AUTOZONE INC 10-Q

Item 1. Financial Statements. AUTOZONE, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ May 10, ​ August 31, (in thousands) ​ 2025 ​ 2024 ​ ​ ​ ​ ​ ​ ​ Assets ​ ​ ​ ​ Current assets: ​ ​ ​ ​ Cash and cash equivalents ​ $ 268,625 ​ $ 298,172 Accounts receivable ​ 588,514 ​ 545,575 Merchandise inventories ​ 6,822,881 ​ 6,155,218 Other current assets ​ 305,691 ​ 307,794 Total current assets ​ 7,985,711 ​ 7,306,759 ​ ​ ​ ​ ​ ​ ​ Property and equipment: ​ ​ ​ ​ ​ ​ Property and equipment ​ 12,128,141 ​ 11,305,125 Less: Accumulated depreciation and amortization ​ ( 5,400,923 ) ​ ( 5,121,586 ) ​ ​ 6,727,218 ​ 6,183,539 ​ ​ ​ ​ ​ ​ ​ Operating lease right-of-use assets ​ ​ 3,145,590 ​ ​ 3,057,780 Goodwill ​ 302,645 ​ 302,645 Deferred income taxes ​ 100,910 ​ 83,689 Other long-term assets ​ 359,909 ​ 242,126 Total long-term assets ​ 3,909,054 ​ 3,686,240 Total assets ​ $ 18,621,983 ​ $ 17,176,538 ​ ​ ​ ​ ​ ​ ​ Liabilities and Stockholders’ Deficit ​ ​ ​ ​ ​ ​ Current liabilities: ​ ​ ​ ​ ​ ​ Accounts payable ​ $ 7,887,417 ​ $ 7,355,701 Current portion of operating lease liabilities ​ ​ 314,919 ​ ​ 266,855 Accrued expenses and other ​ 1,095,921 ​ 1,060,746 Income taxes payable ​ 167,278 ​ 30,941 Total current liabilities ​ 9,465,535 ​ 8,714,243 ​ ​ ​ ​ ​ ​ ​ Long-term debt ​ 8,853,110 ​ 9,024,381 Operating lease liabilities, less current portion ​ ​ 3,020,664 ​ ​ 2,960,174 Deferred income taxes ​ 412,429 ​ 447,067 Other long-term liabilities ​ 844,650 ​ 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; 16,869 shares issued and 16,724 shares outstanding as of May 10, 2025; 17,451 shares issued and 16,926 shares outstanding as of August 31, 2024 ​ 169 ​ 175 Additional paid-in capital ​ 1,745,937 ​ 1,621,553 Retained deficit ​ ( 4,812,803 ) ​ ( 4,424,982 ) Accumulated other comprehensive loss ​ ( 357,051 ) ​ ( 361,618 ) Treasury stock, at cost ​ ( 550,657 ) ​ ( 1,584,742 ) Total stockholders’ deficit ​ ( 3,974,405 ) ​ ( 4,749,614 ) Total liabilities and stockholders' deficit ​ $ 18,621,983 ​ $ 17,176,538 See Notes to Condensed Consolidated Financial Statements. 3 Table of Contents AUTOZONE, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Twelve Weeks Ended ​ Thirty-Six Weeks Ended ​ ​ May 10, ​ May 4, ​ May 10, ​ May 4, (in thousands, except per share data) ​ 2025 ​ 2024 ​ 2025 ​ 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net sales $ 4,464,339 $ 4,235,485 $ 12,695,991 $ 12,284,888 Cost of sales, including warehouse and delivery expenses ​ ​ 2,110,816 ​ ​ 1,969,963 ​ ​ 5,946,010 ​ ​ 5,725,698 Gross profit ​ ​ 2,353,523 ​ 2,265,522 ​ ​ 6,749,981 ​ 6,559,190 Operating, selling, general and administrative expenses ​ ​ 1,487,349 ​ ​ 1,365,341 ​ ​ 4,335,891 ​ ​ 4,067,163 Operating profit ​ ​ 866,174 ​ ​ 900,181 ​ ​ 2,414,090 ​ ​ 2,492,027 Interest expense, net ​ ​ 111,285 ​ ​ 104,422 ​ ​ 327,736 ​ ​ 298,426 Income before income taxes ​ ​ 754,889 ​ 795,759 ​ ​ 2,086,354 ​ 2,193,601 Income tax expense ​ ​ 146,449 ​ ​ 144,033 ​ ​ 425,057 ​ ​ 433,382 Net income ​ $ 608,440 ​ $ 651,726 ​ $ 1,661,297 ​ $ 1,760,219 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average shares for basic earnings per share ​ 16,746 ​ 17,273 ​ 16,815 ​ 17,434 Effect of dilutive stock equivalents ​ ​ 461 ​ ​ 488 ​ ​ 459 ​ ​ 507 Weighted average shares for diluted earnings per share ​ 17,207 ​ 17,761 ​ 17,274 ​ 17,941 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic earnings per share ​ $ 36.33 ​ $ 37.73 ​ $ 98.80 ​ $ 100.96 Diluted earnings per share ​ $ 35.36 ​ $ 36.69 ​ $ 96.17 ​ $ 98.11 ​ See Notes to Condensed Consolidated Financial Statements. AUTOZONE, INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Twelve Weeks Ended ​ Thirty-Six Weeks Ended ​ ​ May 10, May 4, May 10, May 4, (in thousands) 2025 ​ 2024 ​ 2025 ​ 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 608,440 ​ $ 651,726 ​ $ 1,661,297 ​ $ 1,760,219 Other comprehensive income (loss): ​ ​ ​ ​ ​ ​ Foreign currency translation adjustments ​ 49,636 ​ 1,630 ​ 3,744 ​ ( 14,252 ) Unrealized gains (losses) on marketable debt securities, net of taxes ​ 498 ​ ( 34 ) ​ ( 389 ) ​ 978 Net derivative activities, net of taxes ​ 404 ​ 404 ​ 1,212 ​ 1,211 Total other comprehensive income (loss) ​ 50,538 ​ 2,000 ​ 4,567 ​ ( 12,063 ) Comprehensive income ​ $ 658,978 ​ $ 653,726 ​ $ 1,665,864 ​ $ 1,748,156 ​ See Notes to Condensed Consolidated Financial Statements. ​ 4 Table of Contents AUTOZONE, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ Thirty-Six Weeks Ended ​ ​ May 10, ​ May 4, (in thousands) ​ 2025 ​ 2024 ​ ​ ​ ​ ​ ​ ​ Cash flows from operating activities: ​ ​ ​ Net income ​ $ 1,661,297 ​ $ 1,760,219 Adjustments to reconcile net income to net cash provided by operating activities: ​ ​ ​ Depreciation and amortization of property and equipment ​ 415,787 ​ 374,416 Other non-cash income ​ ( 16,000 ) ​ ( 40,000 ) Amortization of debt origination fees ​ 9,083 ​ 8,155 Deferred income taxes ​ ( 59,320 ) ​ 9,016 Share-based compensation expense ​ 85,584 ​ 71,314 Changes in operating assets and liabilities: ​ ​ ​ Accounts receivable ​ ( 41,820 ) ​ ( 66,550 ) Merchandise inventories ​ ( 642,317 ) ​ ( 353,813 ) Accounts payable and accrued expenses ​ 603,613 ​ 126,488 Income taxes ​ 135,953 ​ 69,746 Other, net ​ 12,722 ​ ( 25,125 ) Net cash provided by operating activities ​ 2,164,582 ​ 1,933,866 ​ ​ ​ ​ ​ ​ ​ Cash flows from investing activities: ​ ​ ​ Capital expenditures ​ ( 885,623 ) ​ ( 725,910 ) Purchase of marketable debt securities ​ ( 54,250 ) ​ ( 17,551 ) Proceeds from sale of marketable debt securities ​ 54,827 ​ 21,245 Investment in tax credit equity investments ​ ​ ( 50,424 ) ​ ​ ( 193,327 ) Other, net ​ 18,209 ​ ( 715 ) Net cash used in investing activities ​ ( 917,261 ) ​ ( 916,258 ) ​ ​ ​ ​ ​ ​ ​ Cash flows from financing activities: ​ ​ ​ Net proceeds from commercial paper ​ 225,500 ​ 631,300 Proceeds from issuance of debt ​ 500,000 ​ 1,000,000 Repayment of debt ​ ​ ( 900,000 ) ​ ​ ( 300,000 ) Net proceeds from sale of common stock ​ 111,008 ​ 154,367 Purchase of treasury stock ​ ​ ( 1,135,260 ) ​ ​ ( 2,437,176 ) Repayment of principal portion of finance lease liabilities ​ ( 74,096 ) ​ ​ ( 62,455 ) Other, net ​ ( 4,927 ) ​ ( 5,001 ) Net cash used in financing activities ​ ( 1,277,775 ) ​ ( 1,018,965 ) ​ ​ ​ ​ ​ ​ ​ Effect of exchange rate changes on cash ​ 907 ​ ( 339 ) ​ ​ ​ ​ ​ ​ ​ Net decrease in cash and cash equivalents ​ ( 29,547 ) ​ ( 1,696 ) Cash and cash equivalents at beginning of period ​ 298,172 ​ 277,054 Cash and cash equivalents at end of period ​ $ 268,625 ​ $ 275,358 See Notes to Condensed Consolidated Financial Statements. ​ 5 Table of Contents AUTOZONE, INC. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Twelve Weeks Ended May 10, 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ Common ​ ​ ​ ​ Additional ​ ​ ​ Other ​ ​ ​ ​ ​ ​ ​ Shares Common Paid-in Retained Comprehensive Treasury ​ ​ (in thousands) ​ Issued ​ Stock ​ Capital ​ Deficit ​ Loss ​ Stock ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at February 15, 2025 16,822 ​ $ 168 ​ $ 1,671,200 ​ $ ( 5,421,243 ) ​ $ ( 407,589 ) ​ $ ( 300,309 ) ​ $ ( 4,457,773 ) Net income — ​ — ​ — ​ 608,440 ​ — ​ — ​ 608,440 Total other comprehensive income — ​ — ​ — ​ — ​ 50,538 ​ — ​ 50,538 Purchase of 70 shares of treasury stock — ​ — ​ — ​ — ​ — ​ ( 250,348 ) ​ ( 250,348 ) Issuance of common stock under stock options and stock purchase plans 47 ​ 1 ​ 46,706 ​ — ​ — ​ — ​ 46,707 Share-based compensation expense — ​ — ​ 28,031 ​ — ​ — ​ — ​ 28,031 Balance at May 10, 2025 16,869 ​ $ 169 ​ $ 1,745,937 ​ $ ( 4,812,803 ) ​ $ ( 357,051 ) ​ $ ( 550,657 ) ​ $ ( 3,974,405 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Twelve Weeks Ended May 4, 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ Common ​ ​ ​ ​ Additional ​ ​ ​ ​ Other ​ ​ ​ ​ ​ ​ ​ Shares Common Paid-in Retained Comprehensive Treasury ​ ​ (in thousands) ​ Issued ​ Stock ​ Capital ​ Deficit ​ Loss ​ Stock ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at February 10, 2024 17,351 ​ $ 174 ​ $ 1,485,789 ​ $ ( 5,978,916 ) ​ $ ( 204,899 ) ​ $ ( 139,469 ) ​ $ ( 4,837,321 ) Net income — ​ — ​ — ​ 651,726 ​ — ​ — ​ 651,726 Total other comprehensive income — ​ — ​ — ​ — ​ 2,000 ​ — ​ 2,000 Purchase of 242 shares of treasury stock — ​ — ​ — ​ — ​ — ​ ( 734,713 ) ​ ( 734,713 ) Issuance of common stock under stock options and stock purchase plans 74 ​ — ​ 56,028 ​ ​ — ​ ​ — ​ ​ — ​ 56,028 Share-based compensation expense — ​ — ​ 24,043 ​ — ​ — ​ — ​ 24,043 Balance at May 4, 2024 17,425 ​ $ 174 ​ $ 1,565,860 ​ $ ( 5,327,190 ) ​ $ ( 202,899 ) ​ $ ( 874,182 ) ​ $ ( 4,838,237 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Thirty-Six Weeks Ended May 10, 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ Common ​ ​ ​ ​ Additional ​ ​ ​ ​ Other ​ ​ ​ ​ ​ ​ ​ Shares Common Paid-in Retained Comprehensive Treasury ​ ​ (in thousands) ​ Issued ​ Stock ​ Capital ​ Deficit ​ Loss ​ Stock ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at August 31, 2024 17,451 ​ $ 175 ​ $ 1,621,553 ​ $ ( 4,424,982 ) ​ $ ( 361,618 ) ​ $ ( 1,584,742 ) ​ $ ( 4,749,614 ) Net income — ​ — ​ — ​ 1,661,297 ​ — ​ — ​ 1,661,297 Total other comprehensive income — ​ — ​ — ​ — ​ 4,567 ​ — ​ 4,567 Retirement of treasury shares ( 710 ) ​ ( 7 ) ​ ( 69,877 ) ​ ( 2,049,118 ) ​ — ​ 2,119,002 ​ — Purchase of 330 shares of treasury stock — ​ — ​ — ​ — ​ — ​ ( 1,084,917 ) ​ ( 1,084,917 ) Issuance of common stock under stock options and stock purchase plans 128 ​ 1 ​ 111,007 ​ — ​ — ​ — ​ 111,008 Share-based compensation expense — ​ — ​ 83,254 ​ — ​ — ​ — ​ 83,254 Balance at May 10, 2025 16,869 ​ $ 169 ​ $ 1,745,937 ​ $ ( 4,812,803 ) ​ $ ( 357,051 ) ​ $ ( 550,657 ) ​ $ ( 3,974,405 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Thirty-Six Weeks Ended May 4, 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ Common ​ ​ ​ ​ Additional ​ ​ ​ ​ Other ​ ​ ​ ​ ​ ​ ​ Shares Common Paid-in Retained Comprehensive Treasury ​ ​ (in thousands) ​ Issued ​ Stock ​ Capital ​ Deficit ​ Loss ​ Stock ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at August 26, 2023 18,936 ​ $ 189 ​ $ 1,484,992 ​ $ ( 2,959,278 ) ​ $ ( 190,836 ) ​ $ ( 2,684,961 ) ​ $ ( 4,349,894 ) Net income — ​ — ​ — ​ 1,760,219 ​ — ​ — ​ 1,760,219 Total other comprehensive loss — ​ — ​ — ​ — ​ ( 12,063 ) ​ — ​ ( 12,063 ) Retirement of treasury shares ( 1,703 ) ​ ( 17 ) ​ ( 142,391 ) ​ ( 4,128,131 ) ​ — ​ 4,270,539 ​ — Purchase of 905 shares of treasury stock — ​ — ​ — ​ — ​ — ​ ( 2,459,760 ) ​ ( 2,459,760 ) Issuance of common stock under stock options and stock purchase plans 192 ​ 2 ​ 154,365 ​ ​ — ​ ​ — ​ ​ — ​ 154,367 Share-based compensation expense — ​ — ​ 68,894 ​ — ​ — ​ — ​ 68,894 Balance at May 4, 2024 17,425 ​ $ 174 ​ $ 1,565,860 ​ $ ( 5,327,190 ) ​ $ ( 202,899 ) ​ $ ( 874,182 ) ​ $ ( 4,838,237 ) See Notes to Condensed Consolidated Financial Statements. 6 Table of Contents AUTOZONE, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note A – General The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“U.S. GAAP”) for interim financial information and are presented in accordance with the requirements of Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission’s (the “SEC”) rules and regulations. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments, including normal recurring accruals, considered necessary for a fair presentation have been included. For further information, refer to the consolidated financial statements and related notes included in the AutoZone, Inc. (“AutoZone” or the “Company”) Annual Report on Form 10-K for the year ended August 31, 2024. Operating results for the twelve and thirty-six weeks ended May 10, 2025, are not necessarily indicative of the results that may be expected for the full fiscal year ending August 30, 2025. Each of the first three quarters of AutoZone’s fiscal year consists of 12 weeks, and the fourth quarter consists of 16 or 17 weeks. The fourth quarter of fiscal 2025 has 16 weeks, and the fourth quarter of fiscal 2024 had 17 weeks. Recently Issued Accounting Pronouncements In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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 will adopt this standard with its fiscal 2025 annual filing. The Company is currently evaluating these new disclosure requirements and the impact of adoption. 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 its fiscal 2026 annual filing. The 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. ​ 7 Table of Contents Note B – 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 value for domestic inventories and the weighted average cost method stated at the lower of cost or net realizable value for Mexico and Brazil inventories. The Company’s policy is not to write up inventory in excess of replacement cost. Due to price changes on the Company’s merchandise purchases, primarily driven by fluctuating freight costs, the Company’s LIFO credit reserve balance decreased to $ 3.0 million at May 10, 2025, from $ 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. Note C – 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 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 May 10, 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 $ 104.3 million and $ 53.9 million as of May 10, 2025, and August 31, 2024, respectively, and was included in Other long-term assets in the Condensed Consolidated Balance Sheets. Note D – 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. 8 Table of Contents 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: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ May 10, 2025 (in thousands) Level 1 Level 2 Level 3 Fair Value ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other current assets ​ $ 9,909 ​ $ 9,084 ​ $ — ​ $ 18,993 Other long-term assets ​ 50,646 ​ ​ 51,465 ​ — ​ 102,111 ​ ​ $ 60,555 ​ $ 60,549 ​ $ — ​ $ 121,104 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 ​ At May 10, 2025, and August 31, 2024, the fair value measurement amounts for assets and liabilities recorded in the accompanying Condensed Consolidated Balance Sheets consisted of short-term marketable debt securities of $ 19.0 million and $ 38.4 million, respectively, which are included in Other current assets, and long-term marketable debt securities of $ 102.1 million and $ 83.7 million, respectively, which are included in Other long-term assets. The Company’s marketable debt securities are typically valued at the closing price in the principal active market as of the last business day of the quarter or through the use of other market inputs relating to the securities, including benchmark yields and reported trades. The fair values of the marketable debt securities, by asset class, are described in “Note E – Marketable Debt Securities.” Financial Instruments not Recognized at Fair Value The Company has financial instruments, including cash and cash equivalents, accounts receivable, other current assets and accounts payable. The carrying amounts of these financial instruments approximate fair value because of their short maturities. A discussion of the carrying values and fair values of the Company’s debt is included in “Note H – Financing.” Note E – Marketable Debt Securities The Company holds marketable debt securities in its wholly-owned insurance captive subsidiary. These securities are carried at fair value, with unrealized gains and losses, net of income taxes, recorded in Accumulated other comprehensive loss until realized, and any credit risk related losses are recognized in net income in the period incurred. The Company’s basis for determining the cost of a security sold is the “Specific Identification Model.” The Company’s available-for-sale marketable debt securities consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ May 10, 2025 ​ Amortized Gross Gross ​ ​ ​ Cost ​ Unrealized ​ Unrealized ​ Fair (in thousands) ​ Basis ​ Gains ​ Losses ​ Value ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Corporate debt securities ​ $ 26,081 ​ $ 92 ​ $ ( 195 ) ​ $ 25,978 Government bonds ​ 58,790 ​ 501 ​ ( 423 ) ​ 58,868 Mortgage-backed securities ​ 22,432 ​ 108 ​ ( 215 ) ​ 22,325 Asset-backed securities and other ​ 13,912 ​ 40 ​ ( 19 ) ​ 13,933 ​ ​ $ 121,215 ​ $ 741 ​ $ ( 852 ) ​ $ 121,104 9 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 ​ The contractual maturities of the Company’s available for sale marketable debt securities are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ May 10, 2025 ​ ​ Amortized ​ Fair (in thousands) ​ Cost Basis ​ Value ​ ​ ​ ​ ​ ​ ​ Due within one year ​ $ 20,607 ​ $ 18,993 Due after one year through five years ​ ​ 45,465 ​ ​ 47,256 Due after five years through ten years ​ ​ 38,753 ​ ​ 38,629 Due after ten years ​ ​ 16,390 ​ ​ 16,226 ​ ​ $ 121,215 ​ $ 121,104 ​ The Company held 65 securities that were in an unrealized loss position of approximately $ 0.9 million at May 10, 2025, and 45 securities in an unrealized loss position of approximately $ 0.7 million at August 31, 2024. 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 the thirty-six week period ended May 10, 2025, and the comparable prior year period. Included above in total available-for-sale marketable debt securities are $ 114.5 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 May 10, 2025, and August 31, 2024, respectively. 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 May 10, 2025, and August 31, 2024 , the Company had supplier obligations outstanding that had been confirmed under these arrangements of $ 5.2 billion and $ 4.9 billion respectively, which are included in Accounts payable and $ 288.1 million and $ 226.7 million, respectively, which are included in Other long-term liabilities in the Condensed Consolidated Balance Sheets. Note G – 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, 10 Table of Contents 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. Note H – Financing The Company’s debt consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ May 10, 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 4.56 % at May 10, 2025 and 5.40 % at August 31, 2024 ​ 805,500 ​ 580,000 Total debt before discounts and debt issuance costs ​ 8,905,500 ​ 9,080,000 Less: Discounts and debt issuance costs ​ ​ 52,390 ​ 55,619 Long-term debt ​ $ 8,853,110 ​ $ 9,024,381 ​ The Company has entered into 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 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, Term Secured Overnight Financing Rate (“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 May 10, 2025, and August 31, 2024, the Company had no outstanding borrowings and $ 1.7 million and $ 1.8 million, respectively, of outstanding letters of credit under the Revolving Credit Agreement. 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. 11 Table of Contents In addition to the outstanding letters of credit issued under the Revolving Credit Agreement discussed above, the Company had $ 150.5 million and $ 141.6 million in letters of credit outstanding as of May 10, 2025, and August 31, 2024, respectively. These letters of credit have various maturity dates and were issued on an uncommitted basis. Additionally, the Company’s total surety bonds commitment was $ 97.7 million at May 10, 2025, compared with $ 48.9 million at August 31, 2024. Since its fiscal year end, the Company has canceled, issued and modified stand-by letters of credit that are primarily renewed on an annual basis to cover deductible payments to its casualty insurance carriers. As of May 10, 2025, the $ 805.5 million commercial paper borrowings and the $ 400 million 3.125 % Senior Notes due April 2026 were classified as long-term debt in the accompanying Condensed Consolidated Balance Sheets as the Company currently has the ability and intent to refinance them on a long-term basis through available capacity under its Revolving Credit Agreement. As of May 10, 2025, the Company had $ 2.2 billion of availability under its Revolving Credit Agreement, which would allow it 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 14, 2025, the Company issued $ 500 million 5.125 % Senior Notes due June 2030. Proceeds from the debt issuance were used for general corporate purposes. The Senior Notes contain a provision that repayment may be accelerated if the Company experiences both a change of control and a rating event (both 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 the Senior Notes is paid on a semi-annual basis. ​ The fair value of the Company’s debt was estimated at $ 8.8 billion and $ 9.0 billion as of May 10, 2025, and August 31, 2024, respectively, 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 less than the carrying value of debt by $ 57.9 million and greater than the carrying value of debt by $ 3.5 million at May 10, 2025, and August 31, 2024, respectively, which reflects the face amount, adjusted for any unamortized debt issuance costs and discounts. As of May 10, 2025, the Company was in compliance with all covenants and expects to remain in compliance with all covenants under its borrowing arrangements. Note I – Stock Repurchase Program From January 1, 1998, to May 10, 2025, the Company has repurchased a total of 155.5 million shares of its common stock at an aggregate cost of $ 38.1 billion, including 330.3 thousand shares of its common stock at an aggregate cost of $ 1.1 billion during the thirty-six week period ended May 10, 2025. On June 19, 2024, the Board 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, which raised the total value of shares authorized to be repurchased to $ 39.2 billion. Considering the cumulative repurchases as of May 10, 2025, the Company had $ 1.1 billion remaining under the Board’s authorization to repurchase its common stock. During the thirty-six week period ended May 10, 2025, the Company retired 0.7 million shares of treasury stock which had been previously 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. Subsequent to May 10, 2025, and through June 6, 2025, the Company has repurchased 2.7 thousand shares of its common stock at an aggregate cost of $ 10.0 million. 12 Table of Contents Note J – Accumulated Other Comprehensive Loss Accumulated other comprehensive loss includes foreign currency translation adjustments, net unrealized gains (losses) on marketable debt securities, and net derivative activities. ​ Changes in Accumulated other comprehensive loss for the twelve week periods ended May 10, 2025, and May 4, 2024, consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net ​ ​ ​ ​ ​ ​ ​ ​ Foreign ​ Unrealized ​ ​ ​ ​ ​ ​ ​ ​ Currency ​ Gain (Loss) ​ ​ ​ ​ ​ ​ (in thousands) and Other (1) on Securities ​ Derivatives ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at February 15, 2025 ​ $ ( 397,164 ) ​ $ ( 587 ) ​ $ ( 9,838 ) ​ $ ( 407,589 ) Other comprehensive income before reclassifications (2) ​ 49,636 ​ ​ 511 ​ — ​ 50,147 Amounts reclassified from Accumulated other comprehensive loss (2) ​ — ​ ( 13 ) ​ 404 ​ 391 Balance at May 10, 2025 ​ $ ( 347,528 ) ​ $ ( 89 ) ​ $ ( 9,434 ) ​ $ ( 357,051 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net ​ ​ ​ ​ ​ ​ ​ ​ Foreign ​ Unrealized ​ ​ ​ ​ ​ ​ ​ ​ Currency ​ Gain (Loss) ​ ​ ​ ​ ​ ​ (in thousands) and Other (1) on Securities ​ Derivatives ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at February 10, 2024 ​ $ ( 192,439 ) ​ $ ( 839 ) ​ $ ( 11,621 ) ​ $ ( 204,899 ) Other comprehensive income (loss) before reclassifications (2) ​ 1,630 ​ ( 34 ) ​ — ​ 1,596 Amounts reclassified from Accumulated other comprehensive loss (2) ​ — ​ — ​ 404 ​ 404 Balance at May 4, 2024 ​ $ ( 190,809 ) ​ $ ( 873 ) ​ $ ( 11,217 ) ​ $ ( 202,899 ) ​ Changes in Accumulated other comprehensive loss for the thirty-six week periods ended May 10, 2025, and May 4, 2024, consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net ​ ​ ​ ​ ​ ​ ​ ​ Foreign ​ Unrealized ​ ​ ​ ​ ​ ​ ​ ​ Currency ​ Gain (Loss) ​ ​ ​ ​ ​ ​ (in thousands) and Other (1) on Securities ​ Derivatives ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at August 31, 2024 ​ $ ( 351,272 ) ​ $ 300 ​ $ ( 10,646 ) ​ $ ( 361,618 ) Other comprehensive income (loss) before reclassifications (2) ​ 3,744 ​ ​ ( 359 ) ​ — ​ 3,385 Amounts reclassified from Accumulated other comprehensive loss (2) ​ — ​ ( 30 ) ​ 1,212 ​ 1,182 Balance at May 10, 2025 ​ $ ( 347,528 ) ​ $ ( 89 ) ​ $ ( 9,434 ) ​ $ ( 357,051 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net ​ ​ ​ ​ ​ ​ ​ ​ Foreign ​ Unrealized ​ ​ ​ ​ ​ ​ ​ ​ Currency ​ Gain (Loss) ​ ​ ​ ​ ​ ​ (in thousands) and Other (1) on Securities ​ Derivatives ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at August 26, 2023 ​ $ ( 176,557 ) ​ $ ( 1,851 ) ​ $ ( 12,428 ) ​ $ ( 190,836 ) Other comprehensive (loss) income before reclassifications (2) ​ ( 14,252 ) ​ 978 ​ — ​ ( 13,274 ) Amounts reclassified from Accumulated other comprehensive loss (2) ​ — ​ — ​ 1,211 ​ 1,211 Balance at May 4, 2024 ​ $ ( 190,809 ) ​ $ ( 873 ) ​ $ ( 11,217 ) ​ $ ( 202,899 ) (1) Foreign currency is shown net of U.S. tax to account for foreign currency impacts of certain undistributed non-U.S. subsidiaries’ earnings. Other foreign currency is not shown net of additional U.S. tax as other basis differences of non-U.S. subsidiaries are intended to be permanently reinvested. (2) Amounts shown are net of taxes/tax benefits . 13 Table of Contents Note K – Share-Based Payments AutoZone maintains several equity incentive plans, which provide equity-based compensation to non-employee directors and eligible employees for their service to AutoZone, its subsidiaries or affiliates. The Company recognizes compensation expense for share-based payments based on the fair value of the awards at the grant date. Share-based payments include stock option grants, restricted stock grants, restricted stock unit grants, stock appreciation rights, discounts on shares sold to employees under share purchase plans and other awards. Additionally, directors’ fees are paid in restricted stock units with value equivalent to the value of shares of common stock as of the grant date. The change in fair value of liability-based stock awards is also recognized in share-based compensation expense. Stock Options: The Company grants options to purchase common stock to certain of its employees under its equity incentive plans at prices equal to or above the market value of the stock on the date of grant. Option-vesting periods range from four to five years , with the majority of options vesting ratably over four years . 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 AutoZone, Inc. 2020 Omnibus Incentive Award 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 made stock option grants for 122,802 shares during the thirty-six week period ended May 10, 2025, and 134,821 shares during the comparable prior year period. The weighted average fair value of the stock option awards granted during the thirty-six week periods ended May 10, 2025, and May 4, 2024, using the Black-Scholes-Merton multiple-option pricing valuation model, was $ 1,026.36 and $ 915.03 per share, respectively, using the following weighted average key assumptions: ​ ​ ​ ​ ​ ​ ​ ​ ​ Thirty-Six Weeks Ended ​ ​ May 10, May 4, ​ 2025 ​ 2024 ​ ​ ​ ​ ​ ​ ​ Expected price volatility 26 % 29 % Risk-free interest rate 4.0 % 4.8 % Weighted average expected lives (in years) 5.5 5.4 Forfeiture rate 7 % 7 % Dividend yield 0 % 0 % ​ During the thirty-six week period ended May 10, 2025, and the comparable prior year period, 117,698 and 185,304 stock options, respectively, were exercised at a weighted average exercise price of $ 906.53 and $ 801.74 , respectively. As of May 10, 2025, total unrecognized share-based expense related to stock options, net of estimated forfeitures, was approximately $ 146.9 million, before income taxes, which we expect to recognize over an estimated weighted average period of 2.9 years. Restricted Stock Units: Restricted stock unit awards are valued at the market price of a share of the Company’s stock on the date of grant. Grants of employee restricted stock units vest ratably on an annual basis over a four-year service period and are payable in shares of common stock on the vesting date. Compensation expense for grants of employee restricted stock units is recognized on a straight-line basis over the four-year service period, less estimated forfeitures, which are consistent with stock option forfeiture assumptions. Grants of non-employee director restricted stock units are made and expensed on January 1 of each year, as they vest immediately. 14 Table of Contents The Company made grants of 2,743 and 3,173 restricted stock unit awards at weighted average grant date fair values of $ 3,155.36 and $ 2,560.56 , respectively, during the thirty-six week periods ended May 10, 2025, and May 4, 2024. During the thirty-six week period ended May 10, 2025, and the comparable prior year period, 3,218 and 4,741 restricted stock unit awards, respectively, were vested at a weighted average grant date fair value of $ 2,041.04 and $ 1,617.00 , respectively. As of May 10, 2025, total unrecognized stock-based compensation expense related to nonvested restricted stock unit awards, net of estimated forfeitures, was approximately $ 8.9 million, before income taxes, which we expect to recognize over an estimated weighted average period of 2.7 years. Total share-based compensation expense (a component of Operating, selling, general and administrative expenses) for the twelve and thirty-six week periods ended May 10, 2025, was $ 29.0 million and $ 85.6 million, respectively. For the comparable prior year periods, total share-based compensation expense was $ 25.4 million and $ 71.3 million, respectively. For the twelve and thirty-six week periods ended May 10, 2025, 125,197 and 114,925 , respectively, stock options were excluded from the diluted earnings per share computation because they would have been anti-dilutive. For the comparable prior year periods, 131,280 and 115,997 anti-dilutive stock options were excluded from the dilutive earnings per share computation. See AutoZone’s Annual Report on Form 10-K for the year ended August 31, 2024, and other filings with the SEC for a discussion regarding the methodology used in developing AutoZone’s assumptions to determine the fair value of the option awards and a description of AutoZone’s Amended and Restated 2011 Equity Incentive Award Plan, the AutoZone, Inc. 2020 Omnibus Incentive Award Plan and the Director Compensation Program. Note L – 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 Condensed Consolidated Statements of Income, the same line item as the related hosting fees. No amortization expenses have been recorded in the twelve and thirty-six weeks ended May 10, 2025, or the comparable prior year periods. Capitalized cloud-based enterprise resource planning (ERP) software implementation costs were $ 17.1 million at May 10, 2025, which were 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 Condensed Consolidated Statements of Cash Flows. Note M – Segment Reporting The Company’s primary operating segments (Domestic Auto Parts, Mexico and Brazil) are aggregated as one reportable segment: Auto Parts Stores. The criteria the Company used to identify the reportable segment are primarily the nature of the products the Company sells and the operating results that are regularly reviewed by the Company’s chief operating decision maker to make decisions about the resources to be allocated to the business units and to assess performance. The accounting policies of the Company’s reportable segment are the same as those described in “Note A – Significant Accounting Policies” in its Annual Report on Form 10-K for the year ended August 31, 2024. The Auto Parts Stores segment is a retailer and distributor of automotive parts and accessories through the Company’s 7,516 stores in the U.S., Mexico and Brazil. Each store carries an extensive product line for cars, sport utility vehicles, vans and light trucks, including new and remanufactured automotive hard parts, maintenance items, accessories and non-automotive products. 15 Table of Contents The Other category reflects business activities of two operating segments that are not separately reportable due to the materiality of these operating segments. The operating segments include ALLDATA, which produces, sells and maintains automotive diagnostic, repair and shop management software used in the automotive repair industry, and E-commerce, which includes direct sales to customers through www.autozone.com for sales that are not fulfilled by local stores. The Company evaluates its reportable segment primarily on the basis of net sales and segment profit, which is defined as gross profit. Segment results for the periods presented were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Twelve Weeks Ended ​ Thirty-Six Weeks Ended ​ May 10, May 4, May 10, May 4, (in thousands) ​ 2025 ​ 2024 ​ 2025 ​ 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Sales ​ ​ ​ ​ ​ ​ Auto Parts Stores ​ $ 4,378,327 ​ $ 4,156,411 ​ $ 12,452,425 ​ $ 12,058,444 Other ​ 86,012 ​ 79,074 ​ 243,566 ​ 226,444 Total ​ $ 4,464,339 ​ $ 4,235,485 ​ $ 12,695,991 ​ $ 12,284,888 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Segment Profit ​ ​ ​ ​ ​ ​ Auto Parts Stores ​ $ 2,303,506 ​ $ 2,218,950 ​ $ 6,606,161 ​ $ 6,424,651 Other ​ 50,017 ​ 46,572 ​ 143,820 ​ 134,539 Gross profit ​ 2,353,523 ​ 2,265,522 ​ 6,749,981 ​ 6,559,190 Operating, selling, general and administrative expenses ​ ( 1,487,349 ) ​ ( 1,365,341 ) ​ ( 4,335,891 ) ​ ( 4,067,163 ) Interest expense, net ​ ( 111,285 ) ​ ( 104,422 ) ​ ( 327,736 ) ​ ( 298,426 ) Income before income taxes ​ $ 754,889 ​ $ 795,759 ​ $ 2,086,354 ​ $ 2,193,601 ​ ​ ​ ​ ​ ​ 16 Table of Contents Report of Independent Registered Public Accounting Firm ​ ​ To the Stockholders and Board of Directors of AutoZone, Inc. ​ Results of Review of Interim Financial Statements We have reviewed the accompanying condensed consolidated balance sheet of AutoZone, Inc. (the Company) as of May 10, 2025, the related condensed consolidated statements of income, comprehensive income and stockholders’ deficit for the twelve and thirty-six week periods ended May 10, 2025, and May 4, 2024, the condensed consolidated statements of cash flows for the thirty-six week periods ended May 10, 2025, and May 4, 2024, and the related notes (collectively referred to as the “condensed consolidated interim financial statements”). Based on our reviews, we are not aware of any material modifications that should be made to the condensed consolidated interim financial statements for them to be in conformity with U.S. generally accepted accounting principles. ​ We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of August 31, 2024, the related consolidated statements of income, comprehensive income, stockholders’ deficit and cash flows for the year then ended, and the related notes (not presented herein); and in our report dated October 28, 2024, we expressed an unqualified audit opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of August 31, 2024, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived. ​ Basis for Review Results These financial statements are the responsibility of the Company’s management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the SEC and the PCAOB. We conducted our review in accordance with the standards of the PCAOB. A review of interim financial statements consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. ​ /s/ Ernst & Young LLP ​ ​ Memphis, Tennessee June 13, 2025 ​ ​ 17 Table of Contents