FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

[X] Quarterly report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended November 21, 1998, or

[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from _______ to ________.

Commission file number 1-10714

AUTOZONE, INC.
(Exact name of registrant as specified in its charter)

Nevada 62-1482048
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

123 South Front Street
Memphis, Tennessee 38103
(Address of principal executive offices) (Zip Code)

(901) 495-6500
Registrant's telephone number, including area code

(not applicable)
Former name, former address and former fiscal year, if changed since last
report.

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter periods that
the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes [X] No [ ]

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practical date.

Common Stock, $.01 Par Value - 149,995,940 shares as of December 31, 1998.

PART I. ITEM 1.
AUTOZONE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

Nov. 21, Aug. 29,
1998 1998
-------- --------
(Unaudited)
(in thousands)

ASSETS
Current assets:
Cash and cash equivalents $ 7,060 $ 6,631
Accounts receivable 39,735 42,252
Merchandise inventories 1,004,976 966,560
Prepaid expenses 33,161 37,532
Deferred income taxes 53,089 61,964
Income taxes receivable 2,151
--------- ---------
Total current assets 1,138,021 1,117,090

Property and equipment:
Property and equipment 1,941,230 1,778,485
Less accumulated depreciation and amortization 366,693 350,979
--------- ---------
1,574,537 1,427,506

Other assets:
Cost in excess of net assets acquired 180,245 181,315
Deferred income taxes 22,084 3,510
Other assets 25,360 18,692
------- ------
227,689 203,517
------- -------
$ 2,940,247 $ 2,748,113
=========== ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 659,926 $ 683,372
Accrued expenses 159,347 176,457
Income taxes payable 35,110
------- -------
Total current liabilities 854,383 859,829

Long-term debt 745,091 545,067
Other liabilities 37,170 41,160
Stockholders' equity 1,303,603 1,302,057
--------- -----------
$ 2,940,247 $ 2,748,113
=========== ===========

See Notes to Condensed Consolidated Financial Statements

AUTOZONE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)

Twelve Weeks Ended
--------------------------------
Nov. 21, Nov. 22,
1998 1997
-------- --------
(in thousands, except per share amounts)

Net sales $ 900,949 $ 675,274
Cost of sales, including
warehouse and delivery expenses 524,467 394,833
Operating, selling, general and
administrative expenses 286,667 201,793
------- -------
Operating profit 89,815 78,648
Interest expense 8,515 2,502
------ ------
Income before income taxes 81,300 76,146
Income taxes 30,000 28,600
------ ------
Net income $ 51,300 $ 47,546
========== ========
Weighted average shares
for basic earnings per share 150,762 151,697
Effect of dilutive stock options 806 2,126
------ -------
Adjusted weighted average shares
for diluted earnings per share 151,568 153,823
======= =======

Basic earnings per share $ 0.34 $ 0.31
====== ======
Diluted earnings per share $ 0.34 $ 0.31
====== ======

See Notes to Condensed Consolidated Financial Statements

AUTOZONE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

Twelve Weeks Ended
---------------------------------
Nov. 21, Nov. 22,
1998 1997
-------- --------
(in thousands)

Cash flows from operating activities:
Net income $ 51,300 $ 47,546
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 28,264 19,630
Net increase in merchandise inventories (38,416) (15,413)
Net increase in current liabilities 13,240 10,450
Other - net (13,486) (5,755)
-------- -------
Net cash provided by operating activities 40,902 56,458

Cash flows from investing activities:
Cash outflows for property
and equipment, net (190,743) (70,373)

Cash flows from financing activities:
Net proceeds from debt 200,024 4,600
Purchase of Treasury Stock (50,300)
Proceeds from sale of Common Stock, including
related tax benefit 546 9,012
------- ------
Net cash provided by financing activities 150,270 13,612
------- ------
Net increase (decrease) in cash and cash equivalents 429 (303)
Cash and cash equivalents at beginning of period 6,631 4,668
------- ------
Cash and cash equivalents at end of period $ 7,060 $ 4,365
=========== ===========

See Notes to Condensed Consolidated Financial Statements

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Note A-Basis of Presentation

The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial information and with instructions to Form
10-Q and Article 10 of Regulation S-X. Accordingly, they do not include
all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the twelve weeks ended November 21, 1998, are not necessarily
indicative of the results that may be expected for the fiscal year ending
August 28, 1999. For further information, refer to the financial statements
and footnotes included in the Company's annual report on Form 10-K for the
year ended August 29, 1998.

NOTE B--INVENTORIES

Inventories are stated at the lower of cost or market using the last-
in, first-out (LIFO) method. An actual valuation of inventory under the
LIFO method can be made only at the end of each year based on the inventory
levels and costs at that time. Accordingly, interim LIFO calculations must
necessarily be based on management's estimates of expected year-end
inventory levels and costs.

NOTE C-FINANCING ARRANGEMENTS

The Company's long-term debt as of November 21, 1998 and August 29,
1998 consisted of the following:

NOV. 21, Aug. 29,
1998 1998
------ --------

6.5% Debentures due July 15, 2008 $200,000 $200,000

6% Notes due November 1, 2003 150,000

Commercial Paper, 5.7% weighted
average rate 10,868 305,000

Unsecured bank loan, floating
interest rate averaging 5.4%
at November 21, 1998 and 5.8%
at August 29, 1998 378,500 34,050

Other 5,723 6,017
------- ------
$745,091 $545,067

In October 1998, the Company sold $150 million of 6% Notes due
November 2003 at a discount. Interest on the Notes is payable semi-
annually on May 1 and November 1 each year, beginning May 1, 1999. In July
1998, the Company sold $200 million of 6.5% Debentures due July 2008 at a
discount. Interest on the Debentures is payable semi-annually on January
15 and July 15 of each year, beginning January 15, 1999. Proceeds from the
Notes and Debentures were used to repay portions of the Company's long-term
variable rate bank debt and for general corporate purposes.

The Company has a commercial paper program that allows borrowing up to
$500 million. In connection with the program, the Company has a credit
facility with a group of banks for up to $350 million which extends until
December 2001 and a 364-day $150 million credit facility with another group
of banks. The 364-day facility includes a renewal feature as well as an
option to extinguish the outstanding debt one year from the maturity date.
Borrowings under the commercial paper program reduce availability under the
credit facilities. Outstanding commercial paper and revolver borrowings at
November 21, 1998 are classified as long-term debt as it is the Company's
intention to refinance them on a long-term basis.

Additionally, the Company has a credit facility with a bank for up to
$150 million which extends until May 1999. The Company also has a
negotiated rate unsecured revolving credit agreement totaling $25 million
which extends until March 1999. There were no amounts outstanding under
these agreements at November 21, 1998.

The rate of interest payable under the revolving credit agreements is
a function of the London Interbank Offered Rate (LIBOR) or the lending
bank's base rate (as defined in the agreement) at the option of the
Company. In addition, the $350 million credit facility contains a
competitive bid rate option. All of the revolving credit facilities
contain a covenant limiting the amount of debt the Company may incur
relative to its total capitalization.

NOTE D-STOCKHOLDERS' EQUITY

The Company presents basic and diluted earnings per share (EPS) in
accordance with the Statement of Financial Accounting Standards No. 128,
"Earnings Per Share." Basic EPS is computed as net earnings divided by the
weighted-average number of common shares outstanding for the period.
Diluted EPS reflects the potential dilution that could occur from common
shares issuable through stock-based compensation including stock options.

In October 1998, the Company announced Board approval to repurchase up
to $150 million of common stock in the open market. This is in addition to
the $100 million repurchase approved in January 1998. Since January 1998,
approximately $79 million of common stock has been repurchased under the
plan.

NOTE E-COMPREHENSIVE INCOME

As of August 30, 1998, the Company adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income". This
statement establishes standards for reporting and display of comprehensive
income and its components. Comprehensive income is net income, plus
certain other items that are recorded directly to stockholders' equity,
bypassing net income. There are no such items currently applicable to the
Company and therefore comprehensive income for the periods presented equals
net income.

The adoption of this Statement had no effect on the Company's results
of operations or financial position.

NOTE F-CONTINGENCIES

Chief Auto Parts Inc., a wholly owned subsidiary of the Company, is a
defendant in a class action lawsuit entitled "Doug Winfrey, et al. on their
own behalf and on behalf of a class and all others similarly situated, v.
Chief Auto Parts Inc. et al.," filed in the Superior Court of California,
County of San Joaquin on August 22, 1995 and then transferred to The
Superior Court of California, County of San Francisco on October 26, 1995.
The Superior Court denied the plaintiff's motion for class certification on
December 7, 1996. On February 6, 1998, the Court of Appeals reversed the
Superior Court's order denying class certification and remanded the case to
the Superior Court for further proceedings. On November 16, 1998 the
Superior Court certified the class as all persons considered by Chief to be
non-exempt hourly employees who, from August 22, 1991 to the present,
either work or did work in one of Chief's California retail stores, in
excess of total work time of three and one-half (3.5) hours in any one work
day and who were denied an off-duty rest break.

In the complaint, the plaintiffs allege that Chief had a policy and
practice of denying hourly employees in California mandated rest periods
during their scheduled hours of work. The plaintiffs are seeking damages,
restitution, disgorgement of profits, statutory penalties, declaratory
relief, injunctive relief, prejudgment interest, and reasonable attorneys'
fees, expenses and costs. Management is unable to predict the outcome of
this lawsuit at this time. The Company believes that the potential damages
recoverable by any single plaintiff against Chief are minimal. However, if
the plaintiff class were to prevail on all their claims, the amount of
damages could be substantial. The Company is vigorously defending against
this action.

AutoZone, Inc., is a defendant in a lawsuit entitled "Melvin Quinnie
and Zachery P. Brown on behalf of all other similarly situated v. AutoZone,
Inc., and DOES 1 through 100, inclusive" filed in the Superior Court of
California, County of Los Angeles, on November 13, 1998. The plaintiffs
claim that the defendants failed to pay overtime to store managers as
required by California law and failed to pay terminated managers in a
timely manner as required by California law. The plaintiffs are seeking
injunctive relief, restitution, statutory penalties, prejudgment interest,
and reasonable attorneys' fees, expenses and costs. Management is unable to
predict the outcome of this lawsuit at this time. The Company is vigorously
defending against this action.

The Company currently, and from time to time, is involved in various
legal proceedings incidental to the conduct of its business. Although the
amount of liability that may result from these proceedings cannot be
ascertained, the Company does not currently believe that, in the aggregate,
they will result in liabilities material to the Company's financial
condition or results of operations.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

TWELVE WEEKS ENDED NOVEMBER 21, 1998, COMPARED TO
TWELVE WEEKS ENDED NOVEMBER 22, 1997

Net sales for the twelve weeks ended November 21, 1998 increased by
$225.7 million, or 33.4%, over net sales for the comparable period of
fiscal 1998. This increase was due to a comparable store sales increase of
3%, and increases in net sales for stores opened or acquired since the
beginning of fiscal 1998. At November 21, 1998 the Company had 2,623
stores in operation compared with 1,772 stores at November 22, 1997.

Gross profit for the twelve weeks ended November 21, 1998, was $376.5
million, or 41.8% of net sales, compared with $280.4 million, or 41.5% of
net sales, during the comparable period for fiscal 1998. The increase in
the gross profit percentage was due primarily to higher battery and
commodity gross margins.

Operating, selling, general and administrative expenses for the twelve
weeks ended November 21, 1998 increased by $84.9 million over such expenses
for the comparable period for fiscal 1998, and increased as a percentage of
net sales from 29.9% to 31.8%. The increase in the expense ratio was due
primarily to higher payroll and occupancy costs, primarily in recently
acquired stores, and acquisition integration activities.

Interest expense for the twelve weeks ended November 21, 1998 was $8.5
million compared with $2.5 million during the comparable period of 1998.
The increase in interest expense was primarily due to higher levels of
borrowings as a result of the acquisitions.

The Company's effective income tax rate was 36.9% of pre-tax income
for the twelve weeks ended November 21, 1998 and 37.6 % for the twelve
weeks ended November 22, 1997.

LIQUIDITY AND CAPITAL RESOURCES

For the twelve weeks ended November 21, 1998, net cash of $40.9
million was provided by the Company's operations versus $56.5 million for
the comparable period of fiscal year 1998. The comparative decrease in cash
provided by operations was due primarily to increased inventory
requirements for new store expansion in comparison to the twelve weeks
ended November 22, 1997.

Capital expenditures for the twelve weeks ended November 21, 1998 were
$190.7 million, including approximately $108 million for the acquisition of
real estate for 100 Express auto parts store locations from Pep Boys. Year-
to-date, the Company opened 63 net new auto parts stores including 3 stores
that replaced existing stores. Additionally, the Company closed 97 auto
parts stores in conjunction with its acquisition integration activities.
The Express locations were not open at the end of the quarter and therefore
not included in the store count. These stores will be remodeled and opened
during the second and third quarters of fiscal 1999. The Company expects
to operate between 2,800 and 2,850 auto parts stores at the end of the
fiscal year.

The Company anticipates that it will continue to generate significant
operating cash flow. The Company foresees no difficulty in obtaining long-
term financing in view of its credit rating and favorable experiences in
the debt market in the past.

The Company has a commercial paper program that allows borrowing up to
$500 million. In connection with the program, the Company has a credit
facility with a group of banks for up to $350 million which extends until
December 2001 and a 364-day $150 million credit facility with another group
of banks. The 364-day facility includes a renewal feature as well as an
option to extinguish the outstanding debt one year from the maturity date.
Borrowings under the commercial paper program reduce availability under the
credit facilities. At November 21, 1998, the Company had total commercial
paper and revolving credit borrowings of $389.4 million. Outstanding
commercial paper and revolver borrowings at November 21, 1998 are
classified as long-term debt as it is the Company's intention to refinance
them on a long-term basis.

Additionally, the Company has a credit facility with a bank for up to
$150 million which extends until May 1999. The Company also has a
negotiated rate unsecured revolving credit agreement totaling $25 million
which extends until March 1999. At November 21, 1998, there were no amounts
outstanding under these agreements.

ACCOUNTING PRONOUNCEMENTS

In March 1998, the Accounting Standards Executive Committee (AcSEC)
issued Statement of Position (SOP) 98-1, "Accounting For the Costs of
Computer Software Developed For or Obtained For Internal-Use." The Company
adopted this SOP beginning August 30, 1998. The SOP will require the
capitalization of certain costs incurred in connection with developing or
obtaining software for internal-use. Currently, costs related to
developing internal-use software are expensed as incurred. The adoption of
SOP 98-1 is not anticipated to have a material impact on the Company's
results of operations or financial position.

YEAR 2000 READINESS DISCLOSURE

The Company began addressing the Year 2000 issue in June 1996 and
implemented a formal Year 2000 project office in May 1997. As of November
21, 1998 the Company anticipates completing the conversion and testing of
all known programs by July 31, 1999.

The total estimated cost of the Year 2000 project is $12 million,
which is being expensed as incurred. All of the related costs are being
funded through operating cash flows. These costs are less than 10% of the
overall information technology budget. No major information technology
projects or programs have been deferred.

In addition to internal activities, the Company is addressing Year
2000 issues which do not normally fall under information technology such as
embedded chip equipment and the compliance status of business partners.
Although the Company believes that the ongoing assessment and testing will
minimize the Company's risks, there is no guarantee that there will not be
an adverse effect on the Company if third parties, such as merchandise
vendors, service providers, or utility companies are not Year 2000
compliant.

Although the Company does not anticipate any major business
disruptions as a result of Year 2000 issues, it is possible that certain
disruptions may occur including loss of communications with stores,
distribution centers, or business partners; inability to process
transactions in a timely manner or loss of power. The Company is currently
developing contingency plans, which should be finalized by July 31, 1999.
Elements of the Company's contingency plans may include: switching vendors,
back-up systems, or manual processes, and the stockpiling of certain
products prior to the Year 2000.

The cost of conversion and the completion date are based on
management's best estimates and may be updated as additional information
becomes available.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this Quarterly Report on Form 10-Q are
forward-looking statements. These statements discuss, among other things,
expected growth, domestic and international development and expansion
strategy, and future performance. The forward-looking statements are
subject to risks, uncertainties and assumptions including, without
limitation, competition, product demand, the domestic and international
economies, government regulations and approvals, inflation, the ability to
hire and retain qualified employees, the ability to convert acquired stores
in a profitable and timely manner, consumer debt levels and the weather.
Actual results may materially differ from anticipated results. Please
refer to the Risk Factors section in the Annual Report on Form 10-K for
fiscal year ended August 29, 1998, for more details.

PART II. OTHER INFORMATION

Item 1. Legal Proceeding

In the complaint, t he plaintiffs allege that Chief had a policy and
practice of denying hourly employees in California mandated rest periods
during their scheduled hours of work. The plaintiffs are seeking damages,
restitution, disgorgement of profits, statutory penalties, declaratory
relief, injunctive relief, prejudgment interest, and reasonable attorneys'
fees, expenses and costs. Management is unable to predict the outcome of
this lawsuit at this time. The Company believes that the potential damages
recoverable by any single plaintiff against Chief are minimal. However, if
the plaintiff class were to prevail on all their claims, the amount of
damages could be substantial. The Company is vigorously defending against
this action.

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits

The following exhibits are filed as part of this report:

3.1 Articles of Incorporation of AutoZone, Inc. Incorporated by
reference to Exhibit 3.1 to the Form 10-K for the fiscal year
ended August 27, 1994.

3.2 Amendment to Articles of Incorporation of AutoZone, Inc., dated
December 16, 1993, to increase its authorized shares of common
stock to 200,000,000. Incorporated by reference to Exhibit 3.2 to
the Form 10-K for the fiscal year ended August 27, 1994.

3.3 Amended and Restated By-laws of AutoZone, Inc. Incorporated by
reference to Exhibit 3.3 to the Form 10-K for the fiscal year
ended August 29, 1998.

10.1 Credit Agreement among AutoZone, Inc., as Borrower, the several
lenders from time to time party thereto, NationsBank, N.A., as
Agent, and SunTrust Bank, Nashville, N.A. as Co-Agent, dated
December 20, 1996. Incorporated by reference to the Form 10-Q for
the quarter ended February 15, 1997.

10.2 Amendment No. 1, dated February 10, 1998, to Credit Agreement
among AutoZone, Inc., as Borrower, the several lenders from time
to time party thereto, NationsBank, N.A., as Agent, and SunTrust
Bank, Nashville, N.A. as Co-Agent, dated December 20, 1996.
Incorporated by reference to Exhibit 10.2 to the Form 10-Q for
the quarter ended February 14, 1998.

10.3 Amendment No. 2 to Credit Agreement among AutoZone, Inc., as
Borrower, the several lenders from time to time party thereto,
NationsBank, N.A., as Agent and SunTrust Bank, Nashville, N.A.,
as Co-Agent, dated November 13, 1998.

10.4 Credit Agreement, dated October 20, 1998, between AutoZone, Inc.,
as Borrower, the several lenders from time to time party thereto,
and NationsBank, N.A., as Agent.

10.5 Credit Agreement, dated November 13, 1998, between AutoZone,
Inc., as Borrower, the several lenders from time to time party
thereto, NationsBank, N.A., as Agent, and SunTrust Bank,
Nashville, N.A., as Documentation Agent.

27.1 Financial Data Schedule (SEC Use Only).

(b) On October 21, 1998, the Company filed a Current Report on Form 8-K
to (a) file its audited financial statements for the fiscal year ended
August 29, 1998, and (b) announce that its Board of Directors had approved
repurchasing an additional $150 million of the Company's common stock

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

AUTOZONE, INC.

By: /S/ ROBERT J. HUNT
----------------------
Robert J. Hunt
Executive Vice President and
Chief Financial Officer-Customer Satisfaction
(Principal Financial Officer)

By: /S/ MICHAEL E. BUTTERICK
------------------------
Michael E. Butterick
Vice President, Controller-Customer Satisfaction
(Principal Accounting Officer)

Dated: January 5, 1999

EXHIBIT INDEX

3.1 Articles of Incorporation of AutoZone, Inc. Incorporated by reference
to Exhibit 3.1 to the Form 10-K for the fiscal year ended August 27,
1994.

3.2 Amendment to Articles of Incorporation of AutoZone, Inc., dated
December 16, 1993, to increase its authorized shares of common stock
to 200,000,000. Incorporated by reference to Exhibit 3.2 to the Form
10-K for the fiscal year ended August 27, 1994.

3.3 Amended and Restated By-laws of AutoZone, Inc. Incorporated by
reference to Exhibit 3.3 to the Form 10-K for the fiscal year ended
August 29, 1998.

10.1 Credit Agreement among AutoZone, Inc., as Borrower, the several
lenders from time to time party thereto, NationsBank, N.A., as Agent,
and SunTrust Bank, Nashville, N.A. as Co-Agent, dated December 20,
1996. Incorporated by reference to the Form 10-Q for the quarter ended
February 15, 1997.

10.2 Amendment No. 1, dated February 10, 1998, to Credit Agreement among
AutoZone, Inc., as Borrower, the several lenders from time to time
party thereto, NationsBank, N.A., as Agent, and SunTrust Bank,
Nashville, N.A. as Co-Agent, dated December 20, 1996. Incorporated by
reference to Exhibit 10.2 to the Form 10-Q for the quarter ended
February 14, 1998.

10.3 Amendment No. 2 to Credit Agreement among AutoZone, Inc., as Borrower,
the several lenders from time to time party thereto, NationsBank,
N.A., as Agent and SunTrust Bank, Nashville, N.A., as Co-Agent, dated
November 13, 1998.

10.4 Credit Agreement, dated October 20, 1998, between AutoZone, Inc., as
Borrower, the several lenders from time to time party thereto, and
NationsBank, N.A., as Agent.

10.5 Credit Agreement, dated November 13, 1998, between AutoZone, Inc., as
Borrower, the several lenders from time to time party thereto,
NationsBank, N.A., as Agent, and SunTrust Bank, Nashville, N.A., as
Documentation Agent.

27.1 Financial Data Schedule (SEC Use Only).