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AutoZone 4th Quarter Same Store Sales Increase 2.2%; 4th Quarter EPS Decreases 1.6% to $15.02; 4th Quarter Adjusted EPS Increases 21.4% to $18.54; Annual Sales Surpass $11 Billion

September 18, 2018

MEMPHIS, Tenn., Sept. 18, 2018 (GLOBE NEWSWIRE) -- AutoZone, Inc. (NYSE: AZO) today reported net sales of $3.6 billion for its fourth quarter (16 weeks) ended August 25, 2018, an increase of 1.3% from the fourth quarter of fiscal 2017 (16 weeks). Domestic same store sales, or sales for stores open at least one year, increased 2.2% for the quarter.

Net income for the quarter decreased 7.7% over the same period last year to $400.3 million, while diluted earnings per share decreased 1.6% to $15.02 per share from $15.27 per share in the year-ago quarter. As previously disclosed, during the quarter we terminated our qualified and non-qualified pension plans that had been frozen since fiscal 2003. Adjusted for the charges related to the termination of the pension plans of $93.7 million, net of tax benefit, adjusted net income for the quarter increased 13.8% over the same period last year to $494.0 million, while adjusted diluted earnings per share increased 21.4% to $18.54 per share from $15.27 per share in the year-ago quarter. Net income and diluted earnings per share benefitted from a lower effective income tax rate, primarily due to the recent tax reform. Adjusted operating profit, which excludes the charges related to the termination of the pension plans of $130.3 million, increased 2.0% to $721.5 million.

For the quarter, gross profit, as a percentage of sales, was 53.6% (versus 52.8% the same period last year). The increase in gross margin was attributable to the impact of the sale of two business units completed during the year (+72 bps) and higher merchandise margins, partially offset by higher supply chain costs. Operating expenses, as a percentage of sales, were 37.0% (versus 32.6% the same period last year). The increase was primarily due to the charges related to the termination of the pension plans of $130.3 million (-366 bps) and domestic store payroll.

For the fiscal year ended August 25, 2018, sales were $11.2 billion, an increase of 3.1% from the prior year, while domestic same store sales were up 1.8% for the year. Gross profit, as a percentage of sales, was 53.2% (versus 52.7% the same period last year). Operating expenses, as a percentage of sales, were 37.1% (versus 33.6% the same period last year) primarily due to the second quarter impairment charges of $193.2 million, or 1.7% of sales and the fourth quarter charges related to the termination of the pension plans of $130.3 million, or 1.2% of sales, which on a combined basis negatively impacted earnings per share by $8.76. For fiscal 2018, net income increased 4.4% to $1.338 billion and diluted earnings per share for the year increased 10.7% to $48.77 from $44.07. Net income and diluted earnings per share benefitted from a lower effective income tax rate, primarily due to the recent tax reform. Return on invested capital finished the year at 32.1%, while full year cash flow before share repurchases and changes in debt was $1.596 billion.

Under its share repurchase program, AutoZone repurchased 974 thousand shares of its common stock for $665 million during the fourth quarter, at an average price of $683 per share. For the fiscal year, the Company repurchased 2.4 million shares of its common stock for a record $1.592 billion, at an average price of $664 per share. At year end, the Company had $232 million remaining under its current share repurchase authorization.

The Company’s inventory increased 1.6% over the same period last year, driven by new stores and increased product placement, partially offset by the impact of the sale of two business units.

Inventory per location at the end of the year was $636 thousand versus $644 thousand last year and $658 thousand last quarter. Net inventory, defined as merchandise inventories less accounts payable, on a per location basis, was a negative $75 thousand at the end of the year versus negative $48 thousand last year and last quarter.

“I would like to thank our entire organization for their efforts that delivered solid financial results again in fiscal 2018. Our culture of exceptional customer service continues to guide us every day and is our driving force. We were pleased to deliver positive same store sales for both our Retail and Commercial businesses. We expected our sales, particularly in the Rust Belt, to increase this summer and, for the most part, that materialized. Additionally, our Commercial sales performance accelerated nicely in the quarter growing 8.8%. While these were positive developments, we believe we have further opportunities to improve our operations and results. As we are investing to grow, we will remain committed to our disciplined approach to increasing operating earnings and utilizing our capital effectively,” said Bill Rhodes, Chairman, President and Chief Executive Officer.

During the quarter ended August 25, 2018, AutoZone opened 78 new stores and relocated four stores in the U.S., opened 28 new stores in Mexico and four in Brazil. As of August 25, 2018, the Company had 5,618 stores in 50 states in the U.S., the District of Columbia and Puerto Rico, 564 stores in Mexico and 20 stores in Brazil for a total count of 6,202.

AutoZone is the leading retailer and a leading distributor of automotive replacement parts and accessories in the United States. Each AutoZone 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. Many stores also have a commercial sales program that provides commercial credit and prompt delivery of parts and other products to local, regional and national repair garages, dealers, service stations and public sector accounts. AutoZone also sells the ALLDATA brand diagnostic and repair software through www.alldata.com. Additionally, we sell automotive hard parts, maintenance items, accessories and non-automotive products through www.autozone.com and our commercial customers can make purchases through www.autozonepro.com. AutoZone does not derive revenue from automotive repair or installation.

AutoZone will host a conference call this morning, Tuesday, September 18, 2018, beginning at 10:00 a.m. (EDT) to discuss its fourth quarter results. Investors may listen to the conference call live and review supporting slides on the AutoZone corporate website, www.autozoneinc.com by clicking “Investor Relations,” “Conference Calls.” The call will also be available by dialing (210) 839-8923. A replay of the call and slides will be available on AutoZone’s website. In addition, a replay of the call will be available by dialing (203) 369-1211 through Tuesday, September 25, 2018, at 11:59 p.m. (EDT).

This release includes certain financial information not derived in accordance with generally accepted accounting principles (“GAAP”). These non-GAAP measures include adjustments to reflect adjusted EPS, adjusted operating profit, adjusted operating, SG&A expenses, adjusted net income, return on invested capital, adjusted debt and adjusted debt to EBITDAR and cash flow before share repurchases. These adjustments include impairment charges and pension termination charges. The Company believes that the presentation of these non-GAAP measures provides information that is useful to investors as it indicates more clearly the Company’s comparative year-to-year operating results, but this information should not be considered a substitute for any measures derived in accordance with GAAP. Management targets the Company’s capital structure in order to maintain its investment grade credit ratings and manages cash flows available for share repurchase by monitoring cash flows before share repurchases, as shown on the attached tables. The Company believes this is important information for the management of its debt levels and share repurchases. We have included a reconciliation of this additional information to the most comparable GAAP measures in the accompanying reconciliation tables.

Certain statements contained in this press release are forward-looking statements. Forward-looking statements typically use words such as “believe,” “anticipate,” “should,” “intend,” “plan,” “will,” “expect,” “estimate,” “project,” “positioned,” “strategy” and similar expressions. These are based on assumptions and assessments made by our management in light of experience and perception of historical trends, current conditions, expected future developments and other factors that we believe to be appropriate.

These forward-looking statements are subject to a number of risks and uncertainties, including without limitation: product demand; energy prices; weather; competition; credit market conditions; access to available and feasible financing; the impact of recessionary conditions; consumer debt levels; changes in laws or regulations; war and the prospect of war, including terrorist activity; inflation; the ability to hire and retain qualified employees; construction delays; the compromising of the confidentiality, availability, or integrity of information, including cyber attacks; and raw material costs of our suppliers.

Certain of these risks are discussed in more detail in the “Risk Factors” section contained in Item 1A under Part 1 of the Annual Report on Form 10-K for the year ended August 26, 2017, and these Risk Factors should be read carefully. Forward-looking statements are not guarantees of future performance and actual results; developments and business decisions may differ from those contemplated by such forward-looking statements, and events described above and in the “Risk Factors” could materially and adversely affect our business. Forward-looking statements speak only as of the date made. Except as required by applicable law, we undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Actual results may materially differ from anticipated results.

Contact Information:Financial: Brian Campbell at (901) 495-7005, brian.campbell@autozone.com Media: Ray Pohlman at (866) 966-3017, ray.pohlman@autozone.com

AutoZone’s 4th Quarter Highlights - Fiscal 2018 Condensed Consolidated Statements of Operations 4th Quarter, FY2018 (in thousands, except per share data) GAAP Results ------------------------------ 16 Weeks Ended 16 Weeks Ended August 25, August 26, 2018(2) 2017 -------------- -------------- Net sales $ 3,558,769 $ 3,512,605 Cost of sales 1,650,890 1,658,480 - ---------- - - ---------- - Gross profit 1,907,879 1,854,125 Operating, SG&A expenses 1,316,640 1,146,497 - ---------- - - ---------- - Operating profit (EBIT) 591,239 707,628 Interest expense, net 54,340 51,401 - ---------- - - ---------- - Income before taxes 536,899 656,227 Income taxes (1) 136,617 222,328 - ---------- - - ---------- - Net income $ 400,282 $ 433,899 - ---------- - - ---------- - Net income per share: Basic $ 15.27 $ 15.52 Diluted $ 15.02 $ 15.27 Weighted average shares outstanding: Basic 26,212 27,963 Diluted 26,649 28,424 (1)The Company’s effective tax rate was 25.4% for the 16 Weeks Ended August 25, 2018 and 33.9% for the comparable prior year period. (2)The 16 Weeks Ended August 25, 2018 were negatively impacted by the pension termination charges of $130.3MM (pre-tax). Fiscal 2018 (in thousands, except per GAAP Results share data) ------------------------------ 52 Weeks Ended 52 Weeks Ended August 25, August 26, 2018(2) 2017 -------------- -------------- Net sales $ 11,221,077 $ 10,888,676 Cost of sales 5,247,331 5,149,056 - ---------- - - ---------- - Gross profit 5,973,746 5,739,620 Operating, SG&A expenses 4,162,890 3,659,551 - ---------- - - ---------- - Operating profit (EBIT) 1,810,856 2,080,069 Interest expense, net 174,527 154,580 - ---------- - - ---------- - Income before taxes 1,636,329 1,925,489 Income taxes (1) 298,793 644,620 - ---------- - - ---------- - Net income $ 1,337,536 $ 1,280,869 - ---------- - - ---------- - Net income per share: Basic $ 49.59 $ 45.05 Diluted $ 48.77 $ 44.07 Weighted average shares outstanding: Basic 26,970 28,430 Diluted 27,424 29,065 (1) The Company’s effective tax rate was 18.3% for the 52 Weeks Ended August 25, 2018 and 33.5% for the comparable prior year period. (2) The year ended August 25, 2018 was negatively impacted by the pension termination charges of $130.3MM (pre-tax) recognized in the fourth quarter and asset impairments of $193.2MM (pre-tax) recognized in the second quarter of fiscal 2018. GAAP Reconciliations (in thousands, except per share data) Adjusted operating, SG&A 16 Weeks Ended 16 Weeks Ended expenses August 25, August 26, 2018 2017 -------------- -------------- GAAP operating, SG&A expenses $ 1,316,640 $ 1,146,497 Adjustments: Pension termination charges (130,263 ) - -------------- -------------- Adjusted operating, SG&A $ 1,186,377 $ 1,146,497 expenses - ---------- - - ---------- - Adjusted operating profit 16 Weeks Ended 16 Weeks Ended August 25, August 26, 2018 2017 -------------- -------------- GAAP operating profit (EBIT) $ 591,239 $ 707,628 Adjustments: Pension termination charges 130,263 - Adjusted operating profit $ 721,502 $ 707,628 - ---------- - - ---------- - Adjusted net income 16 Weeks Ended 16 Weeks Ended August 25, August 26, 2018 2017 -------------- -------------- GAAP net income $ 400,282 $ 433,899 Adjustments: Pension termination charges, net of $36.6MM 93,685 - income tax benefit Adjusted net income $ 493,967 $ 433,899 - ---------- - - ---------- - Adjusted EPS 16 Weeks Ended 16 Weeks Ended August 25, August 26, 2018 2017 -------------- -------------- GAAP diluted earnings per $ 15.02 $ 15.27 share Adjustments: Pension termination charges, net of $36.6MM 3.52 - income tax benefit Adjusted diluted earnings per $ 18.54 $ 15.27 share - ---------- - - ---------- - Selected Balance Sheet Information (in thousands) August 25, August 26, 2018 2017 -------------- -------------- Cash and cash equivalents $ 217,824 $ 293,270 Merchandise inventories 3,943,670 3,882,086 Current assets 4,635,869 4,611,255 Property and equipment, net 4,218,400 4,031,018 Total assets 9,346,980 9,259,781 Accounts payable 4,409,372 4,168,940 Current liabilities 5,028,681 4,766,301 Total debt 5,005,930 5,081,238 Stockholders’ deficit (1,520,355 ) (1,428,377 ) Working capital (392,812 ) (155,046 )

Condensed Consolidated Statements of Operations Adjusted Debt / EBITDAR (Trailing 4 Qtrs) (in thousands, except adjusted debt to EBITDAR ratio) August 25, August 26, 2018 2017 -------------- -------------- Net income $ 1,337,536 $ 1,280,869 Add: Impairment before tax impact 193,162 - Pension termination charges before tax 130,263 - impact Interest 174,527 154,580 Taxes 298,793 644,620 - ---------- - - ---------- - Adjusted EBIT 2,134,281 2,080,069 Add: Depreciation and amortization 345,084 323,051 Rent expense 315,580 302,928 Share-based expense 43,674 38,244 EBITDAR $ 2,838,619 $ 2,744,292 - ---------- - - ---------- - Debt $ 5,005,930 $ 5,081,238 Capital lease obligations 154,303 150,456 Add: Rent x 6 1,893,480 1,817,568 - ---------- - - ---------- - Adjusted debt $ 7,053,713 $ 7,049,262 - ---------- - - ---------- - Adjusted debt to EBITDAR 2.5 2.6 Selected Cash Flow Information (in thousands) 16 Weeks Ended 16 Weeks Ended 52 Weeks 52 Weeks Ended Ended August 25, August 26, August 25, August 26, 2018 2017 2018 2017 -------------- -------------- ------------- ----------- Depreciation and amortization $ 107,993 $ 103,063 $ 345,084 $ 323,051 Capital spending 194,640 195,898 521,788 553,832 Cash flow before share repurchases: Increase/(decrease) in cash and cash equivalents $ (562 ) $ 66,129 $ (75,446 ) $ 103,536 Less (decrease)/increase in debt 49,800 (73,100 ) (79,800 ) 157,600 Add back share repurchases 664,858 227,466 1,592,013 1,071,649 - ---------- - - ---------- - - --------- Cash flow before share repurchases and changes $ 614,496 $ 366,695 $ 1,596,367 $ 1,017,585 in debt - ---------- - - ---------- - - --------- - - --------- Other Selected Financial Information (in thousands, except ROIC) August 25, August 26, 2018 2017 -------------- -------------- Cumulative share repurchases ($ since fiscal $ 19,418,311 $ 17,826,298 1998) Remaining share repurchase authorization ($) 231,689 823,702 Cumulative share repurchases (shares since 144,688 142,290 fiscal 1998) Shares outstanding, end of quarter 25,742 27,833 Trailing 4 Quarters August 25, August 26, 2018 2017 -------------- -------------- Net income $ 1,337,536 $ 1,280,869 Adjustments: Impairment before tax impact 193,162 - Pension termination charges before tax 130,263 - impact Interest expense 174,527 154,580 Rent expense 315,580 302,928 Tax effect* (211,806 ) (153,265 ) Deferred tax liabilities, net of (132,113 ) - repatriation tax - ---------- - - ---------- - After-tax return $ 1,807,149 $ 1,585,112 Average debt** 5,013,678 5,061,502 Average stockholders’ deficit** (1,433,196 ) (1,730,559 ) Add: Rent x 6 1,893,480 1,817,568 Average capital lease obligations** 156,198 150,066 - ---------- - - ---------- - Pre-tax invested capital $ 5,630,160 $ 5,298,577 Return on Invested Capital (ROIC) 32.1 % 29.9 % ------------------------------------------------ - ---------- - - ---------- - Effective tax rate over trailing four quarters ended August 25, 2018 is 24.2% for impairment, 28.1% for * pension termination and 26.2% for interest and rent expense. Effective tax rate over trailing four quarters ended August 26, 2017 was 33.5%. ** All averages are computed based on trailing 5 quarter balances.

AutoZone’s 4th Quarter Fiscal 2018 Selected Operating Highlights Condensed Consolidated Statements of Operations Location Count & Square Footage 16 Weeks Ended 16 Weeks Ended 52 Weeks Ended 52 Weeks Ended August 25, August 26, August 25, 2018 August 26, 2017 2018 2017 -------------- -------------- --------------- --------------- AutoZone Domestic stores (Domestic): Store count: Beginning domestic stores 5,540 5,381 5,465 5,297 Stores opened 78 84 155 168 Stores closed - - 2 - - --------- -- - --------- -- - ---------- -- - ---------- -- Ending domestic stores 5,618 5,465 5,618 5,465 Relocated stores 4 1 7 5 Stores with commercial 4,741 4,592 4,741 4,592 programs Square footage (in 36,746 35,713 36,746 35,713 thousands) AutoZone Mexico stores: Stores opened 28 25 40 41 Total stores in Mexico 564 524 564 524 AutoZone Brazil stores: Stores opened 4 5 6 6 Total stores in Brazil 20 14 20 14 - --------- -- - --------- -- - ---------- -- - ---------- -- Total AutoZone stores 6,202 6,003 6,202 6,003 - --------- -- - --------- -- - ---------- -- - ---------- -- Square footage (in 41,066 39,684 41,066 39,684 thousands) Square footage per store 6,621 6,611 6,621 6,611 IMC branches: Branches - - 26 - Branches sold - - (26 ) - - --------- -- - --------- -- - ---------- -- - ---------- -- Total IMC branches - 26 - 26 - --------- -- - --------- -- - ---------- -- - ---------- -- Total locations chainwide 6,202 6,029 6,202 6,029 - --------- -- - --------- -- - ---------- -- - ---------- -- Sales Statistics ($ in thousands, except sales per average square foot) 16 Weeks Ended 16 Weeks Ended Trailing 4 Trailing 4 Quarters Quarters Total AutoZone Parts (Domestic, August 25, August 26, August 25, 2018 August 26, 2017 Mexico and Brazil) 2018 2017 -------------- -------------- --------------- --------------- Sales per average store $ 569 $ 562 $ 1,778 $ 1,756 Sales per average square $ 86 $ 85 $ 269 $ 266 foot Total Auto Parts (Domestic, Mexico, Brazil and IMC) Total auto parts sales $ 3,499,313 $ 3,397,460 $ 10,951,498 (1) $ 10,523,272 % Increase vs. LY 3.0 % 3.5 % 4.1 % 2.6 % Domestic Commercial Total domestic commercial $ 731,834 $ 672,479 $ 2,214,208 $ 2,062,812 sales % Increase vs. LY 8.8 % 5.9 % 7.3 % 5.7 % All Other (ALLDATA, E-Commerce and AutoAnything) All other sales $ 59,456 $ 115,145 $ 269,579 (2) $ 365,404 % Increase vs. LY (48.4 %) (0.8 %) (26.2 %) (2.4 %) (1 ) Results include IMC, which was sold during the third quarter of fiscal 2018 (effective April 4, 2018). (2 ) Results include AutoAnything, which was sold during the third quarter of fiscal 2018 (effective February 26, 2018). 16 Weeks Ended 16 Weeks Ended 52 Weeks Ended 52 Weeks Ended August 25, August 26, August 25, 2018 August 26, 2017 2018 2017 -------------- -------------- --------------- --------------- Domestic same store sales 2.2 % 1.0 % 1.8 % 0.5 % Inventory Statistics (Total Locations) as of as of August 25, August 26, 2018 2017 -------------- -------------- Accounts payable/inventory 111.8 % 107.4 % ($ in thousands) Inventory $ 3,943,670 $ 3,882,086 Inventory per location 636 644 Net inventory (net of (465,702 ) (286,854 ) payables) Net inventory/per location (75 ) (48 ) Trailing 5 Quarters August 25, August 26, 2018 2017 -------------- -------------- Inventory turns 1.3 x 1.4 x

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