Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Aug. 29, 2020 | Oct. 19, 2020 | Feb. 15, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Aug. 29, 2020 | ||
Entity File Number | 1-10714 | ||
Entity Registrant Name | AUTOZONE, INC | ||
Entity Incorporation, State or Country Code | NV | ||
Entity Tax Identification Number | 62-1482048 | ||
Entity Address, Address Line One | 123 South Front Street | ||
Entity Address, City or Town | Memphis | ||
Entity Address, State or Province | TN | ||
Entity Address, Postal Zip Code | 38103 | ||
City Area Code | 901 | ||
Local Phone Number | 495-6500 | ||
Title of 12(b) Security | Common Stock | ||
Trading Symbol | AZO | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 23,175,554 | ||
Entity Public Float | $ 24,661,503,822 | ||
Current Fiscal Year End Date | --08-29 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0000866787 | ||
Amendment Flag | false |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Aug. 29, 2020 | Aug. 31, 2019 | Aug. 25, 2018 | |
Income Statement [Abstract] | |||
Net sales | $ 12,631,967 | $ 11,863,743 | $ 11,221,077 |
Cost of sales, including warehouse and delivery expenses | 5,861,214 | 5,498,742 | 5,247,331 |
Gross profit | 6,770,753 | 6,365,001 | 5,973,746 |
Operating, selling, general and administrative expenses | 4,353,074 | 4,148,864 | 4,162,890 |
Operating profit | 2,417,679 | 2,216,137 | 1,810,856 |
Interest expense, net | 201,165 | 184,804 | 174,527 |
Income before income taxes | 2,216,514 | 2,031,333 | 1,636,329 |
Income tax expense | 483,542 | 414,112 | 298,793 |
Net income | $ 1,732,972 | $ 1,617,221 | $ 1,337,536 |
Weighted average shares for basic earnings per share | 23,540 | 24,966 | 26,970 |
Effect of dilutive stock equivalents | 553 | 532 | 454 |
Weighted average shares for diluted earnings per share | 24,093 | 25,498 | 27,424 |
Basic earnings per share | $ 73.62 | $ 64.78 | $ 49.59 |
Diluted earnings per share | $ 71.93 | $ 63.43 | $ 48.77 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | |||
Aug. 29, 2020 | Aug. 31, 2019 | Aug. 25, 2018 | ||
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 1,732,972 | $ 1,617,221 | $ 1,337,536 | |
Other comprehensive loss: | ||||
Pension liability adjustments, net of taxes | [1],[2] | 72,376 | ||
Foreign currency translation adjustments | (66,723) | (36,699) | (53,085) | |
Unrealized gains (losses) on marketable debt securities, net of taxes | [3] | 1,254 | 1,464 | (862) |
Net derivative activities, net of taxes | [4] | (19,461) | 1,718 | 323 |
Total other comprehensive (loss) income | (84,930) | (33,517) | 18,752 | |
Comprehensive income | $ 1,648,042 | $ 1,583,704 | $ 1,356,288 | |
[1] | On December 19, 2017, the Board approved a resolution to terminate both of the Company’s pension plans, effective March 15, 2018. During the fourth quarter of 2018, the Company completed the termination and no longer has any remaining defined benefit pension obligation. | |||
[2] | Pension liability adjustments are presented net of taxes of $46,523 in 2018, which includes $13,122 related to the adoption of ASU 2018-02 - Income Statement - Reporting Comprehensive Income: Reclassification of Certain Tax effects from Accumulated Other Comprehensive Income (ASU 2018-02). | |||
[3] | Unrealized gains on marketable debt securities are presented net of taxes of $336 and $389 in 2020 and 2019, respectively. Unrealized losses on marketable debt securities are presented net of tax benefit of $234 in 2018. | |||
[4] | Net derivative activities are presented net of tax benefit of $6,164 in 2020. Net derivative activities are presented net of taxes of $530 in 2019 and $1,882 in 2018, which includes $1,367 related to the adoption of ASU 2018-02. |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 29, 2020 | Aug. 31, 2019 | Aug. 25, 2018 | |
Pension liability adjustments, taxes | $ 46,523 | ||
Unrealized gains (losses) on marketable debt securities, net of taxes | $ 336 | $ 389 | (234) |
Net derivative activities, tax (benefit) | $ (6,164) | $ 530 | 1,882 |
Accounting Standards Update 2018-02 | |||
Pension liability adjustments, taxes | 13,122 | ||
Net derivative activities, tax (benefit) | $ 1,367 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Aug. 29, 2020 | Aug. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 1,750,815 | $ 176,300 |
Accounts receivable | 364,774 | 308,995 |
Merchandise inventories | 4,473,282 | 4,319,113 |
Other current assets | 223,001 | 224,277 |
Total current assets | 6,811,872 | 5,028,685 |
Property and equipment: | ||
Land | 1,205,228 | 1,147,709 |
Buildings and improvements | 4,020,271 | 3,895,559 |
Equipment | 2,158,251 | 1,991,042 |
Leasehold improvements | 586,839 | 552,018 |
Construction in progress | 165,953 | 126,868 |
Property and equipment | 8,136,542 | 7,713,196 |
Less: Accumulated depreciation and amortization | (3,627,321) | (3,314,445) |
Property and equipment, net | 4,509,221 | 4,398,751 |
Operating lease right-of-use assets | 2,581,677 | |
Goodwill | 302,645 | 302,645 |
Deferred income taxes | 27,843 | 26,861 |
Other long-term assets | 190,614 | 138,971 |
Other long-term assets, total | 3,102,779 | 468,477 |
Assets | 14,423,872 | 9,895,913 |
Current liabilities: | ||
Accounts payable | 5,156,324 | 4,864,912 |
Current portion of operating lease liabilities | 223,846 | |
Accrued expenses and other | 827,668 | 621,932 |
Income taxes payable | 75,253 | 25,297 |
Total current liabilities | 6,283,091 | 5,512,141 |
Long-term debt | 5,513,371 | 5,206,344 |
Operating lease liabilities, less current portion | 2,501,560 | |
Deferred income taxes | 354,186 | 311,980 |
Other long-term liabilities | 649,641 | 579,299 |
Commitments and contingencies | ||
Stockholders' deficit: | ||
Preferred stock, authorized 1,000 shares; no shares issued | ||
Common stock, par value $.01 per share, authorized 200,000 shares; 23,697 shares issued and 23,376 shares outstanding as of August 29, 2020; 25,445 shares issued and 24,038 shares outstanding as of August 31, 2019 | 237 | 254 |
Additional paid-in capital | 1,283,495 | 1,264,448 |
Retained deficit | (1,450,970) | (1,305,347) |
Accumulated other comprehensive loss | (354,252) | (269,322) |
Treasury stock, at cost | (356,487) | (1,403,884) |
Total stockholders' deficit | (877,977) | (1,713,851) |
Liabilities and Stockholders' Deficit | $ 14,423,872 | $ 9,895,913 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands | Aug. 29, 2020 | Aug. 31, 2019 |
Common Stock [Member] | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 200,000 | 200,000 |
Common stock, shares issued | 23,697 | 25,445 |
Common stock, shares outstanding | 23,376 | 24,038 |
Preferred Stock | ||
Preferred stock, shares authorized | 1,000 | 1,000 |
Preferred stock, shares issued | 0 | 0 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 29, 2020 | Aug. 31, 2019 | Aug. 25, 2018 | |
Cash flows from operating activities: | |||
Net income | $ 1,732,972 | $ 1,617,221 | $ 1,337,536 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization of property and equipment and intangibles | 397,466 | 369,957 | 345,084 |
Amortization of debt origination fees | 10,730 | 8,162 | 8,393 |
Deferred income taxes | 51,077 | 35,051 | (124,261) |
Share-based compensation expense | 44,835 | 43,255 | 43,674 |
Pension plan contributions | (11,596) | ||
Pension termination charges (refund) | 0 | (6,796) | 130,263 |
Asset impairment | 193,162 | ||
Changes in operating assets and liabilities: | |||
Accounts receivable | (58,564) | (48,512) | 7,534 |
Merchandise inventories | (184,174) | (394,147) | (188,782) |
Accounts payable and accrued expenses | 531,131 | 464,176 | 319,609 |
Income taxes payable | 90,172 | (10,489) | (6,438) |
Other, net | 104,463 | 50,635 | 26,114 |
Net cash provided by operating activities | 2,720,108 | 2,128,513 | 2,080,292 |
Cash flows from investing activities: | |||
Capital expenditures | (457,736) | (496,050) | (521,788) |
Proceeds from sale of assets | 35,279 | ||
Purchase of marketable debt securities | (90,949) | (55,538) | (104,536) |
Proceeds from sale of marketable debt securities | 84,237 | 53,140 | 69,644 |
Investment in tax credit equity investments | (45,190) | ||
Proceeds (payments) from disposal of capital assets and other, net | 11,763 | 6,602 | (459) |
Net cash used in investing activities | (497,875) | (491,846) | (521,860) |
Cash flows from financing activities: | |||
Net (payments) proceeds of commercial paper | (1,030,000) | (295,300) | 170,200 |
Proceeds from issuance of debt | 1,850,000 | 750,000 | |
Repayment of debt | (500,000) | (250,000) | (250,000) |
Net proceeds from sale of common stock | 68,392 | 188,819 | 89,715 |
Purchase of treasury stock | (930,903) | (2,004,896) | (1,592,013) |
Repayment of principal portion of finance lease liabilities | (52,158) | (53,307) | (49,004) |
Other, net | (48,967) | (9,404) | (1,052) |
Net cash used in financing activities | (643,636) | (1,674,088) | (1,632,154) |
Effect of exchange rate changes on cash | (4,082) | (4,103) | (1,724) |
Net increase (decrease) in cash and cash equivalents | 1,574,515 | (41,524) | (75,446) |
Cash and cash equivalents at beginning of period | 176,300 | 217,824 | 293,270 |
Cash and cash equivalents at end of period | 1,750,815 | 176,300 | 217,824 |
Supplemental cash flow information: | |||
Interest paid, net of interest cost capitalized | 161,864 | 153,371 | 163,965 |
Income taxes paid | 339,486 | 383,871 | 427,161 |
Leased assets obtained in exchange for new finance lease liabilities | 115,867 | $ 147,699 | $ 98,782 |
Leased assets obtained in exchange for new operating lease liabilities | $ 425,018 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit - USD ($) shares in Thousands, $ in Thousands | Common Stock [Member] | Additional Paid-In Capital [Member] | Retained Deficit [Member] | Accumulated Other Comprehensive Loss [Member] | Treasury Stock [Member] | Total |
Balance at Aug. 26, 2017 | $ 287 | $ 1,086,671 | $ (1,642,387) | $ (254,557) | $ (618,391) | $ (1,428,377) |
Balance, Shares at Aug. 26, 2017 | 28,735 | |||||
Net income | 1,337,536 | 1,337,536 | ||||
Total other comprehensive income | 18,752 | 18,752 | ||||
Purchase of treasury stock | (1,592,013) | (1,592,013) | ||||
Retirement of treasury shares | $ (15) | (60,500) | (918,462) | 978,977 | ||
Retirement of treasury shares, shares | (1,512) | |||||
Issuance of common stock under stock options and stock purchase plans | $ 3 | 89,712 | 89,715 | |||
Issuance of common stock under stock options and stock purchase plans, Shares | 307 | |||||
Adoption of ASU 2018-02 | 14,489 | 14,489 | ||||
Share-based compensation expense | 39,543 | 39,543 | ||||
Balance at Aug. 25, 2018 | $ 275 | 1,155,426 | (1,208,824) | (235,805) | (1,231,427) | (1,520,355) |
Balance, shares at Aug. 25, 2018 | 27,530 | |||||
Cumulative effect of adoption of ASU 2014-09 | (6,773) | (6,773) | ||||
Balance at August 25, 2018, as adjusted | $ 275 | 1,155,426 | (1,215,597) | (235,805) | (1,231,427) | (1,527,128) |
Balance at August 25, 2018, as adjusted, shares | 27,530 | |||||
Net income | 1,617,221 | 1,617,221 | ||||
Total other comprehensive income | (33,517) | (33,517) | ||||
Purchase of treasury stock | (2,004,896) | (2,004,896) | ||||
Retirement of treasury shares | $ (26) | (125,442) | (1,706,971) | 1,832,439 | ||
Retirement of treasury shares, shares | (2,563) | |||||
Issuance of common stock under stock options and stock purchase plans | $ 5 | 195,185 | 195,190 | |||
Issuance of common stock under stock options and stock purchase plans, Shares | 478 | |||||
Share-based compensation expense | 39,279 | 39,279 | ||||
Balance at Aug. 31, 2019 | $ 254 | 1,264,448 | (1,305,347) | (269,322) | (1,403,884) | (1,713,851) |
Balance, shares at Aug. 31, 2019 | 25,445 | |||||
Net income | 1,732,972 | 1,732,972 | ||||
Total other comprehensive income | (84,930) | (84,930) | ||||
Purchase of treasury stock | (930,903) | (930,903) | ||||
Retirement of treasury shares | $ (19) | (99,686) | (1,878,595) | 1,978,300 | ||
Retirement of treasury shares, shares | (1,912) | |||||
Issuance of common stock under stock options and stock purchase plans | $ 2 | 74,985 | 74,987 | |||
Issuance of common stock under stock options and stock purchase plans, Shares | 164 | |||||
Share-based compensation expense | 43,748 | 43,748 | ||||
Balance at Aug. 29, 2020 | $ 237 | $ 1,283,495 | $ (1,450,970) | $ (354,252) | $ (356,487) | $ (877,977) |
Balance, shares at Aug. 29, 2020 | 23,697 |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Deficit (Parenthetical) - shares shares in Thousands | 12 Months Ended | ||
Aug. 29, 2020 | Aug. 31, 2019 | Aug. 25, 2018 | |
Statement of Stockholders' Equity [Abstract] | |||
Purchase of treasury stock, shares | 826 | 2,182 | 2,398 |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Aug. 29, 2020 | |
Significant Accounting Policies | |
Significant Accounting Policies | Note A – Significant Accounting Policies Business: Fiscal Year: Basis of Presentation: Variable Interest Entities: The Company invests in certain tax credit funds that promote renewable energy and generate a return primarily through the realization of federal tax credits. The deferral method is used to account for the tax attributes of these investments. The Company considers its investment in these tax credit funds as an investment in a variable interest entity (“VIE”). The Company evaluates the investment in any VIE to determine whether it is the primary beneficiary. The Company considers a variety of factors in identifying the entity that holds the power to direct matters that most significantly impact the VIE’s economic performance including, but not limited to, the ability to direct financing, leasing, construction and other operating decisions and activities. As of August 29, 2020, the Company held tax credit equity investments that were deemed to be VIE’s and determined that it was not the primary beneficiary of the entities, as it did not have the power to direct the activities that most significantly impacted the entity and accounted for this investment using the equity method. The Company’s maximum exposure to losses is limited to its net investment, which was million as of August 29, 2020, and was included within the Other long-term assets caption in the accompanying Consolidated Balance Sheets. Use of Estimates: Cash and Cash Equivalents: Cash balances are held in various locations around the world. Cash and cash equivalents of $62.4 million and $49.9 million were held outside of the U.S. as of August 29, 2020, and August 31, 2019, respectively, and were generally utilized to support the liquidity needs in foreign operations. Accounts Receivable: Merchandise Inventories: Marketable Debt Securities: Property and Equipment: Impairment of Long-Lived Assets: Goodwill: Intangible Assets: Derivative Instruments and Hedging Activities: AutoZone’s financial market risk results primarily from changes in interest rates. At times, AutoZone reduces its exposure to changes in interest rates by entering into various interest rate hedge instruments such as interest rate swap contracts, treasury lock agreements and forward-starting interest rate swaps. All of the Company’s interest rate hedge instruments are designated as cash flow hedges. Refer to “Note H – Derivative Financial Instruments” for additional disclosures regarding the Company’s derivative instruments and hedging activities. Cash flows related to these instruments designated as qualifying hedges are reflected in the accompanying Consolidated Statements of Cash Flows in the same categories as the cash flows from the items being hedged. Accordingly, cash flows relating to the settlement of interest rate derivatives hedging the forecasted issuance of debt have been reflected upon settlement as a component of financing cash flows. The resulting gain or loss from such settlement is deferred to Accumulated Other Comprehensive Loss and reclassified to interest expense over the term of the underlying debt. This reclassification of the deferred gains and losses impacts the interest expense recognized on the underlying debt that was hedged and is therefore reflected as a component of operating cash flows in periods subsequent to settlement. Foreign Currency: Self-Insurance Reserves: The assumptions made by management in estimating its self-insurance reserves include consideration of historical cost experience, judgments about the present and expected levels of cost per claim and retention levels. The Company utilizes various methods, including analyses of historical trends and use of a specialist, to estimate the costs to settle reported claims and claims incurred but not yet reported. The actuarial methods develop estimates of the future ultimate claim costs based on claims incurred as of the balance sheet date. When estimating these liabilities, the Company considers factors, such as the severity, duration and frequency of claims, legal costs associated with claims, healthcare trends and projected inflation of related factors. The Company’s liabilities for workers’ compensation, general and product liability, property and vehicle claims do not have scheduled maturities; however, the timing of future payments is predictable based on historical patterns and is relied upon in determining the current portion of these liabilities. Accordingly, the Company reflects the net present value of the obligations it determines to be long-term using the risk-free interest rate as of the balance sheet date. Leases: Effective in fiscal 2020, the Company adopted Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842). Refer to “Note A – Recently Adopted Accounting Pronouncements”. Prior to the adoption of Topic 842, the Company accounted for leases under Topic 840 and recognized rent expense on a straight-line basis over the course of the lease term, which included any reasonably assured renewal periods, beginning on the date the Company took physical possession of the property. Differences between the calculated expense and cash payments was recorded as a liability within the Accrued expenses and other and Other long-term liabilities captions in the accompanying Consolidated Balance Sheets, based on the terms of the lease. Deferred rent approximated million as of August 31, 2019. Refer to Note O – Leases for additional disclosures regarding the Company’s leases. Financial Instruments: Income Taxes: The Company recognizes liabilities for uncertain income tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step requires the Company to estimate and measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. The Company reevaluates these uncertain tax positions on a quarterly basis or when new information becomes available to management. These reevaluations are based on factors including, but not limited to, changes in facts or circumstances, changes in tax law, successfully settled issues under audit, expirations due to statutes and new audit activity. Such a change in recognition or measurement could result in the recognition of a tax benefit or an increase to the tax accrual. The Company classifies interest related to income tax liabilities, and if applicable, penalties, as a component of Income tax expense. The income tax liabilities and accrued interest and penalties that are expected to be payable within one year of the balance sheet date are presented within the Accrued expenses and other caption in the accompanying Consolidated Balance Sheets. The remaining portion of the income tax liabilities and accrued interest and penalties are presented within the Other long-term liabilities caption in the accompanying Consolidated Balance Sheets because payment of cash is not anticipated within one year of the balance sheet date. Refer to “Note D – Income Taxes” for additional disclosures regarding the Company’s income taxes. Sales and Use Taxes: Dividends: Revenue Recognition: The Company’s performance obligations are typically satisfied when the customer takes possession of the merchandise. Revenue from retail customers is recognized when the customer leaves our store with the purchased products, typically at the point of sale or for E-commerce orders when the product is shipped. Revenue from commercial customers is recognized upon delivery, typically same-day. Payment from retail customers is at the point of sale and payment terms for commercial customers are based on the Company’s pre-established credit requirements and generally range from 1 to 30 days. Discounts, sales incentives and rebates are treated as separate performance obligations, and revenue allocated to these performance obligations is recognized as the obligations to the customer are satisfied. Additionally, the Company estimates and records gift card breakage as redemptions occur. The Company offers diagnostic and repair information software used in the automotive repair industry through ALLDATA. This revenue is recognized as services are provided. Revenue from these services are recognized over the life of the contract. See “Note R – Revenue Recognition” for further discussion. A portion of the Company’s transactions include the sale of auto parts that contain a core component. The core component represents the recyclable portion of the auto part. Customers are not charged for the core component of the new part if a used core is returned at the point of sale of the new part; otherwise the Company charges customers a specified amount for the core component. The Company refunds that same amount upon the customer returning a used core to the store at a later date. The Company does not recognize sales or cost of sales for the core component of these transactions when a used part is returned or expected to be returned from the customer. Vendor Allowances and Advertising Costs: Rebates and other miscellaneous incentives are earned based on purchases or product sales and are accrued ratably over the purchase or sale of the related product. These monies are generally recorded as a reduction of merchandise inventories and are recognized as a reduction to cost of sales as the related inventories are sold. For arrangements that provide for reimbursement of specific, incremental, identifiable costs incurred by the Company in selling the vendors’ products, the vendor funds are recorded as a reduction to Operating, selling, general and administrative expenses in the period in which the specific costs were incurred. The Company expenses advertising costs as incurred. Advertising expense, net of vendor promotional funds, was $77.6 million in fiscal 2020, $87.5 million in fiscal 2019 and $95.2 million in fiscal 2018. Vendor promotional funds, which reduced advertising expense, amounted to $39.4 million in fiscal 2020, $32.2 million in fiscal 2019 and $25.3 million in fiscal 2018. Cost of Sales and Operating, Selling, General and Administrative Expenses: Cost of Sales ● Total cost of merchandise sold, including: o Freight expenses associated with moving merchandise inventories from the Company’s vendors to the distribution centers; o Vendor allowances that are not reimbursements for specific, incremental and identifiable costs ● Costs associated with operating the Company’s supply chain, including payroll and benefits, warehouse occupancy, transportation and depreciation; and ● Inventory shrinkage Operating, Selling, General and Administrative Expenses ● Payroll and benefits for store, field leadership and store support employees; ● Occupancy of store and store support facilities; ● Depreciation and amortization related to store and store support assets; ● Transportation associated with field leadership, commercial sales force and deliveries from stores; ● Advertising; ● Self-insurance; and ● Other administrative costs, such as credit card transaction fees, legal costs, supplies and travel and lodging Warranty Costs: Shipping and Handling Costs: Pre-opening Expenses: Earnings per Share Share-Based Payments: Risk and Uncertainties: Recently Adopted Accounting Pronouncements: In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02, Leases (Topic 842) The Company adopted this standard and its amendments as of September 1, 2019, using the modified retrospective transition method. Under this method, existing leases were recorded at the adoption date, comparative periods were not restated and prior period amounts were not adjusted and continue to be reported under the accounting standards in effect for the prior periods. In addition, the Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed the carry forward of prior lease identification under Accounting Standards Codification (“ASC”) Topic 840. The Company made the accounting policy election for short-term leases resulting in lease payments being recorded as an expense on a straight-line basis over the lease term. The Company also elected the practical expedient to not separate lease components from the non-lease components (typically fixed common-area maintenance costs at its retail store locations) for all classes of leased assets, except vehicles. The Company chose not to elect the hindsight practical expedient to determine the reasonably certain lease term for existing leases. Adoption of the leasing standard resulted in operating lease right-of-use assets of approximately $2.5 billion and operating lease liabilities of approximately $2.7 billion as of September 1, 2019. Existing prepaid and deferred rent were netted and recorded as an offset to our gross operating lease right-of-use assets. There was no adjustment to the opening balance of retained earnings upon adoption. The standard did not have a material impact on the Company’s Condensed Consolidated Statements of Income, Condensed Consolidated Statements of Cash Flows or covenant compliance under its existing credit agreement. Refer to “Note O – Leases”. In June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. Recently Issued Accounting Pronouncements: In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other Internal Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments Codification Improvements to Topic 326, Financial Instruments Credit Losses. Further, the new credit loss model will affect how entities estimate their allowance for loss receivables that are current with respect to their payment terms. ASU 2016-13 will be effective for the Company at the beginning of its fiscal 2021 year. The Company will adopt this standard beginning its first quarter ending November 21, 2020. The Company does not expect a material effect on its Condensed Consolidated Statements of Income, Condensed Consolidated Balance Sheets or Condensed Consolidated Statements of Cash Flows. |
Share-Based Payments
Share-Based Payments | 12 Months Ended |
Aug. 29, 2020 | |
Share-Based Payments | |
Share-Based Payments | Overview of Share-Based Payment Plans The Company has several active and inactive equity incentive plans under which the Company has been authorized to grant share-based awards to key employees and non-employee directors. Awards under these plans have been in the form of restricted stock, restricted stock units, stock options, stock appreciation rights and other awards as defined by the plans. The Company also has an Employee Stock Purchase Plan that allows employees to purchase Company shares at a discount subject to certain limitations. The Company also has an Executive Stock Purchase Plan which permits all eligible executives to purchase AutoZone’s common stock at a discount up to twenty-five percent of his or her annual salary and bonus. Amended and Restated AutoZone, Inc. 2011 Equity Incentive Award Plan On December 15, 2010, the Company’s stockholders approved the 2011 Equity Incentive Award Plan (the “2011 Plan”), allowing the Company to provide equity-based compensation to non-employee directors and employees for their service to AutoZone or its subsidiaries or affiliates. Prior to the Company’s adoption of the 2011 Plan, equity-based compensation was provided to employees under the 2006 Stock Option Plan and to non-employee directors under the 2003 Director Compensation Plan (the “2003 Comp Plan”). During fiscal 2016, the Company’s stockholders approved the Amended and Restated AutoZone, Inc. 2011 Equity Incentive Award Plan (the “Amended 2011 Equity Plan”). The Amended 2011 Equity Plan imposes a maximum limit on the compensation, measured as the sum of any cash compensation and the aggregate grant date fair value of awards granted under the Amended 2011 Equity Plan, which may be paid to non-employee directors for such service during any calendar year. The Amended 2011 Equity Plan also applies a ten-year term on the Amended 2011 Equity Plan through December 16, 2025 and extends the Company’s ability to grant incentive stock options through October 7, 2025. AutoZone, Inc. Director Compensation Program During fiscal 2020, the Company adopted the 2020 Director Compensation Program (the “Program”), which states that non-employee directors will receive their compensation in awards of restricted stock units under the 2018 Equity Incentive Award Plan, with an option for a certain portion of a director’s compensation to be paid in cash at the non-employee director’s election. The Program replaced the 2018 Director Compensation Program. Under the Program, restricted stock units are granted January 1 of each year (the “Grant Date”). The number of restricted stock units is determined by dividing the amount of the annual retainer by the fair market value of the shares of common stock as of the Grant Date. The restricted stock units are fully vested on January 1 of each year and are paid in shares of the Company’s common stock on the fifth anniversary of the Grant Date or the date the non-employee director ceases to be a member of the Board (“Separation from Service”), whichever occurs first. Non-employee directors may elect to defer receipt of the restricted stock units until their Separation from Service. The cash portion of the award, if elected, is paid ratably over each calendar quarter. Total share-based compensation expense (a component of Operating, selling, general and administrative expenses) was $44.8 million for fiscal 2020, $43.3 million for fiscal 2019 and $43.7 million for fiscal 2018. As of August 29, 2020, share-based compensation expense for unvested awards not yet recognized in earnings is $42.0 million and will be recognized over a weighted average period of 1.7 years. General terms and methods of valuation for the Company’s share-based awards are as follows: Stock Options The Company grants options to purchase common stock to certain of its employees under its plan at prices equal to the market value of the stock on the date of grant. Options have a term of 10 years or 10 years and one day from grant date. Employee options generally vest in equal annual installments on the first, second, third and fourth anniversaries of the grant date and generally have 30 or 90 days after the service relationship ends, or one year after death, to exercise all vested options. The fair value of each option grant is separately estimated for each vesting date. The fair value of each option is amortized into compensation expense on a straight-line basis between the grant date for the award and each vesting date. The Company has estimated the fair value of all stock option awards as of the date of the grant by applying the Black-Scholes-Merton multiple-option pricing valuation model. The following table presents the weighted average for key assumptions used in determining the fair value of options granted and the related share-based compensation expense: Year Ended August 29, August 31, August 25, 2020 2019 2018 Expected price volatility 22 % 21 % 20 % Risk-free interest rate 1.4 % 3.0 % 1.9 % Weighted average expected lives (in years) 5.5 5.6 5.1 Forfeiture rate 10 % 10 % 10 % Dividend yield 0 % 0 % 0 % The following methodologies were applied in developing the assumptions used in determining the fair value of options granted: Expected price volatility – Risk-free interest rate – Expected lives – Forfeiture rate – Dividend yield – The weighted average grant date fair value per share of options granted was $252.54 during fiscal 2020, $208.37 during fiscal 2019 and $129.12 during fiscal 2018. The intrinsic value of options exercised was $101.9 million in fiscal 2020, $227.4 million in fiscal 2019 and $123.1 million in fiscal 2018. The total fair value of options vested was $39.1 million in fiscal 2020, $34.5 million in fiscal 2019 and $35.7 million in fiscal 2018. The Company generally issues new shares when options are exercised. The following table summarizes information about stock option activity for the year ended August 29, 2020: Weighted Average Remaining Aggregate Weighted Contractual Intrinsic Number Average Term Value of Shares Exercise Price (in years) (in thousands) Outstanding – August 31, 2019 1,349,311 $ 601.36 Granted 188,824 1,061.57 Exercised (146,705) 472.37 Cancelled (6,444) 735.42 Outstanding – August 29, 2020 1,384,986 677.15 5.82 $ 709,085 Exercisable 882,668 587.27 4.65 531,234 Expected to vest 452,086 835.08 7.88 160,066 Available for future grants 348,293 Restricted Stock Units Restricted stock unit awards are valued at the market price of a share of the Company’s stock on the date of grant and vest ratably on an annual basis over a four-year service period and are payable in shares of common stock on the vesting date. Compensation expense for grants of employee restricted stock units is recognized on a straight-line basis over the four-year service period, less estimated forfeitures, which are consistent with stock option forfeiture assumptions. As of August 29, 2020, total unrecognized stock-based compensation expense related to nonvested restricted stock unit awards, net of estimated forfeitures, was approximately $9.0 million, before income taxes, which we expect to recognize over an estimated weighted average period of 2.7 years. Transactions related to restricted stock units for the fiscal year ended August 29, 2020 are as follows: Weighted- Number Average Grant of Shares Date Fair Value Nonvested at August 31, 2019 10,049 $ 773.61 Granted 8,735 1,086.61 Vested (4,183) 945.58 Canceled or forfeited (441) 942.76 Nonvested at August 29, 2020 14,160 $ 910.63 Stock Appreciation Rights At August 29, 2020, the Company had $5.7 million and at August 31, 2019, the Company had $11.2 million of accrued compensation expense related to 4,822 and 10,206 outstanding units, respectively, issued under the 2003 Comp Plan and prior plans. As directors retire, this balance will be reduced. No additional shares of stock or units will be issued in future years under the 2003 Comp Plan or prior plans. Employee Stock Purchase Plan and Executive Stock Purchase Plan The Company recognized $3.1 million in compensation expense related to the discount on the selling of shares to employees and executives under the various share purchase plans in fiscal 2020, $2.8 million in fiscal 2019 and $2.1 million in fiscal 2018. Under the Employee Plan, 10,525, 11,011 and 14,523 shares were sold to employees in fiscal 2020, 2019 and 2018, respectively. The Company repurchased 8,287, 17,201 and 11,816 shares in fiscal 2020, 2019 and 2018, respectively all at market value from employees electing to sell their stock. Purchases under the Executive Plan were 1,204, 1,483 and 1,840 shares in fiscal 2020, 2019 and 2018, respectively. Issuances of shares under the Employee Plan are netted against repurchases and such repurchases are not included in share repurchases disclosed in “Note K – Stock Repurchase Program.” At August 29, 2020, 142,241 shares of common stock were reserved for future issuance under the Employee Plan, and 235,361 shares of common stock were reserved for future issuance under the Executive Plan. |
Accrued Expenses and Other
Accrued Expenses and Other | 12 Months Ended |
Aug. 29, 2020 | |
Accrued Expenses and Other | |
Accrued Expenses and Other | Note C – Accrued Expenses and Other Accrued expenses and other consisted of the following: August 29, August 31, (in thousands) 2020 2019 Accrued compensation, related payroll taxes and benefits $ 321,071 $ 170,321 Property, sales, and other taxes 121,196 122,372 Medical and casualty insurance claims (current portion) 112,746 89,250 Finance lease liabilities 67,498 56,246 Accrued interest 63,503 48,147 Accrued gift cards 43,876 38,658 Accrued sales and warranty returns 32,356 34,310 Other 65,422 62,628 $ 827,668 $ 621,932 The Company retains a significant portion of the insurance risks associated with workers’ compensation, employee health, general, product liability, property and vehicle insurance. A portion of these self-insured losses is managed through a wholly owned insurance captive. The Company maintains certain levels for stop-loss coverage for each self-insured plan in order to limit its liability for large claims. The retained limits per claim type are $2.0 million for workers’ compensation, $5.0 million for auto liability, $21.5 million for property, $0.7 million for employee health, and $1.0 million for general and product liability. |
Income Taxes
Income Taxes | 12 Months Ended |
Aug. 29, 2020 | |
Income Taxes | |
Income Taxes | Note D – Income Taxes The components of income from continuing operations before income taxes are as follows: Year Ended August 29, August 31, August 25, (in thousands) 2020 2019 2018 Domestic $ 1,960,320 $ 1,745,625 $ 1,412,963 International 256,194 285,708 223,366 $ 2,216,514 $ 2,031,333 $ 1,636,329 The provision for income tax expense consisted of the following: Year Ended August 29, August 31, August 25, (in thousands) 2020 2019 2018 Current: Federal $ 324,156 $ 274,504 $ 328,963 State 47,880 45,457 36,389 International 60,429 59,100 57,702 432,465 379,061 423,054 Deferred: Federal 43,706 25,757 (131,926) State 12,544 6,914 8,167 International (5,173) 2,380 (502) 51,077 35,051 (124,261) Income tax expense $ 483,542 $ 414,112 $ 298,793 A reconciliation of the provision for income taxes to the amount computed by applying the federal statutory tax rate to income before income taxes is as follows: Year Ended August 29, August 31, August 25, (in thousands) 2020 2019 2018 Federal tax at statutory U.S. income tax rate 21.0 % 21.0 % 25.9 % State income taxes, net 2.2 % 2.0 % 1.9 % Transition tax — — 1.6 % Share-based compensation (0.7) % (1.8) % (1.6) % Impact of tax reform — (0.4) % (9.6) % Global intangible lower-taxed income (“GILTI”) 1.0 % 1.3 % — Foreign Tax Credits (1.1) % (1.1) % — Other (0.6) % (0.6) % 0.1 % Effective tax rate 21.8 % 20.4 % 18.3 % On December 22, 2017, the Tax Cuts and Jobs Act (“Tax Reform”) was enacted into law. Tax Reform significantly revises the U.S. federal corporate income tax by, among other things, lowering the statutory federal corporate rate from During the year ended August 25, 2018, the Company recorded provisional tax benefit of $131.5 million related to Tax Reform, comprised of $157.3 million remeasurement of its net DTA, offset by $25.8 million of transition tax. During the year ended August 31, 2019, the Company completed its analysis of Tax Reform and recorded adjustments to the previously-recorded provisional amounts, resulting in an $8.8 million tax benefit, primarily related to transition tax. For the year ended August 29, 2020, August 31, 2019, and August 25, 2018, the Company recognized excess tax benefits from stock option exercises of $20.9 million, $46.0 million, and $31.3 million, respectively. Beginning with the year ending August 31, 2019, the Company is subject to GILTI which is imposed on foreign earnings. The Company has made the election to record this tax as a period cost, thus has not adjusted the deferred tax assets or liabilities of its foreign subsidiaries for the new tax. Net impacts for GILTI are included in the provision for income taxes for the years ended August 31, 2019 and August 29, 2020. Significant components of the Company’s deferred tax assets and liabilities were as follows: August 29, August 31, (in thousands) 2020 2019 Deferred tax assets: Net operating loss and credit carryforwards $ 41,437 $ 42,958 Accrued benefits 88,226 58,900 Operating lease liabilities 617,002 — Other 69,788 59,237 Total deferred tax assets 816,453 161,095 Less: Valuation allowances (28,373) (23,923) Net deferred tax assets 788,080 137,172 Deferred tax liabilities: Property and equipment (173,696) (114,956) Inventory (298,585) (259,827) Prepaid expenses (55,827) (46,487) Operating lease assets (581,381) — Other (4,934) (1,021) Total deferred tax liabilities (1,114,423) (422,291) Net deferred tax liabilities $ (326,343) $ (285,119) For the year ended August 31, 2019, the Company held the assertion, with few exceptions, that current and accumulated earnings from foreign operations were not indefinitely reinvested. During the year ended August 29, 2020, the Company asserted indefinite reinvestment for other basis differences and accumulated earnings through fiscal 2020 between its Luxembourg parent and Mexico subsidiaries. In addition, the Company has maintained its assertion of indefinite reinvestment of earnings between its Dutch parent and Puerto Rican subsidiary. Where necessary, withholding tax provisions resulting from foreign distributions of current and accumulated earnings have been considered in the Company’s provision for income taxes. The Company maintains its assertion related to other basis differences in foreign subsidiaries. It is impracticable for the Company to determine the amount of unrecognized deferred tax liability on these indefinitely reinvested basis differences. At August 29, 2020 and August 31, 2019, the Company had deferred tax assets of $32.2 million and $29.9 million, respectively, from net operating loss (“NOL”) carryforwards available to reduce future taxable income totaling approximately $247.1 million and $226.3 million, respectively. Certain NOLs have no expiration date and others will expire, if not utilized, in various years from fiscal 2021 through 2040. At August 29, 2020 and August 31, 2019, the Company had deferred tax assets for income tax credit carryforwards of $9.2 million and $13.0 million, respectively. Income tax credit carryforwards will expire, if not utilized, in various years from fiscal 2021 through 2037. At August 29, 2020 and August 31, 2019, the Company had a valuation allowance of $28.4 million and $23.9 million, respectively, on deferred tax assets associated with NOL and tax credit carryforwards for which management has determined it is more likely than not that the deferred tax asset will not be realized. Management believes it is more likely than not that the remaining deferred tax assets will be fully realized. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: August 29, August 31, (in thousands) 2020 2019 Beginning balance $ 30,892 $ 26,077 Additions based on tax positions related to the current year 8,512 8,621 Additions for tax positions of prior years 946 2,115 Reductions for tax positions of prior years (4,124) (1,219) Reductions due to settlements — (1,918) Reductions due to statute of limitations (4,284) (2,784) Ending balance $ 31,942 $ 30,892 Included in the August 29, 2020 and the August 31, 2019 balances are $18.9 million and $16.8 million, respectively, of unrecognized tax benefits that, if recognized, would reduce the Company’s effective tax rate. The balances above also include amounts of $10.5 million and $11.9 million for August 29, 2020 and the August 31, 2019, respectively, that are accounted for as reductions to deferred tax assets for NOL carryforwards and tax credit carryforwards. It is anticipated that in the event the associated uncertain tax positions are disallowed, the NOL carryforwards and tax credit carryforwards would be utilized to settle the liability. The Company accrues interest on unrecognized tax benefits as a component of income tax expense. Penalties, if incurred, would be recognized as a component of income tax expense. The Company had $1.6 million and $1.4 million accrued for the payment of interest and penalties associated with unrecognized tax benefits at August 29, 2020 and August 31, 2019, respectively. The Company files U.S. federal, U.S. state and local, and international income tax returns. With few exceptions, the Company is no longer subject to U.S. federal, U.S. state and local, or Non-U.S. examinations by tax authorities for fiscal year 2013 and prior. The Company is typically engaged in various tax examinations at any given time by U.S. federal, U.S. state and local, and Non-U.S. taxing jurisdictions. As of August 29, 2020, the Company estimates that the amount of unrecognized tax benefits could be reduced by approximately $1.5 million over the next twelve months as a result of tax audit settlements. While the Company believes that it is adequately accrued for possible audit adjustments, the final resolution of these examinations cannot be determined at this time and could result in final settlements that differ from current estimates. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Aug. 29, 2020 | |
Fair Value Measurements | |
Fair Value Measurements | Note E – Fair Value Measurements The Company defines fair value as the price received to transfer an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In accordance with ASC 820, Fair Value Measurements and Disclosures Level 1 inputs — Level 2 inputs — Level 3 inputs — Marketable Debt Securities Measured at Fair Value on a Recurring Basis The Company’s marketable debt securities measured at fair value on a recurring basis were as follows: August 29, 2020 (in thousands) Level 1 Level 2 Level 3 Fair Value Other current assets $ 75,651 $ 467 $ — $ 76,118 Other long-term assets 58,792 12,329 — 71,121 $ 134,443 $ 12,796 $ — $ 147,239 August 31, 2019 (in thousands) Level 1 Level 2 Level 3 Fair Value Other current assets $ 65,344 $ 2,614 $ — $ 67,958 Other long-term assets 65,573 5,395 — 70,968 $ 130,917 $ 8,009 $ — $ 138,926 At August 29, 2020, the fair value measurement amounts for assets and liabilities recorded in the accompanying Consolidated Balance Sheet consisted of short-term marketable debt securities of $76.1 million, which are included within Other current assets and long-term marketable debt securities of $71.1 million, which are included in Other long-term assets. The Company’s marketable debt securities are typically valued at the closing price in the principal active market as of the last business day of the quarter or through the use of other market inputs relating to the debt securities, including benchmark yields and reported trades. A discussion on how the Company’s cash flow hedges are valued is included in “Note H – Derivative Financial Instruments,” while the fair values of the marketable debt securities by asset class are described in “Note F – Marketable Debt Securities.” Non-Financial Assets Measured at Fair Value on a Non-Recurring Basis Certain non-financial assets and liabilities are required to be measured at fair value on a non-recurring basis in certain circumstances, including the event of impairment. These non-financial assets and liabilities could include assets and liabilities acquired in an acquisition as well as goodwill, intangible assets and property, plant and equipment that are determined to be impaired. At August 29, 2020, the Company did not have any other significant non-financial assets or liabilities that had been measured at fair value on a non-recurring basis subsequent to initial recognition. Financial Instruments not Recognized at Fair Value The Company has financial instruments, including cash and cash equivalents, accounts receivable, other current assets and accounts payable. The carrying amounts of these financial instruments approximate fair value because of their short maturities. A discussion of the carrying values and fair values of the Company’s debt is included in “Note I – Financing.” |
Marketable Debt Securities
Marketable Debt Securities | 12 Months Ended |
Aug. 29, 2020 | |
Marketable Debt Securities | |
Marketable Debt Securities | Note F – Marketable Debt Securities The Company’s basis for determining the cost of a security sold is the “Specific Identification Model.” Unrealized gains (losses) on marketable debt securities are recorded in Accumulated Other Comprehensive Loss. The Company’s available-for-sale marketable debt securities consisted of the following: August 29, 2020 Amortized Gross Gross Cost Unrealized Unrealized Fair (in thousands) Basis Gains Losses Value Corporate debt securities $ 46,652 $ 970 $ (4) $ 47,618 Government bonds 44,594 1,172 — 45,766 Mortgage-backed securities 4,842 75 — 4,917 Asset-backed securities and other 48,798 143 (3) 48,938 $ 144,886 $ 2,360 $ (7) $ 147,239 August 31, 2019 Amortized Gross Gross Cost Unrealized Unrealized Fair (in thousands) Basis Gains Losses Value Corporate debt securities $ 36,998 $ 29 $ (19) $ 37,008 Government bonds 45,741 763 — 46,504 Mortgage-backed securities 2,089 2 (15) 2,076 Asset-backed securities and other 53,345 — (7) 53,338 $ 138,173 $ 794 $ (41) $ 138,926 The marketable debt securities held at August 29, 2020, had effective maturities ranging from less than one year to approximately three years. The Company did not realize any material gains or losses on its marketable debt securities during fiscal 2020, 2019 or 2018. Included above in total marketable debt securities are $30.1 million and $89.2 million of marketable debt securities transferred by the Company’s insurance captive to a trust account to secure its obligations to an insurance company related to future workers’ compensation and casualty losses as of August 29, 2020 and August 31, 2019, respectively. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 12 Months Ended |
Aug. 29, 2020 | |
Equity | |
Accumulated Other Comprehensive Loss | Note G – Accumulated Other Comprehensive Loss Accumulated Other Comprehensive Loss includes certain adjustments to pension liabilities, foreign currency translation adjustments, certain activity for interest rate swaps and treasury rate locks that qualify as cash flow hedges and unrealized gains (losses) on available-for-sale debt securities. Changes in Accumulated Other Comprehensive Loss consisted of the following: Net Unrealized Foreign Gain (Loss) (in thousands) Currency (2) on Securities Derivatives Total Balance at August 25, 2018 $ (228,899) $ (873) $ (6,033) $ (235,805) Other Comprehensive (Loss) income before reclassifications (36,699) 1,498 — (35,201) Amounts reclassified from Accumulated Other Comprehensive Loss (1) — (34) (3) 1,718 (4) 1,684 Balance at August 31, 2019 (265,598) 591 (4,315) (269,322) Other Comprehensive (Loss) income before reclassifications (66,723) 1,117 (28,197) (93,803) Amounts reclassified from Accumulated Other Comprehensive Loss (1) — 137 (3) 8,736 (4) 8,873 Balance at August 29, 2020 $ (332,321) $ 1,845 $ (23,776) $ (354,252) (1) Amounts in parentheses indicate debits to Accumulated Other Comprehensive Loss. (2) Foreign currency is shown net of U.S. tax to account for foreign currency impacts of certain undistributed non-U.S. subsidiaries earnings. Other foreign currency is not shown net of additional U.S. tax as other basis differences of non-U.S. subsidiaries are intended to be permanently reinvested. (3) Represents realized gains on marketable debt securities, net of taxes of $38 in fiscal 2020 and realized gains on marketable debt securities, net of tax benefit of $9 in fiscal 2019, which is recorded in Operating, selling, general, and administrative expenses on the Consolidated Statements of Income. See “Note F – Marketable Debt Securities” for further discussion. (4) Represents gains and losses on derivatives, net of tax benefit of $6,164 in fiscal 2020 and net of taxes of $530 in fiscal 2019, which is recorded in Interest expense, net, on the Consolidated Statements of Income. See “Note H – Derivative Financial Instruments” for further discussion . |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Aug. 29, 2020 | |
Derivative Financial Instruments | |
Derivative Financial Instruments | Note H – Derivative Financial Instruments The Company periodically uses derivatives to hedge exposures to interest rates. The Company does not hold or issue financial instruments for trading purposes. For transactions that meet the hedge accounting criteria, the Company formally designates and documents the instrument as a hedge at inception and quarterly thereafter assesses the hedges to ensure they are effective in offsetting changes in the cash flows of the underlying exposures. Derivatives are recorded in the Company’s Consolidated Balance Sheet at fair value, determined using available market information or other appropriate valuation methodologies. In accordance with ASC Topic 815, Derivatives and Hedging At August 29, 2020, the Company had $31.2 million recorded in Accumulated Other Comprehensive Loss related to net realized losses associated with terminated interest rate swap and treasury rate lock derivatives which were designated as hedging instruments. Net losses are amortized into Interest expense over the remaining life of the associated debt. During fiscal 2020, the Company reclassified $2.6 million of net losses from Accumulated Other Comprehensive Loss to Interest expense. During 2019, the Company reclassified $2.2 million of net losses from Accumulated Other Comprehensive Loss to Interest expense. The Company expects to reclassify $3.7 million of net losses from Accumulated Other Comprehensive Loss to Interest expense over the next 12 months. |
Financing
Financing | 12 Months Ended |
Aug. 29, 2020 | |
Financing | |
Financing | Note I – Financing The Company’s debt consisted of the following: August 29, August 31, (in thousands) 2020 2019 4.000% Senior Notes due November 2020, effective interest rate of 4.43% $ — $ 500,000 2.500% Senior Notes due April 2021, effective interest rate of 2.62% 250,000 250,000 3.700% Senior Notes due April 2022, effective interest rate of 3.85% 500,000 500,000 2.875% Senior Notes due January 2023, effective interest rate of 3.21% 300,000 300,000 3.125% Senior Notes due July 2023, effective interest rate of 3.26% 500,000 500,000 3.125% Senior Notes due April 2024, effective interest rate 3.32% 300,000 300,000 3.250% Senior Notes due April 2025, effective interest rate 3.36% 400,000 400,000 3.625% Senior Notes due April 2025, effective interest rate 3.78% 500,000 — 3.125% Senior Notes due April 2026, effective interest rate of 3.28% 400,000 400,000 3.750% Senior Notes due June 2027, effective interest rate of 3.83% 600,000 600,000 3.750% Senior Notes due April 2029, effective interest rate of 3.86% 450,000 450,000 4.000% Senior Notes due April 2030, effective interest rate 4.09% 750,000 — 1.650% Senior Notes due January 2031, effective interest rate of 2.19% 600,000 — Commercial paper, weighted average interest rate of 2.28% at August 31, 2019 — 1,030,000 Total debt before discounts and debt issuance costs 5,550,000 5,230,000 Less: Discounts and debt issuance costs 36,629 23,656 Long-term debt $ 5,513,371 $ 5,206,344 The Company entered into a Master Extension, New Commitment and Amendment Agreement dated as of November 18, 2017 (the “Extension Amendment”) to the Third Amended and Restated Credit Agreement dated as of November 18, 2016, as amended, modified, extended or restated from time to time (the “Revolving Credit Agreement”). Under the Extension Amendment: (i) the Company’s borrowing capacity under the Revolving Credit Agreement was increased from $1.6 billion to $2.0 billion; (ii) the maximum borrowing under the Revolving Credit Agreement may, at the Company’s option, subject to lenders approval, be increased from $2.0 billion to $2.4 billion; (iii) the termination date of the Revolving Credit Agreement was extended from November 18, 2021 until November 18, 2022; and (iv) the Company has the option to make one additional written request of the lenders to extend the termination On April 3, 2020, the Company entered into a 364-Day Credit Agreement (the “364-Day Credit Agreement”) to augment the Company’s access to liquidity due to current macroeconomic conditions and supplement the Company’s existing Revolving Credit Agreement. The 364-Day Credit Agreement provides for loans in the aggregate principal amount of up to $750 million. The 364-Day Credit Agreement will terminate, and all amounts borrowed under the 364-Day Credit Agreement will be due and payable, on April 2, 2021. Revolving loans under the 364-Day Credit Agreement may be base rate loans, Eurodollar loans, or a combination of both, at the Company’s election. As of August 29, 2020, the Company had no outstanding borrowings under each of the revolving credit agreements and $1.7 million of outstanding letters of credit under the Revolving Credit Agreement. Under its revolving credit agreement, covenants include restrictions on liens, a maximum debt to earnings ratio, a minimum fixed charge coverage ratio and a change of control provision that may require acceleration of the repayment obligations under certain circumstances. The Revolving Credit Agreement requires that the Company’s 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. The Company’s consolidated interest coverage ratio as of August 29, 2020 was 6.1:1. As of August 29, 2020, the $250 million 2.500% Senior Notes due April 2021 are classified as long-term in the accompanying Consolidated Balance Sheets as the Company has the ability and intent to refinance the notes on a long-term basis through available capacity in its revolving credit agreements. As of August 29, 2020, the Company had $2.748 billion of availability, before giving effect to commercial paper borrowings, under its $2.750 billion revolving credit agreements which would allow the Company to replace these short-term obligations with long-term financing facilities. The Company also maintains a letter of credit facility that allows it to request the participating bank to issue letters of credit on its behalf up to an aggregate amount of $25 million. The letter of credit facility is in addition to the letters of credit that may be issued under the Revolving Credit Agreement. As of August 29, 2020, the Company had $25.0 million in letters of credit outstanding under the letter of credit facility which expires in June 2022. In addition to the outstanding letters of credit issued under the committed facilities discussed above, the Company had $220.3 million in letters of credit outstanding as of August 29, 2020. These letters of credit have various maturity dates and were issued on an uncommitted basis. On August 14, 2020, the Company issued $600 million in 1.650% Senior Notes due January 2031 under its automatic shelf registration statement on Form S-3, filed with the SEC on April 4, 2019 (File No. 333-230719) (the “2019 Shelf Registration”). The 2019 Shelf Registration allows the Company 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 openings, stock repurchases and acquisitions. Proceeds from the debt issuance were used for general corporate purposes, including the repayment of the $500 million in 4.000% Senior Notes due in November 2020 that were callable at par in August 2020. On March 30, 2020, the Company issued $500 million in 3.625% Senior Notes due April 2025 and $750 million in 4.000% Senior Notes due April 2030 under the 2019 Shelf Registration. Proceeds from the debt issuance were used to repay a portion of the outstanding commercial paper borrowings and for other general corporate purposes. On April 18, 2019, the Company issued $300 million in 3.125% Senior Notes due April 2024 and $450 million in 3.750% Senior Notes due April 2029 under the 2019 Shelf Registration. Proceeds from the debt issuance were used to repay a portion of the outstanding commercial paper borrowings, the $250 million in 1.625% Senior Notes due in April 2019 and for other general corporate purposes. All Senior Notes are subject to an interest rate adjustment if the debt ratings assigned to the Senior Notes are downgraded (as defined in the agreements). Further, the Senior Notes contain a provision that repayment of the Senior Notes may be accelerated if the Company experiences a change in control (as defined in the agreements). The Company’s borrowings under its senior notes contain minimal covenants, primarily restrictions on liens. All of the repayment obligations under its borrowing arrangements may be accelerated and come due prior to the scheduled payment date if covenants are breached or an event of default occurs. As of August 29, 2020, the Company was in compliance with all covenants related to its borrowing arrangements. All of the Company’s debt is unsecured. Scheduled maturities of debt are as follows: Scheduled (in thousands) Maturities 2021 $ 250,000 2022 500,000 2023 800,000 2024 300,000 2025 900,000 Thereafter 2,800,000 Subtotal 5,550,000 Discount and debt issuance costs 36,629 Total Debt $ 5,513,371 The fair value of the Company’s debt was estimated at $6.081 billion as of August 29, 2020, and $5.419 billion as of August 31, 2019, based on the quoted market prices for the same or similar issues or on the current rates available to the Company for debt of the same terms (Level 2). Such fair value is greater than the carrying value of debt by $567.5 million at August 29, 2020, which reflects face amount, adjusted for any unamortized debt issuance costs and discounts. At August 31, 2019, the fair value was greater than the carrying value of debt by $212.7 million. |
Interest Expense
Interest Expense | 12 Months Ended |
Aug. 29, 2020 | |
Interest Expense. | |
Interest Expense | Note J – Interest Expense Net interest expense consisted of the following: Year Ended August 29, August 31, August 25, (in thousands) 2020 2019 2018 Interest expense $ 208,021 $ 193,671 $ 181,668 Interest income (5,689) (7,396) (5,636) Capitalized interest (1,167) (1,471) (1,505) $ 201,165 $ 184,804 $ 174,527 |
Stock Repurchase Program
Stock Repurchase Program | 12 Months Ended |
Aug. 29, 2020 | |
Equity | |
Stock Repurchase Program | Note K – Stock Repurchase Program During 1998, the Company announced a program permitting the Company to repurchase a portion of its outstanding shares not to exceed a dollar maximum established by the Board. On October 7, 2019, the Board voted to authorize the repurchase of an additional $1.25 billion of its common stock in connection with its ongoing share repurchase program. Since the inception of the repurchase program in 1998, the Board has authorized $23.15 billion in share repurchases. The Company has $795.9 million remaining under the Board’s authorization to repurchase its common stock. The Company’s share repurchase activity consisted of the following: Year Ended August 29, August 31, August 25, (in thousands) 2020 2019 2018 Amount $ 930,903 $ 2,004,896 $ 1,592,013 Shares 826 2,182 2,398 During fiscal year 2020, the Company retired 1.9 million shares of treasury stock which had previously been repurchased under the Company’s share repurchase program. The retirement increased Retained deficit by $1.879 billion and decreased Additional paid-in capital by $99.7 million. During the comparable prior year period, the Company retired 2.6 million shares of treasury stock, which increased Retained deficit by $1.707 billion and decreased Additional paid-in capital by $125.4 million. During fiscal 2020, the Company temporarily ceased share repurchases to conserve liquidity in response to the uncertainty related to COVID-19. While the Company restarted share repurchases during the first quarter of fiscal year 2021, the Company will continue to evaluate current and expected business conditions and adjust the level of share repurchases as the Company deems appropriate. Subsequent to August 29, 2020, the Company has repurchased 269,795 shares of common stock at an aggregate cost of $314.4 million. Considering the cumulative repurchases subsequent to August 29, 2020, the Company has $481.5 million remaining under the Board’s authorization to repurchase its common stock. |
Pension and Savings Plans
Pension and Savings Plans | 12 Months Ended |
Aug. 29, 2020 | |
Pension and Savings Plans | |
Pension and Savings Plans | Note L – Pension and Savings Plans Prior to January 1, 2003, substantially all full-time employees were covered by a defined benefit pension plan. The benefits under the plan were based on years of service and the employee’s highest consecutive five-year average compensation. On January 1, 2003, the plan was frozen, resulting in pension plan participants earning no new benefits under the plan formula and no new participants joining the pension plan. On January 1, 2003, the Company’s supplemental defined benefit pension plan for certain highly compensated employees was also frozen, resulting in pension plan participants earning no new benefits under the plan formula and no new participants joining the pension plan. On December 19, 2017, the Board of Directors approved a resolution to terminate both of the Company’s pension plans, effective March 15, 2018. The Company offered plan participants the option to receive an annuity purchased from an insurance carrier or a lump-sum cash payment based on a number of factors. During the fourth quarter of 2018, the Company contributed $11.4 million to the pension plans to ensure that sufficient assets were available for the lump-sum payments and annuity purchases, completed the transfer of all lump sum payments, transferred all remaining benefit obligations related to the pension plans to a highly rated insurance company, and recognized $130.3 million of non-cash pension termination charges in Operating, selling, general and administrative expenses in the Consolidated Statements of Income. During fiscal 2019, the Company received a refund of $6.8 million related primarily to annuity purchase overpayments, recorded in Operating, selling, general and administrative expenses, net within the Consolidated statements of income. No refunds or expenses related to pension termination occurred in fiscal 2020. There are no actuarial assumptions reflected in any pension plans estimates. The Company will no longer have any remaining defined pension benefit obligation and thus no periodic pension benefit expense. Net periodic benefit expense consisted of the following: Year Ended August 25 (in thousands) 2018 (1) Interest cost $ 10,356 Expected return on plan assets (18,997) Recognized net actuarial losses 10,736 Settlement loss 130,263 Net periodic benefit expense $ 132,358 (1) The pension plans were terminated in fiscal 2018. The Company has a 401(k) plan that covers all domestic employees who meet the plan’s participation requirements. The plan features include Company matching contributions, immediate 100% vesting of Company contributions and a savings option up to 25% of qualified earnings. The Company makes matching contributions, per pay period, up to a specified percentage of employees’ contributions as approved by the Board. The Company made matching contributions to employee accounts in connection with the 401(k) plan of $29.8 million in fiscal 2020, $25.8 million in fiscal 2019 and $23.1 million in fiscal 2018. |
Sale of Assets
Sale of Assets | 12 Months Ended |
Aug. 29, 2020 | |
Sale of Assets | |
Sale of Assets | Note M – Sale of Assets During the second quarter of fiscal 2018, the Company determined that the approximate fair value less costs to sell its IMC and AutoAnything businesses was significantly lower than the carrying value of the net assets based on recent offers received and recorded impairment charges totaling $193.2 million within Operating, selling, general and administrative expenses in its Condensed Consolidated Statements of Income. The Company recorded an impairment charge of $93.6 million for its IMC business, which was reflected as a component of Auto Parts Locations in its segment reporting in fiscal 2018. Impairment charges for AutoAnything, which were reflected as a component of the Other category in the Company’s segment reporting, totaled $99.6 million in fiscal 2018. During the third quarter of fiscal 2018, the Company completed the IMC and AutoAnything sales for total consideration that approximated the remaining net book value at the closing date. |
Goodwill and Intangibles
Goodwill and Intangibles | 12 Months Ended |
Aug. 29, 2020 | |
Goodwill and Intangibles | |
Goodwill and Intangibles | Note N – Goodwill and Intangibles The Company had approximately $302.6 million of goodwill, which is allocated to the Auto Parts Locations operating segment at August 29, 2020 and August 31, 2019. The Company performs its annual goodwill and intangibles impairment test in the fourth quarter of each fiscal year. In the fourth quarter of fiscal 2020 and 2019, the Company concluded its remaining goodwill was not impaired. The carrying amounts of intangible assets are included in Other long-term assets as follows: August 29, 2020 Estimated Gross Net Useful Carrying Accumulated Carrying (in thousands) Life Amount Amortization Amount Amortizing intangible assets: Customer relationships 3 29,376 (27,933) 1,443 Total intangible assets other than goodwill $ 29,376 $ (27,933) $ 1,443 August 31, 2019 Estimated Gross Net Useful Carrying Accumulated Carrying (in thousands) Life Amount Amortization Amount Amortizing intangible assets: Technology 3 $ 870 $ (870) $ — Customer relationships 3 29,376 (23,760) 5,616 Total intangible assets other than goodwill $ 30,246 $ (24,630) $ 5,616 Amortization expense of intangible assets for the years ended August 29, 2020 and August 31, 2019 was $4.2 million, respectively. Total future amortization expense for intangible assets that have finite lives, based on the existing intangible assets and their current estimated useful lives as of August 29, 2020, is estimated to be $1.4 million for fiscal 2021 and none thereafter. |
Leases
Leases | 12 Months Ended |
Aug. 29, 2020 | |
Leases | |
Leases | Note O – Leases The Company adopted ASU 2016-02, Leases (Topic 842), beginning with its first quarter ended November 23, 2019 which requires leases to be recognized on the balance sheet. Leases with an original term of 12 months or less are not recognized in the Company’s Condensed Consolidated Balance Sheets, and the lease expense related to these short-term leases is recognized over the lease term. The Company aggregates lease and non-lease components, which includes fixed common-area maintenance costs at its retail store locations, for all classes of leased assets, except vehicles. The Company’s vehicle leases typically include variable non-lease components, such as maintenance and fuel charges. The Company excludes these variable non-lease components from vehicle lease payments for the purpose of calculating the right-of-use assets and liabilities. These variable lease payments are expensed as incurred. The Company’s leases primarily relate to its retail stores, distribution centers and vehicles under various non-callable leases. Leases are categorized at their commencement date, which is the date the Company takes possession or control of the underlying asset. Most of the Company’s leases are operating leases; however, certain land and vehicles are leased under finance leases. The leases have varying terms and expire at various dates through 2040. Retail leases typically have initial terms of between one and 20 years, with one to six optional renewal periods of one to five years each. Finance leases for vehicles typically have original terms between one and five years , and finance leases for real estate leases typically have terms of 20 or more years. The exercise of lease renewal options is at the Company’s sole discretion. The Company evaluates renewal options at lease commencement and on an ongoing basis and includes options that are reasonably certain to exercise in its expected lease terms when classifying leases and measuring lease liabilities. The Company subleases certain properties that are not used in its operations. Sublease income was not significant for the periods presented. Certain lease agreements require variable payments based upon actual costs of common-area maintenance, real estate taxes and insurance. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company’s finance leases for vehicles have a stated borrowing rate which it uses in determining the present value of the lease payments over the lease term. Substantially all the operating leases and finance leases for real estate do not provide a stated borrowing rate. Accordingly, the Company uses its incremental borrowing rate at commencement or modification date in determining the present value of lease payments over the lease term. For operating leases that commenced prior to the date of adoption of the new standard, the Company used the incremental borrowing rate that corresponded to the remaining lease term as of the date of adoption. Lease-related assets and liabilities recorded on the Condensed Consolidated Balance Sheet are as follows: (in thousands) Classification August 29, 2020 Assets: Operating Operating lease right-of-use assets $ 2,581,677 Finance Property and equipment 327,006 Total lease assets $ 2,908,683 Liabilities: Current: Operating Current portion of operating lease liabilities $ 223,680 Finance Accrued expenses and other 67,498 Noncurrent: Operating Operating lease liabilities, less current portion 2,501,726 Finance Other long-term liabilities 155,855 Total lease liabilities $ 2,948,759 Accumulated amortization related to finance lease assets was $107.3 million as of August 29, 2020. Lease costs for finance and operating leases are as follows: For year ended (in thousands) Statement of Income Location August 29, 2020 Finance lease cost: Amortization of lease assets Depreciation and amortization $ 55,920 Interest on lease liabilities Interest expense, net 4,355 Operating lease cost (1) Selling, general and administrative expenses 355,230 Total lease cost $ 415,505 (1) Includes short-term leases, variable lease costs and sublease income, which are immaterial. The future rental payments, inclusive of renewal options that have been included in defining the expected lease term, of our operating and finance lease obligations as of August 29, 2020 having initial or remaining lease terms in excess of one year are as follows: Finance Operating (in thousands) Leases Leases Total 2021 $ 69,013 $ 302,890 $ 371,903 2022 57,188 324,860 382,048 2023 45,377 307,859 353,236 2024 24,590 284,296 308,886 2025 10,447 259,099 269,546 Thereafter 44,765 2,055,365 2,100,130 Total lease payments 251,380 3,534,369 3,785,749 Less: Interest (28,027) (808,963) (836,990) Present value of lease liabilities $ 223,353 $ 2,725,406 $ 2,948,759 The following table summarizes the Company’s lease term and discount rate assumptions: August 29, 2020 Weighted-average remaining lease term in years, inclusive of renewal options that are reasonably certain to be exercised Finance leases – real estate 27 Finance leases – vehicles 3 Operating leases 15 Weighted-average discount rate: Finance leases – real estate 3.49 % Finance leases – vehicles 2.29 % Operating leases 3.46 % Cash paid for amounts included in the measurement of operating lease liabilities of $352.9 million was reflected in cash flows from operating activities in the consolidated statement of cash flows for fiscal 2020. As of August 29, 2020, the Company has entered into additional leases which have not yet commenced and are therefore not part of the right-of-use asset and liability. These leases are generally for real estate and have undiscounted future payments of approximately $16.7 million and will commence when the Company obtains possession of the underlying leased asset. Commencement dates are expected to be from fiscal 2021 to fiscal 2022. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Aug. 29, 2020 | |
Commitments and Contingencies. | |
Commitments and Contingencies | Note P – Commitments and Contingencies Construction commitments, primarily for new stores, totaled approximately $50.9 million at August 29, 2020. The Company had $246.9 million in outstanding standby letters of credit and $56.7 million in surety bonds as of August 29, 2020, which all have expiration periods of less than one year. A substantial portion of the outstanding standby letters of credit (which are primarily renewed on an annual basis) and surety bonds are used to cover reimbursement obligations to our workers’ compensation carriers. There are no additional contingent liabilities associated with these instruments as the underlying liabilities are already reflected in the Consolidated Balance Sheets. The standby letters of credit and surety bonds arrangements have automatic renewal clauses. |
Litigation
Litigation | 12 Months Ended |
Aug. 29, 2020 | |
Litigation | |
Litigation | Note Q – Litigation The Company is involved in various legal proceedings incidental to the conduct of its business, including, but not limited to, several lawsuits containing class-action allegations in which the plaintiffs are current and former hourly and salaried employees who allege various wage and hour violations and unlawful termination practices. The Company does not currently believe that, either individually or in the aggregate, these matters will result in liabilities material to the Company’s financial condition, results of operations or cash flows. |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Aug. 29, 2020 | |
Revenue Recognition | |
Revenue Recognition | Note R – Revenue Recognition The Company adopted ASU 2014-09, Revenue from Contracts with Customers using the modified retrospective method beginning with our first quarter ending in fiscal 2019, November 17, 2018. The cumulative effect of initially applying ASU 2014-09 resulted in an increase to the opening retained deficit balance of $6.8 million, net of taxes at August 26, 2018, and a related adjustment to accounts receivable, other current assets, other long-term assets, other current liabilities and deferred income taxes as of that date. Revenue for periods prior to August 26, 2018 were not adjusted and continue to be reported under the accounting standards in effect for the prior periods. There were no material contract assets, liabilities or deferred costs recorded on the Consolidated Balance Sheet as of August 29, 2020. Revenue related to unfulfilled performance obligations as of August 29, 2020 and August 31, 2019 is not significant. Refer to “Note S – Segment Reporting” for additional information related to revenue recognized during the period. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Aug. 29, 2020 | |
Segment Reporting | |
Segment Reporting | Note S – Segment Reporting The Company’s operating segments (Domestic Auto Parts, Mexico and Brazil; and IMC results 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 – Significant Accounting Policies.” The Auto Parts Locations segment is a retailer and distributor of automotive parts and accessories through the Company’s 6,549 locations in the U.S., Mexico and Brazil. Each location 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 and E-commerce, which includes direct sales to customers through www.autozone.com for sales that are not fulfilled by local stores; and AutoAnything, which includes direct sales to customers through www.autoanything.com, prior to the Company’s sale of substantially all of its 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. The following table shows segment results for the following fiscal years Year Ended August 29, August 31, August 25, (in thousands) 2020 2019 2018 Net Sales Auto Parts Locations $ 12,405,929 $ 11,645,235 $ 10,951,498 Other 226,038 218,508 269,579 Total $ 12,631,967 $ 11,863,743 $ 11,221,077 Segment Profit Auto Parts Locations $ 6,617,508 $ 6,209,229 $ 5,805,561 Other 153,245 155,772 168,185 Gross profit 6,770,753 6,365,001 5,973,746 Operating, selling, general and administrative expenses (1) (4,353,074) (4,148,864) (4,162,890) Interest expense, net (201,165) (184,804) (174,527) Income before income taxes $ 2,216,514 $ 2,031,333 $ 1,636,329 Segment Assets: Auto Parts Locations $ 14,303,427 $ 9,781,926 $ 9,231,021 Other 120,445 113,987 115,959 Total $ 14,423,872 $ 9,895,913 $ 9,346,980 Capital Expenditures: Auto Parts Locations $ 432,067 $ 479,120 $ 499,762 Other 25,669 16,930 22,026 Total $ 457,736 $ 496,050 $ 521,788 Auto Parts Locations Sales by Product Grouping: Failure $ 6,088,859 $ 5,728,294 $ 5,338,890 Maintenance items 4,284,913 4,140,987 3,914,546 Discretionary 2,032,157 1,775,954 1,698,062 Auto Parts Locations net sales $ 12,405,929 $ 11,645,235 $ 10,951,498 (1) Operating, selling, general and administrative expenses for fiscal 2018 include $130.3 million related to pension termination charges and $193.2 million related to impairment charges . |
Quarterly Summary
Quarterly Summary | 12 Months Ended |
Aug. 29, 2020 | |
Quarterly Summary | |
Quarterly Summary | Note T – Quarterly Summary (1) (Unaudited) Sixteen Twelve Weeks Ended Weeks Ended November 23, February 15, May 9, August 29, (in thousands, except per share data) 2019 2020 2020 2020 (2) Net sales $ 2,793,038 $ 2,513,663 $ 2,779,299 $ 4,545,968 Gross profit 1,501,068 1,366,063 1,490,648 2,412,975 Operating profit 500,023 407,938 491,673 1,018,045 Income before income taxes 456,280 363,603 444,223 952,407 Net income 350,338 299,282 342,896 740,457 Basic earnings per share 14.67 12.70 14.66 31.67 Diluted earnings per share 14.30 12.39 14.39 30.93 Seventeen Twelve Weeks Ended Weeks Ended November 17, February 9, May 4, August 31, (in thousands, except per share data) 2018 2019 2019 2019 (2) Net sales $ 2,641,733 $ 2,450,568 $ 2,783,006 $ 3,988,435 Gross profit 1,417,474 1,325,107 1,492,020 2,130,400 Operating profit 487,818 400,020 547,523 780,775 Income before income taxes 448,812 358,658 504,284 719,578 Net income (3) 351,406 294,638 405,949 565,228 Basic earnings per share 13.71 11.71 16.35 23.15 Diluted earnings per share 13.47 11.49 15.99 22.59 (1) The sum of quarterly amounts may not equal the annual amounts reported due to rounding. In addition, the earnings per share amounts are computed independently for each quarter while full year is based on the annual weighted average shares outstanding. (2) The fourth quarter for fiscal 2020 is based on a 16-week period while fiscal 2019 is based on a 17-week period. All other quarters presented are based on a 12-week period. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Aug. 29, 2020 | |
Significant Accounting Policies | |
Business | Business: |
Fiscal Year | Fiscal Year: |
Basis of Presentation | Basis of Presentation: |
Variable Interest Entities | Variable Interest Entities: The Company invests in certain tax credit funds that promote renewable energy and generate a return primarily through the realization of federal tax credits. The deferral method is used to account for the tax attributes of these investments. The Company considers its investment in these tax credit funds as an investment in a variable interest entity (“VIE”). The Company evaluates the investment in any VIE to determine whether it is the primary beneficiary. The Company considers a variety of factors in identifying the entity that holds the power to direct matters that most significantly impact the VIE’s economic performance including, but not limited to, the ability to direct financing, leasing, construction and other operating decisions and activities. As of August 29, 2020, the Company held tax credit equity investments that were deemed to be VIE’s and determined that it was not the primary beneficiary of the entities, as it did not have the power to direct the activities that most significantly impacted the entity and accounted for this investment using the equity method. The Company’s maximum exposure to losses is limited to its net investment, which was million as of August 29, 2020, and was included within the Other long-term assets caption in the accompanying Consolidated Balance Sheets. |
Use of Estimates | Use of Estimates: |
Cash and Cash Equivalents | Cash and Cash Equivalents: Cash balances are held in various locations around the world. Cash and cash equivalents of $62.4 million and $49.9 million were held outside of the U.S. as of August 29, 2020, and August 31, 2019, respectively, and were generally utilized to support the liquidity needs in foreign operations. |
Accounts Receivable | Accounts Receivable: |
Merchandise Inventories | Merchandise Inventories: |
Marketable Debt Securities | Marketable Debt Securities: |
Property and Equipment | Property and Equipment: |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets: |
Goodwill | Goodwill: |
Intangible Assets | Intangible Assets: |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities: AutoZone’s financial market risk results primarily from changes in interest rates. At times, AutoZone reduces its exposure to changes in interest rates by entering into various interest rate hedge instruments such as interest rate swap contracts, treasury lock agreements and forward-starting interest rate swaps. All of the Company’s interest rate hedge instruments are designated as cash flow hedges. Refer to “Note H – Derivative Financial Instruments” for additional disclosures regarding the Company’s derivative instruments and hedging activities. Cash flows related to these instruments designated as qualifying hedges are reflected in the accompanying Consolidated Statements of Cash Flows in the same categories as the cash flows from the items being hedged. Accordingly, cash flows relating to the settlement of interest rate derivatives hedging the forecasted issuance of debt have been reflected upon settlement as a component of financing cash flows. The resulting gain or loss from such settlement is deferred to Accumulated Other Comprehensive Loss and reclassified to interest expense over the term of the underlying debt. This reclassification of the deferred gains and losses impacts the interest expense recognized on the underlying debt that was hedged and is therefore reflected as a component of operating cash flows in periods subsequent to settlement. |
Foreign Currency | Foreign Currency: |
Self-Insurance Reserves | Self-Insurance Reserves: The assumptions made by management in estimating its self-insurance reserves include consideration of historical cost experience, judgments about the present and expected levels of cost per claim and retention levels. The Company utilizes various methods, including analyses of historical trends and use of a specialist, to estimate the costs to settle reported claims and claims incurred but not yet reported. The actuarial methods develop estimates of the future ultimate claim costs based on claims incurred as of the balance sheet date. When estimating these liabilities, the Company considers factors, such as the severity, duration and frequency of claims, legal costs associated with claims, healthcare trends and projected inflation of related factors. The Company’s liabilities for workers’ compensation, general and product liability, property and vehicle claims do not have scheduled maturities; however, the timing of future payments is predictable based on historical patterns and is relied upon in determining the current portion of these liabilities. Accordingly, the Company reflects the net present value of the obligations it determines to be long-term using the risk-free interest rate as of the balance sheet date. |
Leases | Leases: Effective in fiscal 2020, the Company adopted Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842). Refer to “Note A – Recently Adopted Accounting Pronouncements”. Prior to the adoption of Topic 842, the Company accounted for leases under Topic 840 and recognized rent expense on a straight-line basis over the course of the lease term, which included any reasonably assured renewal periods, beginning on the date the Company took physical possession of the property. Differences between the calculated expense and cash payments was recorded as a liability within the Accrued expenses and other and Other long-term liabilities captions in the accompanying Consolidated Balance Sheets, based on the terms of the lease. Deferred rent approximated million as of August 31, 2019. Refer to Note O – Leases for additional disclosures regarding the Company’s leases. |
Financial Instruments | Financial Instruments: |
Income Taxes | Income Taxes: The Company recognizes liabilities for uncertain income tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step requires the Company to estimate and measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. The Company reevaluates these uncertain tax positions on a quarterly basis or when new information becomes available to management. These reevaluations are based on factors including, but not limited to, changes in facts or circumstances, changes in tax law, successfully settled issues under audit, expirations due to statutes and new audit activity. Such a change in recognition or measurement could result in the recognition of a tax benefit or an increase to the tax accrual. The Company classifies interest related to income tax liabilities, and if applicable, penalties, as a component of Income tax expense. The income tax liabilities and accrued interest and penalties that are expected to be payable within one year of the balance sheet date are presented within the Accrued expenses and other caption in the accompanying Consolidated Balance Sheets. The remaining portion of the income tax liabilities and accrued interest and penalties are presented within the Other long-term liabilities caption in the accompanying Consolidated Balance Sheets because payment of cash is not anticipated within one year of the balance sheet date. Refer to “Note D – Income Taxes” for additional disclosures regarding the Company’s income taxes. |
Sales and Use Taxes | Sales and Use Taxes: |
Dividends | Dividends: |
Revenue Recognition | Revenue Recognition: The Company’s performance obligations are typically satisfied when the customer takes possession of the merchandise. Revenue from retail customers is recognized when the customer leaves our store with the purchased products, typically at the point of sale or for E-commerce orders when the product is shipped. Revenue from commercial customers is recognized upon delivery, typically same-day. Payment from retail customers is at the point of sale and payment terms for commercial customers are based on the Company’s pre-established credit requirements and generally range from 1 to 30 days. Discounts, sales incentives and rebates are treated as separate performance obligations, and revenue allocated to these performance obligations is recognized as the obligations to the customer are satisfied. Additionally, the Company estimates and records gift card breakage as redemptions occur. The Company offers diagnostic and repair information software used in the automotive repair industry through ALLDATA. This revenue is recognized as services are provided. Revenue from these services are recognized over the life of the contract. See “Note R – Revenue Recognition” for further discussion. A portion of the Company’s transactions include the sale of auto parts that contain a core component. The core component represents the recyclable portion of the auto part. Customers are not charged for the core component of the new part if a used core is returned at the point of sale of the new part; otherwise the Company charges customers a specified amount for the core component. The Company refunds that same amount upon the customer returning a used core to the store at a later date. The Company does not recognize sales or cost of sales for the core component of these transactions when a used part is returned or expected to be returned from the customer. |
Vendor Allowances and Advertising Costs | Vendor Allowances and Advertising Costs: Rebates and other miscellaneous incentives are earned based on purchases or product sales and are accrued ratably over the purchase or sale of the related product. These monies are generally recorded as a reduction of merchandise inventories and are recognized as a reduction to cost of sales as the related inventories are sold. For arrangements that provide for reimbursement of specific, incremental, identifiable costs incurred by the Company in selling the vendors’ products, the vendor funds are recorded as a reduction to Operating, selling, general and administrative expenses in the period in which the specific costs were incurred. The Company expenses advertising costs as incurred. Advertising expense, net of vendor promotional funds, was $77.6 million in fiscal 2020, $87.5 million in fiscal 2019 and $95.2 million in fiscal 2018. Vendor promotional funds, which reduced advertising expense, amounted to $39.4 million in fiscal 2020, $32.2 million in fiscal 2019 and $25.3 million in fiscal 2018. |
Cost of Sales and Operating, Selling, General and Administrative Expenses | Cost of Sales and Operating, Selling, General and Administrative Expenses: Cost of Sales ● Total cost of merchandise sold, including: o Freight expenses associated with moving merchandise inventories from the Company’s vendors to the distribution centers; o Vendor allowances that are not reimbursements for specific, incremental and identifiable costs ● Costs associated with operating the Company’s supply chain, including payroll and benefits, warehouse occupancy, transportation and depreciation; and ● Inventory shrinkage Operating, Selling, General and Administrative Expenses ● Payroll and benefits for store, field leadership and store support employees; ● Occupancy of store and store support facilities; ● Depreciation and amortization related to store and store support assets; ● Transportation associated with field leadership, commercial sales force and deliveries from stores; ● Advertising; ● Self-insurance; and ● Other administrative costs, such as credit card transaction fees, legal costs, supplies and travel and lodging |
Warranty Costs | Warranty Costs: |
Shipping and Handling Costs | Shipping and Handling Costs: |
Pre-opening Expenses | Pre-opening Expenses: |
Earnings per Share | Earnings per Share |
Share-Based Payments | Share-Based Payments: |
Risk and Uncertainties | Risk and Uncertainties: |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements: In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02, Leases (Topic 842) The Company adopted this standard and its amendments as of September 1, 2019, using the modified retrospective transition method. Under this method, existing leases were recorded at the adoption date, comparative periods were not restated and prior period amounts were not adjusted and continue to be reported under the accounting standards in effect for the prior periods. In addition, the Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed the carry forward of prior lease identification under Accounting Standards Codification (“ASC”) Topic 840. The Company made the accounting policy election for short-term leases resulting in lease payments being recorded as an expense on a straight-line basis over the lease term. The Company also elected the practical expedient to not separate lease components from the non-lease components (typically fixed common-area maintenance costs at its retail store locations) for all classes of leased assets, except vehicles. The Company chose not to elect the hindsight practical expedient to determine the reasonably certain lease term for existing leases. Adoption of the leasing standard resulted in operating lease right-of-use assets of approximately $2.5 billion and operating lease liabilities of approximately $2.7 billion as of September 1, 2019. Existing prepaid and deferred rent were netted and recorded as an offset to our gross operating lease right-of-use assets. There was no adjustment to the opening balance of retained earnings upon adoption. The standard did not have a material impact on the Company’s Condensed Consolidated Statements of Income, Condensed Consolidated Statements of Cash Flows or covenant compliance under its existing credit agreement. Refer to “Note O – Leases”. In June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements: In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other Internal Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments Codification Improvements to Topic 326, Financial Instruments Credit Losses. Further, the new credit loss model will affect how entities estimate their allowance for loss receivables that are current with respect to their payment terms. ASU 2016-13 will be effective for the Company at the beginning of its fiscal 2021 year. The Company will adopt this standard beginning its first quarter ending November 21, 2020. The Company does not expect a material effect on its Condensed Consolidated Statements of Income, Condensed Consolidated Balance Sheets or Condensed Consolidated Statements of Cash Flows. |
Share-Based Payments (Tables)
Share-Based Payments (Tables) | 12 Months Ended |
Aug. 29, 2020 | |
Share-Based Payments | |
Weighted Average for Key Assumptions Used in Determining Fair Value of Options Granted and Related Share-Based Compensation Expense | The following table presents the weighted average for key assumptions used in determining the fair value of options granted and the related share-based compensation expense: Year Ended August 29, August 31, August 25, 2020 2019 2018 Expected price volatility 22 % 21 % 20 % Risk-free interest rate 1.4 % 3.0 % 1.9 % Weighted average expected lives (in years) 5.5 5.6 5.1 Forfeiture rate 10 % 10 % 10 % Dividend yield 0 % 0 % 0 % |
Stock Option Activity | The Company generally issues new shares when options are exercised. The following table summarizes information about stock option activity for the year ended August 29, 2020: Weighted Average Remaining Aggregate Weighted Contractual Intrinsic Number Average Term Value of Shares Exercise Price (in years) (in thousands) Outstanding – August 31, 2019 1,349,311 $ 601.36 Granted 188,824 1,061.57 Exercised (146,705) 472.37 Cancelled (6,444) 735.42 Outstanding – August 29, 2020 1,384,986 677.15 5.82 $ 709,085 Exercisable 882,668 587.27 4.65 531,234 Expected to vest 452,086 835.08 7.88 160,066 Available for future grants 348,293 |
Schedule of Nonvested Restricted Stock Units Activity | Transactions related to restricted stock units for the fiscal year ended August 29, 2020 are as follows: Weighted- Number Average Grant of Shares Date Fair Value Nonvested at August 31, 2019 10,049 $ 773.61 Granted 8,735 1,086.61 Vested (4,183) 945.58 Canceled or forfeited (441) 942.76 Nonvested at August 29, 2020 14,160 $ 910.63 |
Accrued Expenses and Other (Tab
Accrued Expenses and Other (Tables) | 12 Months Ended |
Aug. 29, 2020 | |
Accrued Expenses and Other | |
Accrued Expenses | Accrued expenses and other consisted of the following: August 29, August 31, (in thousands) 2020 2019 Accrued compensation, related payroll taxes and benefits $ 321,071 $ 170,321 Property, sales, and other taxes 121,196 122,372 Medical and casualty insurance claims (current portion) 112,746 89,250 Finance lease liabilities 67,498 56,246 Accrued interest 63,503 48,147 Accrued gift cards 43,876 38,658 Accrued sales and warranty returns 32,356 34,310 Other 65,422 62,628 $ 827,668 $ 621,932 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Aug. 29, 2020 | |
Income Taxes | |
Components of Income from Continuing Operations | The components of income from continuing operations before income taxes are as follows: Year Ended August 29, August 31, August 25, (in thousands) 2020 2019 2018 Domestic $ 1,960,320 $ 1,745,625 $ 1,412,963 International 256,194 285,708 223,366 $ 2,216,514 $ 2,031,333 $ 1,636,329 |
Provision for Income Tax Expense | The provision for income tax expense consisted of the following: Year Ended August 29, August 31, August 25, (in thousands) 2020 2019 2018 Current: Federal $ 324,156 $ 274,504 $ 328,963 State 47,880 45,457 36,389 International 60,429 59,100 57,702 432,465 379,061 423,054 Deferred: Federal 43,706 25,757 (131,926) State 12,544 6,914 8,167 International (5,173) 2,380 (502) 51,077 35,051 (124,261) Income tax expense $ 483,542 $ 414,112 $ 298,793 |
Reconciliation of Provision for Income Taxes | A reconciliation of the provision for income taxes to the amount computed by applying the federal statutory tax rate to income before income taxes is as follows: Year Ended August 29, August 31, August 25, (in thousands) 2020 2019 2018 Federal tax at statutory U.S. income tax rate 21.0 % 21.0 % 25.9 % State income taxes, net 2.2 % 2.0 % 1.9 % Transition tax — — 1.6 % Share-based compensation (0.7) % (1.8) % (1.6) % Impact of tax reform — (0.4) % (9.6) % Global intangible lower-taxed income (“GILTI”) 1.0 % 1.3 % — Foreign Tax Credits (1.1) % (1.1) % — Other (0.6) % (0.6) % 0.1 % Effective tax rate 21.8 % 20.4 % 18.3 % |
Significant Components of Company's Deferred Tax Assets and Liabilities | Significant components of the Company’s deferred tax assets and liabilities were as follows: August 29, August 31, (in thousands) 2020 2019 Deferred tax assets: Net operating loss and credit carryforwards $ 41,437 $ 42,958 Accrued benefits 88,226 58,900 Operating lease liabilities 617,002 — Other 69,788 59,237 Total deferred tax assets 816,453 161,095 Less: Valuation allowances (28,373) (23,923) Net deferred tax assets 788,080 137,172 Deferred tax liabilities: Property and equipment (173,696) (114,956) Inventory (298,585) (259,827) Prepaid expenses (55,827) (46,487) Operating lease assets (581,381) — Other (4,934) (1,021) Total deferred tax liabilities (1,114,423) (422,291) Net deferred tax liabilities $ (326,343) $ (285,119) |
Reconciliation of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: August 29, August 31, (in thousands) 2020 2019 Beginning balance $ 30,892 $ 26,077 Additions based on tax positions related to the current year 8,512 8,621 Additions for tax positions of prior years 946 2,115 Reductions for tax positions of prior years (4,124) (1,219) Reductions due to settlements — (1,918) Reductions due to statute of limitations (4,284) (2,784) Ending balance $ 31,942 $ 30,892 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Aug. 29, 2020 | |
Fair Value Measurements | |
Company's marketable debt securities measured at Fair Value on Recurring Basis | The Company’s marketable debt securities measured at fair value on a recurring basis were as follows: August 29, 2020 (in thousands) Level 1 Level 2 Level 3 Fair Value Other current assets $ 75,651 $ 467 $ — $ 76,118 Other long-term assets 58,792 12,329 — 71,121 $ 134,443 $ 12,796 $ — $ 147,239 August 31, 2019 (in thousands) Level 1 Level 2 Level 3 Fair Value Other current assets $ 65,344 $ 2,614 $ — $ 67,958 Other long-term assets 65,573 5,395 — 70,968 $ 130,917 $ 8,009 $ — $ 138,926 |
Marketable Debt Securities (Tab
Marketable Debt Securities (Tables) | 12 Months Ended |
Aug. 29, 2020 | |
Marketable Debt Securities | |
Available-for-Sale Marketable Securities | August 29, 2020 Amortized Gross Gross Cost Unrealized Unrealized Fair (in thousands) Basis Gains Losses Value Corporate debt securities $ 46,652 $ 970 $ (4) $ 47,618 Government bonds 44,594 1,172 — 45,766 Mortgage-backed securities 4,842 75 — 4,917 Asset-backed securities and other 48,798 143 (3) 48,938 $ 144,886 $ 2,360 $ (7) $ 147,239 August 31, 2019 Amortized Gross Gross Cost Unrealized Unrealized Fair (in thousands) Basis Gains Losses Value Corporate debt securities $ 36,998 $ 29 $ (19) $ 37,008 Government bonds 45,741 763 — 46,504 Mortgage-backed securities 2,089 2 (15) 2,076 Asset-backed securities and other 53,345 — (7) 53,338 $ 138,173 $ 794 $ (41) $ 138,926 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 12 Months Ended |
Aug. 29, 2020 | |
Equity | |
Changes in Accumulated Other Comprehensive Loss | Net Unrealized Foreign Gain (Loss) (in thousands) Currency (2) on Securities Derivatives Total Balance at August 25, 2018 $ (228,899) $ (873) $ (6,033) $ (235,805) Other Comprehensive (Loss) income before reclassifications (36,699) 1,498 — (35,201) Amounts reclassified from Accumulated Other Comprehensive Loss (1) — (34) (3) 1,718 (4) 1,684 Balance at August 31, 2019 (265,598) 591 (4,315) (269,322) Other Comprehensive (Loss) income before reclassifications (66,723) 1,117 (28,197) (93,803) Amounts reclassified from Accumulated Other Comprehensive Loss (1) — 137 (3) 8,736 (4) 8,873 Balance at August 29, 2020 $ (332,321) $ 1,845 $ (23,776) $ (354,252) (1) Amounts in parentheses indicate debits to Accumulated Other Comprehensive Loss. (2) Foreign currency is shown net of U.S. tax to account for foreign currency impacts of certain undistributed non-U.S. subsidiaries earnings. Other foreign currency is not shown net of additional U.S. tax as other basis differences of non-U.S. subsidiaries are intended to be permanently reinvested. (3) Represents realized gains on marketable debt securities, net of taxes of $38 in fiscal 2020 and realized gains on marketable debt securities, net of tax benefit of $9 in fiscal 2019, which is recorded in Operating, selling, general, and administrative expenses on the Consolidated Statements of Income. See “Note F – Marketable Debt Securities” for further discussion. (4) Represents gains and losses on derivatives, net of tax benefit of $6,164 in fiscal 2020 and net of taxes of $530 in fiscal 2019, which is recorded in Interest expense, net, on the Consolidated Statements of Income. See “Note H – Derivative Financial Instruments” for further discussion . |
Financing (Tables)
Financing (Tables) | 12 Months Ended |
Aug. 29, 2020 | |
Financing | |
Schedule of Debt | The Company’s debt consisted of the following: August 29, August 31, (in thousands) 2020 2019 4.000% Senior Notes due November 2020, effective interest rate of 4.43% $ — $ 500,000 2.500% Senior Notes due April 2021, effective interest rate of 2.62% 250,000 250,000 3.700% Senior Notes due April 2022, effective interest rate of 3.85% 500,000 500,000 2.875% Senior Notes due January 2023, effective interest rate of 3.21% 300,000 300,000 3.125% Senior Notes due July 2023, effective interest rate of 3.26% 500,000 500,000 3.125% Senior Notes due April 2024, effective interest rate 3.32% 300,000 300,000 3.250% Senior Notes due April 2025, effective interest rate 3.36% 400,000 400,000 3.625% Senior Notes due April 2025, effective interest rate 3.78% 500,000 — 3.125% Senior Notes due April 2026, effective interest rate of 3.28% 400,000 400,000 3.750% Senior Notes due June 2027, effective interest rate of 3.83% 600,000 600,000 3.750% Senior Notes due April 2029, effective interest rate of 3.86% 450,000 450,000 4.000% Senior Notes due April 2030, effective interest rate 4.09% 750,000 — 1.650% Senior Notes due January 2031, effective interest rate of 2.19% 600,000 — Commercial paper, weighted average interest rate of 2.28% at August 31, 2019 — 1,030,000 Total debt before discounts and debt issuance costs 5,550,000 5,230,000 Less: Discounts and debt issuance costs 36,629 23,656 Long-term debt $ 5,513,371 $ 5,206,344 |
Scheduled Maturities of Debt | Scheduled maturities of debt are as follows: Scheduled (in thousands) Maturities 2021 $ 250,000 2022 500,000 2023 800,000 2024 300,000 2025 900,000 Thereafter 2,800,000 Subtotal 5,550,000 Discount and debt issuance costs 36,629 Total Debt $ 5,513,371 |
Interest Expense (Tables)
Interest Expense (Tables) | 12 Months Ended |
Aug. 29, 2020 | |
Interest Expense. | |
Net Interest Expense | Net interest expense consisted of the following: Year Ended August 29, August 31, August 25, (in thousands) 2020 2019 2018 Interest expense $ 208,021 $ 193,671 $ 181,668 Interest income (5,689) (7,396) (5,636) Capitalized interest (1,167) (1,471) (1,505) $ 201,165 $ 184,804 $ 174,527 |
Stock Repurchase Program (Table
Stock Repurchase Program (Tables) | 12 Months Ended |
Aug. 29, 2020 | |
Equity | |
Summarize Company's Share Repurchase Activity | The Company’s share repurchase activity consisted of the following: Year Ended August 29, August 31, August 25, (in thousands) 2020 2019 2018 Amount $ 930,903 $ 2,004,896 $ 1,592,013 Shares 826 2,182 2,398 |
Pension and Savings Plans (Tabl
Pension and Savings Plans (Tables) | 12 Months Ended |
Aug. 29, 2020 | |
Pension and Savings Plans | |
Net Periodic Benefit Expense | Net periodic benefit expense consisted of the following: Year Ended August 25 (in thousands) 2018 (1) Interest cost $ 10,356 Expected return on plan assets (18,997) Recognized net actuarial losses 10,736 Settlement loss 130,263 Net periodic benefit expense $ 132,358 (1) The pension plans were terminated in fiscal 2018. |
Goodwill and Intangibles (Table
Goodwill and Intangibles (Tables) | 12 Months Ended |
Aug. 29, 2020 | |
Goodwill and Intangibles | |
Schedule of Carrying Amounts of Intangible Assets | The carrying amounts of intangible assets are included in Other long-term assets as follows: August 29, 2020 Estimated Gross Net Useful Carrying Accumulated Carrying (in thousands) Life Amount Amortization Amount Amortizing intangible assets: Customer relationships 3 29,376 (27,933) 1,443 Total intangible assets other than goodwill $ 29,376 $ (27,933) $ 1,443 August 31, 2019 Estimated Gross Net Useful Carrying Accumulated Carrying (in thousands) Life Amount Amortization Amount Amortizing intangible assets: Technology 3 $ 870 $ (870) $ — Customer relationships 3 29,376 (23,760) 5,616 Total intangible assets other than goodwill $ 30,246 $ (24,630) $ 5,616 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Aug. 29, 2020 | |
Leases | |
Balance Sheet Information Related to Leases | (in thousands) Classification August 29, 2020 Assets: Operating Operating lease right-of-use assets $ 2,581,677 Finance Property and equipment 327,006 Total lease assets $ 2,908,683 Liabilities: Current: Operating Current portion of operating lease liabilities $ 223,680 Finance Accrued expenses and other 67,498 Noncurrent: Operating Operating lease liabilities, less current portion 2,501,726 Finance Other long-term liabilities 155,855 Total lease liabilities $ 2,948,759 |
Lease Cost | For year ended (in thousands) Statement of Income Location August 29, 2020 Finance lease cost: Amortization of lease assets Depreciation and amortization $ 55,920 Interest on lease liabilities Interest expense, net 4,355 Operating lease cost (1) Selling, general and administrative expenses 355,230 Total lease cost $ 415,505 (1) Includes short-term leases, variable lease costs and sublease income, which are immaterial. |
Summary of the Future Maturities of the Company's Lease Liabilities | The future rental payments, inclusive of renewal options that have been included in defining the expected lease term, of our operating and finance lease obligations as of August 29, 2020 having initial or remaining lease terms in excess of one year are as follows: Finance Operating (in thousands) Leases Leases Total 2021 $ 69,013 $ 302,890 $ 371,903 2022 57,188 324,860 382,048 2023 45,377 307,859 353,236 2024 24,590 284,296 308,886 2025 10,447 259,099 269,546 Thereafter 44,765 2,055,365 2,100,130 Total lease payments 251,380 3,534,369 3,785,749 Less: Interest (28,027) (808,963) (836,990) Present value of lease liabilities $ 223,353 $ 2,725,406 $ 2,948,759 |
Information on Lease Term and Discount Rate | August 29, 2020 Weighted-average remaining lease term in years, inclusive of renewal options that are reasonably certain to be exercised Finance leases – real estate 27 Finance leases – vehicles 3 Operating leases 15 Weighted-average discount rate: Finance leases – real estate 3.49 % Finance leases – vehicles 2.29 % Operating leases 3.46 % |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Aug. 29, 2020 | |
Segment Reporting | |
Segment Results | The Company evaluates its reportable segment primarily on the basis of net sales and segment profit, which is defined as gross profit. The following table shows segment results for the following fiscal years Year Ended August 29, August 31, August 25, (in thousands) 2020 2019 2018 Net Sales Auto Parts Locations $ 12,405,929 $ 11,645,235 $ 10,951,498 Other 226,038 218,508 269,579 Total $ 12,631,967 $ 11,863,743 $ 11,221,077 Segment Profit Auto Parts Locations $ 6,617,508 $ 6,209,229 $ 5,805,561 Other 153,245 155,772 168,185 Gross profit 6,770,753 6,365,001 5,973,746 Operating, selling, general and administrative expenses (1) (4,353,074) (4,148,864) (4,162,890) Interest expense, net (201,165) (184,804) (174,527) Income before income taxes $ 2,216,514 $ 2,031,333 $ 1,636,329 Segment Assets: Auto Parts Locations $ 14,303,427 $ 9,781,926 $ 9,231,021 Other 120,445 113,987 115,959 Total $ 14,423,872 $ 9,895,913 $ 9,346,980 Capital Expenditures: Auto Parts Locations $ 432,067 $ 479,120 $ 499,762 Other 25,669 16,930 22,026 Total $ 457,736 $ 496,050 $ 521,788 Auto Parts Locations Sales by Product Grouping: Failure $ 6,088,859 $ 5,728,294 $ 5,338,890 Maintenance items 4,284,913 4,140,987 3,914,546 Discretionary 2,032,157 1,775,954 1,698,062 Auto Parts Locations net sales $ 12,405,929 $ 11,645,235 $ 10,951,498 (1) Operating, selling, general and administrative expenses for fiscal 2018 include $130.3 million related to pension termination charges and $193.2 million related to impairment charges . |
Significant Accounting polici_3
Significant Accounting policies - Additional Information (Detail) $ in Thousands | 12 Months Ended | ||||
Aug. 29, 2020USD ($)storeclassshares | Aug. 31, 2019USD ($)shares | Aug. 25, 2018USD ($)shares | Sep. 01, 2019USD ($) | Aug. 26, 2017USD ($) | |
Significant Accounting Policies [Line Items] | |||||
Number of stores with commercial sales program | store | 5,007 | ||||
Description of reporting periods | The Company’s fiscal year consists of 52 or 53 weeks ending on the last Saturday in August. Fiscal 2020 and 2018 represented 52 weeks and 2019 represented 53 weeks. | ||||
Cash and cash equivalents | $ 1,750,815 | $ 176,300 | $ 217,824 | $ 293,270 | |
Allowances for uncollectible accounts | 10,000 | 8,500 | |||
Unrecorded adjustment for LIFO value in excess of replacement value | 357,000 | 404,900 | |||
Self insurance reserve | $ 288,600 | 207,000 | |||
Deferred rent | 159,900 | ||||
Measure of income tax benefit for uncertain income tax positions | more than 50% | ||||
Advertising expense, net of vendor promotional funds | $ 77,600 | 87,500 | 95,200 | ||
Vendor promotional funds, which reduced advertising expense | $ 39,400 | 32,200 | $ 25,300 | ||
Limited warranty period, minimum period (Days) | 30 days | ||||
Products accounted for total revenues | one class of similar products accounted for approximately 12 percent of the Company’s total revenues, and one vendor supplied approximately 12 percent of the Company’s total purchases. No other class of similar products accounted for 10 percent or more of total revenues | ||||
Products accounted for total purchases | one vendor supplied approximately 12 percent of the Company’s total purchases. No other class of similar products accounted for 10 percent or more of total revenues | ||||
Approximate value of operating lease liabilities | $ 2,725,406 | ||||
Accounting Standards Update 2016-02 [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
ROU assets | $ 2,500,000 | ||||
Approximate value of operating lease liabilities | $ 2,700,000 | ||||
Cash Equivalents [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Maturity period of investments | 90 days or less | ||||
Settlement term of credit and debit card transaction | less than five days | ||||
Credit and debit card receivables included within cash and cash equivalents | $ 63,700 | $ 59,400 | |||
Product Concentration Risk | |||||
Significant Accounting Policies [Line Items] | |||||
Number of class of similar products accounted for approximately 13% of the company's total revenues | class | 1 | ||||
Stock Options [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Anti-dilutive shares excluded from the computation of earnings per share | shares | 169,460 | 90,314 | 847,279 | ||
Minimum [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Amortization of intangible assets | 3 years | ||||
Minimum [Member] | Building | |||||
Significant Accounting Policies [Line Items] | |||||
Estimated useful lives | 40 years | ||||
Minimum [Member] | Building Improvements | |||||
Significant Accounting Policies [Line Items] | |||||
Estimated useful lives | 5 years | ||||
Minimum [Member] | Equipment | |||||
Significant Accounting Policies [Line Items] | |||||
Estimated useful lives | 3 years | ||||
Minimum [Member] | Product Concentration Risk | Sales Revenue, Net | |||||
Significant Accounting Policies [Line Items] | |||||
Concentration risk percentage | 10.00% | ||||
Minimum [Member] | Supplier Concentration Risk | Cost of Goods, Total [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Concentration risk percentage | 10.00% | ||||
Maximum [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Amortization of intangible assets | 10 years | ||||
Maximum [Member] | Building | |||||
Significant Accounting Policies [Line Items] | |||||
Estimated useful lives | 50 years | ||||
Maximum [Member] | Building Improvements | |||||
Significant Accounting Policies [Line Items] | |||||
Estimated useful lives | 15 years | ||||
Maximum [Member] | Equipment | |||||
Significant Accounting Policies [Line Items] | |||||
Estimated useful lives | 10 years | ||||
Maximum [Member] | Product Concentration Risk | Sales Revenue, Net | |||||
Significant Accounting Policies [Line Items] | |||||
Concentration risk percentage | 12.00% | ||||
Maximum [Member] | Supplier Concentration Risk | Cost of Goods, Total [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Concentration risk percentage | 12.00% | ||||
VIE not primary beneficiary | Other long-term assets | |||||
Significant Accounting Policies [Line Items] | |||||
Maximum exposure to losses amount | $ 6,500 | ||||
Stores in the United States Including Puerto Rico [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Number of stores | store | 5,885 | ||||
Brazil [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Number of stores | store | 43 | ||||
Mexico [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Number of stores | store | 621 | ||||
Non-US [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Cash and cash equivalents | $ 62,400 | $ 49,900 |
Share-Based Payments - Addition
Share-Based Payments - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Aug. 29, 2020 | Aug. 31, 2019 | Aug. 25, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Maximum percentage of discount on salary and bonus | 25.00% | ||
Weighted average grant date fair value of options granted | $ 252.54 | $ 208.37 | $ 129.12 |
Share-based compensation expense | $ 44,835 | $ 43,255 | $ 43,674 |
Share-based compensation expense for unvested awards not yet recognized in earnings | $ 42,000 | ||
Weighted average period recognition of share-based compensation expense for unvested awards | 1 year 8 months 12 days | ||
Exercise period of vested options after death | 1 year | ||
Intrinsic value of options exercised | $ 101,900 | 227,400 | 123,100 |
Total fair value of options vested | 39,100 | 34,500 | 35,700 |
Expense related to the discount on the selling of shares to employees and executives | $ 3,100 | $ 2,800 | $ 2,100 |
Shares sold to employees under employee stock purchase plan | 10,525 | 11,011 | 14,523 |
Shares purchased from employees at fair value | 8,287 | 17,201 | 11,816 |
Common stock reserved for future issuance | 142,241 | ||
Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Exercise period of vested options after service period | 90 days | ||
Minimum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Exercise period of vested options after service period | 30 days | ||
Two Thousand Three Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Accrued director fees | $ 5,700 | $ 11,200 | |
Additional shares of stock or units | 0 | ||
Accrued director fees in shares | 4,822 | 10,206 | |
Executive Stock Purchase Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares sold to employees under employee stock purchase plan | 1,204 | 1,483 | 1,840 |
Common stock reserved for future issuance | 235,361 | ||
Restricted Stock Units (RSUs) [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Non vested restricted stock unit award | $ 9,000 | ||
Estimated weighted average period | 2 years 8 months 12 days | ||
Service period | 4 years | ||
Stock Options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Term of options from grant date | 10 years or 10 years and one day | ||
2011 Equity Incentive Award Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Debt instrument term | 10 years |
Share-Based Payments - Weighted
Share-Based Payments - Weighted Average for Key Assumptions Used in Determining Fair Value of Options Granted and Related Share-Based Compensation Expense (Detail) | 12 Months Ended | ||
Aug. 29, 2020 | Aug. 31, 2019 | Aug. 25, 2018 | |
Share-Based Payments | |||
Expected price volatility | 22.00% | 21.00% | 20.00% |
Risk-free interest rate | 1.40% | 3.00% | 1.90% |
Weighted average expected lives (in years) | 5 years 6 months | 5 years 7 months 6 days | 5 years 1 month 6 days |
Forfeiture rate | 10.00% | 10.00% | 10.00% |
Dividend yield | 0.00% | 0.00% | 0.00% |
Share Based Payments - Stock op
Share Based Payments - Stock option Activity (Detail) $ / shares in Units, $ in Thousands | 12 Months Ended |
Aug. 29, 2020USD ($)$ / sharesshares | |
Share-Based Payments | |
Outstanding, Beginning balance, Number of Shares | 1,349,311 |
Granted, Number of Shares | 188,824 |
Exercised, Number of Shares | (146,705) |
Cancelled, Number of Shares | (6,444) |
Outstanding, Ending balance, Number of Shares | 1,384,986 |
Exercisable, Number of Shares | 882,668 |
Expected to vest, Number of Shares | 452,086 |
Available for future grants, Number of Shares | 348,293 |
Outstanding, Beginning balance, Weighted Average Exercise Price | $ / shares | $ 601.36 |
Granted, Weighted Average Exercise Price | $ / shares | 1,061.57 |
Exercised, Weighted Average Exercise Price | $ / shares | 472.37 |
Cancelled, Weighted Average Exercise Price | $ / shares | 735.42 |
Outstanding, Ending balance, Weighted Average Exercise Price | $ / shares | 677.15 |
Exercisable, Weighted Average Exercise Price | $ / shares | 587.27 |
Expected to vest, Weighted Average Exercise Price | $ / shares | $ 835.08 |
Outstanding , Weighted-Average Remaining Contractual Term | 5 years 9 months 25 days |
Exercisable, Weighted-Average Remaining Contractual Term | 4 years 7 months 24 days |
Expected to vest, Weighted-Average Remaining Contractual Term | 7 years 10 months 17 days |
Outstanding, Aggregate Intrinsic Value | $ | $ 709,085 |
Exercisable, Aggregate Intrinsic Value | $ | 531,234 |
Expected to vest, Aggregate Intrinsic Value | $ | $ 160,066 |
Share-Based Payments - Schedule
Share-Based Payments - Schedule of Nonvested Restricted Stock Units Activity (Detail) | 12 Months Ended |
Aug. 29, 2020$ / sharesshares | |
Share-Based Payments | |
Nonvested, Beginning balance, Number of Shares | shares | 10,049 |
Granted, Number of Shares | shares | 8,735 |
Vested, Number of Shares | shares | (4,183) |
Canceled or forfeited, Number of Shares | shares | (441) |
Nonvested, Ending balance, Number of Shares | shares | 14,160 |
Nonvested, Beginning balance, Weighted Average Exercise Price | $ / shares | $ 773.61 |
Granted, Weighted Average Exercise Price | $ / shares | 1,086.61 |
Vested, Weighted Average Exercise Price | $ / shares | 945.58 |
Canceled or forfeited, Weighted Average Exercise Price | $ / shares | 942.76 |
Nonvested, Ending balance, Weighted Average Exercise Price | $ / shares | $ 910.63 |
Accrued Expenses and Other - Ac
Accrued Expenses and Other - Accrued Expenses (Detail) - USD ($) $ in Thousands | Aug. 29, 2020 | Aug. 31, 2019 |
Other Income and Expenses [Abstract] | ||
Accrued compensation, related payroll taxes and benefits | $ 321,071 | $ 170,321 |
Property, sales, and other taxes | 121,196 | 122,372 |
Medical and casualty insurance claims (current portion) | 112,746 | 89,250 |
Finance lease liabilities | 67,498 | 56,246 |
Accrued interest | 63,503 | 48,147 |
Accrued gift cards | 43,876 | 38,658 |
Accrued sales and warranty returns | 32,356 | 34,310 |
Other | 65,422 | 62,628 |
Total | $ 827,668 | $ 621,932 |
Accrued Expenses and Other - Ad
Accrued Expenses and Other - Additional Information (Detail) $ in Millions | 12 Months Ended |
Aug. 29, 2020USD ($) | |
Workers Compensation | |
Maximum limits per claim for self-insured plan, per annum | $ 2 |
Auto Liability | |
Maximum limits per claim for self-insured plan, per annum | 5 |
Property | |
Maximum limits per claim for self-insured plan, per annum | 21.5 |
Employee Health | |
Maximum limits per claim for self-insured plan, per annum | 0.7 |
General Products Liability And Vehicle | |
Maximum limits per claim for self-insured plan, per annum | $ 1 |
Income Taxes - Components of In
Income Taxes - Components of Income from Continuing Operations (Detail) - USD ($) $ in Thousands | 3 Months Ended | 4 Months Ended | 12 Months Ended | ||||||||
May 09, 2020 | Feb. 15, 2020 | Nov. 23, 2019 | May 04, 2019 | Feb. 09, 2019 | Nov. 17, 2018 | Aug. 29, 2020 | Aug. 31, 2019 | Aug. 29, 2020 | Aug. 31, 2019 | Aug. 25, 2018 | |
Income Taxes | |||||||||||
Domestic | $ 1,960,320 | $ 1,745,625 | $ 1,412,963 | ||||||||
International | 256,194 | 285,708 | 223,366 | ||||||||
Income before income taxes | $ 444,223 | $ 363,603 | $ 456,280 | $ 504,284 | $ 358,658 | $ 448,812 | $ 952,407 | $ 719,578 | $ 2,216,514 | $ 2,031,333 | $ 1,636,329 |
Income Taxes - Provision for In
Income Taxes - Provision for Income Tax Expense (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 29, 2020 | Aug. 31, 2019 | Aug. 25, 2018 | |
Current: | |||
Federal | $ 324,156 | $ 274,504 | $ 328,963 |
State | 47,880 | 45,457 | 36,389 |
International | 60,429 | 59,100 | 57,702 |
Total | 432,465 | 379,061 | 423,054 |
Deferred: | |||
Federal | 43,706 | 25,757 | (131,926) |
State | 12,544 | 6,914 | 8,167 |
International | (5,173) | 2,380 | (502) |
Total | 51,077 | 35,051 | (124,261) |
Income tax expense | $ 483,542 | $ 414,112 | $ 298,793 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Provision for Income Taxes (Detail) | Dec. 22, 2017 | Dec. 21, 2017 | Aug. 29, 2020 | Aug. 31, 2019 | Aug. 25, 2018 |
Income Taxes | |||||
Federal tax at statutory U.S. income tax rate | 21.00% | 35.00% | 21.00% | 21.00% | 25.90% |
State income taxes, net | 2.20% | 2.00% | 1.90% | ||
Transition tax | 1.6 | ||||
Share-based compensation | (0.70%) | (1.80%) | (1.60%) | ||
Impact of tax reform | (0.40%) | (9.60%) | |||
Global intangible lower-taxed income ("GILTI") | 1.00% | 1.30% | |||
Foreign Tax Credits | (1.10%) | (1.10%) | |||
Other | (0.60%) | (0.60%) | 0.10% | ||
Effective tax rate | 21.80% | 20.40% | 18.30% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | Dec. 22, 2017 | Dec. 21, 2017 | Aug. 29, 2020 | Aug. 31, 2019 | Aug. 25, 2018 |
Income Taxes | |||||
U.S. corporate income tax rate | 21.00% | 35.00% | 21.00% | 21.00% | 25.90% |
Tax cuts and jobs act of 2017, incomplete accounting, provisional income tax expense (benefit) | $ 8,800 | $ 131,500 | |||
Tax Cuts And Jobs Act of 2017 incomplete accounting provisional income tax expense benefit | 157,300 | ||||
Tax cuts and jobs act of 2017, transition tax, provisional income tax expense | 25,800 | ||||
Additional excess tax benefits from stock option exercises compared to prior year | $ 20,900 | 46,000 | $ 31,300 | ||
Deferred tax assets from net operating loss carryforwards | 32,200 | 29,900 | |||
Future taxable income | $ 247,100 | 226,300 | |||
Expiration date of NOLs start year | 2021 | ||||
Expiration date of NOLs end year | 2040 | ||||
Deferred tax assets for income tax credit carryforwards | $ 9,200 | 13,000 | |||
Expiration date of tax credit carryforwards start year | 2021 | ||||
Expiration date of tax credit carryforwards end year | 2037 | ||||
Valuation allowances on deferred tax assets | $ 28,373 | 23,923 | |||
Unrecognized tax benefits, if recognized would reduce effective tax rate, amount | 18,900 | 16,800 | |||
Deferred tax assets operating loss carryforwards and tax credits | 10,500 | 11,900 | |||
Accrued for payment of interest and penalties associated with unrecognized tax benefits | 1,600 | $ 1,400 | |||
Amount of unrecognized tax benefits that could be reduced over next twelve months | $ 1,500 |
Income Taxes - Significant Comp
Income Taxes - Significant Components of Company's Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands | Aug. 29, 2020 | Aug. 31, 2019 |
Deferred tax assets: | ||
Net operating loss and credit carryforwards | $ 41,437 | $ 42,958 |
Accrued benefits | 88,226 | 58,900 |
Operating lease liabilities | 617,002 | |
Other | 69,788 | 59,237 |
Total deferred tax assets | 816,453 | 161,095 |
Less: Valuation allowances | (28,373) | (23,923) |
Net deferred tax assets | 788,080 | 137,172 |
Deferred tax liabilities: | ||
Property and equipment | (173,696) | (114,956) |
Inventory | (298,585) | (259,827) |
Prepaid expenses | (55,827) | (46,487) |
Operating lease assets | (581,381) | |
Other | (4,934) | (1,021) |
Total deferred tax liabilities | (1,114,423) | (422,291) |
Net deferred tax liabilities | $ (326,343) | $ (285,119) |
Income Taxes - Reconciliation_2
Income Taxes - Reconciliation of Unrecognized Tax Benefits (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Aug. 29, 2020 | Aug. 31, 2019 | |
Income Taxes | ||
Beginning balance | $ 30,892 | $ 26,077 |
Additions based on tax positions related to the current year | 8,512 | 8,621 |
Additions for tax positions of prior years | 946 | 2,115 |
Reductions for tax positions of prior years | (4,124) | (1,219) |
Reductions due to settlements | (1,918) | |
Reductions due to statute of limitations | (4,284) | (2,784) |
Ending balance | $ 31,942 | $ 30,892 |
Fair Value Measurements - Compa
Fair Value Measurements - Company's marketable debt securities measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands | Aug. 29, 2020 | Aug. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | $ 147,239 | $ 138,926 |
Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other current assets | 76,118 | 67,958 |
Other long-term assets | 71,121 | 70,968 |
Total | 147,239 | 138,926 |
Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other current assets | 75,651 | 65,344 |
Other long-term assets | 58,792 | 65,573 |
Total | 134,443 | 130,917 |
Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other current assets | 467 | 2,614 |
Other long-term assets | 12,329 | 5,395 |
Total | $ 12,796 | $ 8,009 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands | Aug. 29, 2020 | Aug. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term marketable debt securities | $ 76,118 | $ 67,958 |
Long-term marketable debt securities | $ 71,121 | $ 70,968 |
Marketable Debt Securities - Av
Marketable Debt Securities - Available-for-Sale Marketable Securities (Detail) - USD ($) $ in Thousands | Aug. 29, 2020 | Aug. 31, 2019 |
Schedule of Available-for-sale Securities [Line Items] | ||
Available-For-Sale Marketable Securities, Amortized Cost Basis | $ 144,886 | $ 138,173 |
Available-For-Sale Marketable Securities, Gross Unrealized Gains | 2,360 | 794 |
Available-For-Sale Marketable Securities, Gross Unrealized Losses | (7) | (41) |
Available-For-Sale Marketable Securities, Fair Value | 147,239 | 138,926 |
Corporate Debt Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-For-Sale Marketable Securities, Amortized Cost Basis | 46,652 | 36,998 |
Available-For-Sale Marketable Securities, Gross Unrealized Gains | 970 | 29 |
Available-For-Sale Marketable Securities, Gross Unrealized Losses | (4) | (19) |
Available-For-Sale Marketable Securities, Fair Value | 47,618 | 37,008 |
Government Bonds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-For-Sale Marketable Securities, Amortized Cost Basis | 44,594 | 45,741 |
Available-For-Sale Marketable Securities, Gross Unrealized Gains | 1,172 | 763 |
Available-For-Sale Marketable Securities, Fair Value | 45,766 | 46,504 |
Mortgage-Backed Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-For-Sale Marketable Securities, Amortized Cost Basis | 4,842 | 2,089 |
Available-For-Sale Marketable Securities, Gross Unrealized Gains | 75 | 2 |
Available-For-Sale Marketable Securities, Gross Unrealized Losses | (15) | |
Available-For-Sale Marketable Securities, Fair Value | 4,917 | 2,076 |
Asset-Backed Securities and Other [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-For-Sale Marketable Securities, Amortized Cost Basis | 48,798 | 53,345 |
Available-For-Sale Marketable Securities, Gross Unrealized Gains | 143 | |
Available-For-Sale Marketable Securities, Gross Unrealized Losses | (3) | (7) |
Available-For-Sale Marketable Securities, Fair Value | $ 48,938 | $ 53,338 |
Marketable Debt Securities - Ad
Marketable Debt Securities - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Aug. 29, 2020 | Aug. 31, 2019 | |
Marketable Debt Securities | ||
Available for sale securities debt maturity period range | less than one year to approximately three years | |
Marketable securities transferred | $ 30.1 | $ 89.2 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss - Changes in Accumulated Other Comprehensive Loss (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Aug. 29, 2020 | Aug. 31, 2019 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance | $ (1,713,851) | $ (1,520,355) |
Balance | (877,977) | (1,713,851) |
Foreign Currency [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance | (265,598) | (228,899) |
Other Comprehensive (Loss) income before reclassifications | (66,723) | (36,699) |
Balance | (332,321) | (265,598) |
Net Unrealized Gain (Loss) on Securities [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance | 591 | (873) |
Other Comprehensive (Loss) income before reclassifications | 1,117 | 1,498 |
Amounts reclassified from Accumulated Other Comprehensive Loss | 137 | (34) |
Balance | 1,845 | 591 |
Derivatives [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance | (4,315) | (6,033) |
Other Comprehensive (Loss) income before reclassifications | (28,197) | |
Amounts reclassified from Accumulated Other Comprehensive Loss | 8,736 | 1,718 |
Balance | (23,776) | (4,315) |
Accumulated Other Comprehensive Loss [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance | (269,322) | (235,805) |
Other Comprehensive (Loss) income before reclassifications | (93,803) | (35,201) |
Amounts reclassified from Accumulated Other Comprehensive Loss | 8,873 | 1,684 |
Balance | $ (354,252) | $ (269,322) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Loss - Changes in Accumulated Other Comprehensive Loss (Parenthetical) (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Aug. 29, 2020 | Aug. 31, 2019 | |
Derivatives [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Net derivative activities, taxes | $ (6,164) | $ 530 |
Reclassified from Accumulated Other Comprehensive Income [Member] | Net Unrealized Gain (Loss) on Securities [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Unrealized gains (losses) on marketable securities, taxes | $ 38 | $ (9) |
Derivative Financial Instrume_2
Derivative Financial Instruments - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Aug. 29, 2020 | Aug. 31, 2019 | Aug. 28, 2021 | |
Derivative losses recorded in Accumulated other comprehensive loss | $ 31.2 | ||
Net derivative losses amortized into Interest expense | $ 2.6 | $ 2.2 | |
Scenario Forecast | |||
Net derivative loss expected to be reclassified over next 12 months | $ 3.7 |
Financing - Schedule of Debt (D
Financing - Schedule of Debt (Detail) - USD ($) $ in Thousands | Aug. 29, 2020 | Aug. 14, 2020 | Mar. 30, 2020 | Aug. 31, 2019 | Apr. 18, 2019 |
Debt Instrument [Line Items] | |||||
Commercial paper | $ 1,030,000 | ||||
Total debt before discounts and debt issuance costs | $ 5,550,000 | 5,230,000 | |||
Less: Discounts and debt issuance costs | 36,629 | 23,656 | |||
Long-term debt | 5,513,371 | 5,206,344 | |||
4.000% Senior Notes due November 2020, effective interest rate of 4.43% [Member] | |||||
Debt Instrument [Line Items] | |||||
Senior notes | 0 | 500,000 | |||
2.500% Senior Notes due April 2021, effective interest rate of 2.62% [Member] | |||||
Debt Instrument [Line Items] | |||||
Senior notes | 250,000 | 250,000 | |||
3.700% Senior Notes due April 2022, effective interest rate of 3.85% [Member] | |||||
Debt Instrument [Line Items] | |||||
Senior notes | 500,000 | 500,000 | |||
2.875% Senior Notes due January 2023, effective interest rate of 3.21% [Member] | |||||
Debt Instrument [Line Items] | |||||
Senior notes | 300,000 | 300,000 | |||
3.125% Senior Notes due July 2023, effective interest rate of 3.26% [Member] | |||||
Debt Instrument [Line Items] | |||||
Senior notes | 500,000 | 500,000 | |||
3.125% Senior Notes due April 2024, effective interest rate 3.32% | |||||
Debt Instrument [Line Items] | |||||
Senior notes | 300,000 | 300,000 | $ 300,000 | ||
3.250% Senior Notes due April 2025, effective interest rate 3.36% [Member] | |||||
Debt Instrument [Line Items] | |||||
Senior notes | 400,000 | 400,000 | |||
3.625% Senior Notes due April 2025, effective interest rate 3.78% | |||||
Debt Instrument [Line Items] | |||||
Senior notes | 500,000 | $ 500,000 | 0 | ||
3.125% Senior Notes due April 2026, effective interest rate of 3.28% [Member] | |||||
Debt Instrument [Line Items] | |||||
Senior notes | 400,000 | 400,000 | |||
3.750% Senior Notes due June 2027, effective interest rate of 3.83% [Member] | |||||
Debt Instrument [Line Items] | |||||
Senior notes | 600,000 | 600,000 | |||
3.750% Senior Notes due April 2029, effective interest rate of 3.86% | |||||
Debt Instrument [Line Items] | |||||
Senior notes | 450,000 | 450,000 | $ 450,000 | ||
4.000% Senior Notes due April 2030, effective interest rate 4.09% | |||||
Debt Instrument [Line Items] | |||||
Senior notes | 750,000 | $ 750,000 | 0 | ||
1.650% Senior Notes due January 2031, effective interest rate of 2.19% | |||||
Debt Instrument [Line Items] | |||||
Senior notes | $ 600,000 | $ 600,000 | $ 0 |
Financing - Schedule of Debt (P
Financing - Schedule of Debt (Parenthetical) (Detail) | 12 Months Ended | |||
Aug. 29, 2020 | Aug. 31, 2019 | Aug. 14, 2020 | Mar. 30, 2020 | |
Commercial paper, weighted average interest rate of 2.28% and 2.29% at August 31, 2019 and August 25, 2018, respectively [Member] | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate percentage | 2.28% | |||
4.000% Senior Notes due November 2020, effective interest rate of 4.43% [Member] | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate percentage | 4.00% | 4.00% | ||
Effective interest rate | 4.43% | |||
Debt instrument maturity, month and year | 2020-11 | |||
2.500% Senior Notes due April 2021, effective interest rate of 2.62% [Member] | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate percentage | 2.50% | 2.50% | ||
Effective interest rate | 2.62% | 2.62% | ||
Debt instrument maturity, month and year | 2021-04 | 2021-04 | ||
3.700% Senior Notes due April 2022, effective interest rate of 3.85% [Member] | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate percentage | 3.70% | 3.70% | ||
Effective interest rate | 3.85% | 3.85% | ||
Debt instrument maturity, month and year | 2022-04 | 2022-04 | ||
2.875% Senior Notes due January 2023, effective interest rate of 3.21% [Member] | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate percentage | 2.875% | 2.875% | ||
Effective interest rate | 3.21% | 3.21% | ||
Debt instrument maturity, month and year | 2023-01 | 2023-01 | ||
3.125% Senior Notes due July 2023, effective interest rate of 3.26% [Member] | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate percentage | 3.125% | 3.125% | ||
Effective interest rate | 3.26% | 3.26% | ||
Debt instrument maturity, month and year | 2023-07 | 2023-07 | ||
3.125% Senior Notes due April 2024, effective interest rate 3.32% | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate percentage | 3.125% | 3.125% | ||
Effective interest rate | 3.32% | 3.32% | ||
Debt instrument maturity, month and year | 2024-04 | 2024-04 | ||
3.250% Senior Notes due April 2025, effective interest rate 3.36% [Member] | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate percentage | 3.25% | 3.25% | ||
Effective interest rate | 3.36% | 3.36% | ||
Debt instrument maturity, month and year | 2025-04 | 2025-04 | ||
3.625% Senior Notes due April 2025, effective interest rate 3.78% | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate percentage | 3.625% | 3.625% | ||
Effective interest rate | 3.78% | |||
Debt instrument maturity, month and year | 2025-04 | |||
3.125% Senior Notes due April 2026, effective interest rate of 3.28% [Member] | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate percentage | 3.125% | 3.125% | ||
Effective interest rate | 3.28% | 3.28% | ||
Debt instrument maturity, month and year | 2026-04 | 2026-04 | ||
3.750% Senior Notes due June 2027, effective interest rate of 3.83% [Member] | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate percentage | 3.75% | 3.75% | ||
Effective interest rate | 3.83% | 3.83% | ||
Debt instrument maturity, month and year | 2027-06 | 2027-06 | ||
3.750% Senior Notes due April 2029, effective interest rate of 3.86% | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate percentage | 3.75% | 3.75% | ||
Effective interest rate | 3.86% | 3.86% | ||
Debt instrument maturity, month and year | 2029-04 | 2029-04 | ||
4.000% Senior Notes due April 2030, effective interest rate 4.09% | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate percentage | 4.00% | 4.00% | ||
Effective interest rate | 4.09% | |||
Debt instrument maturity, month and year | 2030-04 | |||
1.650% Senior Notes due January 2031, effective interest rate of 2.19% | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate percentage | 1.65% | 1.65% | ||
Effective interest rate | 2.19% | |||
Debt instrument maturity, month and year | 2031-01 |
Financing - Additional Informat
Financing - Additional Information (Detail) | Nov. 18, 2017USD ($) | Nov. 17, 2017USD ($) | Aug. 29, 2020USD ($) | Aug. 31, 2019USD ($) | Aug. 14, 2020USD ($) | Apr. 03, 2020USD ($) | Mar. 30, 2020USD ($) | Apr. 18, 2019USD ($) |
Debt Instrument [Line Items] | ||||||||
Amount available under credit facility | $ 2,750,000,000 | |||||||
Maximum amount available under credit facility | $ 750,000,000 | |||||||
Credit Agreement description | less than one year | |||||||
Minimum debt covenant interest coverage ratio to be maintained quarterly | 2.5 | |||||||
Debt covenant interest coverage ratio | 6.1 | |||||||
Remaining borrowing capacity under revolving credit facility | $ 2,748,000,000 | |||||||
Fair value of the Company's debt | 6,081,000,000 | $ 5,419,000,000 | ||||||
Excess (shortfall) of fair value of debt over (from) carrying value | 567,500,000 | 212,700,000 | ||||||
Other Letters Of Credit [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Borrowings, outstanding | $ 220,300,000 | |||||||
Third Amended and Restated Credit Agreement [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Amount available under credit facility | $ 1,600,000,000 | |||||||
Maximum amount available under credit facility | $ 2,000,000,000 | |||||||
Credit facility expiration date | Nov. 18, 2021 | |||||||
Master Extension Agreement [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Amount available under credit facility | $ 2,000,000,000 | |||||||
Maximum amount available under credit facility | $ 2,400,000,000 | |||||||
Credit facility expiration date | Nov. 18, 2022 | |||||||
Extended expiration of credit facility | 1 year | |||||||
Credit Agreement description | Under the Revolving Credit Agreement, the Company may borrow funds consisting of Eurodollar loans, base rate loans or a combination of both. Interest accrues on Eurodollar loans at a defined Eurodollar rate, defined as LIBOR plus the applicable percentage, as defined in the Revolving Credit Agreement, depending upon the Company’s senior, unsecured, (non-credit enhanced) long-term debt ratings. Interest accrues on base rate loans as defined in the Revolving Credit Agreement. | |||||||
Letters of credit, outstanding | $ 1,700,000 | |||||||
Letter of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum amount available under credit facility | 25,000,000 | |||||||
Borrowings, outstanding | 25,000,000 | |||||||
Revolving Credit Facility [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Borrowings, outstanding | 0 | |||||||
1.650% Senior Notes due January 2031, effective interest rate of 2.19% | ||||||||
Debt Instrument [Line Items] | ||||||||
Long-term debt | $ 600,000,000 | 0 | $ 600,000,000 | |||||
Stated interest rate percentage | 1.65% | 1.65% | ||||||
2.500% Senior Notes due April 2021, effective interest rate of 2.62% [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Long-term debt | $ 250,000,000 | $ 250,000,000 | ||||||
Stated interest rate percentage | 2.50% | 2.50% | ||||||
4.000% Senior Notes due November 2020, effective interest rate of 4.43% [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Long-term debt | $ 0 | $ 500,000,000 | ||||||
Stated interest rate percentage | 4.00% | 4.00% | ||||||
Repayment of debt | $ 500,000,000 | |||||||
3.625% Senior Notes due April 2025, effective interest rate 3.78% | ||||||||
Debt Instrument [Line Items] | ||||||||
Long-term debt | $ 500,000,000 | $ 0 | $ 500,000,000 | |||||
Stated interest rate percentage | 3.625% | 3.625% | ||||||
4.000% Senior Notes due April 2030, effective interest rate 4.09% | ||||||||
Debt Instrument [Line Items] | ||||||||
Long-term debt | $ 750,000,000 | 0 | $ 750,000,000 | |||||
Stated interest rate percentage | 4.00% | 4.00% | ||||||
3.125% Senior Notes due April 2024, effective interest rate 3.32% | ||||||||
Debt Instrument [Line Items] | ||||||||
Long-term debt | $ 300,000,000 | $ 300,000,000 | $ 300,000,000 | |||||
Stated interest rate percentage | 3.125% | 3.125% | ||||||
3.750% Senior Notes due April 2029, effective interest rate of 3.86% | ||||||||
Debt Instrument [Line Items] | ||||||||
Long-term debt | $ 450,000,000 | $ 450,000,000 | $ 450,000,000 | |||||
Stated interest rate percentage | 3.75% | 3.75% | ||||||
1.625% Senior Notes due April 2019, effective interest rate of 1.77% [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Stated interest rate percentage | 1.625% | |||||||
Repayment of debt | $ 250,000,000 |
Financing - Scheduled Maturitie
Financing - Scheduled Maturities of Debt (Detail) - USD ($) $ in Thousands | Aug. 29, 2020 | Aug. 31, 2019 |
Financing | ||
2021 | $ 250,000 | |
2022 | 500,000 | |
2023 | 800,000 | |
2024 | 300,000 | |
2025 | 900,000 | |
Thereafter | 2,800,000 | |
Subtotal | 5,550,000 | |
Discount and debt issuance costs | 36,629 | $ 23,656 |
Long-term debt | $ 5,513,371 | $ 5,206,344 |
Interest Expense - Net Interest
Interest Expense - Net Interest Expense (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 29, 2020 | Aug. 31, 2019 | Aug. 25, 2018 | |
Other Income and Expenses [Abstract] | |||
Interest expense | $ 208,021 | $ 193,671 | $ 181,668 |
Interest income | (5,689) | (7,396) | (5,636) |
Capitalized interest | (1,167) | (1,471) | (1,505) |
Net Interest Expense | $ 201,165 | $ 184,804 | $ 174,527 |
Stock Repurchase Program - Addi
Stock Repurchase Program - Additional Information (Detail) - USD ($) shares in Thousands, $ in Thousands | Oct. 07, 2019 | Aug. 29, 2020 | Aug. 31, 2019 | Aug. 25, 2018 | Aug. 30, 2020 |
Stock Repurchase Program 1998 | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Increase in authorization of stock repurchase, value | $ 1,250,000 | ||||
Stock repurchase authorized | $ 23,150,000 | ||||
Remaining value authorized for share repurchases | 795,900 | ||||
Retained Deficit [Member] | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Retirement of treasury shares | 1,878,595 | $ 1,706,971 | $ 918,462 | ||
Additional Paid-In Capital [Member] | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Retirement of treasury shares | $ 99,686 | $ 125,442 | $ 60,500 | ||
Common Stock [Member] | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Retirement of treasury shares, shares | 1,912 | 2,563 | 1,512 | ||
Retirement of treasury shares | $ 19 | $ 26 | $ 15 | ||
Subsequent Events [Member] | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Remaining value authorized for share repurchases | $ 481,500 |
Stock Repurchase Program - Shar
Stock Repurchase Program - Share Repurchase Activity (Detail) - USD ($) $ in Thousands | Aug. 30, 2020 | Aug. 29, 2020 | Aug. 31, 2019 | Aug. 25, 2018 |
Equity, Class of Treasury Stock [Line Items] | ||||
Amount | $ 930,903 | $ 2,004,896 | $ 1,592,013 | |
Shares | 826,000 | 2,182,000 | 2,398,000 | |
Subsequent Events [Member] | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Amount | $ 314,400 | |||
Shares | 269,795 | |||
Remaining value authorized for share repurchases | $ 481,500 |
Pension and Savings Plans - Add
Pension and Savings Plans - Additional Information (Detail) - USD ($) $ in Thousands | 4 Months Ended | 12 Months Ended | ||
Aug. 25, 2018 | Aug. 29, 2020 | Aug. 31, 2019 | Aug. 25, 2018 | |
Pension and Savings Plans | ||||
Consecutive years of highest compensation used to determine defined benefit pension plan benefits | 5 years | |||
Annual contributions by the Company to pension plans | $ 11,400 | |||
Pension termination charges (refund) | $ 130,300 | $ 0 | $ (6,796) | $ 130,263 |
Periodic pension benefit expense | $ 0 | |||
Percentage of company matching retirement savings plan contributions that vest immediately | 100.00% | |||
Percentage of savings option up to qualified earnings | 25.00% | |||
Annual contribution by employer towards 401(k) Plan | $ 29,800 | $ 25,800 | $ 23,100 |
Pension and Savings Plans - Net
Pension and Savings Plans - Net Periodic Benefit Expense (Detail) $ in Thousands | 12 Months Ended |
Aug. 25, 2018USD ($) | |
Pension and Savings Plans | |
Interest cost | $ 10,356 |
Expected return on plan assets | (18,997) |
Recognized net actuarial losses | 10,736 |
Settlement loss | 130,263 |
Net periodic benefit expense | $ 132,358 |
Sale of Assets - Additional Inf
Sale of Assets - Additional Information (Detail) $ in Thousands | 12 Months Ended |
Aug. 25, 2018USD ($) | |
Business Acquisition [Line Items] | |
Asset impairment charges | $ 193,162 |
IMC Businesses | Auto Parts Locations [Member] | |
Business Acquisition [Line Items] | |
Asset impairment charges | 93,600 |
Auto Anything | Other [Member] | |
Business Acquisition [Line Items] | |
Asset impairment charges | $ 99,600 |
Goodwill and Intangibles - Addi
Goodwill and Intangibles - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Aug. 29, 2020 | Aug. 31, 2019 | |
Goodwill [Line Items] | ||
Goodwill | $ 302,645 | $ 302,645 |
Amortization expense of intangible assets | 4,200 | 4,200 |
2021 | 1,400,000 | |
Thereafter | 0 | |
Auto Parts Locations [Member] | ||
Goodwill [Line Items] | ||
Goodwill | $ 302,600 | $ 302,600 |
Goodwill and Intangibles - Sche
Goodwill and Intangibles - Schedule of Carrying Amounts of Intangible Assets (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Aug. 29, 2020 | Aug. 31, 2019 | |
Finite Lived And Indefinite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 29,376 | $ 30,246 |
Accumulated Amortization | (27,933) | (24,630) |
Net Carrying Amount | $ 1,443 | 5,616 |
Minimum [Member] | ||
Finite Lived And Indefinite Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 3 years | |
Maximum [Member] | ||
Finite Lived And Indefinite Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 10 years | |
Technology [Member] | ||
Finite Lived And Indefinite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 870 | |
Accumulated Amortization | $ (870) | |
Technology [Member] | Minimum [Member] | ||
Finite Lived And Indefinite Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 3 years | |
Technology [Member] | Maximum [Member] | ||
Finite Lived And Indefinite Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 5 years | |
Customer Relationships [Member] | ||
Finite Lived And Indefinite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 29,376 | $ 29,376 |
Accumulated Amortization | (27,933) | (23,760) |
Net Carrying Amount | $ 1,443 | $ 5,616 |
Customer Relationships [Member] | Minimum [Member] | ||
Finite Lived And Indefinite Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 3 years | 3 years |
Customer Relationships [Member] | Maximum [Member] | ||
Finite Lived And Indefinite Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 10 years | 10 years |
Leases - Additional Information
Leases - Additional Information (Detail) $ in Millions | 12 Months Ended |
Aug. 29, 2020USD ($) | |
Renewal Options And Lease term | The leases have varying terms and expire at various dates through 2040. Retail leases typically have initial terms of between one and 20 years, with one to six optional renewal periods of one to five years each. |
Lease Accumulated Amortization | $ 107.3 |
Cash paid for amounts included in the measurement of operating lease liabilities | 352.9 |
Additional leases not yet commenced, undiscounted future payments | $ 16.7 |
Finance lease term | 20 years |
Minimum [Member] | |
Operating lease commencement date | 2021 |
Finance lease term | 1 year |
Maximum [Member] | |
Operating lease commencement date | 2022 |
Finance lease term | 5 years |
Leases - Summary of Lease-relat
Leases - Summary of Lease-related assets and liabilities recorded on the Condensed Consolidated Balance Sheet (Detail) - USD ($) $ in Thousands | Aug. 29, 2020 | Aug. 31, 2019 |
Assets | ||
Operating | $ 2,581,677 | |
Total lease assets | 2,908,683 | |
Current | ||
Operating | 223,846 | |
Finance | 67,498 | $ 56,246 |
Noncurrent | ||
Operating | 2,501,560 | |
Total lease liabilities | 2,948,759 | |
Operating lease right-of-use assets | ||
Assets | ||
Operating | 2,581,677 | |
Property And Equipment | ||
Assets | ||
Finance | 327,006 | |
Current portion of operating lease liablities | ||
Current | ||
Operating | 223,680 | |
Accrued expenses and other | ||
Current | ||
Finance | 67,498 | |
Operating lease liabilities, less current portion | ||
Noncurrent | ||
Operating | 2,501,726 | |
Other long-term liabilities | ||
Noncurrent | ||
Finance | $ 155,855 |
Leases - Lease Cost (Detail)
Leases - Lease Cost (Detail) $ in Thousands | 12 Months Ended |
Aug. 29, 2020USD ($) | |
Amortization of lease assets | $ 107,300 |
Total lease cost | 415,505 |
Depreciation and amortization | |
Amortization of lease assets | 55,920 |
Interest expense, net | |
Interest on lease liabilities | 4,355 |
Selling, general and administrative expenses | |
Operating lease cost | $ 355,230 |
Leases - Summary of future matu
Leases - Summary of future maturities of the Company's lease liabilities (Details) $ in Thousands | Aug. 29, 2020USD ($) |
Leases | |
2021 | $ 69,013 |
2022 | 57,188 |
2023 | 45,377 |
2024 | 24,590 |
2025 | 10,447 |
Thereafter | 44,765 |
Total Lease Payments | 251,380 |
Less: Interest | (28,027) |
Present value of lease liabilities | 223,353 |
2021 | 302,890 |
2022 | 324,860 |
2023 | 307,859 |
2024 | 284,296 |
2025 | 259,099 |
Thereafter | 2,055,365 |
Total Lease Payments | 3,534,369 |
Less: Interest | (808,963) |
Present value of lease liabilities | 2,725,406 |
2021 | 371,903 |
2022 | 382,048 |
2023 | 353,236 |
2024 | 308,886 |
2025 | 269,546 |
Thereafter | 2,100,130 |
Total Lease Payments | 3,785,749 |
Less: Interest | (836,990) |
Present value of lease liabilities | $ 2,948,759 |
Leases - Information on lease t
Leases - Information on lease term and discount rate (Detail) | 12 Months Ended |
Aug. 29, 2020 | |
Weighted-average remaining lease term (years) | |
Finance leases - real estate | 27 years |
Finance leases - vehicles | 3 years |
Operating leases | 15 years |
Weighted-average discount rate: | |
Finance leases - real estate | 3.49% |
Finance leases - vehicles | 2.29% |
Operating leases | 3.46% |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ in Millions | 12 Months Ended |
Aug. 29, 2020USD ($) | |
Loss Contingencies [Line Items] | |
Commitment for construction | $ 50.9 |
Surety bonds | $ 56.7 |
The period of time before expiration of standby letters of credit and surety bonds | less than one year |
Standby Letters of Credit | |
Loss Contingencies [Line Items] | |
Borrowings, outstanding | $ 246.9 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Detail) - USD ($) $ in Thousands | Aug. 26, 2018 | Aug. 25, 2018 |
Revenue From Contract With Customer [Line Items] | ||
An increase of retained deficit | $ 6,773 | |
Accounting Standards Update 2014-09 [Member] | ||
Revenue From Contract With Customer [Line Items] | ||
An increase of retained deficit | $ 6,800 |
Segment Reporting - Additional
Segment Reporting - Additional Information (Detail) | 12 Months Ended |
Aug. 29, 2020USD ($) | |
Segment Reporting | |
Number of reportable segments | 1 |
Number of automotive parts and accessories locations in the United States, Mexico, and Brazil | 6,549 |
Number of operating segments | 3 |
Segment Reporting - Segment Res
Segment Reporting - Segment Results (Detail) - USD ($) $ in Thousands | 3 Months Ended | 4 Months Ended | 12 Months Ended | ||||||||
May 09, 2020 | Feb. 15, 2020 | Nov. 23, 2019 | May 04, 2019 | Feb. 09, 2019 | Nov. 17, 2018 | Aug. 29, 2020 | Aug. 31, 2019 | Aug. 29, 2020 | Aug. 31, 2019 | Aug. 25, 2018 | |
Segment Reporting Information [Line Items] | |||||||||||
Net sales | $ 2,779,299 | $ 2,513,663 | $ 2,793,038 | $ 2,783,006 | $ 2,450,568 | $ 2,641,733 | $ 4,545,968 | $ 3,988,435 | $ 12,631,967 | $ 11,863,743 | $ 11,221,077 |
Gross profit | 1,490,648 | 1,366,063 | 1,501,068 | 1,492,020 | 1,325,107 | 1,417,474 | 2,412,975 | 2,130,400 | 6,770,753 | 6,365,001 | 5,973,746 |
Operating, selling, general and administrative expenses | (4,353,074) | (4,148,864) | (4,162,890) | ||||||||
Interest expense, net | (201,165) | (184,804) | (174,527) | ||||||||
Income before income taxes | $ 444,223 | $ 363,603 | $ 456,280 | $ 504,284 | $ 358,658 | $ 448,812 | 952,407 | 719,578 | 2,216,514 | 2,031,333 | 1,636,329 |
Assets | 14,423,872 | 9,895,913 | 14,423,872 | 9,895,913 | 9,346,980 | ||||||
Capital Expenditures | 457,736 | 496,050 | 521,788 | ||||||||
Auto Parts Locations [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 12,405,929 | 11,645,235 | 10,951,498 | ||||||||
Gross profit | 6,617,508 | 6,209,229 | 5,805,561 | ||||||||
Assets | 14,303,427 | 9,781,926 | 14,303,427 | 9,781,926 | 9,231,021 | ||||||
Capital Expenditures | 432,067 | 479,120 | 499,762 | ||||||||
Auto Parts Locations [Member] | Failure | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 6,088,859 | 5,728,294 | 5,338,890 | ||||||||
Auto Parts Locations [Member] | Maintenance Items | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 4,284,913 | 4,140,987 | 3,914,546 | ||||||||
Auto Parts Locations [Member] | Discretionary | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 2,032,157 | 1,775,954 | 1,698,062 | ||||||||
Other [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 226,038 | 218,508 | 269,579 | ||||||||
Gross profit | 153,245 | 155,772 | 168,185 | ||||||||
Assets | $ 120,445 | $ 113,987 | 120,445 | 113,987 | 115,959 | ||||||
Capital Expenditures | $ 25,669 | $ 16,930 | $ 22,026 |
Segment Reporting - Segment R_2
Segment Reporting - Segment Results (Parenthetical) (Detail) - USD ($) $ in Thousands | 4 Months Ended | 12 Months Ended | ||
Aug. 25, 2018 | Aug. 29, 2020 | Aug. 31, 2019 | Aug. 25, 2018 | |
Segment Reporting | ||||
Termination settlement costs | $ 130,300 | $ 0 | $ (6,796) | $ 130,263 |
Asset impairment charges | $ 193,162 |
Quarterly Summary - Quarterly S
Quarterly Summary - Quarterly Summary (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 4 Months Ended | 12 Months Ended | ||||||||
May 09, 2020 | Feb. 15, 2020 | Nov. 23, 2019 | May 04, 2019 | Feb. 09, 2019 | Nov. 17, 2018 | Aug. 29, 2020 | Aug. 31, 2019 | Aug. 29, 2020 | Aug. 31, 2019 | Aug. 25, 2018 | |
Quarterly Summary | |||||||||||
Net sales | $ 2,779,299 | $ 2,513,663 | $ 2,793,038 | $ 2,783,006 | $ 2,450,568 | $ 2,641,733 | $ 4,545,968 | $ 3,988,435 | $ 12,631,967 | $ 11,863,743 | $ 11,221,077 |
Gross profit | 1,490,648 | 1,366,063 | 1,501,068 | 1,492,020 | 1,325,107 | 1,417,474 | 2,412,975 | 2,130,400 | 6,770,753 | 6,365,001 | 5,973,746 |
Operating profit | 491,673 | 407,938 | 500,023 | 547,523 | 400,020 | 487,818 | 1,018,045 | 780,775 | 2,417,679 | 2,216,137 | 1,810,856 |
Income before income taxes | 444,223 | 363,603 | 456,280 | 504,284 | 358,658 | 448,812 | 952,407 | 719,578 | 2,216,514 | 2,031,333 | 1,636,329 |
Net income | $ 342,896 | $ 299,282 | $ 350,338 | $ 405,949 | $ 294,638 | $ 351,406 | $ 740,457 | $ 565,228 | $ 1,732,972 | $ 1,617,221 | $ 1,337,536 |
Basic earnings per share | $ 14.66 | $ 12.70 | $ 14.67 | $ 16.35 | $ 11.71 | $ 13.71 | $ 31.67 | $ 23.15 | $ 73.62 | $ 64.78 | $ 49.59 |
Diluted earnings per share | $ 14.39 | $ 12.39 | $ 14.30 | $ 15.99 | $ 11.49 | $ 13.47 | $ 30.93 | $ 22.59 | $ 71.93 | $ 63.43 | $ 48.77 |