Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Aug. 26, 2023 | Oct. 16, 2023 | Feb. 11, 2023 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Aug. 26, 2023 | ||
Entity File Number | 1-10714 | ||
Entity Registrant Name | AUTOZONE, INC | ||
Entity Incorporation, State or Country Code | NV | ||
Entity Tax Identification Number | 62-1482048 | ||
Entity Address, Address Line One | 123 South Front Street | ||
Entity Address, City or Town | Memphis | ||
Entity Address, State or Province | TN | ||
Entity Address, Postal Zip Code | 38103 | ||
City Area Code | 901 | ||
Local Phone Number | 495-6500 | ||
Title of 12(b) Security | Common Stock | ||
Trading Symbol | AZO | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 17,683,418 | ||
Entity Public Float | $ 46,248,303,523 | ||
Current Fiscal Year End Date | --08-26 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0000866787 | ||
Amendment Flag | false | ||
Auditor Name | Ernst & Young LLP | ||
Auditor Firm ID | 42 | ||
Auditor Location | Memphis, Tennessee | ||
ICFR Auditor Attestation Flag | true |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Aug. 26, 2023 | Aug. 27, 2022 | Aug. 28, 2021 | |
Consolidated Statements of Income | |||
Net sales | $ 17,457,209 | $ 16,252,230 | $ 14,629,585 |
Cost of sales, including warehouse and delivery expenses | 8,386,787 | 7,779,580 | 6,911,800 |
Gross profit | 9,070,422 | 8,472,650 | 7,717,785 |
Operating, selling, general and administrative expenses | 5,596,436 | 5,201,921 | 4,773,258 |
Operating profit | 3,473,986 | 3,270,729 | 2,944,527 |
Interest expense, net | 306,372 | 191,638 | 195,337 |
Income before income taxes | 3,167,614 | 3,079,091 | 2,749,190 |
Income tax expense | 639,188 | 649,487 | 578,876 |
Net income | $ 2,528,426 | $ 2,429,604 | $ 2,170,314 |
Weighted average shares for basic earnings per share | 18,510 | 20,107 | 22,237 |
Effect of dilutive stock equivalents | 593 | 626 | 562 |
Weighted average shares for diluted earnings per share | 19,103 | 20,733 | 22,799 |
Basic earnings per share | $ 136.60 | $ 120.83 | $ 97.60 |
Diluted earnings per share | $ 132.36 | $ 117.19 | $ 95.19 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 26, 2023 | Aug. 27, 2022 | Aug. 28, 2021 | |
Consolidated Statements of Comprehensive Income | |||
Net income | $ 2,528,426 | $ 2,429,604 | $ 2,170,314 |
Other comprehensive income: | |||
Foreign currency translation adjustments | 103,633 | 7,448 | 44,683 |
Unrealized gains (losses) on marketable debt securities, net of taxes | 320 | (2,760) | (1,256) |
Net derivative activities, net of taxes | 5,747 | 2,762 | 2,839 |
Total other comprehensive income | 109,700 | 7,450 | 46,266 |
Comprehensive income | $ 2,638,126 | $ 2,437,054 | $ 2,216,580 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Aug. 26, 2023 | Aug. 27, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 277,054 | $ 264,380 |
Accounts receivable | 520,385 | 504,886 |
Merchandise inventories | 5,764,143 | 5,638,004 |
Other current assets | 217,844 | 220,714 |
Total current assets | 6,779,426 | 6,627,984 |
Property and equipment: | ||
Land | 1,367,391 | 1,299,981 |
Buildings and improvements | 4,860,216 | 4,486,676 |
Equipment | 2,972,879 | 2,650,831 |
Leasehold improvements | 831,508 | 724,095 |
Construction in progress | 305,896 | 291,588 |
Property and equipment | 10,337,890 | 9,453,171 |
Less: Accumulated depreciation and amortization | (4,741,342) | (4,282,752) |
Property and equipment, net | 5,596,548 | 5,170,419 |
Operating lease right-of-use assets | 2,998,097 | 2,918,817 |
Goodwill | 302,645 | 302,645 |
Deferred income taxes | 86,002 | 52,047 |
Other long-term assets | 223,160 | 203,131 |
Total long-term assets | 3,609,904 | 3,476,640 |
Total assets | 15,985,878 | 15,275,043 |
Current liabilities: | ||
Accounts payable | 7,201,281 | 7,301,347 |
Current portion of operating lease liabilities | 257,256 | 243,407 |
Accrued expenses and other | 1,000,841 | 1,008,701 |
Income taxes payable | 52,478 | 34,938 |
Total current liabilities | 8,511,856 | 8,588,393 |
Long-term debt | 7,668,549 | 6,122,092 |
Operating lease liabilities, less current portion | 2,917,046 | 2,837,973 |
Deferred income taxes | 536,278 | 533,884 |
Other long-term liabilities | 702,043 | 731,614 |
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; 18,936 shares issued and 17,857 shares outstanding as of August 26, 2023; 20,732 shares issued and 19,126 shares outstanding as of August 27, 2022 | 189 | 207 |
Additional paid-in capital | 1,484,992 | 1,354,252 |
Retained deficit | (2,959,278) | (1,330,067) |
Accumulated other comprehensive loss | (190,836) | (300,536) |
Treasury stock, at cost | (2,684,961) | (3,262,769) |
Total stockholders' deficit | (4,349,894) | (3,538,913) |
Total liabilities and stockholders' deficit | $ 15,985,878 | $ 15,275,043 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands | Aug. 26, 2023 | Aug. 27, 2022 |
Preferred Stock | ||
Preferred stock, shares authorized | 1,000 | 1,000 |
Preferred stock, shares issued | 0 | 0 |
Common Stock | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 200,000 | 200,000 |
Common stock, shares issued | 18,936 | 20,732 |
Common stock, shares outstanding | 17,857 | 19,126 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 26, 2023 | Aug. 27, 2022 | Aug. 28, 2021 | |
Cash flows from operating activities: | |||
Net income | $ 2,528,426 | $ 2,429,604 | $ 2,170,314 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization of property and equipment | 497,577 | 442,223 | 407,683 |
Other non-cash charges | 44,000 | 15,000 | |
Amortization of debt origination fees | 9,264 | 11,276 | 12,858 |
Deferred income taxes | (25,707) | 185,594 | (34,432) |
Share-based compensation expense | 93,087 | 70,612 | 56,112 |
Changes in operating assets and liabilities: | |||
Accounts receivable | (6,674) | (125,732) | (11,039) |
Merchandise inventories | (89,180) | (1,005,686) | (138,517) |
Accounts payable and accrued expenses | (183,679) | 1,224,692 | 1,029,912 |
Income taxes | 92,832 | (10,517) | 29,467 |
Other, net | (19,158) | (25,931) | (3,815) |
Net cash provided by operating activities | 2,940,788 | 3,211,135 | 3,518,543 |
Cash flows from investing activities: | |||
Capital expenditures | (796,657) | (672,391) | (621,767) |
Purchase of marketable debt securities | (66,917) | (56,040) | (63,676) |
Proceeds from sale of marketable debt securities | 58,357 | 53,882 | 95,393 |
Investment in tax credit equity investments | (98,003) | (31,537) | (41,712) |
Proceeds from disposal of capital assets and other, net | 27,042 | 57,987 | 29,984 |
Net cash used in investing activities | (876,178) | (648,099) | (601,778) |
Cash flows from financing activities: | |||
Net proceeds from commercial paper | 606,200 | 603,400 | |
Proceeds from issuance of debt | 1,750,000 | 750,000 | |
Repayment of debt | (800,000) | (500,000) | (250,000) |
Net proceeds from sale of common stock | 182,494 | 113,934 | 187,757 |
Purchase of treasury stock | (3,699,552) | (4,359,991) | (3,378,321) |
Repayment of principal portion of finance lease liabilities | (81,055) | (67,182) | (59,853) |
Other, net | (18,169) | (10,658) | |
Net cash used in financing activities | (2,060,082) | (3,470,497) | (3,500,417) |
Effect of exchange rate changes on cash | 8,146 | 506 | 4,172 |
Net increase/(decrease) in cash and cash equivalents | 12,674 | (906,955) | (579,480) |
Cash and cash equivalents at beginning of period | 264,380 | 1,171,335 | 1,750,815 |
Cash and cash equivalents at end of period | 277,054 | 264,380 | 1,171,335 |
Supplemental cash flow information: | |||
Interest paid, net of interest cost capitalized | 260,866 | 178,561 | 187,948 |
Income taxes paid | 570,250 | 461,232 | 574,854 |
Leased assets obtained in exchange for new finance lease liabilities | 58,316 | 100,711 | 112,095 |
Leased assets obtained in exchange for new operating lease liabilities | $ 428,150 | $ 527,966 | $ 444,626 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit - USD ($) shares in Thousands, $ in Thousands | Common Stock | Additional Paid-in Capital | Retained Deficit | Accumulated Other Comprehensive Loss | Treasury Stock | Total |
Balance at Aug. 29, 2020 | $ 237 | $ 1,283,495 | $ (1,450,970) | $ (354,252) | $ (356,487) | $ (877,977) |
Balance, shares at Aug. 29, 2020 | 23,697 | |||||
Net income | 2,170,314 | 2,170,314 | ||||
Total other comprehensive income | 46,266 | 46,266 | ||||
Purchase of treasury stock | (3,378,321) | $ (3,378,321) | ||||
Purchase of treasury stock, shares | (2,592) | |||||
Retirement of treasury shares | $ (10) | (60,005) | (1,139,173) | 1,199,188 | ||
Retirement of treasury shares, shares | (1,044) | |||||
Issuance of common stock under stock options and stock purchase plans | $ 3 | 187,754 | $ 187,757 | |||
Issuance of common stock under stock options and stock purchase plans, shares | 354 | |||||
Share-based compensation expense | 54,425 | 54,425 | ||||
Balance at Aug. 28, 2021 | $ 230 | 1,465,669 | (419,829) | (307,986) | (2,535,620) | (1,797,536) |
Balance, shares at Aug. 28, 2021 | 23,007 | |||||
Net income | 2,429,604 | 2,429,604 | ||||
Total other comprehensive income | 7,450 | 7,450 | ||||
Purchase of treasury stock | (4,359,991) | $ (4,359,991) | ||||
Purchase of treasury stock, shares | (2,220) | |||||
Retirement of treasury shares | $ (25) | (292,975) | (3,339,842) | 3,632,842 | ||
Retirement of treasury shares, shares | (2,484) | |||||
Issuance of common stock under stock options and stock purchase plans | $ 2 | 113,932 | $ 113,934 | |||
Issuance of common stock under stock options and stock purchase plans, shares | 209 | |||||
Share-based compensation expense | 67,626 | 67,626 | ||||
Balance at Aug. 27, 2022 | $ 207 | 1,354,252 | (1,330,067) | (300,536) | (3,262,769) | (3,538,913) |
Balance at Aug. 27, 2022 | (3,262,769) | |||||
Balance, shares at Aug. 27, 2022 | 20,732 | |||||
Net income | 2,528,426 | 2,528,426 | ||||
Total other comprehensive income | 109,700 | 109,700 | ||||
Purchase of treasury stock | (3,723,289) | $ (3,723,289) | ||||
Purchase of treasury stock, shares | (1,524) | |||||
Retirement of treasury shares | $ (20) | (143,440) | (4,157,637) | 4,301,097 | ||
Retirement of treasury shares, shares | (2,051) | |||||
Issuance of common stock under stock options and stock purchase plans | $ 2 | 182,492 | $ 182,494 | |||
Issuance of common stock under stock options and stock purchase plans, shares | 255 | |||||
Share-based compensation expense | 91,688 | 91,688 | ||||
Balance at Aug. 26, 2023 | $ 189 | $ 1,484,992 | $ (2,959,278) | $ (190,836) | $ (2,684,961) | (4,349,894) |
Balance at Aug. 26, 2023 | $ (2,684,961) | |||||
Balance, shares at Aug. 26, 2023 | 18,936 |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Deficit (Parenthetical) - USD ($) shares in Thousands, $ in Millions | 12 Months Ended | ||
Aug. 26, 2023 | Aug. 27, 2022 | Aug. 28, 2021 | |
Consolidated Statements of Stockholders' Deficit | |||
Purchase of treasury stock, shares | 1,524 | 2,220 | 2,592 |
Excise tax | $ 23.7 |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Aug. 26, 2023 | |
Significant Accounting Policies | |
Significant Accounting Policies | Note A – Significant Accounting Policies Business: Fiscal Year: Basis of Presentation: Variable Interest Entities: The Company considers its investment in these tax credit funds as an investment in a variable interest entity (“VIE”). 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 26, 2023, the Company held tax credit equity investments that were deemed to be VIE’s 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 entity and accounted for this investment using the equity method. The Company’s maximum exposure to losses is generally limited to its net investment, which was $29.6 million as of August 26, 2023 and $14.1 million as of August 27, 2022 and was included within the Other long-term assets caption in the accompanying Consolidated Balance Sheets. As of August 26, 2023, the Company had commitments to make certain additional capital contributions to one of its tax credit funds totaling $9.3 million. Use of Estimates: Cash and Cash Equivalents: Cash balances are held in various locations around the world. Cash and cash equivalents of $108.5 million and $86.8 million were held outside of the U.S. as of August 26, 2023, and August 27, 2022, respectively, and were generally utilized to support the liquidity needs in foreign operations. Accounts Receivable: Financial Instruments - Credit Losses (Topic 326) 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 26, 2023 and August 27, 2022. The balance of the allowance for credit losses was $7.7 million at August 26, 2023, and $9.5 million at August 27, 2022. Vendor Receivables: Merchandise Inventories: Marketable Debt Securities: Property and Equipment: 40 5 3 Impairment of Long-Lived Assets: Goodwill: Derivative Instruments and Hedging Activities: 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. (Refer to “Note H – Derivative Financial Instruments” for additional disclosures regarding the Company’s derivative instruments and hedging activities.) 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: Self-Insurance Reserves: 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 date. Leases: one 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. Financial Instruments: Income Taxes: 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 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 D – Income Taxes” for additional disclosures regarding the Company’s income taxes.) Sales and Use Taxes: Dividends: Revenue Recognition: 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. There were no material contract assets, liabilities or deferred costs recorded on the Consolidated Balance Sheet as of August 26, 2023 and August 27, 2022. Revenue related to unfulfilled performance obligations as of August 26, 2023 and August 27, 2022 is not significant. (Refer to “Note P – Segment Reporting” for additional information related to revenue recognized during the period.) Vendor Allowances and Advertising Costs: 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 $99.5 million in fiscal 2023, $97.1 million in fiscal 2022 and $85.9 million in fiscal 2021. Vendor promotional funds, which reduced advertising expense, amounted to $62.4 million in fiscal 2023, $52.1 million in fiscal 2022 and $53.2 million in fiscal 2021. Cost of Sales and Operating, Selling, General and Administrative Expenses: 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 occupancy, transportation and depreciation; 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; and ● Other administrative costs, such as credit card transaction fees, legal costs, supplies and travel and lodging Warranty Costs: Pre-opening Expenses: Earnings per Share common stock equivalents, which are primarily stock options. There were 140,071, 142,887 and 171,652 stock options excluded for the year ended August 26, 2023, August 27, 2022 and August 28, 2021, respectively, because they would have been anti-dilutive. Share-Based Payments: Risk and Uncertainties: Recently Adopted Accounting Pronouncements In November 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-10, Government Assistance (Topic 832) – Disclosures by Business Entities about Government Assistance Recently Issued Accounting Pronouncements: In September 2022, the FASB issued ASU 2022-04, Liabilities – Supplier Finance Programs (Subtopic 405-50) |
Share-Based Payments
Share-Based Payments | 12 Months Ended |
Aug. 26, 2023 | |
Share-Based Payments | |
Share-Based Payments | Overview of Share-Based Payment 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. 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 extends 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 $93.1 million, $70.6 million and $56.1 million for fiscal 2023, 2022 and 2021, 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 the market value of the stock on the date of grant. Options have a term of ten years from grant date. Employee options generally vest in equal annual installments on the first, second, third and fourth anniversaries of the grant date and 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 between the grant date for the award and each vesting date. 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 for key assumptions used in determining the fair value of options granted and the related share-based compensation expense: Year Ended August 26, August 27, August 28, 2023 2022 2021 Expected price volatility 29 % 28 % 28 % Risk-free interest rate 3.8 % 1.1 % 0.4 % Weighted average expected lives (in years) 5.5 5.6 5.6 Forfeiture rate 10 % 10 % 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 – Risk-free interest rate – Expected lives – Forfeiture rate – Dividend yield – The weighted average grant date fair value per share of options granted was $764.68, $463.45 and $304.31 during fiscal 2023, 2022 and 2021, respectively. The intrinsic value of options exercised was $424.6 million, $282.7 million and $280.1 million in fiscal 2023, 2022 and 2021, respectively. The total fair value of options vested was $47.9 million, $39.3 million and $44.7 million in fiscal 2023, 2022 and 2021, respectively. The Company generally issues new shares when options are exercised. The following table summarizes information about stock option activity for the year ended August 26, 2023: Weighted Average Remaining Aggregate Weighted Contractual Intrinsic Number Average Term Value of Shares Exercise Price (in years) (in thousands) Outstanding – August 27, 2022 1,139,100 $ 941.28 Granted 161,510 2,218.35 Exercised (242,920) 708.46 Forfeited/Cancelled (30,102) 1,504.17 Outstanding – August 26, 2023 1,027,588 1,180.39 5.97 $ 1,308,493 Exercisable 651,032 862.98 4.71 1,035,417 Expected to vest 359,109 1,719.64 8.13 263,838 Available for future grants 862,178 As of August 26, 2023, total unrecognized share-based compensation expense related to stock options, net of estimated forfeitures, was approximately $90.1 million, before income taxes, and will be recognized 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 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 26, 2023, total unrecognized stock-based compensation expense related to nonvested restricted stock unit awards, net of estimated forfeitures, was approximately $8.2 million, before income taxes, which we expect to recognize over an estimated weighted average period of 2.4 years. Transactions related to restricted stock units for the fiscal year ended August 26, 2023 are as follows: Weighted- Number Average Grant of Shares Date Fair Value Nonvested at August 27, 2022 12,731 $ 1,223.61 Granted 3,584 2,267.41 Vested (6,643) 1,276.36 Forfeited (1,539) 1,581.25 Nonvested at August 26, 2023 8,133 $ 1,572.87 Stock Appreciation Rights At August 26, 2023 and August 27, 2022, the Company had $11.8 million and $10.4 million, respectively of accrued compensation expense. 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. Employee Stock Purchase Plan and Executive Stock Purchase Plan The Company recognized $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 2023, $3.2 million in fiscal 2022 and $2.5 million in fiscal 2021. Under the Employee Plan, 5,183, 6,238 and 8,479 shares were sold to employees in fiscal 2023, 2022 and 2021, respectively. The Company repurchased 4,886 and 7,611 shares in fiscal 2022 and 2021, respectively, all at market value from employees electing to sell their stock. Purchases under the Executive Plan were 689, 709 and 997 shares in fiscal 2023, 2022 and 2021, 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 26, 2023, 122,341 shares of common stock were reserved for future issuance under the Employee Plan, and 232,966 shares of common stock were reserved for future issuance under the Executive Plan. |
Accrued Expenses and Other
Accrued Expenses and Other | 12 Months Ended |
Aug. 26, 2023 | |
Accrued Expenses and Other | |
Accrued Expenses and Other | Note C – Accrued Expenses and Other Accrued expenses and other consisted of the following: August 26, August 27, (in thousands) 2023 2022 Accrued compensation, related payroll taxes and benefits $ 343,379 $ 414,892 Property, sales and other taxes 165,731 153,305 Medical and casualty insurance claims (current portion) 127,624 115,201 Finance lease liabilities 86,916 92,877 Accrued gift cards 59,254 52,237 Accrued interest 54,493 50,696 Accrued sales and warranty returns 43,355 35,696 Other 120,089 93,797 $ 1,000,841 $ 1,008,701 The Company retains a significant portion of the insurance risks associated with workers’ compensation, general, 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, $7.5 million for auto liability, $21.5 million for property and $2.0 million for general and product liability. |
Income Taxes
Income Taxes | 12 Months Ended |
Aug. 26, 2023 | |
Income Taxes | |
Income Taxes | Note D – Income Taxes The components of income from continuing operations before income taxes are as follows: Year Ended August 26, August 27, August 28, (in thousands) 2023 2022 2021 Domestic $ 2,621,714 $ 2,429,262 $ 2,436,548 International 545,900 649,829 312,642 $ 3,167,614 $ 3,079,091 $ 2,749,190 The provision for income tax expense consisted of the following: Year Ended August 26, August 27, August 28, (in thousands) 2023 2022 2021 Current: Federal $ 423,301 $ 293,022 $ 438,686 State 86,687 48,490 79,271 International 154,907 122,381 95,351 664,895 463,893 613,308 Deferred: Federal 20,266 160,749 (21,366) State (21,847) 34,564 (1,707) International (24,126) (9,719) (11,359) (25,707) 185,594 (34,432) Income tax expense $ 639,188 $ 649,487 $ 578,876 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 26, August 27, August 28, (in thousands) 2023 2022 2021 Federal tax at statutory U.S. income tax rate 21.0 % 21.0 % 21.0 % State income taxes, net 1.6 % 2.1 % 2.2 % Share-based compensation (2.3) % (1.6) % (1.7) % US Tax on Non-U.S. Income (GILTI and Subpart F) 3.3 % 3.1 % 2.8 % Non-U.S. Permanent Differences (1.4) % (1.5) % (0.4) % Foreign Tax Credits (2.3) % (1.9) % (1.7) % Other 0.3 % (0.1) % (1.1) % Effective tax rate 20.2 % 21.1 % 21.1 % For the year ended August 26, 2023, August 27, 2022, and August 28, 2021, the Company recognized excess tax benefits from stock option exercises of $92.2 million, $63.2 million, and $56.4 million, respectively. 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 26, August 27, (in thousands) 2023 2022 Deferred tax assets: Net operating loss and credit carryforwards $ 45,081 $ 33,924 Accrued benefits 82,318 60,561 Operating lease liabilities 698,728 692,730 Other 90,897 79,850 Total deferred tax assets 917,024 867,065 Valuation allowances (24,940) (27,790) Net deferred tax assets 892,084 839,275 Deferred tax liabilities: Property and equipment (194,686) (197,482) Inventory (451,360) (448,273) Operating lease assets (652,652) (650,145) Other (43,662) (25,211) Deferred tax liabilities (1,342,360) (1,321,111) Net deferred tax liabilities $ (450,276) $ (481,836) For the year ended August 26, 2023, 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 26, 2023, we have not recorded incremental income taxes for outside basis differences of $383.7 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. At August 26, 2023 and August 27, 2022, the Company had net operating loss (“NOL”) carryforwards totaling approximately $314.6 million ($37.2 million tax effected) and $241.2 million ($28.9 million tax effected), respectively. Certain NOLs have no expiration date and others will expire, if not utilized, in various years from fiscal 2024 through 2043. At August 26, 2023 and August 27, 2022, the Company had deferred tax assets for income tax credit carryforwards of $7.9 million and $5.0 million, respectively. Income tax credit carryforwards will expire, if not utilized, in various years from fiscal 2024 through 2033. At August 26, 2023 and August 27, 2022, the Company had a valuation allowance of $24.9 million and $27.8 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. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: August 26, August 27, (in thousands) 2023 2022 Beginning balance $ 49,316 $ 39,797 Additions based on tax positions related to the current year 9,416 17,488 Additions for tax positions of prior years 8,012 3,008 Reductions for tax positions of prior years (5,336) (6,806) Reductions due to settlements (6,800) (1,539) Reductions due to statute of limitations (5,121) (2,632) Ending balance $ 49,487 $ 49,316 Included in the August 26, 2023 and the August 27, 2022 balances are $37.0 million and $32.4 million, respectively, of unrecognized tax benefits that, if recognized, would reduce the Company’s effective tax rate. The balances above also include amounts of $8.6 million and $11.5 million for August 26, 2023 and August 27, 2022, 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 $10.1 million and $5.7 million accrued for the payment of interest and penalties associated with unrecognized tax benefits at August 26, 2023 and August 27, 2022, 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 2019 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 26, 2023, the Company estimates that the amount of unrecognized tax benefits could be reduced by approximately $6.2 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. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Aug. 26, 2023 | |
Fair Value Measurements | |
Fair Value Measurements | Note E – 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 Level 1 inputs — Level 2 inputs — Level 3 inputs — 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 26, 2023 (in thousands) Level 1 Level 2 Level 3 Fair Value Other current assets $ 35,349 $ 4,290 $ — $ 39,639 Other long-term assets 71,028 10,846 — 81,874 $ 106,377 $ 15,136 $ — $ 121,513 August 27, 2022 (in thousands) Level 1 Level 2 Level 3 Fair Value Other current assets $ 49,659 $ 109 $ — $ 49,768 Other long-term assets 57,301 5,476 — 62,777 $ 106,960 $ 5,585 $ — $ 112,545 At August 26, 2023, the fair value measurement amounts for assets and liabilities recorded in the accompanying Consolidated Balance Sheet consisted of short-term marketable debt securities of $39.6 million, which are included within Other current assets and long-term marketable debt securities of $81.9 million, which are included within 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 debt securities, including benchmark yields and reported trades. A discussion on how the Company’s cash flow hedges are valued is included in “Note H – Derivative Financial Instruments,” while the fair values of the marketable debt securities by asset class are described in “Note F – 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 26, 2023, 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.” |
Marketable Debt Securities
Marketable Debt Securities | 12 Months Ended |
Aug. 26, 2023 | |
Marketable Debt Securities | |
Marketable Debt Securities | Note F – 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 26, 2023 Amortized Gross Gross Cost Unrealized Unrealized Fair (in thousands) Basis Gains Losses Value Corporate debt securities $ 31,683 $ 17 $ (504) $ 31,196 Government bonds 63,747 — (1,440) 62,307 Mortgage-backed securities 3,215 — (213) 3,002 Asset-backed securities and other 25,242 — (234) 25,008 $ 123,887 $ 17 $ (2,391) $ 121,513 August 27, 2022 Amortized Gross Gross Cost Unrealized Unrealized Fair (in thousands) Basis Gains Losses Value Corporate debt securities $ 15,293 $ 1 $ (298) $ 14,996 Government bonds 88,903 — (1,963) 86,940 Mortgage-backed securities 4,600 — (243) 4,357 Asset-backed securities and other 6,531 — (279) 6,252 $ 115,327 $ 1 $ (2,783) $ 112,545 The marketable debt securities held at August 26, 2023, had effective maturities ranging from less than one year to approximately three years. At August 26, 2023, the Company held 75 securities that are in an unrealized loss position of approximately $2.4 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 2023, 2022 or 2021. Included above in total marketable debt securities are $105.0 million and $91.1 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 26, 2023 and August 27, 2022, respectively. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 12 Months Ended |
Aug. 26, 2023 | |
Equity. | |
Accumulated Other Comprehensive Loss | Note G – 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 28, 2021 $ (287,638) $ 589 $ (20,937) $ (307,986) Other Comprehensive Income (Loss) before reclassifications 7,448 (2,760) — 4,688 Amounts reclassified from Accumulated Other Comprehensive Loss (2) — — 2,762 2,762 Balance at August 27, 2022 (280,190) (2,171) (18,175) (300,536) Other Comprehensive Income before reclassifications 103,633 472 3,635 107,740 Amounts reclassified from Accumulated Other Comprehensive Loss (2) — (152) 2,112 1,960 Balance at August 26, 2023 $ (176,557) $ (1,851) $ (12,428) $ (190,836) (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. |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Aug. 26, 2023 | |
Derivative Financial Instruments | |
Derivative Financial Instruments | Note H – Derivative Financial Instruments The Company periodically uses derivatives to hedge exposures to interest rates. The Company does not hold or issue financial instruments for trading purposes. For transactions that meet the hedge accounting criteria, the Company formally designates and documents the instrument as a hedge at inception and quarterly thereafter assesses the hedges to ensure they are effective in offsetting changes in the cash flows of the underlying exposures. Derivatives are recorded in the Company’s Consolidated Balance Sheet at fair value, determined using available market information or other appropriate valuation methodologies. In accordance with ASC Topic 815, Derivatives and Hedging At August 26, 2023, the Company had $16.3 million (excluding the impact of deferred taxes) recorded in Accumulated Other Comprehensive Loss related to net realized losses associated with terminated interest rate swap and treasury rate lock derivatives which were designated as hedging instruments. Net losses are amortized into Interest expense over the remaining life of the associated debt. During fiscal 2023, the Company reclassified $2.8 million of net losses from Accumulated Other Comprehensive Loss to Interest expense. During fiscal 2022, the Company reclassified $3.6 million of net losses from Accumulated Other Comprehensive Loss to Interest expense. The Company expects to reclassify $2.3 million of net losses from Accumulated Other Comprehensive Loss to Interest expense over the next 12 months. |
Financing
Financing | 12 Months Ended |
Aug. 26, 2023 | |
Financing | |
Financing | Note I – Financing The Company’s debt consisted of the following: August 26, August 27, (in thousands) 2023 2022 2.875% Senior Notes due January 2023, effective interest rate 3.21% $ — $ 300,000 3.125% Senior Notes due July 2023, effective interest rate 3.26% — 500,000 3.125% Senior Notes due April 2024, effective interest rate 3.32% 300,000 300,000 3.250% Senior Notes due April 2025, effective interest rate 3.36% 400,000 400,000 3.625% Senior Notes due April 2025, effective interest rate 3.78% 500,000 500,000 3.125% Senior Notes due April 2026, effective interest rate 3.28% 400,000 400,000 5.050% Senior Notes due July 2026, effective interest rate 5.09% 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 — 3.750% Senior Notes due April 2029, effective interest rate 3.86% 450,000 450,000 4.000% Senior Notes due April 2030, effective interest rate 4.09% 750,000 750,000 1.650% Senior Notes due January 2031, effective interest rate 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 — 5.200% Senior Notes due August 2033, effective interest rate 5.22% 300,000 — Commercial paper, weighted average interest rate 5.43% and 2.43% at August 26, 2023 and August 27, 2022, respectively 1,209,600 603,400 Total debt before discounts and debt issuance costs 7,709,600 6,153,400 Less: Discounts and debt issuance costs 41,051 31,308 Long-term Debt $ 7,668,549 $ 6,122,092 On November 15, 2021, the Company amended and restated its existing revolving credit facility (the “Revolving Credit Agreement”) pursuant to which the Company’s borrowing capacity was increased from $2.0 billion to $2.25 billion and the maximum borrowing under the Revolving Credit Agreement may, at the Company’s option, subject to lenders approval, be increased from $2.25 billion to $3.25 billion. On November 15, 2022, the Company amended the Revolving Credit Agreement, extending 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, 2027 , but the Company may make one additional request to extend the termination date for an additional period of one year Under the Company’s Revolving Credit Agreement, covenants include restrictions on liens, a maximum debt to earnings ratio, a minimum fixed charge coverage ratio and a change of control provision that may require acceleration of the repayment obligations under certain circumstances. As of August 26, 2023, the Company had no outstanding borrowings and $1.8 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 26, 2023 was 6.3:1. As of August 26, 2023, the $1.2 billion of commercial paper borrowings and the $300 million 3.125% Senior Notes due April 2024 were classified as long-term in the accompanying Consolidated Balance Sheets as the Company currently has the ability and intent to refinance them on a long-term basis through available capacity in its Revolving Credit Agreement. As of August 26, 2023, the Company had Agreement, without giving effect to commercial paper borrowings, which would allow the Company to replace these short-term obligations with a long-term financing facility. On July 17, 2023, the Company repaid its outstanding $500 million 3.125% Senior Notes due July 2023, which were callable at par in April 2023. On January 17, 2023, the Company repaid its outstanding $300 million 2.875% Senior Notes due January 2023, which were callable at par in October 2022. On January 18, 2022, the Company repaid the $500 million 3.700% Senior Notes due April 2022, which were callable at par in January 2022. On March 15, 2021, the Company repaid the $250 million 2.500% Senior Notes due April 2021, which were callable at par in March 2021. On July 21, 2023, the Company issued $450 million in 5.050% Senior Notes due July 2026 and $300 million 5.200% Senior Notes due August 2033 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 allows us 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 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. On August 1, 2022, the Company issued $750 million in 4.750% Senior Notes due August 2032 under the 2022 Shelf Registration Statement. Proceeds from the debt issuance were used to repay a portion of the 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 maintains a letter of credit facility that allows 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 is in addition to the letters of credit that may be issued under the Revolving Credit Agreement and expired in June 2022. On May 16, 2022, the Company amended and restated the letter of credit facility to, among other things, extend the facility through June 2025. As of August 26, 2023, the Company had $25 million in letters of credit outstanding under the letter of credit facility. In addition to the outstanding letters of credit issued under the committed facility discussed above, the Company had $107.2 million in letters of credit outstanding as of August 26, 2023. These letters of credit have various maturity dates and were issued on an uncommitted basis. As of August 26, 2023, the Company was in compliance with all covenants related to its borrowing arrangements. The fair value of the Company’s debt was estimated at $7.3 billion as of August 26, 2023, and $5.9 billion as of August 27, 2022, 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 $406.6 million and $182.8 million at August 26, 2023 and August 27, 2022, 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 2024 $ 1,509,600 2025 900,000 2026 850,000 2027 600,000 2028 450,000 Thereafter 3,400,000 Subtotal 7,709,600 Discount and debt issuance costs 41,051 Total Debt $ 7,668,549 |
Interest Expense
Interest Expense | 12 Months Ended |
Aug. 26, 2023 | |
Interest Expense | |
Interest Expense | Note J – Interest Expense Net interest expense consisted of the following: Year Ended August 26, August 27, August 28, (in thousands) 2023 2022 2021 Interest expense $ 320,121 $ 198,883 $ 202,326 Interest income (12,054) (6,048) (5,417) Capitalized interest (1,695) (1,197) (1,572) $ 306,372 $ 191,638 $ 195,337 |
Stock Repurchase Program
Stock Repurchase Program | 12 Months Ended |
Aug. 26, 2023 | |
Equity. | |
Stock Repurchase Program | 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 October 5, 2021, $1.5 billion on December 15, 2021, $2.0 billion on March 22, 2022, $2.5 billion on October 4, 2022 and $2.0 billion on June 14, 2023 bringing the total authorization to $35.7 billion. The Company has $1.8 billion remaining under the Board’s authorization to repurchase its common stock. The Company’s share repurchase activity consisted of the following: Year Ended August 26, August 27, August 28, (in thousands) 2023 2022 2021 Amount (1) $ 3,723,289 $ 4,359,991 $ 3,378,321 Shares 1,524 2,220 2,592 (1) Inclusive of excise tax of $23.7 million for the year ended August 26, 2023. The excise tax is assessed at one percent of the fair market value of net stock repurchases after December 31, 2022. During fiscal year 2023, the Company retired 2.1 million shares of treasury stock which had previously been repurchased under the Company’s share repurchase program. The retirement increased Retained deficit by $4.2 billion and decreased Additional paid-in capital by $143.4 million. During the comparable prior year period, the Company retired 2.5 million shares of treasury stock, which increased Retained deficit by $3.3 billion and decreased Additional paid-in capital by $293.0 million. Subsequent to August 26, 2023 and through October 16, 2023, the Company has repurchased 200,303 shares of common stock at an aggregate cost of $512.4 million. Considering the cumulative repurchases through October 16, 2023, the Company has $1.3 billion remaining under the Board’s authorization to repurchase its common stock. |
401(k) Savings Plans
401(k) Savings Plans | 12 Months Ended |
Aug. 26, 2023 | |
401(k) Savings Plans | |
401(k) Savings Plans | Note L – 401(k) Savings Plan 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 $37.3 million in fiscal 2023, $37.9 million in fiscal 2022 and $34.1 million in fiscal 2021. |
Leases
Leases | 12 Months Ended |
Aug. 26, 2023 | |
Leases | |
Leases | Note M – Leases Lease-related assets and liabilities recorded on the Consolidated Balance Sheets are as follows: (in thousands) Classification August 26, 2023 August 27, 2022 Assets: Operating Operating lease right-of-use assets $ 2,998,097 $ 2,918,817 Finance Property and equipment 419,247 404,442 Total lease assets $ 3,417,344 $ 3,323,259 Liabilities: Current: Operating Current portion of operating lease liabilities $ 257,256 $ 243,407 Finance Accrued expenses and other 86,916 92,877 Noncurrent: Operating Operating lease liabilities, less current portion 2,917,046 2,837,973 Finance Other long-term liabilities 200,702 217,428 Total lease liabilities $ 3,461,920 $ 3,391,685 Accumulated amortization related to finance lease assets was $132.5 million as of August 26, 2023 and $97.2 million as of August 27, 2022. Lease costs for finance and operating leases for the 52 weeks ended August 26, 2023 and August 27, 2022 are as follows: For the year ended (in thousands) Statement of Income Location August 26, 2023 August 27, 2022 Finance lease cost: Amortization of lease assets Depreciation and amortization $ 71,913 $ 65,212 Interest on lease liabilities Interest expense, net 14,608 4,351 Operating lease cost (1) Selling, general and administrative expenses 437,762 401,000 Total lease cost $ 524,283 $ 470,563 (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 26, 2023 having initial or remaining lease terms in excess of one year are as follows: Finance Operating (in thousands) Leases Leases Total 2024 $ 88,284 $ 372,849 $ 461,133 2025 81,535 402,798 484,333 2026 61,571 378,865 440,436 2027 34,159 354,370 388,529 2028 10,409 327,795 338,204 Thereafter 43,228 2,260,833 2,304,061 Total lease payments 319,186 4,097,510 4,416,696 Less: Interest (31,568) (923,208) (954,776) Present value of lease liabilities $ 287,618 $ 3,174,302 $ 3,461,920 The following table summarizes the Company’s lease term and discount rate assumptions: August 26, 2023 Weighted-average remaining lease term in years, inclusive of renewal options that are reasonably certain to be exercised: Finance leases – real estate 23 Finance leases – vehicles 3 Operating leases 13 Weighted-average discount rate: Finance leases – real estate 3.85 % Finance leases – vehicles 2.44 % Operating leases 3.90 % Cash paid for amounts included in the measurement of operating lease liabilities of $335.2 million and $316.0 million was reflected in cash flows from operating activities in the consolidated statement of cash flows for fiscal years 2023 and 2022, respectively. As of August 26, 2023, 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 $56.9 million for real estate and will commence when the Company obtains possession of the underlying leased asset. Commencement dates are expected to be from fiscal 2024 to fiscal 2025. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Aug. 26, 2023 | |
Commitments and Contingencies. | |
Commitments and Contingencies | Note N – Commitments and Contingencies Construction commitments, primarily for new stores, totaled approximately $198.9 million at August 26, 2023. The Company had $134.0 million in outstanding standby letters of credit and $43.1 million in surety bonds as of August 26, 2023, 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 equity investments upon the completion of project milestones. As of August 26, 2023, the Company had commitments to make certain additional capital contributions to one of its tax credit funds totaling $9.3 million in fiscal 2024. |
Litigation
Litigation | 12 Months Ended |
Aug. 26, 2023 | |
Litigation | |
Litigation | Note O – 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. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Aug. 26, 2023 | |
Segment Reporting | |
Segment Reporting | Note P – 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.” The Auto Parts Stores segment is the leading retailer and distributor of automotive parts and accessories through the Company’s 7,140 stores in the U.S., Mexico and 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. The Other category reflects business activities of two operating segments that are not separately reportable due to the materiality of these operating segments. The operating segments include ALLDATA, which produces, sells and maintains diagnostic, repair, collision and shop management software used in the automotive repair industry and E-commerce, which includes direct sales to customers through www.autozone.com for sales that are not fulfilled by local stores. The Company evaluates its reportable segment primarily on the basis of net sales and segment profit, which is defined as gross profit. The following table shows segment results for the following fiscal years Year Ended August 26, August 27, August 28, (in thousands) 2023 2022 2021 Net Sales Auto Parts Stores $ 17,145,137 $ 15,963,196 $ 14,381,712 Other 312,072 289,034 247,873 Total $ 17,457,209 $ 16,252,230 $ 14,629,585 Segment Profit Auto Parts Stores $ 8,885,403 $ 8,301,234 $ 7,556,889 Other 185,019 171,416 160,896 Gross profit 9,070,422 8,472,650 7,717,785 Operating, selling, general and administrative expenses (5,596,436) (5,201,921) (4,773,258) Interest expense, net (306,372) (191,638) (195,337) Income before income taxes $ 3,167,614 $ 3,079,091 $ 2,749,190 Segment Assets: Auto Parts Stores $ 15,664,891 $ 15,060,704 $ 14,398,581 Other 320,987 214,339 117,618 Total $ 15,985,878 $ 15,275,043 $ 14,516,199 Capital Expenditures: Auto Parts Stores $ 775,601 $ 650,495 $ 602,329 Other 21,056 21,896 19,438 Total $ 796,657 $ 672,391 $ 621,767 Auto Parts Stores Sales by Product Grouping: Failure $ 8,407,690 $ 7,801,155 $ 7,048,700 Maintenance items 6,223,620 5,670,278 4,888,763 Discretionary 2,513,827 2,491,763 2,444,249 Auto Parts Stores net sales $ 17,145,137 $ 15,963,196 $ 14,381,712 The following table presents the Company’s net sales disaggregated by geographical area: Year Ended August 26, August 27, August 28, 2023 2022 2021 United States 89 % 92 % 93 % Mexico 10 % 8 % 7 % Brazil and all other 1 % — % — % Total 100 % 100 % 100 % The Company’s long-lived assets, consisting primarily of property and equipment, net and operating lease right-of-use assets, within the United States were 88%, 91% and 92% in fiscal years 2023, 2022 and 2021, respectively. No individual country outside of the United States had long-lived assets that were material to the consolidated totals. |
Subsequent Event
Subsequent Event | 12 Months Ended |
Aug. 26, 2023 | |
Subsequent Event | |
Subsequent Event | Note Q – Subsequent Events Subsequent to year end, the Company initiated the process of issuing Senior Notes under the 2022 Shelf Registration Statement. Proceeds from the debt issuance are projected to be received at the end of October 2023 and will be used for general corporate purposes. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Aug. 26, 2023 | |
Significant Accounting Policies | |
Business | Business: |
Fiscal Year | Fiscal Year: |
Basis of Presentation | Basis of Presentation: |
Variable Interest Entities | Variable Interest Entities: The Company considers its investment in these tax credit funds as an investment in a variable interest entity (“VIE”). 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 26, 2023, the Company held tax credit equity investments that were deemed to be VIE’s 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 entity and accounted for this investment using the equity method. The Company’s maximum exposure to losses is generally limited to its net investment, which was $29.6 million as of August 26, 2023 and $14.1 million as of August 27, 2022 and was included within the Other long-term assets caption in the accompanying Consolidated Balance Sheets. As of August 26, 2023, the Company had commitments to make certain additional capital contributions to one of its tax credit funds totaling $9.3 million. |
Use of Estimates | Use of Estimates: |
Cash and Cash Equivalents | Cash and Cash Equivalents: Cash balances are held in various locations around the world. Cash and cash equivalents of $108.5 million and $86.8 million were held outside of the U.S. as of August 26, 2023, and August 27, 2022, respectively, and were generally utilized to support the liquidity needs in foreign operations. |
Accounts Receivable | Accounts Receivable: Financial Instruments - Credit Losses (Topic 326) 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 26, 2023 and August 27, 2022. The balance of the allowance for credit losses was $7.7 million at August 26, 2023, and $9.5 million at August 27, 2022. |
Vendor Receivables | Vendor Receivables: |
Merchandise Inventories | Merchandise Inventories: |
Marketable Debt Securities | Marketable Debt Securities: |
Property and Equipment | Property and Equipment: 40 5 3 |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets: |
Goodwill | Goodwill: |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities: 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. (Refer to “Note H – Derivative Financial Instruments” for additional disclosures regarding the Company’s derivative instruments and hedging activities.) 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 | Foreign Currency: |
Self-Insurance Reserves | Self-Insurance Reserves: 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 date. |
Leases | Leases: one 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. |
Financial Instruments | Financial Instruments: |
Income Taxes | Income Taxes: 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 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 D – Income Taxes” for additional disclosures regarding the Company’s income taxes.) |
Sales and Use Taxes | Sales and Use Taxes: |
Dividends | Dividends: |
Revenue Recognition | Revenue Recognition: 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. There were no material contract assets, liabilities or deferred costs recorded on the Consolidated Balance Sheet as of August 26, 2023 and August 27, 2022. Revenue related to unfulfilled performance obligations as of August 26, 2023 and August 27, 2022 is not significant. (Refer to “Note P – Segment Reporting” for additional information related to revenue recognized during the period.) |
Vendor Allowances and Advertising Costs | Vendor Allowances and Advertising Costs: 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 $99.5 million in fiscal 2023, $97.1 million in fiscal 2022 and $85.9 million in fiscal 2021. Vendor promotional funds, which reduced advertising expense, amounted to $62.4 million in fiscal 2023, $52.1 million in fiscal 2022 and $53.2 million in fiscal 2021. |
Cost of Sales and Operating, Selling, General and Administrative Expenses | Cost of Sales and Operating, Selling, General and Administrative Expenses: 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 occupancy, transportation and depreciation; 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; and ● Other administrative costs, such as credit card transaction fees, legal costs, supplies and travel and lodging |
Warranty Costs | Warranty Costs: |
Pre-opening Expenses | Pre-opening Expenses: |
Earnings per Share | Earnings per Share common stock equivalents, which are primarily stock options. There were 140,071, 142,887 and 171,652 stock options excluded for the year ended August 26, 2023, August 27, 2022 and August 28, 2021, respectively, because they would have been anti-dilutive. |
Share-Based Payments | Share-Based Payments: |
Risk and Uncertainties | Risk and Uncertainties: |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In November 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-10, Government Assistance (Topic 832) – Disclosures by Business Entities about Government Assistance |
Recent Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements: In September 2022, the FASB issued ASU 2022-04, Liabilities – Supplier Finance Programs (Subtopic 405-50) |
Share-Based Payments (Tables)
Share-Based Payments (Tables) | 12 Months Ended |
Aug. 26, 2023 | |
Share-Based Payments | |
Schedule of Weighted Average for Key Assumptions Used in Determining Fair Value of Options Granted and Related Share-Based Compensation Expense | Year Ended August 26, August 27, August 28, 2023 2022 2021 Expected price volatility 29 % 28 % 28 % Risk-free interest rate 3.8 % 1.1 % 0.4 % Weighted average expected lives (in years) 5.5 5.6 5.6 Forfeiture rate 10 % 10 % 10 % Dividend yield 0 % 0 % 0 % |
Schedule of Stock Option Activity | The Company generally issues new shares when options are exercised. The following table summarizes information about stock option activity for the year ended August 26, 2023: Weighted Average Remaining Aggregate Weighted Contractual Intrinsic Number Average Term Value of Shares Exercise Price (in years) (in thousands) Outstanding – August 27, 2022 1,139,100 $ 941.28 Granted 161,510 2,218.35 Exercised (242,920) 708.46 Forfeited/Cancelled (30,102) 1,504.17 Outstanding – August 26, 2023 1,027,588 1,180.39 5.97 $ 1,308,493 Exercisable 651,032 862.98 4.71 1,035,417 Expected to vest 359,109 1,719.64 8.13 263,838 Available for future grants 862,178 |
Schedule of Nonvested Restricted Stock Units Activity | Transactions related to restricted stock units for the fiscal year ended August 26, 2023 are as follows: Weighted- Number Average Grant of Shares Date Fair Value Nonvested at August 27, 2022 12,731 $ 1,223.61 Granted 3,584 2,267.41 Vested (6,643) 1,276.36 Forfeited (1,539) 1,581.25 Nonvested at August 26, 2023 8,133 $ 1,572.87 |
Accrued Expenses and Other (Tab
Accrued Expenses and Other (Tables) | 12 Months Ended |
Aug. 26, 2023 | |
Accrued Expenses and Other | |
Schedule of Accrued Expenses | Accrued expenses and other consisted of the following: August 26, August 27, (in thousands) 2023 2022 Accrued compensation, related payroll taxes and benefits $ 343,379 $ 414,892 Property, sales and other taxes 165,731 153,305 Medical and casualty insurance claims (current portion) 127,624 115,201 Finance lease liabilities 86,916 92,877 Accrued gift cards 59,254 52,237 Accrued interest 54,493 50,696 Accrued sales and warranty returns 43,355 35,696 Other 120,089 93,797 $ 1,000,841 $ 1,008,701 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Aug. 26, 2023 | |
Income Taxes | |
Components of Income from Continuing Operations | The components of income from continuing operations before income taxes are as follows: Year Ended August 26, August 27, August 28, (in thousands) 2023 2022 2021 Domestic $ 2,621,714 $ 2,429,262 $ 2,436,548 International 545,900 649,829 312,642 $ 3,167,614 $ 3,079,091 $ 2,749,190 |
Provision for Income Tax Expense | The provision for income tax expense consisted of the following: Year Ended August 26, August 27, August 28, (in thousands) 2023 2022 2021 Current: Federal $ 423,301 $ 293,022 $ 438,686 State 86,687 48,490 79,271 International 154,907 122,381 95,351 664,895 463,893 613,308 Deferred: Federal 20,266 160,749 (21,366) State (21,847) 34,564 (1,707) International (24,126) (9,719) (11,359) (25,707) 185,594 (34,432) Income tax expense $ 639,188 $ 649,487 $ 578,876 |
Reconciliation of Provision for Income Taxes | 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 26, August 27, August 28, (in thousands) 2023 2022 2021 Federal tax at statutory U.S. income tax rate 21.0 % 21.0 % 21.0 % State income taxes, net 1.6 % 2.1 % 2.2 % Share-based compensation (2.3) % (1.6) % (1.7) % US Tax on Non-U.S. Income (GILTI and Subpart F) 3.3 % 3.1 % 2.8 % Non-U.S. Permanent Differences (1.4) % (1.5) % (0.4) % Foreign Tax Credits (2.3) % (1.9) % (1.7) % Other 0.3 % (0.1) % (1.1) % Effective tax rate 20.2 % 21.1 % 21.1 % |
Significant Components of Company's Deferred Tax Assets and Liabilities | Significant components of the Company's deferred tax assets and liabilities were as follows: August 26, August 27, (in thousands) 2023 2022 Deferred tax assets: Net operating loss and credit carryforwards $ 45,081 $ 33,924 Accrued benefits 82,318 60,561 Operating lease liabilities 698,728 692,730 Other 90,897 79,850 Total deferred tax assets 917,024 867,065 Valuation allowances (24,940) (27,790) Net deferred tax assets 892,084 839,275 Deferred tax liabilities: Property and equipment (194,686) (197,482) Inventory (451,360) (448,273) Operating lease assets (652,652) (650,145) Other (43,662) (25,211) Deferred tax liabilities (1,342,360) (1,321,111) Net deferred tax liabilities $ (450,276) $ (481,836) |
Reconciliation of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: August 26, August 27, (in thousands) 2023 2022 Beginning balance $ 49,316 $ 39,797 Additions based on tax positions related to the current year 9,416 17,488 Additions for tax positions of prior years 8,012 3,008 Reductions for tax positions of prior years (5,336) (6,806) Reductions due to settlements (6,800) (1,539) Reductions due to statute of limitations (5,121) (2,632) Ending balance $ 49,487 $ 49,316 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Aug. 26, 2023 | |
Fair Value Measurements | |
Company's marketable debt securities measured at Fair Value on Recurring Basis | The Company’s marketable debt securities measured at fair value on a recurring basis were as follows: August 26, 2023 (in thousands) Level 1 Level 2 Level 3 Fair Value Other current assets $ 35,349 $ 4,290 $ — $ 39,639 Other long-term assets 71,028 10,846 — 81,874 $ 106,377 $ 15,136 $ — $ 121,513 August 27, 2022 (in thousands) Level 1 Level 2 Level 3 Fair Value Other current assets $ 49,659 $ 109 $ — $ 49,768 Other long-term assets 57,301 5,476 — 62,777 $ 106,960 $ 5,585 $ — $ 112,545 |
Marketable Debt Securities (Tab
Marketable Debt Securities (Tables) | 12 Months Ended |
Aug. 26, 2023 | |
Marketable Debt Securities | |
Available-for-Sale Marketable Securities | August 26, 2023 Amortized Gross Gross Cost Unrealized Unrealized Fair (in thousands) Basis Gains Losses Value Corporate debt securities $ 31,683 $ 17 $ (504) $ 31,196 Government bonds 63,747 — (1,440) 62,307 Mortgage-backed securities 3,215 — (213) 3,002 Asset-backed securities and other 25,242 — (234) 25,008 $ 123,887 $ 17 $ (2,391) $ 121,513 August 27, 2022 Amortized Gross Gross Cost Unrealized Unrealized Fair (in thousands) Basis Gains Losses Value Corporate debt securities $ 15,293 $ 1 $ (298) $ 14,996 Government bonds 88,903 — (1,963) 86,940 Mortgage-backed securities 4,600 — (243) 4,357 Asset-backed securities and other 6,531 — (279) 6,252 $ 115,327 $ 1 $ (2,783) $ 112,545 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 12 Months Ended |
Aug. 26, 2023 | |
Equity. | |
Changes in Accumulated Other Comprehensive Loss | Net Unrealized Foreign Gain (Loss) (in thousands) Currency (1) on Securities Derivatives Total Balance at August 28, 2021 $ (287,638) $ 589 $ (20,937) $ (307,986) Other Comprehensive Income (Loss) before reclassifications 7,448 (2,760) — 4,688 Amounts reclassified from Accumulated Other Comprehensive Loss (2) — — 2,762 2,762 Balance at August 27, 2022 (280,190) (2,171) (18,175) (300,536) Other Comprehensive Income before reclassifications 103,633 472 3,635 107,740 Amounts reclassified from Accumulated Other Comprehensive Loss (2) — (152) 2,112 1,960 Balance at August 26, 2023 $ (176,557) $ (1,851) $ (12,428) $ (190,836) (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. |
Financing (Tables)
Financing (Tables) | 12 Months Ended |
Aug. 26, 2023 | |
Financing | |
Schedule of Debt | The Company’s debt consisted of the following: August 26, August 27, (in thousands) 2023 2022 2.875% Senior Notes due January 2023, effective interest rate 3.21% $ — $ 300,000 3.125% Senior Notes due July 2023, effective interest rate 3.26% — 500,000 3.125% Senior Notes due April 2024, effective interest rate 3.32% 300,000 300,000 3.250% Senior Notes due April 2025, effective interest rate 3.36% 400,000 400,000 3.625% Senior Notes due April 2025, effective interest rate 3.78% 500,000 500,000 3.125% Senior Notes due April 2026, effective interest rate 3.28% 400,000 400,000 5.050% Senior Notes due July 2026, effective interest rate 5.09% 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 — 3.750% Senior Notes due April 2029, effective interest rate 3.86% 450,000 450,000 4.000% Senior Notes due April 2030, effective interest rate 4.09% 750,000 750,000 1.650% Senior Notes due January 2031, effective interest rate 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 — 5.200% Senior Notes due August 2033, effective interest rate 5.22% 300,000 — Commercial paper, weighted average interest rate 5.43% and 2.43% at August 26, 2023 and August 27, 2022, respectively 1,209,600 603,400 Total debt before discounts and debt issuance costs 7,709,600 6,153,400 Less: Discounts and debt issuance costs 41,051 31,308 Long-term Debt $ 7,668,549 $ 6,122,092 |
Scheduled Maturities of Debt | Scheduled (in thousands) Maturities 2024 $ 1,509,600 2025 900,000 2026 850,000 2027 600,000 2028 450,000 Thereafter 3,400,000 Subtotal 7,709,600 Discount and debt issuance costs 41,051 Total Debt $ 7,668,549 |
Interest Expense (Tables)
Interest Expense (Tables) | 12 Months Ended |
Aug. 26, 2023 | |
Interest Expense | |
Net Interest Expense | Net interest expense consisted of the following: Year Ended August 26, August 27, August 28, (in thousands) 2023 2022 2021 Interest expense $ 320,121 $ 198,883 $ 202,326 Interest income (12,054) (6,048) (5,417) Capitalized interest (1,695) (1,197) (1,572) $ 306,372 $ 191,638 $ 195,337 |
Stock Repurchase Program (Table
Stock Repurchase Program (Tables) | 12 Months Ended |
Aug. 26, 2023 | |
Equity. | |
Summarize Company's Share Repurchase Activity | The Company’s share repurchase activity consisted of the following: Year Ended August 26, August 27, August 28, (in thousands) 2023 2022 2021 Amount (1) $ 3,723,289 $ 4,359,991 $ 3,378,321 Shares 1,524 2,220 2,592 (1) Inclusive of excise tax of $23.7 million for the year ended August 26, 2023. The excise tax is assessed at one percent of the fair market value of net stock repurchases after December 31, 2022. |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Aug. 26, 2023 | |
Leases | |
Lease related assets and liabilities recorded on the Balance Sheet | (in thousands) Classification August 26, 2023 August 27, 2022 Assets: Operating Operating lease right-of-use assets $ 2,998,097 $ 2,918,817 Finance Property and equipment 419,247 404,442 Total lease assets $ 3,417,344 $ 3,323,259 Liabilities: Current: Operating Current portion of operating lease liabilities $ 257,256 $ 243,407 Finance Accrued expenses and other 86,916 92,877 Noncurrent: Operating Operating lease liabilities, less current portion 2,917,046 2,837,973 Finance Other long-term liabilities 200,702 217,428 Total lease liabilities $ 3,461,920 $ 3,391,685 |
Lease Cost | For the year ended (in thousands) Statement of Income Location August 26, 2023 August 27, 2022 Finance lease cost: Amortization of lease assets Depreciation and amortization $ 71,913 $ 65,212 Interest on lease liabilities Interest expense, net 14,608 4,351 Operating lease cost (1) Selling, general and administrative expenses 437,762 401,000 Total lease cost $ 524,283 $ 470,563 (1) Includes short-term leases, variable lease costs and sublease income, which are immaterial. |
Schedule of future maturities of finance lease liability | Finance Operating (in thousands) Leases Leases Total 2024 $ 88,284 $ 372,849 $ 461,133 2025 81,535 402,798 484,333 2026 61,571 378,865 440,436 2027 34,159 354,370 388,529 2028 10,409 327,795 338,204 Thereafter 43,228 2,260,833 2,304,061 Total lease payments 319,186 4,097,510 4,416,696 Less: Interest (31,568) (923,208) (954,776) Present value of lease liabilities $ 287,618 $ 3,174,302 $ 3,461,920 |
Summary of the Future Maturities of the Company's Lease Liabilities | 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 26, 2023 having initial or remaining lease terms in excess of one year are as follows: Finance Operating (in thousands) Leases Leases Total 2024 $ 88,284 $ 372,849 $ 461,133 2025 81,535 402,798 484,333 2026 61,571 378,865 440,436 2027 34,159 354,370 388,529 2028 10,409 327,795 338,204 Thereafter 43,228 2,260,833 2,304,061 Total lease payments 319,186 4,097,510 4,416,696 Less: Interest (31,568) (923,208) (954,776) Present value of lease liabilities $ 287,618 $ 3,174,302 $ 3,461,920 |
Lease Term and Discount Rate Assumptions | August 26, 2023 Weighted-average remaining lease term in years, inclusive of renewal options that are reasonably certain to be exercised: Finance leases – real estate 23 Finance leases – vehicles 3 Operating leases 13 Weighted-average discount rate: Finance leases – real estate 3.85 % Finance leases – vehicles 2.44 % Operating leases 3.90 % |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Aug. 26, 2023 | |
Segment Reporting | |
Segment Results | Year Ended August 26, August 27, August 28, (in thousands) 2023 2022 2021 Net Sales Auto Parts Stores $ 17,145,137 $ 15,963,196 $ 14,381,712 Other 312,072 289,034 247,873 Total $ 17,457,209 $ 16,252,230 $ 14,629,585 Segment Profit Auto Parts Stores $ 8,885,403 $ 8,301,234 $ 7,556,889 Other 185,019 171,416 160,896 Gross profit 9,070,422 8,472,650 7,717,785 Operating, selling, general and administrative expenses (5,596,436) (5,201,921) (4,773,258) Interest expense, net (306,372) (191,638) (195,337) Income before income taxes $ 3,167,614 $ 3,079,091 $ 2,749,190 Segment Assets: Auto Parts Stores $ 15,664,891 $ 15,060,704 $ 14,398,581 Other 320,987 214,339 117,618 Total $ 15,985,878 $ 15,275,043 $ 14,516,199 Capital Expenditures: Auto Parts Stores $ 775,601 $ 650,495 $ 602,329 Other 21,056 21,896 19,438 Total $ 796,657 $ 672,391 $ 621,767 Auto Parts Stores Sales by Product Grouping: Failure $ 8,407,690 $ 7,801,155 $ 7,048,700 Maintenance items 6,223,620 5,670,278 4,888,763 Discretionary 2,513,827 2,491,763 2,444,249 Auto Parts Stores net sales $ 17,145,137 $ 15,963,196 $ 14,381,712 |
Schedule of net sales disaggregated by geographical area | Year Ended August 26, August 27, August 28, 2023 2022 2021 United States 89 % 92 % 93 % Mexico 10 % 8 % 7 % Brazil and all other 1 % — % — % Total 100 % 100 % 100 % |
Significant Accounting Polici_3
Significant Accounting Policies - Additional Information (Detail) $ in Thousands | 12 Months Ended | ||
Aug. 26, 2023 USD ($) store class shares | Aug. 27, 2022 USD ($) shares | Aug. 28, 2021 USD ($) shares | |
Significant Accounting Policies [Line Items] | |||
Number of stores with commercial sales program | store | 5,682 | ||
Description of reporting periods | The Company’s fiscal year consists of 52 or 53 weeks ending on the last Saturday in August. Fiscal 2023, 2022 and 2021 represented 52 weeks. | ||
Additional capital contributions to tax credit funds | $ 9,300 | ||
Cash and cash equivalents | 277,054 | $ 264,380 | |
Allowances for credit losses | 7,700 | 9,500 | |
Inventory LIFO Reserves | 59,000 | 15,000 | |
Goodwill | 302,645 | 302,645 | |
Self insurance reserve | $ 268,800 | 264,300 | |
Renewal options and lease term | The leases have varying terms and expire at various dates through 2046. Retail leases typically have initial terms between one and 20 years, with one to six optional renewal periods of one to five years each. | ||
Measure of income tax benefit for uncertain income tax positions | more than 50% | ||
Advertising expense, net of vendor promotional funds | $ 99,500 | 97,100 | $ 85,900 |
Vendor promotional funds, which reduced advertising expense | $ 62,400 | 52,100 | $ 53,200 |
Limited warranty period, minimum period (Days) | 30 days | ||
Products accounted for total revenues | one class of similar products accounted for approximately 14 percent of the Company’s total revenues. No other class of similar products accounted for 10 percent or more of total revenues | ||
Products accounted for total purchases | no individual vendor provided more than 10 percent of total purchases | ||
Cash Equivalents | |||
Significant Accounting Policies [Line Items] | |||
Maturity period of investments | 90 days or less | ||
Settlement term of credit and debit card transaction | less than five days | ||
Credit and debit card receivables included within cash and cash equivalents | $ 88,600 | $ 78,400 | |
Product Concentration Risk | |||
Significant Accounting Policies [Line Items] | |||
Number of class of similar products | class | 1 | ||
Employee Stock Option [Member] | |||
Significant Accounting Policies [Line Items] | |||
Anti-dilutive shares excluded from the computation of earnings per share | shares | 140,071 | 142,887 | 171,652 |
Minimum [Member] | Building | |||
Significant Accounting Policies [Line Items] | |||
Estimated useful lives | 40 years | ||
Minimum [Member] | Building Improvements | |||
Significant Accounting Policies [Line Items] | |||
Estimated useful lives | 5 years | ||
Minimum [Member] | Equipment | |||
Significant Accounting Policies [Line Items] | |||
Estimated useful lives | 3 years | ||
Minimum [Member] | Vehicles | |||
Significant Accounting Policies [Line Items] | |||
Finance lease term | 1 year | ||
Minimum [Member] | Land and Building | |||
Significant Accounting Policies [Line Items] | |||
Finance lease term | 20 years | ||
Minimum [Member] | Product Concentration Risk | Sales Revenue, Net | |||
Significant Accounting Policies [Line Items] | |||
Concentration risk percentage | 10% | ||
Minimum [Member] | Supplier Concentration Risk | Cost of Goods, Total [Member] | |||
Significant Accounting Policies [Line Items] | |||
Concentration risk percentage | 10% | ||
Maximum [Member] | Building | |||
Significant Accounting Policies [Line Items] | |||
Estimated useful lives | 50 years | ||
Maximum [Member] | Building Improvements | |||
Significant Accounting Policies [Line Items] | |||
Estimated useful lives | 15 years | ||
Maximum [Member] | Equipment | |||
Significant Accounting Policies [Line Items] | |||
Estimated useful lives | 10 years | ||
Maximum [Member] | Vehicles | |||
Significant Accounting Policies [Line Items] | |||
Finance lease term | 5 years | ||
Maximum [Member] | Product Concentration Risk | Sales Revenue, Net | |||
Significant Accounting Policies [Line Items] | |||
Concentration risk percentage | 14% | ||
Variable Interest Entity Not Primary Beneficiary | |||
Significant Accounting Policies [Line Items] | |||
Additional capital contributions to tax credit funds | $ 9,300 | ||
Variable Interest Entity Not Primary Beneficiary | Other long-term assets | |||
Significant Accounting Policies [Line Items] | |||
Maximum exposure to losses amount | $ 29,600 | $ 14,100 | |
Stores in the United States Including Puerto Rico | |||
Significant Accounting Policies [Line Items] | |||
Number of stores | store | 6,300 | ||
Brazil | |||
Significant Accounting Policies [Line Items] | |||
Number of stores | store | 100 | ||
Mexico | |||
Significant Accounting Policies [Line Items] | |||
Number of stores | store | 740 | ||
Non-US | |||
Significant Accounting Policies [Line Items] | |||
Cash and cash equivalents | $ 108,500 | $ 86,800 |
Share-Based Payments - Addition
Share-Based Payments - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Aug. 26, 2023 | Aug. 27, 2022 | Aug. 28, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Maximum percentage of discount on salary and bonus | 25% | ||
Share-based compensation expense | $ 93,087 | $ 70,612 | $ 56,112 |
Share-based compensation expense for unvested awards not yet recognized in earnings | $ 90,100 | ||
Weighted average period recognition of share-based compensation expense for unvested awards | 2 years 10 months 24 days | ||
Exercise period of vested options after death | 1 year | ||
Weighted average grant date fair value of options granted | $ 764.68 | $ 463.45 | $ 304.31 |
Intrinsic value of options exercised | $ 424,600 | $ 282,700 | $ 280,100 |
Total fair value of options vested | 47,900 | 39,300 | 44,700 |
Expense related to the discount on the selling of shares to employees and executives | $ 2,500 | $ 3,200 | $ 2,500 |
Shares sold to employees under employee stock purchase plan | 5,183 | 6,238 | 8,479 |
Shares purchased from employees at fair value | 4,886 | 7,611 | |
Common stock reserved for future issuance | 122,341 | ||
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Term of options granted | 10 years | ||
Exercise period of vested options after service period | 90 days | ||
Two Thousand Three Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Accrued director fees | $ 11,800 | $ 10,400 | |
Additional shares of stock or units | 0 | 0 | |
Accrued director fees in shares | 4,822 | 4,822 | |
Executive Stock Purchase Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares sold to employees under employee stock purchase plan | 689 | 709 | 997 |
Common stock reserved for future issuance | 232,966 | ||
Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Non vested restricted stock unit award | $ 8,200 | ||
Estimated weighted average period | 2 years 4 months 24 days | ||
Service period | 4 years | ||
Employee Stock Option [Member] | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Term of options from grant date | ten years | ||
2011 Equity Incentive Award Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Debt instrument term | 10 years |
Share-Based Payments - Weighted
Share-Based Payments - Weighted Average for Key Assumptions Used in Determining Fair Value of Options Granted and Related Share-Based Compensation Expense (Detail) | 12 Months Ended | ||
Aug. 26, 2023 | Aug. 27, 2022 | Aug. 28, 2021 | |
Share-Based Payments | |||
Expected price volatility | 29% | 28% | 28% |
Risk-free interest rate | 3.80% | 1.10% | 0.40% |
Weighted average expected lives (in years) | 5 years 6 months | 5 years 7 months 6 days | 5 years 7 months 6 days |
Forfeiture rate | 10% | 10% | 10% |
Dividend yield | 0% | 0% | 0% |
Share Based Payments - Stock op
Share Based Payments - Stock option Activity (Detail) $ / shares in Units, $ in Thousands | 12 Months Ended |
Aug. 26, 2023 USD ($) $ / shares shares | |
Share-Based Payments | |
Outstanding, Beginning balance, Number of Shares | 1,139,100 |
Granted, Number of Shares | 161,510 |
Exercised, Number of Shares | (242,920) |
Forfeited/Cancelled, Number of Shares | (30,102) |
Outstanding, Ending balance, Number of Shares | 1,027,588 |
Exercisable, Number of Shares | 651,032 |
Expected to vest, Number of Shares | 359,109 |
Available for future grants, Number of Shares | 862,178 |
Outstanding, Beginning balance, Weighted Average Exercise Price | $ / shares | $ 941.28 |
Granted, Weighted Average Exercise Price | $ / shares | 2,218.35 |
Exercised, Weighted Average Exercise Price | $ / shares | 708.46 |
Forfeited/Cancelled, Weighted Average Exercise Price | $ / shares | 1,504.17 |
Outstanding, Ending balance, Weighted Average Exercise Price | $ / shares | 1,180.39 |
Exercisable, Weighted Average Exercise Price | $ / shares | 862.98 |
Expected to vest, Weighted Average Exercise Price | $ / shares | $ 1,719.64 |
Outstanding , Weighted-Average Remaining Contractual Term | 5 years 11 months 19 days |
Exercisable, Weighted-Average Remaining Contractual Term | 4 years 8 months 15 days |
Expected to vest, Weighted-Average Remaining Contractual Term | 8 years 1 month 17 days |
Outstanding, Aggregate Intrinsic Value | $ | $ 1,308,493 |
Exercisable, Aggregate Intrinsic Value | $ | 1,035,417 |
Expected to vest, Aggregate Intrinsic Value | $ | $ 263,838 |
Share-Based Payments - Schedule
Share-Based Payments - Schedule of Nonvested Restricted Stock Units Activity (Detail) | 12 Months Ended |
Aug. 26, 2023 $ / shares shares | |
Share-Based Payments | |
Nonvested, Beginning balance, Number of Shares | shares | 12,731 |
Granted, Number of Shares | shares | 3,584 |
Vested, Number of Shares | shares | (6,643) |
Forfeited, Number of Shares | shares | (1,539) |
Nonvested, Ending balance, Number of Shares | shares | 8,133 |
Nonvested, Beginning balance, Weighted Average Grant Date Fair Value | $ / shares | $ 1,223.61 |
Granted, Weighted Average Grant Date Fair Value | $ / shares | 2,267.41 |
Vested, Weighted Average Grant Date Fair Value | $ / shares | 1,276.36 |
Forfeited, Weighted Average Grant Date Fair Value | $ / shares | 1,581.25 |
Nonvested, Ending balance, Weighted Average Grant Date Fair Value | $ / shares | $ 1,572.87 |
Accrued Expenses and Other - Ac
Accrued Expenses and Other - Accrued Expenses (Detail) - USD ($) $ in Thousands | Aug. 26, 2023 | Aug. 27, 2022 |
Other Income and Expenses [Abstract] | ||
Accrued compensation, related payroll taxes and benefits | $ 343,379 | $ 414,892 |
Property, sales, and other taxes | 165,731 | 153,305 |
Medical and casualty insurance claims (current portion) | 127,624 | 115,201 |
Finance lease liabilities | $ 86,916 | $ 92,877 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Total accrued expenses and other | Total accrued expenses and other |
Accrued gift cards | $ 59,254 | $ 52,237 |
Accrued interest | 54,493 | 50,696 |
Accrued sales and warranty returns | 43,355 | 35,696 |
Other | 120,089 | 93,797 |
Total accrued expenses and other | $ 1,000,841 | $ 1,008,701 |
Accrued Expenses and Other - Ad
Accrued Expenses and Other - Additional Information (Detail) $ in Millions | 12 Months Ended |
Aug. 26, 2023 USD ($) | |
Workers Compensation | |
Maximum limits per claim for self-insured plan, per annum | $ 2 |
Auto Liability | |
Maximum limits per claim for self-insured plan, per annum | 7.5 |
Property | |
Maximum limits per claim for self-insured plan, per annum | 21.5 |
General and product liability | |
Maximum limits per claim for self-insured plan, per annum | $ 2 |
Income Taxes - Components of In
Income Taxes - Components of Income from Continuing Operations (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 26, 2023 | Aug. 27, 2022 | Aug. 28, 2021 | |
Income Taxes | |||
Domestic | $ 2,621,714 | $ 2,429,262 | $ 2,436,548 |
International | 545,900 | 649,829 | 312,642 |
Income before income taxes | $ 3,167,614 | $ 3,079,091 | $ 2,749,190 |
Income Taxes - Provision for In
Income Taxes - Provision for Income Tax Expense (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 26, 2023 | Aug. 27, 2022 | Aug. 28, 2021 | |
Current: | |||
Federal | $ 423,301 | $ 293,022 | $ 438,686 |
State | 86,687 | 48,490 | 79,271 |
International | 154,907 | 122,381 | 95,351 |
Total | 664,895 | 463,893 | 613,308 |
Deferred: | |||
Federal | 20,266 | 160,749 | (21,366) |
State | (21,847) | 34,564 | (1,707) |
International | (24,126) | (9,719) | (11,359) |
Total | (25,707) | 185,594 | (34,432) |
Income tax expense | $ 639,188 | $ 649,487 | $ 578,876 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Provision for Income Taxes (Detail) | 12 Months Ended | ||
Aug. 26, 2023 | Aug. 27, 2022 | Aug. 28, 2021 | |
Income Taxes | |||
Federal tax at statutory U.S. income tax rate | 21% | 21% | 21% |
State income taxes, net | 1.60% | 2.10% | 2.20% |
Share-based compensation | (2.30%) | (1.60%) | (1.70%) |
US Tax on Non-U.S. Income (GILTI and Subpart F) | 3.30% | 3.10% | 2.80% |
Non-U.S. Permanent Differences | (1.40%) | (1.50%) | (0.40%) |
Foreign Tax Credits | (2.30%) | (1.90%) | (1.70%) |
Other | 0.30% | (0.10%) | (1.10%) |
Effective tax rate | 20.20% | 21.10% | 21.10% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 26, 2023 | Aug. 27, 2022 | Aug. 28, 2021 | |
Income Taxes | |||
Additional excess tax benefits from stock option exercises compared to prior year | $ 92,200 | $ 63,200 | $ 56,400 |
Outside basis differences in foreign subsidiaries investments | 383,700 | ||
Future taxable income | 314,600 | 241,200 | |
Deferred tax assets from net operating loss carryforwards | $ 37,200 | 28,900 | |
Expiration date of NOLs start year | 2024 | ||
Expiration date of NOLs end year | 2043 | ||
Deferred tax assets for income tax credit carryforwards | $ 7,900 | 5,000 | |
Expiration date of tax credit carryforwards start year | 2024 | ||
Expiration date of tax credit carryforwards end year | 2033 | ||
Valuation allowances on deferred tax assets | $ 24,940 | 27,790 | |
Unrecognized tax benefits, if recognized would reduce effective tax rate, amount | 37,000 | 32,400 | |
Deferred tax assets operating loss carryforwards and tax credits | 8,600 | 11,500 | |
Accrued for payment of interest and penalties associated with unrecognized tax benefits | 10,100 | $ 5,700 | |
Amount of unrecognized tax benefits that could be reduced over next twelve months | $ 6,200 |
Income Taxes - Significant Comp
Income Taxes - Significant Components of Company's Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands | Aug. 26, 2023 | Aug. 27, 2022 |
Deferred tax assets: | ||
Net operating loss and credit carryforwards | $ 45,081 | $ 33,924 |
Accrued benefits | 82,318 | 60,561 |
Operating lease liabilities | 698,728 | 692,730 |
Other | 90,897 | 79,850 |
Total deferred tax assets | 917,024 | 867,065 |
Valuation allowances | (24,940) | (27,790) |
Net deferred tax assets | 892,084 | 839,275 |
Deferred tax liabilities: | ||
Property and equipment | (194,686) | (197,482) |
Inventory | (451,360) | (448,273) |
Operating lease assets | (652,652) | (650,145) |
Other | (43,662) | (25,211) |
Deferred tax liabilities | (1,342,360) | (1,321,111) |
Net deferred tax liabilities | $ (450,276) | $ (481,836) |
Income Taxes - Reconciliation_2
Income Taxes - Reconciliation of Unrecognized Tax Benefits (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Aug. 26, 2023 | Aug. 27, 2022 | |
Income Taxes | ||
Beginning balance | $ 49,316 | $ 39,797 |
Additions based on tax positions related to the current year | 9,416 | 17,488 |
Additions for tax positions of prior years | 8,012 | 3,008 |
Reductions for tax positions of prior years | (5,336) | (6,806) |
Reductions due to settlements | (6,800) | (1,539) |
Reductions due to statute of limitations | (5,121) | (2,632) |
Ending balance | $ 49,487 | $ 49,316 |
Fair Value Measurements - Compa
Fair Value Measurements - Company's Marketable Debt Securities Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands | Aug. 26, 2023 | Aug. 27, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | $ 121,513 | $ 112,545 |
Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other current assets | 39,639 | 49,768 |
Other long-term assets | 81,874 | 62,777 |
Total | 121,513 | 112,545 |
Level 1 | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other current assets | 35,349 | 49,659 |
Other long-term assets | 71,028 | 57,301 |
Total | 106,377 | 106,960 |
Level 2 | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other current assets | 4,290 | 109 |
Other long-term assets | 10,846 | 5,476 |
Total | $ 15,136 | $ 5,585 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Aug. 26, 2023 | Aug. 27, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term marketable debt securities | $ 39,639 | $ 49,768 |
Long-term marketable debt securities | $ 81,874 | $ 62,777 |
Marketable Debt Securities - Av
Marketable Debt Securities - Available-for-Sale Marketable Securities (Detail) - USD ($) $ in Thousands | Aug. 26, 2023 | Aug. 27, 2022 |
Schedule of Available-for-sale Securities [Line Items] | ||
Available-For-Sale Marketable Securities, Amortized Cost Basis | $ 123,887 | $ 115,327 |
Available-For-Sale Marketable Securities, Gross Unrealized Gains | 17 | 1 |
Available-For-Sale Marketable Securities, Gross Unrealized Losses | (2,391) | (2,783) |
Available-For-Sale Marketable Securities, Fair Value | 121,513 | 112,545 |
Corporate debt securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-For-Sale Marketable Securities, Amortized Cost Basis | 31,683 | 15,293 |
Available-For-Sale Marketable Securities, Gross Unrealized Gains | 17 | 1 |
Available-For-Sale Marketable Securities, Gross Unrealized Losses | (504) | (298) |
Available-For-Sale Marketable Securities, Fair Value | 31,196 | 14,996 |
Government bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-For-Sale Marketable Securities, Amortized Cost Basis | 63,747 | 88,903 |
Available-For-Sale Marketable Securities, Gross Unrealized Losses | (1,440) | (1,963) |
Available-For-Sale Marketable Securities, Fair Value | 62,307 | 86,940 |
Mortgage-backed securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-For-Sale Marketable Securities, Amortized Cost Basis | 3,215 | 4,600 |
Available-For-Sale Marketable Securities, Gross Unrealized Losses | (213) | (243) |
Available-For-Sale Marketable Securities, Fair Value | 3,002 | 4,357 |
Asset-backed securities and other | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-For-Sale Marketable Securities, Amortized Cost Basis | 25,242 | 6,531 |
Available-For-Sale Marketable Securities, Gross Unrealized Losses | (234) | (279) |
Available-For-Sale Marketable Securities, Fair Value | $ 25,008 | $ 6,252 |
Marketable Debt Securities - Ad
Marketable Debt Securities - Additional Information (Detail) $ in Thousands | Aug. 26, 2023 USD ($) security | Aug. 27, 2022 USD ($) |
Marketable Debt Securities | ||
Available for sale securities debt maturity period range | less than one year to approximately three years | |
Number of securities available for sale loss position | security | 75 | |
Unrealized loss on securities | $ 2,391 | $ 2,783 |
Marketable securities transferred | $ 105,000 | $ 91,100 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss - Changes in Accumulated Other Comprehensive Loss (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Aug. 26, 2023 | Aug. 27, 2022 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance | $ (3,538,913) | $ (1,797,536) |
Balance | (4,349,894) | (3,538,913) |
Foreign Currency and Other | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance | (280,190) | (287,638) |
Other Comprehensive Income (Loss) before reclassifications | 103,633 | 7,448 |
Balance | (176,557) | (280,190) |
Net Unrealized Gain (Loss) on Securities | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance | (2,171) | 589 |
Other Comprehensive Income (Loss) before reclassifications | 472 | (2,760) |
Amounts reclassified from Accumulated Other Comprehensive Loss | (152) | |
Balance | (1,851) | (2,171) |
Derivatives | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance | (18,175) | (20,937) |
Other Comprehensive Income (Loss) before reclassifications | 3,635 | |
Amounts reclassified from Accumulated Other Comprehensive Loss | 2,112 | 2,762 |
Balance | (12,428) | (18,175) |
Accumulated Other Comprehensive Loss | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance | (300,536) | (307,986) |
Other Comprehensive Income (Loss) before reclassifications | 107,740 | 4,688 |
Amounts reclassified from Accumulated Other Comprehensive Loss | 1,960 | 2,762 |
Balance | $ (190,836) | $ (300,536) |
Derivative Financial Instrume_2
Derivative Financial Instruments - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Aug. 26, 2023 | Aug. 27, 2022 | |
Derivative Financial Instruments | ||
Derivative losses recorded in Accumulated other comprehensive loss | $ 16.3 | |
Net derivative losses amortized into Interest expense | 2.8 | $ 3.6 |
Net derivative loss expected to be reclassified over next 12 months | $ 2.3 |
Financing - Schedule of Debt (D
Financing - Schedule of Debt (Detail) - USD ($) $ in Thousands | Aug. 26, 2023 | Jul. 21, 2023 | Jan. 27, 2023 | Aug. 27, 2022 | Aug. 01, 2022 |
Debt Instrument [Line Items] | |||||
Total debt before discounts and debt issuance costs | $ 7,709,600 | $ 6,153,400 | |||
Less: Discounts and debt issuance costs | 41,051 | 31,308 | |||
Long-term debt | 7,668,549 | 6,122,092 | |||
2.875% Senior Notes due January 2023, effective interest rate 3.21% | |||||
Debt Instrument [Line Items] | |||||
Senior notes | 300,000 | ||||
3.125% Senior Notes due July 2023, effective interest rate 3.26% | |||||
Debt Instrument [Line Items] | |||||
Senior notes | 500,000 | ||||
3.125% Senior Notes due April 2024, effective interest rate 3.32% | |||||
Debt Instrument [Line Items] | |||||
Senior notes | 300,000 | 300,000 | |||
3.250% Senior Notes due April 2025, effective interest rate 3.36% | |||||
Debt Instrument [Line Items] | |||||
Senior notes | 400,000 | 400,000 | |||
3.625% Senior Notes due April 2025, effective interest rate 3.78% | |||||
Debt Instrument [Line Items] | |||||
Senior notes | 500,000 | 500,000 | |||
3.125% Senior Notes due April 2026, effective interest rate 3.28% | |||||
Debt Instrument [Line Items] | |||||
Senior notes | 400,000 | 400,000 | |||
5.050% Senior Notes due July 2026, effective interest rate 5.095% | |||||
Debt Instrument [Line Items] | |||||
Senior notes | 450,000 | $ 450,000 | |||
3.750% Senior Notes due June 2027, effective interest rate 3.83% | |||||
Debt Instrument [Line Items] | |||||
Senior notes | 600,000 | 600,000 | |||
4.500% Senior Notes due February 2028, effective interest rate 4.43% | |||||
Debt Instrument [Line Items] | |||||
Senior notes | 450,000 | $ 450,000 | |||
3.750% Senior Notes due April 2029, effective interest rate 3.86% | |||||
Debt Instrument [Line Items] | |||||
Senior notes | 450,000 | 450,000 | |||
4.000% Senior Notes due April 2030, effective interest rate 4.09% | |||||
Debt Instrument [Line Items] | |||||
Senior notes | 750,000 | 750,000 | |||
1.650% Senior Notes due January 2031, effective interest rate 2.19% | |||||
Debt Instrument [Line Items] | |||||
Senior notes | 600,000 | 600,000 | |||
4.750% Senior Notes due August 2032, effective interest rate 4.76% | |||||
Debt Instrument [Line Items] | |||||
Senior notes | 750,000 | 750,000 | $ 750,000 | ||
4.750% Senior Notes due February 2033, effective interest rate 4.70% | |||||
Debt Instrument [Line Items] | |||||
Senior notes | 550,000 | $ 550,000 | |||
5.200% Senior Notes due August 2033, effective interest rate 5.221% | |||||
Debt Instrument [Line Items] | |||||
Senior notes | 300,000 | $ 300,000 | |||
Commercial paper, weighted average interest rate 5.43% and 2.43% at August 26, 2023 and August 27, 2022, respectively | |||||
Debt Instrument [Line Items] | |||||
Commercial paper | $ 1,209,600 | $ 603,400 |
Financing - Schedule of Debt -
Financing - Schedule of Debt - Interest Rates And Maturity (Detail) | 12 Months Ended | ||||||
Aug. 26, 2023 | Aug. 27, 2022 | Jul. 21, 2023 | Jul. 17, 2023 | Jan. 27, 2023 | Jan. 17, 2023 | Aug. 01, 2022 | |
2.875% Senior Notes due January 2023, effective interest rate 3.21% | |||||||
Debt Instrument [Line Items] | |||||||
Stated interest rate percentage | 2.875% | 2.875% | |||||
Debt instrument maturity, month and year | 2023-01 | ||||||
Effective interest rate | 3.21% | ||||||
3.125% Senior Notes due July 2023, effective interest rate 3.26% | |||||||
Debt Instrument [Line Items] | |||||||
Stated interest rate percentage | 3.125% | 3.125% | |||||
Debt instrument maturity, month and year | 2023-07 | ||||||
Effective interest rate | 3.26% | ||||||
3.125% Senior Notes due April 2024, effective interest rate 3.32% | |||||||
Debt Instrument [Line Items] | |||||||
Stated interest rate percentage | 3.125% | 3.125% | |||||
Debt instrument maturity, month and year | 2024-04 | 2024-04 | |||||
Effective interest rate | 3.32% | 3.32% | |||||
3.250% Senior Notes due April 2025, effective interest rate 3.36% | |||||||
Debt Instrument [Line Items] | |||||||
Stated interest rate percentage | 3.25% | 3.25% | |||||
Debt instrument maturity, month and year | 2025-04 | 2025-04 | |||||
Effective interest rate | 3.36% | 3.36% | |||||
3.625% Senior Notes due April 2025, effective interest rate 3.78% | |||||||
Debt Instrument [Line Items] | |||||||
Stated interest rate percentage | 3.625% | 3.625% | |||||
Debt instrument maturity, month and year | 2025-04 | 2025-04 | |||||
Effective interest rate | 3.78% | 3.78% | |||||
3.125% Senior Notes due April 2026, effective interest rate 3.28% | |||||||
Debt Instrument [Line Items] | |||||||
Stated interest rate percentage | 3.125% | 3.125% | |||||
Debt instrument maturity, month and year | 2026-04 | 2026-04 | |||||
Effective interest rate | 3.28% | 3.28% | |||||
5.050% Senior Notes due July 2026, effective interest rate 5.095% | |||||||
Debt Instrument [Line Items] | |||||||
Stated interest rate percentage | 5.05% | 5.05% | |||||
Debt instrument maturity, month and year | 2026-07 | ||||||
Effective interest rate | 5.09% | ||||||
3.750% Senior Notes due June 2027, effective interest rate 3.83% | |||||||
Debt Instrument [Line Items] | |||||||
Stated interest rate percentage | 3.75% | 3.75% | |||||
Debt instrument maturity, month and year | 2027-06 | 2027-06 | |||||
Effective interest rate | 3.83% | 3.83% | |||||
4.500% Senior Notes due February 2028, effective interest rate 4.43% | |||||||
Debt Instrument [Line Items] | |||||||
Stated interest rate percentage | 4.50% | 4.50% | |||||
Debt instrument maturity, month and year | 2028-02 | ||||||
Effective interest rate | 4.43% | ||||||
3.750% Senior Notes due April 2029, effective interest rate 3.86% | |||||||
Debt Instrument [Line Items] | |||||||
Stated interest rate percentage | 3.75% | 3.75% | |||||
Debt instrument maturity, month and year | 2029-04 | 2029-04 | |||||
Effective interest rate | 3.86% | 3.86% | |||||
4.000% Senior Notes due April 2030, effective interest rate 4.09% | |||||||
Debt Instrument [Line Items] | |||||||
Stated interest rate percentage | 4% | 4% | |||||
Debt instrument maturity, month and year | 2030-04 | 2030-04 | |||||
Effective interest rate | 4.09% | 4.09% | |||||
1.650% Senior Notes due January 2031, effective interest rate 2.19% | |||||||
Debt Instrument [Line Items] | |||||||
Stated interest rate percentage | 1.65% | 1.65% | |||||
Debt instrument maturity, month and year | 2031-01 | 2031-01 | |||||
Effective interest rate | 2.19% | 2.19% | |||||
4.750% Senior Notes due August 2032, effective interest rate 4.76% | |||||||
Debt Instrument [Line Items] | |||||||
Stated interest rate percentage | 4.75% | 4.75% | 4.75% | ||||
Debt instrument maturity, month and year | 2032-08 | 2032-08 | |||||
Effective interest rate | 4.76% | 4.76% | |||||
4.750% Senior Notes due February 2033, effective interest rate 4.70% | |||||||
Debt Instrument [Line Items] | |||||||
Stated interest rate percentage | 4.75% | 4.75% | |||||
Debt instrument maturity, month and year | 2033-02 | ||||||
Effective interest rate | 4.70% | ||||||
5.200% Senior Notes due August 2033, effective interest rate 5.221% | |||||||
Debt Instrument [Line Items] | |||||||
Stated interest rate percentage | 5.20% | 5.20% | |||||
Debt instrument maturity, month and year | 2033-08 | ||||||
Effective interest rate | 5.22% | ||||||
Commercial paper, weighted average interest rate 5.43% and 2.43% at August 26, 2023 and August 27, 2022, respectively | |||||||
Debt Instrument [Line Items] | |||||||
Weighted average interest rate of commercial paper | 5.43% | 2.43% |
Financing - Additional Informat
Financing - Additional Information (Detail) $ in Thousands | 12 Months Ended | ||||||||||||
Jul. 17, 2023 USD ($) | Jan. 17, 2023 USD ($) | Nov. 15, 2022 USD ($) | Jan. 18, 2022 USD ($) | Mar. 15, 2021 USD ($) | Aug. 26, 2023 USD ($) | Aug. 27, 2022 USD ($) | Aug. 28, 2021 USD ($) | Jul. 21, 2023 USD ($) | Jan. 27, 2023 USD ($) | Aug. 01, 2022 USD ($) | Nov. 15, 2021 USD ($) | Nov. 14, 2021 USD ($) | |
Debt Instrument [Line Items] | |||||||||||||
Minimum debt covenant interest coverage ratio to be maintained quarterly | 2.5 | ||||||||||||
Debt covenant interest coverage ratio | 6.3 | ||||||||||||
Remaining borrowing capacity under revolving credit agreement | $ 2,200,000 | ||||||||||||
Repayment of debt | 800,000 | $ 500,000 | $ 250,000 | ||||||||||
Fair value of the Company's debt | 7,300,000 | 5,900,000 | |||||||||||
Excess (shortfall) of fair value of debt over (from) carrying value | (406,600) | (182,800) | |||||||||||
Revolving Credit Agreement | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Amount available under credit facility | $ 2,250,000 | $ 2,000,000 | |||||||||||
Maximum amount available under credit facility | $ 3,250,000 | $ 2,250,000 | |||||||||||
Additional amount of year(s) to extend termination date of agreement | 1 year | ||||||||||||
Letters of credit, outstanding | 1,800 | ||||||||||||
Swingline Loans | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Maximum amount available under credit facility | $ 75,000 | ||||||||||||
Individual Issuer, Letter of Credit | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Maximum amount available under credit facility | 50,000 | ||||||||||||
Letter of Credit | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Maximum amount available under credit facility | $ 250,000 | 25,000 | |||||||||||
Borrowings, outstanding | 107,200 | ||||||||||||
Letters of credit, outstanding | 25,000 | ||||||||||||
Master Extension Agreement | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Credit facility expiration date | Nov. 15, 2027 | ||||||||||||
Revolving Credit Facility | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Borrowings, outstanding | 0 | ||||||||||||
2.875% Senior Notes due January 2023, effective interest rate 3.21% | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Senior notes | $ 300,000 | ||||||||||||
Stated interest rate percentage | 2.875% | 2.875% | |||||||||||
Repayments of Debt | $ 300,000 | ||||||||||||
4.500% Senior Notes due February 2028, effective interest rate 4.43% | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Senior notes | $ 450,000 | $ 450,000 | |||||||||||
Stated interest rate percentage | 4.50% | 4.50% | |||||||||||
3.125% Senior Notes due April 2024, effective interest rate 3.32% | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Senior notes | $ 300,000 | $ 300,000 | |||||||||||
Stated interest rate percentage | 3.125% | 3.125% | |||||||||||
4.750% Senior Notes due February 2033, effective interest rate 4.70% | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Senior notes | $ 550,000 | $ 550,000 | |||||||||||
Stated interest rate percentage | 4.75% | 4.75% | |||||||||||
3.125% Senior Notes due July 2023, effective interest rate 3.26% | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Senior notes | $ 500,000 | ||||||||||||
Stated interest rate percentage | 3.125% | 3.125% | |||||||||||
Repayments of Debt | $ 500,000 | ||||||||||||
5.050% Senior Notes due July 2026, effective interest rate 5.095% | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Senior notes | $ 450,000 | $ 450,000 | |||||||||||
Stated interest rate percentage | 5.05% | 5.05% | |||||||||||
5.200% Senior Notes due August 2033, effective interest rate 5.221% | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Senior notes | $ 300,000 | $ 300,000 | |||||||||||
Stated interest rate percentage | 5.20% | 5.20% | |||||||||||
3.700% Senior Notes due April 2022, effective interest rate of 3.85% | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Stated interest rate percentage | 3.70% | ||||||||||||
Repayments of Debt | $ 500,000 | ||||||||||||
2.500% Senior Notes due April 2021 | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Stated interest rate percentage | 2.50% | ||||||||||||
Repayments of Debt | $ 250,000 | ||||||||||||
4.750% Senior Notes due August 2032, effective interest rate 4.76% | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Senior notes | $ 750,000 | $ 750,000 | $ 750,000 | ||||||||||
Stated interest rate percentage | 4.75% | 4.75% | 4.75% | ||||||||||
Commercial paper, weighted average interest rate 5.43% and 2.43% at August 26, 2023 and August 27, 2022, respectively | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Commercial paper borrowings | $ 1,209,600 | $ 603,400 |
Financing - Scheduled Maturitie
Financing - Scheduled Maturities of Debt (Detail) - USD ($) $ in Thousands | Aug. 26, 2023 | Aug. 27, 2022 |
Financing | ||
2024 | $ 1,509,600 | |
2025 | 900,000 | |
2026 | 850,000 | |
2027 | 600,000 | |
2028 | 450,000 | |
Thereafter | 3,400,000 | |
Subtotal | 7,709,600 | |
Discount and debt issuance costs | 41,051 | $ 31,308 |
Long-term debt | $ 7,668,549 | $ 6,122,092 |
Interest Expense - Net Interest
Interest Expense - Net Interest Expense (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 26, 2023 | Aug. 27, 2022 | Aug. 28, 2021 | |
Other Income and Expenses [Abstract] | |||
Interest expense | $ 320,121 | $ 198,883 | $ 202,326 |
Interest income | (12,054) | (6,048) | (5,417) |
Capitalized interest | (1,695) | (1,197) | (1,572) |
Net Interest Expense | $ 306,372 | $ 191,638 | $ 195,337 |
Stock Repurchase Program - Shar
Stock Repurchase Program - Share Repurchase Activity (Detail) - USD ($) $ in Thousands | 2 Months Ended | 12 Months Ended | ||
Oct. 16, 2023 | Aug. 26, 2023 | Aug. 27, 2022 | Aug. 28, 2021 | |
Equity, Class of Treasury Stock [Line Items] | ||||
Amount | $ 3,723,289 | $ 4,359,991 | $ 3,378,321 | |
Shares | 1,524,000 | 2,220,000 | 2,592,000 | |
Subsequent Events | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Amount | $ 512,400 | |||
Shares | 200,303 |
Stock Repurchase Program - Addi
Stock Repurchase Program - Additional Information (Detail) - USD ($) $ in Thousands | 2 Months Ended | 12 Months Ended | |||||||
Oct. 16, 2023 | Aug. 26, 2023 | Aug. 27, 2022 | Aug. 28, 2021 | Jun. 14, 2023 | Oct. 04, 2022 | Mar. 22, 2022 | Dec. 15, 2021 | Oct. 05, 2021 | |
Equity, Class of Treasury Stock [Line Items] | |||||||||
Excise tax | $ 23,700 | ||||||||
Purchase of treasury stock, shares | 1,524,000 | 2,220,000 | 2,592,000 | ||||||
Purchase of treasury stock | $ 3,723,289 | $ 4,359,991 | $ 3,378,321 | ||||||
Subsequent Events | |||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||
Remaining value authorized for share repurchases | $ 1,300,000 | ||||||||
Purchase of treasury stock, shares | 200,303 | ||||||||
Purchase of treasury stock | $ 512,400 | ||||||||
Stock Repurchase Program 1998 | |||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||
Increase (decrease) to repurchase authorization amount | $ 2,000,000 | $ 2,500,000 | $ 2,000,000 | $ 1,500,000 | $ 1,500,000 | ||||
Stock repurchase authorized | 35,700,000 | ||||||||
Remaining value authorized for share repurchases | $ 1,800,000 | ||||||||
Common Stock | |||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||
Retirement of treasury shares, shares | 2,051,000 | 2,484,000 | 1,044,000 | ||||||
Retirement of treasury shares | $ 20 | $ 25 | $ 10 | ||||||
Additional Paid-in Capital | |||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||
Retirement of treasury shares | 143,440 | 292,975 | 60,005 | ||||||
Retained Deficit | |||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||
Retirement of treasury shares | $ 4,157,637 | $ 3,339,842 | $ 1,139,173 |
401(k) Savings Plans - Addition
401(k) Savings Plans - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Aug. 26, 2023 | Aug. 27, 2022 | Aug. 28, 2021 | |
401(k) Savings Plans | |||
Percentage of company matching retirement savings plan contributions that vest immediately | 100% | ||
Percentage of savings option up to qualified earnings | 25% | ||
Annual contribution by employer towards 401(k) Plan | $ 37.3 | $ 37.9 | $ 34.1 |
Leases - Additional Information
Leases - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Aug. 26, 2023 | Aug. 27, 2022 | |
Accumulated amortization related to finance lease assets | $ 132.5 | $ 97.2 |
Cash paid for amounts included in the measurement of lease liabilities - operating cash flows from operating leases | 335.2 | $ 316 |
Land and Building | ||
Additional leases not yet commenced, undiscounted future payments | $ 56.9 | |
Minimum [Member] | ||
Operating lease commencement date | 2024 | |
Maximum [Member] | ||
Operating lease commencement date | 2025 |
Leases - Summary of Lease-Relat
Leases - Summary of Lease-Related Assets and Liabilities Recorded on the Consolidated Balance Sheet (Detail) - USD ($) $ in Thousands | Aug. 26, 2023 | Aug. 27, 2022 |
Assets | ||
Operating | $ 2,998,097 | $ 2,918,817 |
Finance | $ 419,247 | $ 404,442 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Property, Plant and Equipment, Net | Property, Plant and Equipment, Net |
Total lease assets | $ 3,417,344 | $ 3,323,259 |
Current | ||
Operating | 257,256 | 243,407 |
Finance | $ 86,916 | $ 92,877 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Accrued Liabilities, Current | Accrued Liabilities, Current |
Noncurrent | ||
Operating | $ 2,917,046 | $ 2,837,973 |
Finance | $ 200,702 | $ 217,428 |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other Liabilities, Noncurrent | Other Liabilities, Noncurrent |
Total lease liabilities | $ 3,461,920 | $ 3,391,685 |
Leases - Lease Cost (Detail)
Leases - Lease Cost (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Aug. 26, 2023 | Aug. 27, 2022 | |
Amortization of lease assets | $ 132,500 | $ 97,200 |
Total lease cost | 524,283 | 470,563 |
Depreciation and amortization | ||
Amortization of lease assets | 71,913 | 65,212 |
Interest expense, net | ||
Interest on lease liabilities | 14,608 | 4,351 |
Selling, general and administrative expenses | ||
Operating lease cost | $ 437,762 | $ 401,000 |
Leases - Summary of Future Matu
Leases - Summary of Future Maturities of the Company's Lease Liabilities (Detail) $ in Thousands | Aug. 26, 2023 USD ($) |
Finance Leases | |
2024 | $ 88,284 |
2025 | 81,535 |
2026 | 61,571 |
2027 | 34,159 |
2028 | 10,409 |
Thereafter | 43,228 |
Total Lease Payments | 319,186 |
Less: Interest | (31,568) |
Present value of lease liabilities | 287,618 |
Operating Leases | |
2024 | 372,849 |
2025 | 402,798 |
2026 | 378,865 |
2027 | 354,370 |
2028 | 327,795 |
Thereafter | 2,260,833 |
Total Lease Payments | 4,097,510 |
Less: Interest | (923,208) |
Present value of lease liabilities | 3,174,302 |
Operating And Finance Leases | |
2024 | 461,133 |
2025 | 484,333 |
2026 | 440,436 |
2027 | 388,529 |
2028 | 338,204 |
Thereafter | 2,304,061 |
Total Lease Payments | 4,416,696 |
Less: Interest | (954,776) |
Present value of lease liabilities | $ 3,461,920 |
Leases - Information on Lease T
Leases - Information on Lease Term and Discount Rate (Detail) | 12 Months Ended |
Aug. 26, 2023 | |
Weighted-average remaining lease term (years) | |
Finance leases - real estate | 23 years |
Finance leases - vehicles | 3 years |
Operating leases | 13 years |
Weighted-average discount rate: | |
Finance leases - real estate | 3.85% |
Finance leases - vehicles | 2.44% |
Operating leases | 3.90% |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ in Millions | 12 Months Ended |
Aug. 26, 2023 USD ($) | |
Loss Contingencies [Line Items] | |
Commitment for construction | $ 198.9 |
Surety bonds | $ 43.1 |
The period of time before expiration of standby letters of credit and surety bonds | less than one year |
Additional capital contributions to tax credit funds | $ 9.3 |
Standby Letters of Credit | |
Loss Contingencies [Line Items] | |
Borrowings, outstanding | $ 134 |
Segment Reporting - Additional
Segment Reporting - Additional Information (Detail) | 12 Months Ended | ||
Aug. 26, 2023 segment store | Aug. 27, 2022 | Aug. 28, 2021 | |
Product Information [Line Items] | |||
Number of reportable segments | 1 | ||
Number of automotive parts and accessories locations in the United States, Mexico, and Brazil | store | 7,140 | ||
Number of operating segments | 2 | ||
Net Assets, Geographic Area | Geographic Concentration Risk | United States | |||
Product Information [Line Items] | |||
Concentration risk percentage | 88% | 91% | 92% |
Segment Reporting - Segment Res
Segment Reporting - Segment Results (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 26, 2023 | Aug. 27, 2022 | Aug. 28, 2021 | |
Segment Reporting Information [Line Items] | |||
Net Sales | $ 17,457,209 | $ 16,252,230 | $ 14,629,585 |
Gross profit | 9,070,422 | 8,472,650 | 7,717,785 |
Operating, selling, general and administrative expenses | (5,596,436) | (5,201,921) | (4,773,258) |
Interest expense, net | (306,372) | (191,638) | (195,337) |
Income before income taxes | 3,167,614 | 3,079,091 | 2,749,190 |
Segment Assets | 15,985,878 | 15,275,043 | 14,516,199 |
Capital Expenditures | 796,657 | 672,391 | 621,767 |
Auto Parts Stores | |||
Segment Reporting Information [Line Items] | |||
Net Sales | 17,145,137 | 15,963,196 | 14,381,712 |
Gross profit | 8,885,403 | 8,301,234 | 7,556,889 |
Segment Assets | 15,664,891 | 15,060,704 | 14,398,581 |
Capital Expenditures | 775,601 | 650,495 | 602,329 |
Auto Parts Stores | Failure | |||
Segment Reporting Information [Line Items] | |||
Net Sales | 8,407,690 | 7,801,155 | 7,048,700 |
Auto Parts Stores | Maintenance Items | |||
Segment Reporting Information [Line Items] | |||
Net Sales | 6,223,620 | 5,670,278 | 4,888,763 |
Auto Parts Stores | Discretionary | |||
Segment Reporting Information [Line Items] | |||
Net Sales | 2,513,827 | 2,491,763 | 2,444,249 |
Other | |||
Segment Reporting Information [Line Items] | |||
Net Sales | 312,072 | 289,034 | 247,873 |
Gross profit | 185,019 | 171,416 | 160,896 |
Segment Assets | 320,987 | 214,339 | 117,618 |
Capital Expenditures | $ 21,056 | $ 21,896 | $ 19,438 |
Segment Reporting - Schedule of
Segment Reporting - Schedule of sales disaggregated by geographical area (Detail) - Sales Revenue, Net - Geographic Concentration Risk | 12 Months Ended | ||
Aug. 26, 2023 | Aug. 27, 2022 | Aug. 28, 2021 | |
Product Information [Line Items] | |||
Concentration risk percentage | 100% | 100% | 100% |
United States | |||
Product Information [Line Items] | |||
Concentration risk percentage | 89% | 92% | 93% |
Mexico | |||
Product Information [Line Items] | |||
Concentration risk percentage | 10% | 8% | 7% |
Brazil and all other | |||
Product Information [Line Items] | |||
Concentration risk percentage | 1% |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 26, 2023 | Aug. 27, 2022 | Aug. 28, 2021 | |
Pay vs Performance Disclosure | |||
Net Income (Loss) | $ 2,528,426 | $ 2,429,604 | $ 2,170,314 |
Insider Trading Arrangements
Insider Trading Arrangements | 4 Months Ended |
Aug. 26, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |