AUTOZONE INC
For the period ended Aug 29, 2026. Filed Oct 26, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2026 · Filed Oct 26, 2026
AZO$3,216.35-2.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2025-08-30; filed 2025-10-27.
0001104659-25-102611
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2026-08-29; filed 2026-10-26.
0001104659-26-118791
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 103 previous paragraphs and 101 current paragraphs.
51 unchanged; 42 reworded; 5 added; 8 removed; 2 previous and 3 current paragraphs rearranged.
Tables are not compared: 19 previous and 19 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (5)
Current report
Tariffs
Current report
On February 20, 2026, the U.S. Supreme Court invalidated tariffs imposed under IEEPA. The President immediately introduced new tariffs under different statutory authority, though their scope and duration, and the likelihood and outcome of further legal challenges to these tariffs, remain uncertain. On April 20, 2026, the Company filed for refunds of IEEPA tariffs paid directly by the Company via the U.S. Customs and Border Protection’s consolidated administration and processing of entries tool in the automated commercial environment portal. During the fiscal year ended August 29, 2026, the Company received $127.6 million in IEEPA refunds representing substantially all of the refunds filed by the Company. These refunds were recorded upon receipt as a $96.0 million reduction to Cost of Sales for the refunds related to products previously sold and a $31.6 million reduction to inventory for the portion of the refunds related to unsold inventory. The portion recorded as a reduction to inventory is recorded as a reduction to Cost of Sales as the underlying inventory is sold.
Current report
Net income for fiscal 2026 increased by 3.0% to $2.6 billion compared to fiscal 2025 due to the factors set forth above, and diluted earnings per share increased 5.3% to $152.55 from $144.87 in fiscal 2025.
Current report
On July 15, 2026, the Company repaid its outstanding $450 million 5.050% Senior Notes due July 2026.
Current report
On April 21, 2026, we repaid the outstanding $400 million 3.125% Senior Notes due April 2026.
Removed paragraphs (8)
Previous report
(2)* The 52 weeks ended August 28, 2021 was negatively impacted by pandemic related expenses, including Emergency Time-Off of approximately $43.0 million (pre-tax).*
Previous report
(5)* During the third quarter of fiscal 2020, the Company temporarily suspended share repurchases under the share repurchase program in response to the COVID-19 pandemic which was restarted beginning in the first quarter of fiscal 2021.*
Previous report
Net income for fiscal 2025 decreased by 6.2% to $2.5 billion, and diluted earnings per share decreased 3.1% to $144.87 from $149.55 in fiscal 2024. The impact on the fiscal 2025 diluted earnings per share from stock repurchases was an increase of $0.26.
Previous report
We also maintained a letter of credit facility that allowed us to request the participating bank to issue letters of credit on our behalf up to an aggregate amount of $25 million. The letter of credit facility was in addition to the letters of
Previous report
credit that may be issued under the Revolving Credit Agreement. As of August 31, 2024, we had no letters of credit outstanding under the letter of credit facility, which was terminated in September 2024.
Previous report
On July 17, 2023, we repaid the $500 million 3.125% Senior Notes due July 2023.
Previous report
On July 21, 2023, we issued $450 million in 5.050% Senior Notes due July 2026 and$300 million in 5.200% Senior Notes due August 2033 under the 2022 Shelf Registration Statement. Proceeds from the debt issuance were used for general corporate purposes.
Previous report
On January 27, 2023 we issued $450 million in 4.500% Senior Notes due February 2028 and $550 million in 4.750% Senior Notes due February 2033 under the 2022 Shelf Registration Statement. Proceeds from the debt issuance were used for general corporate purposes.
Reworded paragraphs (42)
Previous wording
We are a leading retailer and distributor of automotive replacement parts and accessories in the Americas. We began operations in 1979 and at August 30, 2025, operated 6,627 stores in the U.S., 883 stores in Mexico and 147 stores in Brazil. Each store carries an extensive product line for cars, sport utility vehicles, vans and light duty trucks, including new and remanufactured automotive hard parts, maintenance items, accessories and non-automotive products. At August 30, 2025, in 6,098 of our domestic stores as well as the vast majority of our stores in Mexico and Brazil, we had a commercial sales program that provides prompt delivery of parts and other products and commercial credit to local, regional and national repair garages, dealers, service stations, fleet owners and other accounts. We also 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. Additionally, we sell the ALLDATA brand of automotive diagnostic, repair, collision and shop management software through www.alldata.com. We also provide product information on our Duralast branded products through www.duralastparts.com. We do not derive revenue from automotive repair or installation services.
Current wording
We are a leading retailer and distributor of automotive replacement parts and accessories in the Americas. We began operations in 1979 and at August 29, 2026, operated 6,863 stores in the U.S., 1,001 stores in Mexico and 167 stores in Brazil. Each store carries an extensive product line for cars, sport utility vehicles, vans and light duty trucks, including new and remanufactured automotive hard parts, maintenance items, accessories and non-automotive products. At August 29, 2026, in 6,443 of our domestic stores as well as the vast majority of our stores in Mexico and Brazil, we had a commercial sales program that provides prompt delivery of parts and other products and commercial credit to local, regional and national repair garages, dealers, service stations, fleet owners and other accounts. We also 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. Additionally, we sell the ALLDATA brand of automotive diagnostic, repair, collision and shop management software through www.alldata.com. We also provide product information on our Duralast branded products through www.duralastparts.com. We do not derive revenue from automotive repair or installation services.
Previous wording
For fiscal 2025, net sales increased to $18.9 billion, a 2.4% increase over the prior year. Domestic commercial sales increased 6.7%, which represents 31.7% of our total Domestic sales. Operating profit decreased 4.7% to $3.6 billion, net income decreased 6.2% to $2.5 billion and diluted earnings per share decreased 3.1% to $144.87 for the year.
Current wording
For fiscal 2026, net sales increased to $20.3 billion, a 7.4% increase over the prior year. Domestic commercial sales increased 10.6%, which represents 33.1% of our total Domestic sales. Operating profit increased 3.1% to $3.7 billion, net income increased 3.0% to $2.6 billion and diluted earnings per share increased 5.3% to $152.55 for the year.
Previous wording
Fiscal 2025 consisted of 52 weeks whereas fiscal 2024 consisted of 53 weeks. The inclusion of the 53 rd week in fiscal 2024 resulted in an increase to net sales of $365.9 million and an increase in operating profit of $86.7 million. Additionally, fiscal 2025 comparisons were negatively impacted by foreign currency exchange rates which had an unfavorable impact to net sales of $273.1 million and operating profit of $88.2 million. Operating profit comparison was also negatively impacted by an unfavorable net non-cash LIFO impact of $104.0 million.
Current wording
Fiscal 2026 comparisons were positively impacted by foreign currency exchange rates which had a favorable impact to net sales of $254.4 million and operating profit of $73.9 million, and IEEPA tariff refunds which has a positive impact on operating profit of $96.0 million. Operating profit comparison was also negatively impacted by an unfavorable net non-cash LIFO impact of $128.0 million.
Previous wording
During fiscal 2025, failure and maintenance related categories represented the largest portion of our sales mix, at approximately 85% of total sales. While we have not experienced any fundamental shifts in our category sales mix as compared to previous years, we have seen a slight decrease in mix of sales of the accessories category and a slight increase in the maintenance and failure categories compared to the previous two years.
Current wording
During fiscal 2026, failure and maintenance related categories represented the largest portion of our sales mix, at approximately 85% of total sales. We have not experienced any fundamental shifts in our category sales mix as compared to previous years.
Previous wording
We believe as the number of miles driven increases, consumers’ vehicles are more likely to need service and maintenance, resulting in an increase in the need for automotive hard parts and maintenance items. For the twelve-month period ended July 2025, miles driven in the U.S. increased 1.0% compared to the same period in the prior year based on the latest information available from the U.S. Department of Transportation.
Current wording
We believe as the number of miles driven increases, consumers’ vehicles are more likely to need service and maintenance, resulting in an increase in the need for automotive hard parts and maintenance items. For the twelve-month period ended July 2026, miles driven in the U.S. increased 0.8% compared to the same period in the prior year based on the latest information available from the U.S. Department of Transportation.
Previous wording
As the number of seven-year-old or older vehicles on the road increases, we expect an increase in demand for the products we sell. We expect the aging vehicle population to continue to increase as consumers keep their cars longer. According to the latest data provided by S&P Global Mobility, the average age of light vehicles on the road increased slightly to 12.8 years and these vehicles account for approximately 43% of U.S. vehicles.
Current wording
As the number of seven-year-old or older vehicles on the road increases, we expect an increase in demand for the products we sell. We expect the aging vehicle population to continue to increase as consumers keep their cars longer. According to the latest data provided by S&P Global Mobility, the average age of light vehicles on the road increased slightly to 12.9 years and these vehicles account for approximately 44% of U.S. vehicles.
Previous wording
According to the U.S. Department of Transportation – Federal Highway Administration, vehicles are driven an average of approximately 11,000 miles each year. In seven years, the average miles driven equates to approximately 77,000 miles. Our experience is that at this point in a vehicle’s life, most vehicles are not covered by warranties and increased maintenance and repairs are needed to keep the vehicle operating.
Current wording
According to the U.S. Department of Transportation – Federal Highway Administration, vehicles are driven an average of approximately 10,800 miles each year. In seven years, the average miles driven equates to approximately 75,500 miles. Our experience is that at this point in a vehicle’s life, most vehicles are not covered by warranties and increased maintenance and repairs are needed to keep the vehicle operating.
Previous wording
(3)* Fiscal 2025, 2024, 2023, 2022 and 2021 include excess tax benefits from stock option exercises of $58.2 million, $81.4 million, $92.2 million, $63.2 million, and $56.4 million, respectively.*
Current wording
(2)Fiscal 2026, 2025, 2024, 2023 and 2022 include excess tax benefits from stock option exercises of $30.7 million, $58.2 million, $81.4 million, $92.2 million, and $63.2 million, respectively.
Previous wording
(4)* The domestic and international comparable sales increases are based on sales for all AutoZone stores open at least one year. Constant currency same store sales exclude impacts from fluctuations of foreign exchange rates by converting both the current year and prior year international results at the prior year foreign currency exchange rate. Same store sales are computed on a 52-week basis. Relocated stores are included in the same store sales computation based on the year the original store was opened. Closed store sales are included in the same store sales computation up to the week it closes, and excluded from the computation for all periods subsequent to closing. All sales through our www.autozone.com website, including consumer direct ship-to-home sales, are also included in the computation.*
Current wording
(3)* The domestic and international comparable sales increases are based on sales for all AutoZone stores open at least one year. Constant currency same store sales exclude impacts from fluctuations of foreign exchange rates by converting both the current year and prior year international results at the prior year foreign currency exchange rate. Same store sales are computed on a 52-week basis. Relocated stores are included in the same store sales computation based on the year the original store was opened. Closed store sales are included in the same store sales computation up to the week it closes, and excluded from the computation for all periods subsequent to closing. All sales through our www.autozone.com website, including consumer direct ship-to-home sales, are also included in the computation.*
Previous wording
(6)* Inventory turnover is calculated as cost of sales divided by the average merchandise inventory balance over the trailing 5 quarters.*
Current wording
(4)Inventory turnover is calculated as cost of sales divided by the average merchandise inventory balance over the trailing 5 quarters.
Previous wording
(7)* After-tax return on invested capital is defined as after-tax operating profit (excluding rent charges) divided by invested capital (which includes a factor to capitalize leases).*
Current wording
(5)* After-tax return on invested capital is defined as after-tax operating profit (excluding rent charges) divided by invested capital (which includes a factor to capitalize leases).*
Previous wording
(8)* Adjusted debt to EBITDAR is defined as the sum of total debt, finance lease obligations and annual rents times six; divided by net income plus interest, taxes, depreciation, amortization, rent and share-based compensation expense. See Reconciliation of Non-GAAP Financial Measures in Management’s Discussion and Analysis of Financial Condition and Results of Operations.*
Current wording
(6)* Adjusted debt to EBITDAR is defined as the sum of total debt, finance lease obligations and annual rents times six; divided by net income plus interest, taxes, depreciation, amortization, rent and share-based compensation expense. See Reconciliation of Non-GAAP Financial Measures in Management’s Discussion and Analysis of Financial Condition and Results of Operations.*
Previous wording
(9)* Cash flow before share repurchases and changes in debt is defined as the change in cash and cash equivalents less the change in debt plus treasury stock purchases. See Reconciliation of Non-GAAP Financial Measures in Management’s Discussion and Analysis of Financial Condition and Results of Operations.*
Current wording
(7)* Cash flow before share repurchases and changes in debt is defined as the change in cash and cash equivalents less the change in debt plus treasury stock purchases. See Reconciliation of Non-GAAP Financial Measures in Management’s Discussion and Analysis of Financial Condition and Results of Operations.*
Previous wording
(10)Share repurchases are inclusive of excise tax in fiscal 2025, 2024 and 2023. The excise tax is assessed at one percent of the fair market value of net stock repurchases after December 31, 2022.
Current wording
(8)Share repurchases are inclusive of excise tax in fiscal 2026, 2025, 2024 and 2023. The excise tax is assessed at one percent of the fair market value of net stock repurchases after December 31, 2022.
Previous wording
For the fiscal year ended August 30, 2025, we had net sales of $18.9 billion compared with $18.5 billion for the year ended August 31, 2024, an increase of 2.4%. This growth was driven primarily by a domestic same store sales increase of 3.2% and net sales of $374.3 million from new domestic and international stores. Domestic commercial sales increased $329.5 million, or 6.7%, compared to fiscal 2024 domestic commercial sales.
Current wording
For the fiscal year ended August 29, 2026, we had net sales of $20.3 billion compared with $18.9 billion for the year ended August 30, 2025, an increase of 7.4%. This growth was driven primarily by a domestic same store sales increase of 3.3% and net sales of $534.3 million from new domestic and international stores. Domestic commercial sales increased $550.1 million, or 10.6%, compared to fiscal 2025 domestic commercial sales.
Previous wording
Gross profit for fiscal 2025 was $10.0 billion, or 52.6% of net sales, a 47 basis point decrease compared with $9.8 billion, or 53.1% of net sales for fiscal 2024. The decrease in gross margin was driven by 55 basis points ($64.0 million charge in the current year versus $40.0 million benefit in the prior year) from non-cash LIFO impact.
Current wording
Gross profit for fiscal 2026 was $10.6 billion, or 52.3% of net sales, a 29 basis point decrease compared with $10.0 billion, or 52.6% of net sales for fiscal 2025. The decrease in gross margin was driven by 61 basis points ($192.0 million charge in the current year versus $64.0 million charge in the prior year) from non-cash LIFO impact.
Previous wording
Operating, selling, general and administrative expenses for fiscal 2025 increased to $6.4 billion, or 33.6% of net sales, from $6.0 billion, or 32.6% of net sales for fiscal 2024. The increase in operating expenses as a percentage of sales was primarily driven by investments to support our growth initiatives.
Current wording
Operating, selling, general and administrative expenses for fiscal 2026 increased to $6.9 billion, or 34.0% of net sales, from $6.4 billion, or 33.6% of net sales for fiscal 2025. The increase in operating expenses as a percentage of sales was primarily driven by investments to support our growth initiatives.
Previous wording
Interest expense, net for fiscal 2025 was $475.8 million compared with $451.6 million during fiscal 2024. Average borrowings for fiscal 2025 were $9.0 billion, compared with $8.7 billion for fiscal 2024. Weighted average borrowing rates were 4.48% and 4.39% for fiscal 2025 and 2024, respectively.
Current wording
Interest expense, net for fiscal 2026 was $472.6 million compared with $475.8 million during fiscal 2025. Average borrowings for fiscal 2026 were $8.9 billion, compared with $9.0 billion for fiscal 2025. Weighted average borrowing rates were 4.53% and 4.48% for fiscal 2026 and 2025, respectively.
Previous wording
Our effective income tax rate was 20.3% and 20.2% of pre-tax income for fiscal 2025 and fiscal 2024, respectively. The benefit from stock options exercised in fiscal 2025 was $58.2 million compared to $81.4 million in fiscal 2024 (see “Note E – Income Taxes” in the Notes to Consolidated Financial Statements).
Current wording
Our effective income tax rate was 20.9% and 20.3% of pre-tax income for fiscal 2026 and fiscal 2025, respectively. The benefit from stock options exercised in fiscal 2026 was $30.7 million compared to $58.2 million in fiscal 2025 (see “Note E – Income Taxes” in the Notes to Consolidated Financial Statements).
Previous wording
Each of the first three quarters of our fiscal year consists of 12 weeks, and the fourth quarter consisted of 16 weeks in 2025, 17 weeks in 2024 and 16 weeks in 2023. Because the fourth quarter contains seasonally high sales volume and consists of 16 or 17 weeks, compared with 12 weeks for each of the first three quarters, our fourth quarter represents a disproportionate share of our annual net sales and net income. The fourth quarter of fiscal year 2025 represented 33.0% of annual sales and 33.5% of net income; the fourth quarter of fiscal year 2024 represented
Current wording
Each of the first three quarters of our fiscal year consists of 12 weeks, and the fourth quarter consisted of 16 weeks in 2026 and 2025, and 17 weeks in 2024. Because the fourth quarter contains seasonally high sales volume and consists of 16 or 17 weeks, compared with 12 weeks for each of the first three quarters, our fourth quarter represents a disproportionate share of our annual net sales and net income. The fourth quarter of fiscal year 2026 represented 32.4% of annual sales and 36.2% of net income; the fourth quarter of fiscal year 2025 represented 33.0% of annual
Previous wording
33.6% of annual sales and 33.9% of net income; and the fourth quarter of fiscal year 2023 represented 32.6% of annual sales and 34.2% of net income.
Current wording
sales and 33.5% of net income; and the fourth quarter of fiscal year 2024 represented 33.6% of annual sales and 33.9% of net income.
Previous wording
The primary source of our liquidity is our cash flows realized through the sale of automotive parts, products and accessories. We believe that our cash generated from operating activities, available cash reserves and available credit, supplemented with our long-term borrowings will provide ample liquidity to fund our operations while allowing us to make strategic investments to support growth initiatives and return excess cash to shareholders in the form of share repurchases. As of August 30, 2025, we held $271.8 million of cash and cash equivalents, as well as $2.2 billion in undrawn capacity on our revolving credit facility, without giving effect to commercial paper borrowings. We believe our sources of liquidity will continue to be adequate to fund our operations and investments to grow our business, repay our debt as it becomes due and fund our share repurchases over the short-term and long-term. In addition, we believe we have the ability to obtain alternative sources of financing, if necessary.
Current wording
The primary source of our liquidity is our cash flows realized through the sale of automotive parts, products and accessories. We believe that our cash generated from operating activities, available cash reserves and available credit, supplemented with our long-term borrowings will provide ample liquidity to fund our operations while allowing us to make strategic investments to support growth initiatives and return excess cash to stockholders in the form of share repurchases. As of August 29, 2026, we held $326.1 million of cash and cash equivalents, as well as $2.2 billion in undrawn capacity on our revolving credit facility, without giving effect to commercial paper borrowings. We believe our sources of liquidity will continue to be adequate to fund our operations and investments to grow our business, repay our debt as it becomes due and fund our share repurchases over the short-term and long-term. In addition, we believe we have the ability to obtain alternative sources of financing, if necessary. However, decreased demand for our products or changes in customer buying patterns would negatively impact our ability to generate cash from operating activities. Decreased demand or changes in buying patterns could also impact our ability to meet the debt covenants of our credit agreements and, therefore, negatively impact the funds available under our Revolving Credit Agreement. In the event our liquidity is insufficient, we may be required to limit our spending. All of our material borrowing arrangements are described in greater detail in “Note I – Financing” in the Notes to Consolidated Financial Statements.
Previous wording
Net cash provided by operating activities was $3.1 billion in 2025, $3.0 billion in 2024 and $2.9 billion in 2023. Cash flows from operations increased slightly over last year primarily due to favorable changes in deferred income taxes.
Current wording
Net cash provided by operating activities was $3.2 billion in 2026, $3.1 billion in 2025 and $3.0 billion in 2024. Cash flows from operations increased over last year primarily due to increased net income and favorable changes in accounts receivable and inventory.
Previous wording
Our net cash flows used in investing activities were $1.4 billion, $1.3 billion and $876.2 million in fiscal 2025, 2024 and 2023, respectively. The increase in net cash used in investing activities in fiscal 2025 was primarily due to an increase in capital expenditures. We invested $1.3 billion, $1.1 billion and $796.7 million in capital assets in fiscal 2025, 2024 and 2023, respectively. The increase in capital expenditures from fiscal 2024 to fiscal 2025 was primarily driven by our growth initiatives, including investments in new stores and hub and mega hub store expansions. We had net new store openings of 304, 213 and 197 for fiscal 2025, 2024 and 2023, respectively. We invest a portion of our assets held by our wholly owned insurance captive in marketable debt securities. We purchased marketable debt securities of $64.5 million, $38.8 million and $66.9 million in fiscal 2025, 2024 and 2023, respectively. We had proceeds from the sale of marketable debt securities of $63.3 million, $40.8 million and $58.4 million in fiscal 2025, 2024 and 2023, respectively. Our net investment in tax credit equity investments was $111.8 million, $227.5 million and $98.0 million in fiscal 2025, 2024 and 2023, respectively.
Current wording
Our net cash flows used in investing activities were $1.4 billion, $1.4 billion and $1.3 billion in fiscal 2026, 2025 and 2024, respectively. The increase in net cash used in investing activities in fiscal 2026 was primarily due to an increase in capital expenditures. We invested $1.4 billion, $1.3 billion and $1.1 billion in capital assets in fiscal 2026, 2025 and 2024, respectively. The increase in capital expenditures from fiscal 2025 to fiscal 2026 was primarily driven by our growth initiatives, including investments in new stores and hub and mega hub store expansions. We had net new store openings of 374, 304 and 213 for fiscal 2026, 2025 and 2024, respectively. We invest a portion of our assets held by our wholly owned insurance captive in marketable debt securities. We purchased marketable debt securities of $41.0 million, $64.5 million and $38.8 million in fiscal 2026, 2025 and 2024, respectively. We had proceeds from the sale of marketable debt securities of $28.4 million, $63.3 million and $40.8 million in fiscal 2026, 2025 and 2024, respectively. Our net investment in tax credit equity investments was $24.0 million, $111.8 million and $227.5 million in fiscal 2026, 2025 and 2024, respectively.
Previous wording
Net cash used in financing activities was $1.7 billion, $1.7 billion and $2.1 billion in fiscal 2025, 2024 and 2023, respectively. The net cash used in financing activities reflected purchases of treasury stock, which totaled $1.6 billion, $3.1 billion and $3.7 billion for fiscal 2025, 2024 and 2023, respectively. The treasury stock purchases in fiscal 2025, 2024 and 2023 were primarily funded by cash flows from operations and increased borrowings in fiscal 2024 and 2023. During the year ended August 30, 2025, we repaid our $400 million 3.250% Senior Notes and $500 million 3.625% Senior Notes due April 2025 and issued $500 million of new debt compared to $2.3 billion in 2024 and $1.8 billion in 2023. In fiscal years 2025 and 2023 the proceeds from the issuance of debt were used for general corporate purposes. In fiscal year 2024 the proceeds from the issuance of debt were used to repay a portion of our commercial paper borrowings and for general corporate purposes.
Current wording
Net cash used in financing activities was $1.8 billion, $1.7 billion and $1.7 billion in fiscal 2026, 2025 and 2024, respectively. The net cash used in financing activities reflected purchases of treasury stock, which totaled $2.0 billion, $1.6 billion and $3.1 billion for fiscal 2026, 2025 and 2024, respectively. The treasury stock purchases in fiscal 2026, 2025 and 2024 were primarily funded by cash flows from operations and increased borrowings in fiscal 2024. During the year ended August 29, 2026, we repaid our $400 million 3.125% Senior Notes due April 2026 and our $450 million 5.050% Senior Notes due July 2026, and issued $850 million of new debt compared to $500 million in 2025 and $2.3 billion in 2024. In fiscal years 2026 and 2025, the proceeds from the issuance of debt were used for general corporate purposes. In fiscal year 2024, the proceeds from the issuance of debt were used to repay a portion of our commercial paper borrowings and for general corporate purposes.
Previous wording
The Company had net proceeds from commercial paper and short-term borrowings of $168.6 million during fiscal 2025, net repayments of commercial paper and short-term borrowings of $629.6 million during fiscal 2024 and net proceeds from the issuance of commercial paper and short-term borrowings of $606.2 million during fiscal 2023.
Current wording
The Company had net proceeds from commercial paper and short-term borrowings of $276.4 million and $168.6 million during fiscal 2026 and fiscal 2025, respectively, and net repayments of commercial paper and short-term borrowings of $629.6 million during fiscal 2024.
Previous wording
During fiscal 2026, we expect to moderately increase the investment in our business as compared to fiscal 2025. Our investments are expected to be directed primarily to our growth initiatives, including new stores and expanded hub and mega hub stores. The amount of investments in our new stores is impacted by different factors, including whether the building and land are purchased (requiring higher investment) or leased (generally lower investment) and whether such buildings are located in the U.S., Mexico or Brazil, or located in urban or rural areas.
Current wording
During fiscal 2027, we expect to slightly increase the investment in our business as compared to fiscal 2026. Our investments are expected to be directed primarily to our growth initiatives, including new stores and expanded hub and mega hub stores. The amount of investments in our new stores is impacted by different factors, including
Previous wording
inventory purchases; however, our ability to do so may be limited by our suppliers’ ability to factor their receivables from us. The Company has arrangements with third-party financial institutions to confirm invoice balances owed by the Company to certain suppliers and pay the financial institutions the confirmed amounts on the invoice due dates. These arrangements allow the Company’s inventory suppliers, at their sole discretion, to enter into agreements with these financial institutions to finance the Company’s obligations to the suppliers at terms negotiated between the suppliers and the financial institutions. Supplier participation is optional and our obligations to our suppliers, including the amount and dates due, are not impacted by our suppliers’ decision to enter into an agreement with a third-party financial institution. A downgrade in our credit ratings or changes in the financial markets could limit the financial institutions’ and our suppliers’ willingness to participate in these arrangements. We plan to continue negotiating extended terms with our suppliers, benefitting our working capital and resulting in a high accounts payable to inventory ratio. We had an accounts payable to inventory ratio of 114.2% at August 30, 2025, and 119.5% at August 31, 2024.
Current wording
In addition to building and land costs, our new stores and distribution centers require working capital, predominantly for inventories. Historically, we have negotiated extended payment terms from suppliers, reducing the working capital required and resulting in a high accounts payable to inventory ratio. We plan to continue leveraging our inventory purchases; however, our ability to do so may be limited by our suppliers’ ability to factor their receivables from us. The Company has arrangements with third-party financial institutions to confirm invoice balances owed by the Company to certain suppliers and pay the financial institutions the confirmed amounts on the invoice due dates. These arrangements allow the Company’s inventory suppliers, at their sole discretion, to enter into agreements with these financial institutions to finance the Company’s obligations to the suppliers at terms negotiated between the suppliers and the financial institutions. Supplier participation is optional and our obligations to our suppliers, including the amount and dates due, are not impacted by our suppliers’ decision to enter into an agreement with a third-party financial institution. A downgrade in our credit ratings or changes in the financial markets could limit the financial institutions’ and our suppliers’ willingness to participate in these arrangements. We plan to continue negotiating extended terms with our suppliers, benefitting our working capital and resulting in a high accounts payable to inventory ratio. We had an accounts payable to inventory ratio of 111.1% at August 29, 2026, and 114.2% at August 30, 2025.
Previous wording
Our cash balances are held in various locations around the world. As of August 30, 2025, and August 31, 2024, cash and cash equivalents of $79.1 million and $99.8 million, respectively, were held outside of the U.S. and were generally utilized to support the liquidity needs in our foreign operations.
Current wording
Our cash balances are held in various locations around the world. As of August 29, 2026, and August 30, 2025, cash and cash equivalents of $113.6 million and $79.1 million, respectively, were held outside of the U.S. and were generally utilized to support the liquidity needs in our foreign operations.
Previous wording
For the fiscal year ended August 30, 2025, our adjusted after-tax return on invested capital (“ROIC”), which is a non-GAAP measure, was 41.3% as compared to 49.7% for the prior year. Adjusted ROIC is calculated as after-tax operating profit (excluding rent charges) divided by invested capital (which includes a factor to capitalize operating leases). We use adjusted ROIC to evaluate whether we are effectively using our capital resources and believe it is an important indicator of our overall operating performance. Refer to the “Reconciliation of Non-GAAP Financial Measures” section for further details of our calculation.
Current wording
For the fiscal year ended August 29, 2026, our adjusted after-tax return on invested capital (“ROIC”), which is a non-GAAP measure, was 35.8% as compared to 41.3% for the prior year. Adjusted ROIC is calculated as after-tax operating profit (excluding rent charges) divided by invested capital (which includes a factor to capitalize operating leases). We use adjusted ROIC to evaluate whether we are effectively using our capital resources and believe it is an important indicator of our overall operating performance. Refer to the “Reconciliation of Non-GAAP Financial Measures” section for further details of our calculation.
Previous wording
The Revolving Credit Agreement requires that our consolidated interest coverage ratio as of the last day of each quarter shall be no less than 2.5:1. This ratio is defined as the ratio of (i) consolidated earnings before interest, taxes and rents to (ii) consolidated interest expense plus consolidated rents. Our consolidated interest coverage ratio as of August 30, 2025, was 5.1:1.
Current wording
The Revolving Credit Agreement requires that our consolidated interest coverage ratio as of the last day of each quarter shall be no less than 2.5:1. This ratio is defined as the ratio of (i) consolidated earnings before interest, taxes
Previous wording
In addition to the outstanding letters of credit issued under the Revolving Credit Agreement discussed above, we had $149.1 million in letters of credit outstanding as of August 30, 2025. These letters of credit have various maturity dates and were issued on an uncommitted basis.
Current wording
In addition to the outstanding letters of credit issued under the Revolving Credit Agreement discussed above, we had $214.5 million in letters of credit outstanding as of August 29, 2026. These letters of credit have various maturity dates and were issued on an uncommitted basis.
Previous wording
As of August 30, 2025, the $748.6 million of commercial paper borrowings, the $400 million 3.125% Senior Notes due April 2026 and the $450 million 5.050% Senior Notes due July 2026 were classified as long-term in the Consolidated Balance Sheets as we have the current ability and intent to refinance them on a long-term basis through available capacity in our revolving credit facility. As of August 30, 2025, we had $2.2 billion of availability under our Revolving Credit Agreement, which would allow us to replace these short-term obligations with a long-term financing facility.
Current wording
As of August 29, 2026, the $1.0 billion of commercial paper borrowings, the $600 million 3.750% Senior Notes due June 2027 were classified as long-term in the Consolidated Balance Sheets as we have the current ability and intent to refinance them on a long-term basis through available capacity in our revolving credit facility. As of August 29, 2026, we had $2.2 billion of availability under our Revolving Credit Agreement, which would allow us to replace these short-term obligations with a long-term financing facility.
Previous wording
The Senior Notes contain a provision that repayment may be accelerated if we experience a change in control (as defined in the agreements). Our borrowings under our Senior Notes contain minimal covenants, primarily restrictions on liens, sale and leaseback transactions and consolidations, mergers and the sale of assets. All of the repayment obligations under our borrowing arrangements may be accelerated and come due prior to the applicable scheduled payment date if covenants are breached or an event of default occurs. Interest is paid on a semi-annual basis.
Current wording
The Senior Notes contain a provision that repayment may be accelerated if we experience a change in control (as defined in the agreements). Our borrowings under our Senior Notes contain minimal covenants, primarily restrictions on liens, sale and leaseback transactions and consolidations, mergers and the sale of assets. All of the repayment obligations under our borrowing arrangements may be accelerated and come due prior to the applicable scheduled payment date if covenants are breached or an event of default occurs. Interest on the Senior Notes is paid on a semi-annual basis.
Previous wording
For the fiscal years ended August 30, 2025, and August 31, 2024, our adjusted debt to earnings before interest, taxes, depreciation, amortization, rent and share-based compensation expense (“EBITDAR”) ratio was 2.5:1 for both periods. We calculate adjusted debt as the sum of total debt, finance lease liabilities and rent times six; and we calculate adjusted EBITDAR by adding interest, taxes, depreciation, amortization, rent and share-based compensation expense to net income. We target our debt levels to a specified ratio of adjusted debt to EBITDAR in order to maintain our investment grade credit ratings and believe this is important information for the management of our debt levels. To the extent adjusted EBITDAR increases, we expect our debt levels to increase; conversely, if adjusted EBITDAR decreases, we would expect our debt levels to decrease. Refer to the “Reconciliation of Non-GAAP Financial Measures” section for further details of our calculation.
Current wording
For both of the fiscal years ended August 29, 2026, and August 30, 2025, our adjusted debt to earnings before interest, taxes, depreciation, amortization, rent and share-based compensation expense (“EBITDAR”) ratio was 2.5:1. We calculate adjusted debt as the sum of total debt, finance lease liabilities and rent times six; and we calculate adjusted EBITDAR by adding interest, taxes, depreciation, amortization, rent and share-based compensation expense to net income. We target our debt levels to a specified ratio of adjusted debt to EBITDAR in order to maintain our investment grade credit ratings and believe this is important information for the management of our debt levels. To the extent adjusted EBITDAR increases, we expect our debt levels to increase; conversely, if adjusted EBITDAR decreases, we would expect our debt levels to decrease. Refer to the “Reconciliation of Non-GAAP Financial Measures” section for further details of our calculation.
Previous wording
During 1998, we announced a program permitting us to repurchase a portion of our outstanding shares not to exceed a dollar maximum established by our Board of Directors (the “Board”). On June 19, 2024, the Board voted to increase the repurchase authorization by $1.5 billion, bringing the total authorization to $39.2 billion. From January 1998 to August 30, 2025, we have repurchased a total of 155.6 million shares at an aggregate cost of $38.5 billion. We repurchased 0.4 million, 1.1 million and 1.5 million shares of common stock at an aggregate cost of $1.5 billion, $3.2 billion and $3.7 billion during fiscal 2025, 2024 and 2023, respectively. Considering cumulative repurchases as of August 30, 2025 we had $632.3 million remaining under the Board’s authorization to repurchase our common stock. We will continue to evaluate current and expected business conditions and adjust the level of share repurchases under our share repurchase program in a manner that is consistent with our capital allocation strategy or as we otherwise deem appropriate.
Current wording
During 1998, we announced a program permitting us to repurchase a portion of our outstanding shares not to exceed a dollar maximum established by our Board of Directors (the “Board”). On June 16, 2026, the Board voted to increase the repurchase authorization by $1.5 billion, bringing the total authorization to $42.2 billion. From January 1998 to August 29, 2026, we have repurchased a total of 156.2 million shares at an aggregate cost of $40.5 billion. We repurchased 0.6 million, 0.4 million and 1.1 million shares of common stock at an aggregate cost of $2.0 billion, $1.5 billion and $3.2 billion during fiscal 2026, 2025 and 2024, respectively. Considering cumulative repurchases as of August 29, 2026, we had $1.6 billion remaining under the Board’s authorization to repurchase our common stock. We will continue to evaluate current and expected business conditions and adjust the level of share repurchases under our share repurchase program in a manner that is consistent with our capital allocation strategy or as we otherwise deem appropriate.
Previous wording
Cash flow before share repurchases and changes in debt was $1.8 billion, $1.8 billion and $2.2 billion for the fiscal year ended August 30, 2025, August 31, 2024 and August 26, 2023, respectively. Cash flow before share repurchases and changes in debt is calculated as the net increase or decrease in cash and cash equivalents less net increases or decreases in debt (excluding deferred financing costs) plus share repurchases. We use cash flow before share repurchases and changes in debt to calculate the cash flows remaining and available. We believe this is important information regarding our allocation of available capital where we prioritize investments in the business and utilize the remaining funds to repurchase shares, while maintaining debt levels that support our investment grade credit ratings. Refer to the “Reconciliation of Non-GAAP Financial Measures” section for further details of our calculation.
Current wording
Cash flow before share repurchases and changes in debt was $1.8 billion for each of the fiscal years ended August 29, 2026, August 30, 2025 and August 31, 2024, respectively. Cash flow before share repurchases and changes in debt is calculated as the net increase or decrease in cash and cash equivalents less net increases or decreases in debt (excluding deferred financing costs) plus share repurchases. We use cash flow before share repurchases and changes in debt to calculate the cash flows remaining and available. We believe this is important information regarding our allocation of available capital where we prioritize investments in the business and utilize the remaining funds to repurchase shares, while maintaining debt levels that support our investment grade credit ratings. Refer to the “Reconciliation of Non-GAAP Financial Measures” section for further details of our calculation.
Previous wording
On October 8, 2025, the Board voted to authorize the repurchase of an additional $1.5 billion of our common stock in connection with our ongoing share repurchase program. Since the inception of the repurchase program in 1998, the Board has authorized $40.7 billion in share repurchases. Subsequent to August 30, 2025, and through October 20, 2025, we have repurchased 51,543 shares of common stock at an aggregate cost of $215.6 million. Considering the cumulative repurchases and the increase in authorization subsequent to August 30, 2025, and through October 20, 2025, we have $1.9 billion remaining under the Board’s authorization to repurchase our common stock.
Current wording
Subsequent to August 29, 2026, and through October 19, 2026, we have repurchased 106,862 shares of common stock at an aggregate cost of $310.6 million. Considering the cumulative repurchases subsequent to August 29, 2026, and through October 19, 2026, we have $1.3 billion remaining under the Board’s authorization to repurchase our common stock.
Previous wording
Our tax liability for uncertain tax positions, including interest and penalties, was $22.3 million at August 30, 2025. Approximately $4.2 million is classified as current liabilities and $18.1 million is classified as long-term liabilities. We did not reflect these obligations in the table above as we are unable to make an estimate of the timing of payments of the long-term liabilities due to uncertainties in the timing and amounts of the settlement of these tax positions.
Current wording
Our tax liability for uncertain tax positions, including interest and penalties, was $16.9 million at August 29, 2026. Approximately $0.7 million is classified as current liabilities and $16.2 million is classified as long-term liabilities. We did not reflect these obligations in the table above as we are unable to make an estimate of the timing of payments of the long-term liabilities due to uncertainties in the timing and amounts of the settlement of these tax positions.
Previous wording
We retain a significant portion of the risks associated with workers’ compensation, general and product liability, property and vehicle insurance; and we obtain third party insurance to limit the exposure related to certain of these risks. Our self-insurance reserve estimates totaled $268.8 million at August 30, 2025, and $257.7 million at August 31, 2024. Where estimates are possible, losses covered by insurance are recognized on a gross basis with a corresponding insurance receivable.
Current wording
We retain a significant portion of the risks associated with workers’ compensation, general and product liability, property and vehicle insurance; and we obtain third-party insurance to limit the exposure related to certain of these risks. Our self-insurance reserve estimates totaled $308.5 million at August 29, 2026, and $268.8 million at August 30, 2025. Where estimates are possible, losses covered by insurance are recognized on a gross basis with a corresponding insurance receivable.
Showing the first 40 of 42 pairs. Open the source sections for the rest.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
whether the building and land are purchased (requiring higher investment) or leased (generally lower investment) and whether such buildings are located in the U.S., Mexico or Brazil, or located in urban or rural areas.
Current report — wording carried from elsewhere
and rents to (ii) consolidated interest expense plus consolidated rents. Our consolidated interest coverage ratio as of August 29, 2026, was 5.2:1.
Current report — wording carried from elsewhere
On July 14, 2026, we issued $850 million 4.950% Senior Notes due July 2031 under our automatic shelf registration statement on Form S-3, filed with the SEC on July 7, 2026 (File No. 333-297291) (the “2026 Shelf Registration Statement”). The 2026 Shelf Registration Statement allows us to sell an indeterminate amount in debt securities to fund general corporate purposes, including repaying, redeeming or repurchasing outstanding debt and for working capital, capital expenditures, new store or distribution center openings, stock repurchases and acquisitions. Proceeds from the debt issuance were used for general corporate purposes.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
In addition to building and land costs, our new stores and distribution centers require working capital, predominantly for inventories. Historically, we have negotiated extended payment terms from suppliers, reducing the working capital required and resulting in a high accounts payable to inventory ratio. We plan to continue leveraging our
Previous report — wording carried elsewhere
On January 17, 2023, we repaid the $300 million 2.875% Senior Notes due January 2023.