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 February 15, 1997,
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 -150,825,189 shares as of March 28, 1997

AUTOZONE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

Feb. 15, Aug. 31,
1997 1996
----------- ------------
(Unaudited)

(in thousands)

ASSETS
Current assets:
Cash and cash equivalents .......................................... $ 4,636 $ 3,904
Accounts receivable ............................................... 20,987 15,466
Merchandise inventories ........................................... 664,220 555,894
Prepaid expenses .................................................. 23,651 19,225
Deferred income taxes ............................................. 17,587 18,608
----------- -----------
Total current assets ............................................ 731,081 613,097

Property and equipment:
Property and equipment ............................................ 1,164,331 1,061,166
Less accumulated depreciation and amortization .................... (233,263) (198,292)
----------- -----------
931,068 862,874

Other assets:
Cost in excess of net assets acquired ............................. 16,902 17,187
Deferred income taxes ............................................. 3,814 2,938
Other assets ...................................................... 1,751 2,301
----------- -----------
22,467 22,426
----------- -----------
$ 1,684,616 $ 1,498,397
=========== ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable .................................................. $ 390,610 $ 401,309
Accrued expenses .................................................. 106,841 104,909
Income taxes payable .............................................. 11,697 12,260
Revolving credit agreements ....................................... 0 94,400
----------- -----------
Total current liabilities ....................................... 509,148 612,878

Long-term debt .................................................... 215,900 0
Other liabilities ................................................. 19,270 19,937
Stockholders' equity .............................................. 940,298 865,582
----------- -----------
$ 1,684,616 $ 1,498,397
=========== ===========

See notes to Condensed Consolidated Financial Statements.

AUTOZONE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

Twelve Weeks Ended Twenty-four Weeks Ended
------------------------ --------------------------
Feb. 15, Feb. 10, Feb. 15, Feb. 10,
1997 1996 1997 1996
--------- -------- ----------- --------

(in thousands, except per share amounts)

Net sales .......................... $ 538,012 $425,838 $ 1,107,157 $888,867

Cost of sales, including warehouse
and delivery expenses ............ 311,056 249,805 639,903 519,614
Operating, selling, general and
administrative expenses .......... 177,739 132,609 356,139 270,432
--------- -------- ----------- --------
Operating profit ................... 49,217 43,424 111,115 98,821
Interest income (expense)-net ...... (2,110) -- (3,283) --
--------- -------- ----------- --------
Income before income taxes ......... 47,107 43,424 107,832 98,821
Income taxes ....................... 17,700 16,100 40,450 36,700
--------- -------- ----------- --------
Net income ..................... $ 29,407 $ 27,324 $ 67,382 $ 62,121
--------- -------- ----------- --------

Net income per share ............... $ 0.19 $ 0.18 $ 0.44 $ 0.41
========= ======== =========== ========

Average shares outstanding, including
common stock equivalents ......... 152,251 150,086 152,264 149,959
========= ======== =========== ========

See notes to Condensed Consolidated Financial Statements.

AUTOZONE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

Twenty-four Weeks Ended
-------------------------
Feb. 15, Feb. 10,
1997 1996
--------- ---------
(in thousands)

Cash flows from operating activities:
Net income ...................................................... $ 67,382 $ 62,121
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization ............................... 35,482 26,372
Net increase in merchandise inventories ..................... (108,326) (92,303)
Net increase (decrease) in current liabilities .............. (9,330) 39,251
Other - net ................................................. (9,966) 5,226
--------- ---------
Net cash provided by (used in) operating activities ....... (24,758) 40,667

Cash flows from investing activities:
Cash outflows for property
and equipment, net ............................................ (103,344) (120,920)

Cash flows from financing activities:
Net proceeds from debt .......................................... 121,500 70,872
Proceeds from sale of Common Stock, including related tax benefit 7,334 5,977
--------- ---------
Net cash provided by financing activities ................. 128,834 76,849
--------- ---------
Net increase (decrease) in cash and cash equivalents .............. 732 (3,404)
Cash and cash equivalents at beginning of period .................. 3,904 6,411
--------- ---------
Cash and cash equivalents at end of period ........................ $ 4,636 $ 3,007
========= =========

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 twenty-four weeks ended February 15,
1997, are not necessarily indicative of the results that may be expected for the
fiscal year ending August 30, 1997. For further information, refer to the
financial statements and footnotes thereto included in the Company's annual
report on Form 10-K for the year ended August 31, 1996.

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--DEBT

During December 1996, the Company executed an agreement with a group of
banks for a $275 million five-year revolving credit facility to replace the
existing revolving credit agreements. The rate of interest payable under the
agreement is a function of the London Interbank Offered Rate (LIBOR), or the
lending bank's base rate (as defined in the agreement), or a competitive bid
rate, at the option of the Company. At February 15, 1997, the Company's
borrowings under this agreement were $215.9 million and the weighted average
interest rate was 5.7%. The revolving credit agreement contains a covenant
limiting the amount of debt the Company may incur relative to its total
capitalization. Based on the terms of the Company's new five-year credit
facility, amounts outstanding under the revolving credit facility have been
classified as long-term.

NOTE D--SUBSEQUENT EVENT

During late February 1997, the Company closed the Memphis call center
and offered to transfer all Memphis call center employees to AutoZone stores in
the Memphis area. The Company anticipates that the closing of the call center
will result in ongoing savings to the Company.

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

TWELVE WEEKS ENDED FEBRUARY 15, 1997, COMPARED TO
TWELVE WEEKS ENDED FEBRUARY 10, 1996

Net sales for the twelve weeks ended February 15, 1997 increased by
$112.2 million, or 26.3%, over net sales for the comparable period of fiscal
1996. This increase was due to a comparable store sales increase of 10%, (which
was primarily due to sales growth in the Company's newer stores and the added
sales of the Company's commercial program), and increases in net sales for
stores opened since the beginning of fiscal 1996. At February 15, 1997 the
Company had 1,516 stores in operation compared with 1,251 stores at February 10,
1996.

Gross profit for the twelve weeks ended February 15, 1997, was $227.0
million, or 42.2% of net sales, compared with $176.0 million, or 41.3% of net
sales, during the comparable period for fiscal 1996. The increase in the gross
profit percentage was due primarily to higher gross margins for commodity
products such as oil and antifreeze, efficiencies in distribution costs and the
added sales of higher margin ALLDATA products.

Operating, selling, general and administrative expenses for the twelve
weeks ended February 15,1997 increased by $45.1 million over such expenses for
the comparable period for fiscal 1996, and increased as a percentage of net
sales from 31.1% to 33.0%. The increase in the expense ratio was due primarily
to costs of the Company's commercial program, which was fully implemented at the
end of the first fiscal quarter of 1997, and operating costs of ALLDATA. The
number of stores participating in the commercial program was 1,275 at February
15, 1997.

The Company's effective income tax rate was 37.6% of pre-tax income
for the twelve weeks ended February 15, 1997 and 37.1% for the twelve weeks
ended February 10, 1996.

TWENTY-FOUR WEEKS ENDED FEBRUARY 15, 1997, COMPARED TO
TWENTY-FOUR WEEKS ENDED FEBRUARY 10, 1996

Net sales for the twenty-four weeks ended February 15, 1997 increased
by $218.3 million, or 24.6%, over net sales for the comparable period of fiscal
1996. This increase was due to a comparable store sales increase of 8%, (which
was primarily due to sales growth in the Company's newer stores and the added
sales of the Company's commercial program), and increases in net sales for
stores opened since the beginning of fiscal 1996.

Gross profit for the twenty-four weeks ended February 15, 1997, was
$467.3 million, or 42.2% of net sales, compared with $369.3 million, or 41.5% of
net sales, during the comparable period for fiscal 1996. The increase in the
gross profit percentage was due primarily to improved gross margin in
commodities, such as oil and antifreeze, efficiencies in distribution costs and
the added sales of higher margin ALLDATA products.

Operating, selling, general and administrative expenses for the
twenty-four weeks ended February 15,1997 increased by $85.7 million over such
expenses for the comparable period for fiscal 1996, and increased as a
percentage of net sales from 30.4% to 32.2%. The increase in the expense ratio
was due primarily to costs of the Company's commercial program and to operating
costs of ALLDATA.

The Company's effective income tax rate was 37.5% of pre-tax income for
the twenty-four weeks ended February 15, 1997 and 37.1% for the twenty-four
weeks ended February 10, 1996.

LIQUIDITY AND CAPITAL RESOURCES

For the twenty-four weeks ended February 15,1997, net cash of $24.8
million was used by the Company's operations versus $40.7 million provided by
operations for the comparable period of fiscal year 1996. The comparative
decrease in cash provided by operations is due primarily to increased inventory
requirements which were not offset by a corresponding increase in accounts
payable. The change in accounts payable through February 15, 1997 is due to
shorter payment terms on certain forward buy inventory, whereas extended payment
terms on initial inventory purchases for the new Zanesville distribution center
increased cash flow from operations in the prior year.

Capital expenditures for the twenty-four weeks ended February 15, 1997
were $103.3 million. The Company anticipates that capital expenditures for
fiscal 1997 will be approximately $325 to $340 million. Year-to-date, the
Company opened 93 net new stores and 11 stores that replaced existing stores.
The Company expects to open approximately 315 to 335 new stores and
approximately 30 replacement stores during fiscal 1997.

The Company anticipates that it will rely on internally generated funds
to support a majority of its capital expenditures and working capital
requirements; the balance of such requirements will be funded through
borrowings. The Company has a five-year revolving credit agreement with a group
of banks for $275 million. At February 15, 1997 the Company had borrowings
outstanding under this credit agreement of $215.9 million.

PART II. OTHER INFORMATION

Item 4. Submission of Matters to a Vote of Security Holders

(a) The Annual Meeting of the Shareholders of the Company was held
on December 12, 1996.

(b) Not applicable.

Votes For Votes Withheld
--------- --------------

Johnston C. Adams, Jr. 131,978,426 1,730,448
Andrew M. Clarkson 131,997,691 1,711,183
Thomas S. Hanemann 131,992,576 1,716,298
N. Gerry House 132,301,001 1,407,873
J. R. Hyde, III 132,002,382 1,706,492
James F. Keegan 132,349,569 1,359,305
Michael W. Michelson 130,144,957 3,563,917
John E. Moll 132,350,329 1,358,545
George R. Roberts 122,506,205 11,202,669
Ronald A. Terry 131,992,564 1,716,310
Timothy D. Vargo 132,023,419 1,685,455

2. Approval of the 1996 Stock Option Plan : 121,937,983 votes in favor;
11,554,320 votes against; and 216,571 shares abstained from voting.

3. Ratification of Ernst & Young LLP, as the Company's independent
auditors: 133,538,766 votes in favor; 112,411 votes against; and
57,697 shares abstained from voting.

(d) Not applicable.

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 By-laws of AutoZone, Inc. Incorporated by reference to Exhibit
3.2 to the February 1992 Form S-1.

4.1 Form of Common Stock Certificate. Incorporated by reference to
Exhibit 4.1 to Pre-Effective Amendment No. 2 to the February 1992 Form S-1.

4.2 Registration Rights Agreement, dated as of February 18, 1987, by
and among Auto Shack, Inc. and certain stockholders. Incorporated by reference
to Exhibit 4.9 to the Form S-1 Registration Statement filed by the Company under
the Securities Act (No. 33-39197), (the "April 1991 Form S-1").

4.3 Amendment to the Registration Rights Agreement dated as of August
1, 1993. Incorporated by reference to Exhibit 4.1 to the Form S-3 Registration
Statement filed by the Company under the Securities Act (No. 33-67550).

10.1 Credit Agreement dated as of December 20, 1996 among AutoZone,
Inc., as Borrower, the several lenders from time to time party hereto,
NationsBank, N.A., as Agent, and SunTrust Bank, Nashville, N.A. as Co-Agent.
(Portions of exhibit have been omitted pursuant to a request for confidential
treatment.)

11.1 Statement re: Computation of earnings per share.

27.1 Financial Data Schedule. (SEC Use Only)

(b) Reports on Form 8-K

During the twelve weeks ended February 15, 1997, the Company filed a
report on Form 8-K dated December 9, 1996, stating:

On December 9, 1996, the Company announced earnings for the first
fiscal quarter of 1997 and that Johnston C. Adams, Jr. currently the
Company's Vice Chairman and Chief Operating Officer, will be elected
President and Chief Executive Officer and Timothy D. Vargo, currently
Vice Chairman will be elected Chief Operating Officer at the
December 12, 1996 Board of Directors Meeting.

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: April 1, 1997