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AutoZone Inc. (NYSE:AZO)

This company has been moved to the archive! The financial data has not been updated since December 18, 2023.

Common-Size Income Statement

AutoZone Inc., common-size consolidated income statement

Microsoft Excel
12 months ended: Aug 26, 2023 Aug 27, 2022 Aug 28, 2021 Aug 29, 2020 Aug 31, 2019 Aug 25, 2018
Net sales 100.00 100.00 100.00 100.00 100.00 100.00
Cost of sales, including warehouse and delivery expenses -48.04 -47.87 -47.25 -46.40 -46.35 -46.76
Gross profit 51.96% 52.13% 52.75% 53.60% 53.65% 53.24%
Operating, selling, general and administrative expenses -32.06 -32.01 -32.63 -34.46 -34.97 -37.10
Operating profit 19.90% 20.12% 20.13% 19.14% 18.68% 16.14%
Interest expense, less capitalized interest -1.82 -1.22 -1.37 -1.64 -1.62 -1.61
Interest income 0.07 0.04 0.04 0.05 0.06 0.05
Interest expense, net -1.75% -1.18% -1.34% -1.59% -1.56% -1.56%
Income before income taxes 18.15% 18.95% 18.79% 17.55% 17.12% 14.58%
Income tax expense -3.66 -4.00 -3.96 -3.83 -3.49 -2.66
Net income 14.48% 14.95% 14.84% 13.72% 13.63% 11.92%

Based on: 10-K (reporting date: 2023-08-26), 10-K (reporting date: 2022-08-27), 10-K (reporting date: 2021-08-28), 10-K (reporting date: 2020-08-29), 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-25).

The financial performance from 2018 to 2023 reveals a strategic shift where operational efficiency gains have more than offset a gradual decline in gross margins, resulting in an overall expansion of net profitability.

Gross Profitability Trends
Gross profit margins exhibited a slight peak of 53.65% in 2019 before entering a consistent downward trajectory, reaching 51.96% by 2023. This compression is attributed to a steady increase in the cost of sales, including warehouse and delivery expenses, which rose from 46.76% of net sales in 2018 to 48.04% in 2023.
Operating Expense Management
A significant improvement in operational efficiency is observed in the selling, general, and administrative expenses. These expenses decreased substantially from 37.10% of net sales in 2018 to 32.06% in 2023. This disciplined reduction in overhead acted as the primary driver for operating profit growth, effectively insulating the bottom line from the aforementioned gross margin pressure.
Operating and Pre-tax Profitability
Operating profit margins showed a strong upward trend, climbing from 16.14% in 2018 to a peak of 20.13% in 2021, before stabilizing at 19.90% in 2023. Consequently, income before income taxes followed a similar trajectory, rising from 14.58% in 2018 to 18.15% in 2023, despite fluctuations in net interest expenses which ranged between -1.18% and -1.82% over the period.
Net Income Performance
Net income as a percentage of net sales improved from 11.92% in 2018 to a high of 14.95% in 2022, ending the period at 14.48% in 2023. The growth in net margin reflects the successful scaling of operations and the mitigation of rising cost of sales through aggressive management of operating expenditures.

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