AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 4/6 · 18/10/2026
Moat—
Insufficient evidence for every rubric criterion; no category score is inferred.
structural advantage · — · Store coverage, inventory integration and supplier funding are demonstrated, but their superiority over competitors is unestablished. The moat verdict remains uncertain.
durability · — · Established infrastructure and continued investment do not establish a lasting relative economic advantage or barriers to replication.
customer dependency · — · Convenient delivery and parts lookup support service, but the passages do not establish customer dependence, switching friction or exclusive access.
erosion resilience · — · Continuing demand and investment coexist with weaker supplier funding and capital returns. The passages cannot establish resilience of an underlying relative moat; prospective risks are not realized competitive losses.
Pricing power—
Insufficient evidence for every rubric criterion; no category score is inferred.
realized pricing · — · Sales growth is not separated into prices, volume and mix. The disclosure that prices affect same-store sales provides no observed pricing outcome; neither LIFO nor total growth establishes price realization.
retention · 2/4 · Multi-year revenue growth with disclosed same-store sales contributions provides indirect evidence of continuing customer demand. Expansion also contributes, and repeat purchasing or retention rates are unavailable; easy comparison limits an inference of strong loyalty.
margin resilience · 2/4 · Gross margin declined from 53.2% to 51.9% over the comparable thirty-six-week periods. The disclosed 142-basis-point unfavorable LIFO impact exceeds that decline, indicating some offsetting resilience, but does not identify pricing as the cause or establish durable pass-through.
contractual freedom · — · Retail revenue is generally recognized at purchase or shipment, but transaction timing does not establish contractual discretion to reset prices or commercial-account terms. Relevant pricing restrictions or freedoms are not disclosed.
Predictability99
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 100.00
- Revenue growth volatility (pp)
- 3.11
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 3.78
Financial strength41
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 43.67
- netDebtEbitGrade
- 52.49
- interestCoverageGrade
- 57.88
- currentRatioGrade
- 10.10
- Debt / FCF (x)
- 4.94
- Net debt / operating income (x)
- 2.38
- Interest coverage (x)
- 7.37
- Current ratio (x)
- 0.88
Capital allocation94
Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 104.31
- 3-year average dilution (%)
- -5.81
- 3-year average SBC / revenue (%)
- 0.59
- cashConversionGrade
- 76.29
Management63
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Actual cash generation funds substantial investment and repurchases, but recent thirty-six-week operating cash flow of $2.1 billion was below the combined approximately $1.0 billion capital spending and $1.3 billion repurchases. Debt rose from fiscal year-end and adjusted ROIC fell from 43.5% to 36.3%. Deployment is demonstrated; incremental investment returns and repurchase value remain mixed.
incentive alignment · 3/4 · Existing annual incentives incorporate economic profit, EBIT and ROIC, with a minimum performance hurdle. Multi-year option vesting and elimination of the individual modifier provide additional alignment. Committee adjustment discretion and missing ownership values limit confidence; these are disclosed arrangements, not assumed future award adoption.
execution · 2/4 · Multi-year sales growth, accelerated completed store openings, operating distribution centers and sustained cash generation demonstrate execution. Recent net income, cash flow and capital returns weakened, leaving the results mixed. Service quality and retention are inferred indirectly rather than measured.
governance · 3/4 · Independent standing committees, defined Lead Independent Director authority, implemented compensation changes following feedback and an unqualified internal-control opinion support strong governance processes. Long-serving directors and incomplete ownership evidence limit the assessment; announced future leadership changes are not treated as completed.
Evidence
Z-net provides parts information based on year, make, model and engine type of a vehicle and also tracks inventory availability at the store, at other nearby stores and through special order.
Business / Store Automation · Filed 27/10/2025
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.
Note A / Business / geographic store footprint · Filed 27/10/2025
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.
Note A / Business / commercial delivery and credit programs · Filed 27/10/2025
We had an accounts payable to inventory ratio of 111.1% at May 9, 2026, and 115.6% at May 10, 2025.
MD&A / Liquidity and Capital Resources / accounts payable to inventory · Filed 12/06/2026
In addition, we have made, and plan to continue to make, significant investments in our supply chain, such as the construction of multiple new distribution centers which began operations in fiscal 2025 and the execution of various technology initiatives.
Risk Factors / completed distribution centers and continuing investment · Filed 27/10/2025
With the increasing use of digital tools, our customers often begin their shopping experience online and are quickly able to compare prices, product assortment, product availability and feedback from other customers before purchasing products.
Risk Factors / digital comparison of prices and availability · Filed 27/10/2025
Although we believe we compete effectively, our competitors may have greater financial resources allowing them to invest more in their business, greater sourcing capabilities allowing them to sell merchandise at lower prices, larger stores with more merchandise, longer operating histories with deeper customer relationships, more frequent customer visits, more effective advertising and more successful utilization of data analytics, artificial intelligence and other new and emerging technologies.
Risk Factors / potential competitor capabilities · Filed 27/10/2025
Capital expenditures for the thirty-six weeks ended May 9, 2026, were $997.5 million compared to $885.6 million in the comparable prior year period.
MD&A / Liquidity and Capital Resources / capital expenditures · Filed 12/06/2026
prevalence of electric vehicles. Increased prevalence of electric vehicles, whether due to changes in consumer preferences or regulatory actions incentivizing the purchase of electric vehicles, can result in less frequent parts failures and reduced need for parts.
Risk Factors / electric vehicle demand exposure · Filed 27/10/2025
These restrictions may cause vehicle owners to rely on dealers to perform maintenance and repairs.
Risk Factors / repair-information restrictions and dealer reliance · Filed 27/10/2025
Patent and Trademark Office as well as in certain other countries, including without limitation: “AutoZone,” “AutoZone Rewards,” “Get in the Zone,” “Zone,” “Duralast,” “Econocraft,” “ProElite,” “ShopPro,” “SureBilt,” “TotalPro,” “TruGrade,” “Valucraft,” and “ALLDATA,” along with variations of these trademarks.
Business / Trademarks and Patents / registered brands · Filed 27/10/2025
We believe our continued sales growth is driven in significant part by our AutoZone and private label brand names and our positive reputation with customers, AutoZoners, suppliers, vendors and other stakeholders.
Risk Factors / management attribution of growth to brand reputation · Filed 27/10/2025
We have increased annual revenues in the past five fiscal years from $12.6 billion in fiscal 2020 to $18.9 billion in fiscal 2025, with a compounded annual growth rate of approximately eight percent.
Risk Factors / fiscal 2020–2025 revenue growth · Filed 27/10/2025
Annual revenue growth is driven by increases in same store sales, the opening of new stores and the development of new commercial programs.
Risk Factors / same-store sales and expansion contributions · Filed 27/10/2025
Same store sales are impacted both by customer demand levels and by the prices we are able to charge for our products, which can also be negatively impacted by economic pressures.
Risk Factors / demand and pricing influences on same-store sales · Filed 27/10/2025
Gross profit, as a percentage of sales, was 51.9% compared to 53.2% during the comparable prior year period.
MD&A / thirty-six-week gross margin comparison · Filed 12/06/2026
The decrease in gross margin was driven by a 142 basis point unfavorable net non-cash LIFO impact.
MD&A / LIFO attribution of gross-margin decline · Filed 12/06/2026
22 Table of Contents For the thirty-six week periods ended May 9, 2026, and May 10, 2025, our net cash flows from operating activities provided $2.1 billion and $2.2 billion, respectively.
MD&A / Liquidity and Capital Resources / operating cash flow · Filed 12/06/2026
Note J – Stock Repurchase Program From January 1, 1998, to May 9, 2026, the Company has repurchased a total of 156.0 million shares of its common stock at an aggregate cost of $39.8 billion, including 356.3 thousand shares of its common stock at an aggregate cost of $1.3 billion during the thirty-six week period ended May 9, 2026.
Note J / completed stock repurchases · Filed 12/06/2026
11 Table of Contents Note I – Financing The Company’s debt consisted of the following: May 9, August 30, (in thousands) 2026 2025 3.125% Senior Notes due April 2026, effective interest rate 3.28% $ — $ 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% 500,000 500,000 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 3.96% at May 9, 2026, and 4.46% at August 30, 2025 1,358,000 748,600 Total debt before discounts and debt issuance costs 9,058,000 8,848,600 Less: Discounts and debt issuance costs 41,523 48,825 Long-term debt $ 9,016,477 $ 8,799,775 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.
Note I / debt and commercial paper balances · Filed 12/06/2026
For the trailing four quarters ended May 9, 2026, our adjusted after-tax return on invested capital (“ROIC”), which is a non-GAAP measure, was 36.3% as compared to 43.5% for the comparable prior year period.
MD&A / trailing-four-quarter adjusted ROIC comparison · Filed 12/06/2026
We had net new store openings of 304, 213 and 197 for fiscal 2025, 2024 and 2023, respectively.
MD&A / investing activities / net new store openings · Filed 27/10/2025
Net income for the thirty-six weeks ended May 9, 2026, decreased by $20.1 million from the comparable prior year period to $1.6 billion due to the factors set forth above, and diluted earnings per share increased by 0.5% to $96.69 from $96.17.
MD&A / thirty-six-week net income and diluted EPS · Filed 12/06/2026
EXECUTIVE COMPENSATION ● Significant portion of executive’s compensation is variable or at-risk ● Annual Incentive Plan tied to economic profit, as a function of Earnings Before Interest and Taxes (“EBIT”) and Return on Invested Capital (“ROIC”) ● Improved Say-On-Pay Vote receiving support from over 89% of the votes cast.
Proxy Summary / existing executive incentive structure · Filed 28/10/2025
Performance Hurdle. The annual incentive plan is subject to a pre-established threshold or hurdle such that no annual incentive awards are paid out unless the Company achieves 90% of target Economic Profit.
Compensation Discussion and Analysis / annual incentive performance hurdle · Filed 28/10/2025
In response to shareholder feedback, the individual modifier component of the annual incentive plan has been eliminated effective FY25.
Compensation Discussion and Analysis / elimination of individual modifier effective FY25 · Filed 28/10/2025
The Compensation Committee may (but is not required to) adjust for the effect of one-time charges and extraordinary events such as asset write-downs, litigation judgments or settlements, changes in tax laws, accounting principles or other laws or provisions affecting reported results, accruals for reorganization or restructuring, and any other extraordinary non-recurring items, acquisitions or divestitures and any foreign exchange gains or losses on the calculation of performance.
Compensation Discussion and Analysis / committee discretion over performance adjustments · Filed 28/10/2025
Option-vesting periods range from four to five years, with the majority of options vesting ratably over four years.
Share-Based Compensation / actual option vesting periods · Filed 12/06/2026
CORPORATE GOVERNANCE ● Board Leadership consists of Executive Chairman and Lead Independent Director ● Intentional Board refreshment and succession planning resulted in two new independent candidates to further enhance the Board’s diverse skillset ● Disciplined CEO succession planning resulted in appointment of new President and Chief Executive Officer in FY24 ● Audit, Compensation and Nominating & Corporate Governance Committees (the “Standing Committees”) made up entirely of Independent Directors ● Use of Third-Party Firm for 2021 and 2024 Board Evaluations ● Review and update of Corporate Governance Principles in FY24 and Committee Charters in FY25 For more information, see: Corporate Governance beginning on page 7.
Proxy Summary / governance practices and independent committees · Filed 28/10/2025
Our Corporate Governance Principles provide our Lead Independent Director with clearly defined responsibilities as follows: ● Presides at all executive sessions of the independent directors of the Board (without management present) at every regularly scheduled Board meeting; ● Chairs Board meetings when the Chairman is not present; ● Works with management to determine the information and materials to be provided to the Board; ● With Executive Chairman, approves Board meeting agendas, schedules, and other information to be provided to the Board; ● Consults with the Executive Chairman and the CEO on such other matters as are pertinent to the Board and the Company; ● Has the authority to call meetings of the independent directors; ● Is available for direct communication and consultation with stockholders upon reasonable request; and ● Serves as a liaison between the Executive Chairman and the independent directors.
Corporate Governance / Lead Independent Director responsibilities · Filed 28/10/2025
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.
Independent auditor report / internal control opinion as of August 30, 2025 · Filed 27/10/2025
Graves and Mr. Mrkonic have each served on the Board for greater than 15 years.
Corporate Governance / directors with more than 15 years of service · Filed 28/10/2025
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.
Note A / Revenue Recognition / retail transactions · Filed 27/10/2025
Net cash provided by operating activities was $3.1 billion in 2025, $3.0 billion in 2024 and $2.9 billion in 2023.
MD&A / fiscal 2023–2025 operating cash flow · Filed 27/10/2025
