notes due August 2033 under the 2022 Shelf Registration Statement. Proceeds from the debt issuance were used for general corporate purposes. On January 27, 2023, the Company issued $ 450 million in 4.500 % Senior Notes due February 2028 and $ 550 million in 4.750 % Senior Notes due February 2033 under the 2022 Shelf Registration Statement. Proceeds from the debt issuance were used to repay a portion of the Company’s outstanding commercial paper borrowings and for other general corporate purposes. The Senior Notes contain a provision that repayment of the Senior Notes 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. 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. Interest for Senior Notes is paid on a semi-annual basis. The Company also maintained a letter of credit facility that allowed it to request the participating bank to issue letters of credit on its behalf up to an aggregate amount of $ 25 million. The letter of credit facility was in addition to the letters of credit that may be issued under the Revolving Credit Agreement. As of August 31, 2024, the Company had no letters of credit outstanding under the letter of credit facility which was terminated in September 2024. In addition to the outstanding letters of credit issued under the Revolving Credit Agreement discussed above, the Company had $ 149.1 million in letters of credit outstanding as of August 30, 2025. These letters of credit have various maturity dates and were issued on an uncommitted basis. As of August 30, 2025, the Company was in compliance with all covenants related to its borrowing arrangements. 68 Table of Contents The fair value of the Company’s debt was estimated at $ 8.9 billion as of August 30, 2025, and $ 9.0 billion as of August 31, 2024, 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 $ 94.4 million and $ 3.5 million at August 30, 2025, and August 31, 2024, respectively. This amount reflects face amount, adjusted for any unamortized debt issuance costs and discounts. All of the Company’s debt is unsecured. Scheduled maturities of debt are as follows: ​ ​ ​ ​ ​ Scheduled (in thousands) ​ Maturities ​ ​ ​ ​ 2026 ​ $ 1,598,600 2027 ​ 600,000 2028 ​ 450,000 2029 ​ 1,550,000 2030 ​ 1,250,000 Thereafter ​ 3,400,000 Subtotal ​ 8,848,600 Discount and debt issuance costs ​ 48,825 Total Debt ​ $ 8,799,775 ​ Note J – Interest Expense Net interest expense consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ August 30, August 31, August 26, (in thousands) ​ 2025 ​ 2024 ​ 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest expense ​ $ 490,025 ​ $ 465,191 ​ $ 320,121 Interest income ​ ( 10,972 ) ​ ( 11,312 ) ​ ( 12,054 ) Capitalized interest ​ ( 3,229 ) ​ ( 2,301 ) ​ ( 1,695 ) ​ ​ $ 475,824 ​ $ 451,578 ​ $ 306,372 ​ ​ Note K – Stock Repurchase Program During 1998, the Company announced a program permitting the Company to repurchase a portion of its outstanding shares not to exceed a dollar maximum established by the Company’s Board of Directors. The Board voted to increase the repurchase authorization by $ 1.5 billion on June 19, 2024, bringing the total authorization to $ 39.2 billion. Considering cumulative repurchases as of August 30, 2025, the Company had $ 632.3 million remaining under the Board’s authorization to repurchase its common stock. The Company’s share repurchase activity consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ August 30, August 31, August 26, (in thousands) ​ 2025 ​ 2024 ​ 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amount ​ $ 1,531,659 ​ $ 3,170,320 ​ $ 3,723,289 Shares ​ 447 ​ 1,149 ​ 1,524 ​ During fiscal year 2025, the Company retired 0.7 million shares of treasury stock which had previously been repurchased under the Company’s share repurchase program. The retirement increased Retained deficit by $ 2.0 billion and decreased Additional paid-in capital by $ 69.9 million. During the comparable prior year period, the Company retired 1.7 million shares of treasury stock, which increased Retained deficit by $ 4.1 billion and decreased Additional paid-in capital by $ 142.4 million. 69 Table of Contents On October 8, 2025, the Board of Directors voted to authorize the repurchase of an additional $ 1.5 billion of the Company’s common stock in connection with its ongoing share repurchase program. Since the inception of the repurchase program in 1998, the Board has authorized $ 40.7 billion in share repurchases. Subsequent to August 30, 2025, and through October 20, 2025, the Company has repurchased 51,543 shares of common stock at an aggregate cost of $ 215.6 million. Considering the cumulative repurchases and the increase in authorization subsequent to August 30, 2025, and through October 20, 2025, the Company has $ 1.9 billion remaining under the Board’s authorization to repurchase its common stock. ​ Note L – Accumulated Other Comprehensive Loss Accumulated Other Comprehensive Loss includes certain adjustments to foreign currency translation adjustments, certain activity for interest rate swaps and treasury rate locks that qualify as cash flow hedges and unrealized gains (losses) on available-for-sale marketable debt securities. Changes in Accumulated Other Comprehensive Loss consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrealized ​ ​ ​ ​ ​ ​ ​ ​ Foreign ​ Gain (Loss) ​ ​ ​ ​ ​ ​ (in thousands) Currency (1) on Securities ​ Derivatives ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at August 26, 2023 ​ $ ( 176,557 ) ​ $ ( 1,851 ) ​ $ ( 12,428 ) ​ $ ( 190,836 ) Other Comprehensive (Loss) Income before reclassifications ​ ( 174,715 ) ​ ​ 2,179 ​ ​ — ​ ( 172,536 ) Amounts reclassified from Accumulated Other Comprehensive Loss (2) ​ — ​ ​ ( 28 ) ​ ​ 1,782 ​ 1,754 Balance at August 31, 2024 ​ ​ ( 351,272 ) ​ ​ 300 ​ ​ ( 10,646 ) ​ ​ ( 361,618 ) Other Comprehensive Income before reclassifications ​ 74,236 ​ ​ 667 ​ ​ — ​ 74,903 Amounts reclassified from Accumulated Other Comprehensive Loss (2) ​ — ​ ​ ( 49 ) ​ ​ 1,754 ​ 1,705 Balance at August 30, 2025 ​ $ ( 277,036 ) ​ $ 918 ​ $ ( 8,892 ) ​ $ ( 285,010 ) ​ (1) Foreign currency, which primarily relates to our operations in Mexico, is shown net of U.S. tax to account for foreign currency impacts of certain undistributed non-U.S. subsidiaries earnings. (2) Amounts shown are net of taxes/tax benefits. Note M – Retirement Savings Plans The Company has a 401(k) plan that covers all domestic employees who meet the plan’s participation requirements. The plan features include Company matching contributions, immediate 100 % vesting of Company contributions and a savings option up to 25 % of qualified earnings. The Company makes matching contributions, per pay period, up to a specified percentage of employees’ contributions as approved by the Board. The Company made matching contributions to employee accounts in connection with the 401(k) plan of $ 42.7 million in fiscal 2025, $ 39.0 million in fiscal 2024 and $ 37.3 million in fiscal 2023. The Company also has a non-qualified executive deferred compensation plan which allows certain qualifying employees to defer a portion of their annual base salary and their annual incentive bonus. This plan provides for matching contributions similar to the 401(k) plan. Note N – Share-Based Plans The Company has several active and inactive equity incentive plans under which the Company has been authorized to grant share-based awards to key employees and non-employee directors. Awards under these plans have been in the form of restricted stock, restricted stock units, stock options, stock appreciation rights and other awards as defined by the plans. The Company also has an Employee Stock Purchase Plan that allows employees to purchase Company shares at a discount subject to certain limitations. The Company also has an Executive Stock Purchase Plan which permits all eligible executives to purchase AutoZone’s common stock using up to twenty-five percent of his or her annual salary and bonus. 70 Table of Contents Amended and Restated AutoZone, Inc. 2011 Equity Incentive Award Plan On December 15, 2010, the Company’s stockholders approved the 2011 Equity Incentive Award Plan (the “2011 Plan”), allowing the Company to provide equity-based compensation to non-employee directors and employees for their service to AutoZone or its subsidiaries or affiliates. Prior to the Company’s adoption of the 2011 Plan, equity-based compensation was provided to employees under the 2006 Stock Option Plan and to non-employee directors under the 2003 Director Compensation Plan (the “2003 Comp Plan”). During fiscal 2016, the Company’s stockholders approved the Amended and Restated AutoZone, Inc. 2011 Equity Incentive Award Plan (the “Amended 2011 Equity Plan”). The Amended 2011 Equity Plan imposes a maximum limit on the compensation, measured as the sum of any cash compensation and the aggregate grant date fair value of awards granted under the Amended 2011 Equity Plan, which may be paid to non-employee directors for such service during any calendar year. The Amended 2011 Equity Plan also applies a ten-year term on the Amended 2011 Equity Plan through December 16, 2025, and extended the Company’s ability to grant incentive stock options under the Amended 2011 Equity Plan through October 7, 2025. AutoZone, Inc. 2020 Omnibus Incentive Award Plan On December 16, 2020, the Company’s stockholders approved the AutoZone, Inc. 2020 Omnibus Incentive Award Plan (the “2020 Omnibus Plan”), which serves as the successor to the Amended 2011 Equity Plan. The 2020 Omnibus Plan provides equity-based compensation to our non-employee directors and employees for their service to AutoZone or our subsidiaries or affiliates. Under the 2020 Omnibus Plan, participants may receive equity-based compensation in the form of stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalents, deferred stock, stock payments, performance based awards, cash based awards and other incentive awards structured by the Compensation Committee and the Board within parameters set forth in the 2020 Omnibus Plan. ​ AutoZone, Inc. Director Compensation Program Under the Company’s Director Compensation Program (the “Program”), non-employee directors will receive their compensation in awards of restricted stock units under the 2020 Omnibus Plan, with an option for a certain portion of a director’s compensation to be paid in cash at the non-employee director’s election. Under the Program, restricted stock units are granted on January 1 of each year (the “Grant Date”). The number of restricted stock units is determined by dividing the amount of the annual retainer by the fair market value of the shares of common stock as of the Grant Date. The restricted stock units are fully vested on the date of grant and are paid in shares of the Company’s common stock on the first or the fifth anniversary of the Grant Date (at the Director’s election) or if sooner, the date the non-employee director ceases to be a member of the Board (“Separation from Service”). The cash portion of the award, if elected, is paid ratably over each calendar quarter. Total share-based compensation expense (a component of Operating, selling, general and administrative expenses) was $ 124.7 million, $ 106.2 million and $ 93.1 million for fiscal 2025, 2024 and 2023, respectively. General terms and methods of valuation for the Company’s share-based awards are as follows: Stock Options The Company grants options to purchase common stock to certain of its employees under the 2020 Omnibus Plan at prices equal to or above the market value of the stock on the date of grant. Options have a term of ten years from grant date. Option-vesting periods range from four to five years , with the majority of options vesting ratably over four years . Options generally have 90 days after the service relationship ends, or one year after death, to exercise all vested options, unless retirement provisions are met. The fair value of each option grant is separately estimated for each vesting date. The fair value of each option is amortized into compensation expense on a straight-line basis over the requisite service period, less estimated forfeitures. Employees who meet the qualified retirement provisions under the 2020 Omnibus Plan are assumed to have a 0 % forfeiture rate. All other employee grants assume a 10 % forfeiture rate, which is based on historical experience. The Company has estimated the fair value of all stock option awards as of the date of the grant by applying the Black-Scholes-Merton multiple-option pricing valuation model. The following table presents the weighted average 71 Table of Contents for key assumptions used in determining the fair value of options granted and the related share-based compensation expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ August 30, ​ August 31, ​ August 26, ​ ​ 2025 ​ 2024 ​ 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ Expected price volatility ​ 26 % 29 % 29 % Risk-free interest rate ​ 4.0 % 4.7 % 3.8 % Weighted average expected lives (in years) ​ 5.5 ​ 5.5 ​ 5.5 ​ Forfeiture rate ​ 7 % 7 % 10 % Dividend yield ​ 0 % 0 % 0 % ​ The following methodologies were applied in developing the assumptions used in determining the fair value of options granted: Expected price volatility – This is a measure of the amount by which a price has fluctuated or is expected to fluctuate. The Company uses actual historical changes in the market value of its stock to calculate the volatility assumption as it is management’s belief that this is the best indicator of future volatility. The Company calculates daily market value changes from the date of grant over a past period representative of the expected life of the options to determine volatility. An increase in the expected volatility will increase compensation expense. Risk-free interest rate – This is the U.S. Treasury rate for the week of the grant having a term equal to the expected life of the option. An increase in the risk-free interest rate will increase compensation expense. Expected lives – This is the period of time over which the options granted are expected to remain outstanding and is based on historical experience. Separate groups of employees that have similar historical exercise behavior are considered separately for valuation purposes. Options granted have a maximum term of ten years . An increase in the expected life will increase compensation expense. Forfeiture rate – This is the estimated percentage of options granted that are expected to be forfeited or canceled before becoming fully vested. This estimate is based on historical experience at the time of valuation and reduces expense ratably over the vesting period. An increase in the forfeiture rate will decrease compensation expense. This estimate is evaluated periodically based on the extent to which actual forfeitures differ, or are expected to differ, from the previous estimate. Dividend yield – The Company has not made any dividend payments nor does it have plans to pay dividends in the foreseeable future. An increase in the dividend yield will decrease compensation expense. The weighted average grant date fair value per share of options granted was $ 1,026.93 , $ 922.10 and $ 764.68 during fiscal 2025, 2024 and 2023, respectively. The intrinsic value of options exercised was $ 447.4 million, $ 424.5 million and $ 424.6 million in fiscal 2025, 2024 and 2023, respectively. The total fair value of options vested was $ 79.9 million, $ 67.0 million and $ 47.9 million in fiscal 2025, 2024 and 2023, respectively. 72 Table of Contents The Company generally issues new shares when options are exercised. The following table summarizes information about stock option activity for the year ended August 30, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ ​ ​ ​ Average ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Remaining ​ Aggregate ​ ​ ​ ​ Weighted ​ Contractual ​ Intrinsic ​ ​ Number ​ Average ​ Term ​ Value ​ ​ of Shares ​ Exercise Price ​ (in years) ​ (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding – August 31, 2024 923,843 ​ $ 1,452.52 ​ ​ ​ ​ Granted 123,102 ​ ​ 3,142.60 ​ Exercised ( 174,676 ) ​ ​ 941.18 ​ Forfeited/Cancelled ( 14,361 ) ​ ​ 2,099.03 ​ Outstanding – August 30, 2025 857,908 ​ 1,788.32 5.96 ​ $ 2,067,737 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Exercisable 541,437 ​ ​ 1,293.90 ​ 4.70 ​ ​ 1,572,672 Expected to vest 306,076 ​ ​ 2,627.69 ​ 8.10 ​ ​ 480,797 Available for future grants 599,542 ​ ​ ​ ​ ​ ​ ​ ​ ​ As of August 30, 2025, total unrecognized share-based compensation expense related to stock options, net of estimated forfeitures, was approximately $ 112.6 million, before income taxes, and will be recognized over an estimated weighted average period of 2.8 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 and 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. As of August 30, 2025, total unrecognized stock-based compensation expense related to nonvested restricted stock unit awards, net of estimated forfeitures, was approximately $ 7.4 million, before income taxes, which we expect to recognize over an estimated weighted average period of 2.5 years. Transactions related to restricted stock units for the fiscal year ended August 30, 2025, are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ Number Average Grant ​ ​ of Shares ​ Date Fair Value ​ ​ ​ ​ ​ ​ Nonvested at August 31, 2024 5,510 ​ $ 1,999.92 Granted 2,789 ​ ​ 3,164.92 Vested ( 3,264 ) ​ ​ 2,064.66 Forfeited ( 510 ) ​ ​ 2,515.44 Nonvested at August 30, 2025 4,525 ​ $ 2,613.24 ​ Stock Appreciation Rights At August 30, 2025, and August 31, 2024, the Company had $ 20.2 million and $ 15.3 million, respectively of accrued compensation expense for stock appreciation rights. There were 4,822 outstanding units issued under the 2003 Comp Plan and prior plans. As directors retire, this balance will be reduced. No additional shares of stock or units will be issued in future years under the 2003 Comp Plan or prior plans. 73 Table of Contents Employee Stock Purchase Plan and Executive Stock Purchase Plan The Company recognized $ 3.2 million, $ 3.1 million and $ 2.5 million in compensation expense related to the discount on the selling of shares to employees and executives under the various share purchase plans in fiscal 2025, 2024 and 2023, respectively. Under the Employee Plan, 4,419 , 5,000 and 5,183 shares were sold to employees in fiscal 2025, 2024 and 2023, respectively. Purchases under the Executive Plan were 246 , 540 and 689 shares in fiscal 2025, 2024 and 2023, respectively. Issuances of shares under the Employee Plan are netted against repurchases and such repurchases are not included in share repurchases disclosed in “Note K – Stock Repurchase Program.” At August 30, 2025, 112,922 shares of common stock were reserved for future issuance under the Employee Plan, and 232,180 shares of common stock were reserved for future issuance under the Executive Plan. ​ ​ Note O – Commitments and Contingencies Construction commitments, primarily for new stores, totaled approximately $ 130.5 million at August 30, 2025. The Company had $ 150.8 million in outstanding standby letters of credit and $ 100.5 million in surety bonds as of August 30, 2025, which all have expiration periods of less than one year . A substantial portion of the outstanding standby letters of credit (which are primarily renewed on an annual basis) and surety bonds are used to cover reimbursement obligations to our workers’ compensation carriers. There are no additional contingent liabilities associated with these instruments as the underlying liabilities are already reflected in the Consolidated Balance Sheets. The standby letters of credit and surety bonds arrangements have automatic renewal clauses. The Company has entered into agreements to make capital contributions to certain tax credit instruments upon the completion of project milestones. As of August 30, 2025, the Company had commitments to make certain additional capital contributions to these tax credit instruments totaling $ 207.2 million in fiscal 2026. Note P – Segment Reporting The Company is a leading retailer and distributor of automotive parts and accessories through the Company’s 7,657 stores in the Americas. The Company adopted ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures , during the fourth quarter of fiscal 2025. The Company determines its segments based on how the business is managed and evaluated. During the fourth quarter of fiscal 2025, the Company combined all its previously defined operating segments into a single operating and reportable segment to align with how the Company is currently managed and evaluated. This single operating segment includes all operations which are designed to enable customers to purchase products seamlessly in stores and from our online platforms. We carry an extensive product line for cars, sport utility vehicles, vans and light duty trucks, including new and remanufactured automotive hard parts, maintenance items, accessories and non-automotive products. The Company’s chief operating decision maker (“CODM”), the Chief Executive Officer, regularly reviews consolidated net income, as well as significant segment expenses included in the table below, to evaluate performance and allocate resources. The CODM also evaluates consolidated actual results versus forecasts, budgets and prior year results. The measure of segment assets is reported as “Total assets” on the Consolidated Balance Sheets as of August 30, 2025, and August 31, 2024. Expenditures for long-lived segment assets are reported as “Capital Expenditures” on the Consolidated Statements of Cash Flows for the fiscal years ended 2025, 2024 and 2023. Segment information for previous periods has been recast to conform to the current-period presentation. ​ 74 Table of Contents The following table represents significant expenses that are regularly provided to the CODM for the following fiscal years : ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ August 30, August 31, August 26, (in thousands) ​ 2025 ​ 2024 ​ 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Auto Parts Segment ​ ​ ​ Net sales ​ $ 18,938,717 ​ $ 18,490,268 ​ $ 17,457,209 Cost of sales, including warehouse and delivery expenses ​ ​ 8,972,243 ​ ​ 8,673,216 ​ ​ 8,386,787 Gross profit ​ ​ 9,966,474 ​ ​ 9,817,052 ​ ​ 9,070,422 Less: ​ ​ ​ ​ ​ ​ ​ ​ ​ Compensation expense (1) ​ ​ 3,858,570 ​ ​ 3,708,476 ​ ​ 3,471,566 Rent expense (2) ​ ​ 478,106 ​ ​ 456,862 ​ ​ 410,975 Depreciation & amortization ​ ​ 544,117 ​ ​ 498,391 ​ ​ 451,522 Advertising expense ​ ​ 109,531 ​ ​ 102,656 ​ ​ 99,510 Other segment expenses (3) ​ ​ 1,365,994 ​ ​ 1,261,959 ​ ​ 1,162,863 Interest expense, net ​ ​ 475,824 ​ ​ 451,578 ​ ​ 306,372 Income tax expense ​ ​ 636,085 ​ ​ 674,703 ​ ​ 639,188 Consolidated net income ​ $ 2,498,247 ​ $ 2,662,427 ​ $ 2,528,426 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Auto Parts Segment Sales by Product Grouping: ​ ​ ​ Failure ​ $ 9,291,584 ​ $ 8,979,152 ​ $ 8,407,690 Maintenance items ​ 6,807,347 ​ 6,618,494 ​ 6,223,620 Accessories and other ​ 2,839,786 ​ 2,892,622 ​ 2,825,899 Auto Parts net sales ​ $ 18,938,717 ​ $ 18,490,268 ​ $ 17,457,209 ​ (1) Compensation expense includes operating, selling, general and administrative expenses for payroll expense, benefits, related taxes, share-based compensation and other employee costs. (2) Rent expense includes rent and variable operating lease components, related to insurance and common area maintenance included in selling, general and administrative expenses. Rent expense related to supply chain is included in cost of sales, including warehouse and delivery expenses. (3) Other segment items include vehicle expense, utilities expense, real estate taxes and insurance expense, service charges and other operating expenses. ​ The following table presents the Company’s net sales classified by geography: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ August 30, ​ August 31, ​ August 26, (in thousands) ​ 2025 ​ 2024 ​ 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ In the United States ​ $ 16,671,606 ​ $ 16,219,570 ​ $ 15,619,789 Outside the United States ​ ​ 2,267,111 ​ ​ 2,270,698 ​ ​ 1,837,420 Total ​ $ 18,938,717 ​ $ 18,490,268 ​ $ 17,457,209 ​ The following table presents the Company’s long-lived assets, consisting primarily of property and equipment, less accumulated depreciation and amortization and operating lease right-of-use assets, classified by geography: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ August 30, ​ August 31, (in thousands) ​ 2025 ​ 2024 ​ ​ ​ ​ ​ ​ ​ In the United States ​ $ 8,847,597 ​ $ 8,222,624 Outside the United States ​ ​ 1,409,578 ​ ​ 1,018,695 Total ​ $ 10,257,175 ​ $ 9,241,319 ​ 75 Table of Contents ​ Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure ​ Not applicable.