Segment Reporting

5 Months Ended

Feb. 09, 2019

Note N – Segment Reporting

The Company’s operating segments (Domestic Auto Parts, Mexico and Brazil; and IMC through April 4, 2018) are aggregated as one reportable segment: Auto Parts Locations. 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 in its Annual Report on Form 10-K for the year ended August 25, 2018.

The Auto Parts Locations segment is a retailer and distributor of automotive parts and accessories through the Company’s 6,241 stores in the United States, Puerto Rico, Mexico and Brazil. Each store carries an extensive product line for cars, sport utility vehicles, vans and light trucks, including new and remanufactured automotive hard parts, maintenance items, accessories and non-automotive products.

The Other category reflects business activities of three 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 and repair information software used in the automotive repair industry; sales through www.autozone.com that are not fulfilled by an AutoZone store; and AutoAnything, which includes direct sales to customers through www.autoanything.com, prior to the Company’s sale of substantially all of AutoAnything’s assets on February 26, 2018.

The Company evaluates its reportable segment primarily on the basis of net sales and segment profit, which is defined as gross profit. Segment results for the periods presented were as follows:


	Twelve Weeks Ended								Twenty-Four Weeks Ended
(in thousands)	February 9, 2019				February 10, 2018				February 9, 2019				February 10, 2018

Net Sales
Auto Parts Locations		$	2,402,833			$	2,331,572			$	4,996,273			$	4,841,700
Other			47,735				81,454				96,029				160,456

Total		$	2,450,568			$	2,413,026			$	5,092,302			$	5,002,156


Segment Profit
Auto Parts Locations		$	1,291,186			$	1,233,008			$	2,674,751			$	2,555,452
Other			33,921				44,038				67,830				87,441

Gross profit			1,325,107				1,277,046				2,742,581				2,642,893
Operating, selling, general and administrative expenses			(925,087	)			(1,071,948	)			(1,854,742	)			(1,969,041	)
Interest expense, net			(41,362	)			(39,340	)			(80,369	)			(78,229	)

Income before income taxes		$	358,658			$	165,758			$	807,470			$	595,623