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AZO, AutoZone Inc.

AutoZone Inc. is a leading retailer and distributor of automotive replacement parts and accessories in the Americas.

At August 30, 2025, in 6,098 of our domestic stores as well as the vast majority of our stores in Mexico and Brazil, we had a commercial sales program that provides prompt delivery of parts and other products and commercial credit to local, regional and national repair garages, dealers, service stations, fleet owners and other accounts.

We do not derive revenue from automotive repair or installation services.

Latest annual: FY2025 10-K

AZO · AutoZone Inc.

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2025

$18.9B

+2.4% YoY · 8% 5-yr CAGR

Vital signs · TTM, with 5-yr average

Revenue $20.0B 5-yr avg $17.2B

Gross margin 52% 5-yr avg 53%

Operating margin 18.0% 5-yr avg 19.9%

ROIC 44% 5-yr avg 86%

Owner-earnings margin 12% 5-yr avg 16%

Free cash flow margin 8% 5-yr avg 14%

The business in brief

read the 10-K →

What this business is and what moves its needle, from its own SEC filings.

What moves the needle: Gross margin has run about 53% and operating margin about 19% through the cycle, a wide spread between price and the cost of what it sells — whether that advantage is durable pricing power or a margin that can erode is the question the record is for. That margin has stayed fairly steady relative to where it runs (16%–20% over the years), so unit growth and cost discipline, not a moving line, are the lever. The cash cycle has run negative through the cycle (a median of −32 days): the operation is paid before it pays, so working capital releases cash as the business grows rather than tying it up. On its own account, the filing leans hardest on pricing power & competition, set against the numbers in what the filing emphasizes, below.
Is it a good business?: Return on capital has run high across the record (median 60%, above 15% in 10 of 10 years), though buybacks and expensed R&D and brands shrink the capital base, so the figure overstates the underlying economics. The steadier read is owner earnings: roughly 14% of revenue reaches owners as cash, consistently, and customers and suppliers fund the business through negative working capital. Whether these returns reflect real pricing power or an accounting artifact is the judgment the 10-K is for.

Every line is arithmetic on the company's filings, shown in full in the sections below.

The record

Ten years of arithmetic, read across the cycle.

The record, 2016–2025

realized figures from each filing · older years to the left

2016’16	2017’17	2018’18	2019’19	2020’20	2021’21	2022’22	2023’23	2024’24	2025’25	TTMTTMMay 2026
											Income statement
$10.6B	$10.9B	$11.2B	$11.9B	$12.6B	$14.6B	$16.3B	$17.5B	$18.5B	$18.9B	$20.0B	RevenueRevenue
53%	53%	53%	54%	54%	53%	52%	52%	53%	53%	52%	Gross marginGross mgn
33%	34%	37%	35%	34%	33%	32%	32%	33%	34%	34%	SG&A / revenueSG&A/rev
$2.1B	$2.1B	$1.8B	$2.2B	$2.4B	$2.9B	$3.3B	$3.5B	$3.8B	$3.6B	$3.6B	Operating incomeOp. inc.
19.4%	19.1%	16.1%	18.7%	19.1%	20.1%	20.1%	19.9%	20.5%	19.1%	18.0%	Operating marginOp. mgn
$1.2B	$1.3B	$1.3B	$1.6B	$1.7B	$2.2B	$2.4B	$2.5B	$2.7B	$2.5B	$2.5B	Net incomeNet inc.
35%	33%	18%	20%	22%	21%	21%	20%	20%	20%	21%	Effective tax rateTax rate
											Cash flow & returns
$1.6B	$1.6B	$2.1B	$2.1B	$2.7B	$3.5B	$3.2B	$2.9B	$3.0B	$3.1B	$3.1B	Operating cash flowOp. cash
$297M	$323M	$345M	$370M	$397M	$408M	$442M	$498M	$550M	$613M	$662M	DepreciationDeprec.
$103M	($33M)	$398M	$141M	$590M	$941M	$339M	($85M)	($208M)	$6M	($107M)	Working capital & otherWC & other
$489M	$554M	$522M	$496M	$458M	$622M	$672M	$797M	$1.1B	$1.3B	$1.4B	CapexCapex
4.6%	5.1%	4.7%	4.2%	3.6%	4.3%	4.1%	4.6%	5.8%	7.0%	7.2%	Capex / revenueCapex/rev
$1.3B	$1.2B	$1.7B	$1.8B	$2.3B	$3.1B	$2.8B	$2.4B	$2.5B	$2.5B	$2.4B	Owner earningsOwner earn.
12.6%	11.5%	15.5%	14.8%	17.9%	21.3%	17.0%	14.0%	13.3%	13.2%	12.1%	Owner earnings marginOE mgn
$1.2B	$1.0B	$1.6B	$1.6B	$2.3B	$2.9B	$2.5B	$2.1B	$1.9B	$1.8B	$1.6B	Free cash flowFCF
10.8%	9.3%	13.9%	13.8%	17.9%	19.8%	15.6%	12.3%	10.4%	9.5%	8.2%	Free cash flow marginFCF mgn
$0	$0	—	—	—	—	—	—	—	—	$0	AcquisitionsAcquis.
$1.5B	$1.1B	$1.6B	$2.0B	$931M	$3.4B	$4.4B	$3.7B	$3.1B	$1.6B	—	BuybacksBuybacks
45%	41%	45%	53%	65%	100%	110%	90%	75%	56%	44%	ROICROIC
											Balance sheet
$190M	$293M	$218M	$176M	$1.8B	$1.2B	$264M	$277M	$298M	$272M	$330M	Cash & investmentsCash+inv
$288M	$281M	$258M	$309M	$365M	$378M	$505M	$520M	$546M	$670M	$765M	ReceivablesReceiv.
$3.6B	$3.9B	$3.9B	$4.3B	$4.5B	$4.6B	$5.6B	$5.8B	$6.2B	$7.0B	$7.6B	InventoryInvent.
$4.1B	$4.2B	$4.4B	$4.9B	$5.2B	$6.0B	$7.3B	$7.2B	$7.4B	$8.0B	$8.4B	Accounts payablePayables
($176M)	($6M)	($208M)	($237M)	($318M)	($996M)	($1.2B)	($917M)	($655M)	($330M)	($77M)	Operating working capitalOper. WC
$4.2B	$4.6B	$4.6B	$5.0B	$6.8B	$6.4B	$6.6B	$6.8B	$7.3B	$8.3B	$8.9B	Current assetsCur. assets
$4.7B	$4.8B	$5.0B	$5.5B	$6.3B	$7.4B	$8.6B	$8.5B	$8.7B	$9.5B	$10.0B	Current liabilitiesCur. liab.
0.9×	1.0×	0.9×	0.9×	1.1×	0.9×	0.8×	0.8×	0.8×	0.9×	0.9×	Current ratioCurr. ratio
$392M	$392M	$303M	$303M	$303M	$303M	$303M	$303M	$303M	$303M	$303M	GoodwillGoodwill
$8.6B	$9.3B	$9.3B	$9.9B	$14.4B	$14.5B	$15.3B	$16.0B	$17.2B	$19.4B	$20.9B	Total assetsAssets
$4.9B	$5.1B	$5.0B	$5.2B	$5.5B	$5.3B	$6.2B	$7.7B	$9.1B	$8.8B	$9.5B	Total debtDebt
$4.8B	$4.8B	$4.8B	$5.1B	$3.8B	$4.1B	$5.9B	$7.4B	$8.8B	$8.6B	$9.2B	Net debt / (cash)Net debt
13.6×	13.1×	10.0×	11.4×	11.6×	14.6×	16.4×	10.9×	8.1×	7.4×	7.4×	Interest coverageInt. cov.
($1.8B)	($1.4B)	($1.5B)	($1.7B)	($878M)	($1.8B)	($3.5B)	($4.3B)	($4.7B)	($3.4B)	($2.8B)	Shareholders’ equityEquity
											Per share
30.5M	29.1M	27.4M	25.5M	24.1M	22.8M	20.7M	19.1M	17.8M	17.2M	17.0M	Shares out (diluted)Shares
$348.85	$374.63	$409.17	$465.28	$524.30	$641.68	$783.88	$913.85	$1038.60	$1098.21	$1177.47	Revenue / shareRev/sh
$40.70	$44.07	$48.77	$63.43	$71.93	$95.19	$117.19	$132.36	$149.55	$144.87	$146.00	EPS (diluted)EPS
$44.07	$42.92	$63.27	$68.97	$93.90	$136.45	$133.55	$127.90	$137.86	$145.21	$142.03	Owner earnings / shareOE/sh
$37.79	$34.98	$56.83	$64.02	$93.90	$127.06	$122.45	$112.24	$108.49	$103.80	$96.22	Free cash flow / shareFCF/sh
$16.03	$19.05	$19.03	$19.45	$19.00	$27.27	$32.43	$41.70	$60.25	$76.96	$84.78	Cap. spending / shareCapex/sh
$-58.63	$-49.14	$-55.44	$-67.22	$-36.44	$-78.84	$-170.69	$-227.71	$-266.79	$-197.99	$-164.05	Book value / shareBVPS

Per-share growththe realized rate an owner's share compounded

	9-yr	5-yr
Revenue / share	+13.6%/yr	+15.9%/yr
Owner earnings / share	+14.2%/yr	+9.1%/yr
EPS	+15.1%/yr	+15.0%/yr
Capital spending / share	+19.0%/yr	+32.3%/yr

The record, charted

FY2016–2025

Each measure over its full record; the current point and the worst year marked.

Share count

17Mpeak FY2016

ROIC

56%low FY2017

Gross margin

53%low FY2023

Net debt ÷ owner earnings

3.4×peak FY2017

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

$2.5Bowner earningsvs.$2.5Bnet incomelow FY2017

Where the cash went

ReinvestBuybacksDividendsAcquisitionsRetainedBeyond op. cash

Each year's outlays against its operating cash: the mix, and how it drifts. The hatched cap is spending beyond that year's operating cash — financed from the balance sheet or borrowing, not operations.

FY2016FY2025

Owner-earnings bridge

FY2021–FY2025cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2025 the business earned $2.5B of owner earnings, the operating cash left after the $613M it takes just to hold its position. It put $714M more into growth; free cash flow, after that spending, was $1.8B.

Reported net income$2.5B

Owner earnings$2.5B · 13% of revenue

	FY2025	FY2024	FY2023	FY2022	FY2021
Reported net income	$2.5B	$2.7B	$2.5B	$2.4B	$2.2B
Depreciation & amortizationnon-cash charge added back	+$613M	+$550M	+$498M	+$442M	+$408M
Working capital & othertiming of cash in and out, other non-cash items	+$6M	−$208M	−$85M	+$339M	+$941M
Cash from operations	$3.1B	$3.0B	$2.9B	$3.2B	$3.5B
Maintenance capital expenditurethe spending needed just to hold position and volume	−$613M	−$550M	−$498M	−$442M	−$408M
Owner earnings	$2.5B	$2.5B	$2.4B	$2.8B	$3.1B
Growth capital expenditurediscretionary; spent to get bigger, not to stand still	−$714M	−$523M	−$299M	−$230M	−$214M
Free cash flow	$1.8B	$1.9B	$2.1B	$2.5B	$2.9B
Owner-earnings marginowner earnings ÷ revenue	13%	13%	14%	17%	21%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the maintenance capital it must spend to hold its position (here about $613M, roughly its depreciation, the rate its assets wear out). The other $714M of its capital spending is growth it chose, not upkeep it owed; charged only with the maintenance it must do, the business earns well more than the year's free cash flow shows.

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2025 10-K · source on SEC EDGAR →

Will it survive?

Can it pay its interest? 7.4×

Comfortable

Operating income $3.6B ÷ interest expense $490M

What this means
Operating profit covers interest with the kind of margin Graham wanted for a defensive holding. Necessary, not sufficient, it says solvent, not cheap.
How heavy is the debt, net of cash? $8.7B · 2.4× operating profit

Meaningful net debt

Cash $272M + ST investments $23M − debt $9.0B

What this means
Netting $294M of cash and short-term investments against $9.0B of debt leaves $8.7B owed, about 2.4× a year's operating profit (2.5× on the gross debt, before the cash). It also holds $54M in longer-dated marketable securities; counting those, it sits at $8.6B of net debt. Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? -28d

Negative, funded by others

DSO 13 + DIO 286 − DPO 326 days

What this means
Days cash is tied up between paying suppliers and collecting from customers. A negative cycle is a quiet moat: suppliers and customers fund the operation (Buffett's “float”), the company grows on other people's money.

Is it a good business?

Return on invested capital 56%

Very high (≥25%) through the cycle

10-yr median, range 41%–110%; 54% latest = NOPAT $2.9B ÷ invested capital $5.3B

Industry peers: median 13%

What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 10 years (it ran 54% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
Owner-earnings margin 14%

Solid through the cycle

10-yr median margin, range 11%–21%; latest $2.5B = operating cash $3.1B − maintenance capex $613M

Industry peers: median 4%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 13% of revenue this year, a 14% median across 10 years. It chose to put $714M more into growth, so free cash flow this year was $1.8B — the gap is investment, not weakness. Treating stock comp as the real expense it is (less $39M of SBC) leaves $2.5B.
Are earnings backed by cash? 1.25×

Cash-backed

Cash from ops $3.1B ÷ net income $2.5B

What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

Where do the earnings go? 63%

Returns about half

Dividends + buybacks $1.6B ÷ Owner Earnings $2.5B

What this means
Of $2.5B Owner Earnings, $1.6B (63%) went back to shareholders, $0 dividends, $1.6B buybacks. Net of $39M stock comp, the real buyback was about $1.5B. Returning most of it is the mark of a mature business with little left to reinvest at a high return; reinvesting most could mean a long runway, or empire-building. The split doesn't say which; the return earned on it (see ROIC) does.
Investing or harvesting? 2.16×

Expanding

Capex $1.3B ÷ depreciation $613M

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 3 of 6 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Pass

Revenue ≥ $2B · $18.9B

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity Miss

Current ratio ≥ 2× · 0.88×

What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
Conservative debt Miss

Debt ≤ working capital · $9.0B vs ($1.2B) WC

What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
Earnings stability Pass

A profit every year (10-yr record) · no losses

What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
Dividend record Miss

Uninterrupted dividends · none paid

What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
Earnings growth Pass

Earnings +33% over the record · +99%

What this means
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $157.00/share (latest year $153.03), the averaged base the calculator's gate runs on, and book value is $-209.14/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2016–2025

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 10 of 10

What this means
Never lost money over the record, the earnings stability Graham insisted on.
Return on capital ≥ 15% 10 of 10 yrs

What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
Operating margin 18% → 20% (3-yr avg ends)

What this means
Through the cycle the operating margin held roughly steady — about 18% early, 20% lately, median 19%.
Reinvestment, incremental ROIC returns capital

What this means
The capital base barely grew: this business returns cash through dividends and buybacks rather than reinvesting. Judge it on the cash returned, not on compounding.
Owner earnings growth +7%/yr

What this means
Owner earnings grew about 7% a year over the record.
Worst year 2018 · 16.1% op. margin

What this means
Stayed profitable even in its hardest year, the resilience that survives recessions.
Share count −6.1%/yr

What this means
The share count is shrinking, buybacks are quietly growing your slice of the business.
How management talks about it Owner’s terms

What this means
The record and the register agree: capital is compounding and the filing reasons in an owner’s terms — per-share value, return on capital, the long term — not a promoter’s.

Does AI threaten the moat?

Moderate contestability

AI is likely to reshape costs and some products here without clearly contesting or sparing the core moat; how the company itself frames it is the tell.

In its own filing Named as a competitive risk

Its FY2025 10-K names artificial intelligence as a competitive threat.

“Although we believe we compete effectively, our competitors may have greater financial resources allowing them to invest more in their business, greater sourcing capabilities allowing them to sell merchandise at lower prices, larger stores with more merchandise, longer operating histories with deeper customer relations…”

The question is whether a moat the record shows as durable outlasts a technology that lowers the cost of part of what the firm sells. The durability is read in the record above, the filing's own framing of AI beside it; the industry label decides nothing on its own.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

Current Position

as of the latest quarter, May 9, 2026

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$8.9B

Cash & short-term investments$276M
Receivables$765M
Inventory$7.6B
Other current assets$334M

Current liabilities$10.0B

Debt due within a year$500M
Accounts payable$8.4B
Other current liabilities$1.1B

Current ratio0.89×all current assets ÷ what's due · Graham looked for 2×

Quick ratio0.14×stricter: inventory excluded

Cash ratio0.03×strictest: cash alone against what's due

Working capital($1.1B)the cushion left after near-term bills

Its current ratio is below 1, which usually reads as strain; here it is likely structural strength. This business collects from customers before it pays suppliers (a negative cash-conversion cycle), so the balance sheet is funded by that float, the way Costco's and Amazon's are. The low ratio can be the edge, not the risk; the cash-conversion cycle and the debt due above say which.

Debt due this year vs. cash$500M due · $276M cash cash alone won't cover the maturities; it leans on refinancing or operating cash · both figures from the May 9, 2026 balance sheet

Revenue, latest quarter vs. a year ago+8.4%the freshest read on whether the business is still growing

Current ratio, recent quarters0.8× → 0.9×

Deeper floors

Tangible book value($3.1B)equity stripped of goodwill & intangibles

Debt incl. operating leases$13.1B$3.6B of it operating leases; with finance leases, “total fixed claims” below reaches $12.8B (annual-report basis)

From the company's latest filing.

Lease obligations

the lease note, SEC EDGAR →

Debt by another name. What the business owes on the property, aircraft, stores and equipment it rents rather than owns is a fixed claim due on a schedule; added back to the debt, it is the true leverage. That ladder, operating and finance leases together, and what it adds to the debt on the page above.

Operating leasesFinance leases

'26$537M

'27$580M

'28$536M

'29$474M

'30$395M

later$2.3B

Lease payments by year, scaled to the largest; “later” is everything beyond year five, shown apart. These are the contractual cash payments, before the interest the filing imputes back out to the balance-sheet liability.

Due in the next 12 months$537Ma fixed cash payment, owed whether or not the business has a good year

Total lease payments$4.8Bevery year plus the tail, undiscounted: the full cash the leases will take

On the balance sheet$3.8Bthe present value of those payments, the recognised lease liability

True leverage: debt plus leases

On-balance-sheet debt$9.0B

Lease obligations (present value)$3.8B

Total fixed claims on the business$12.8B

Counting the leases the way Buffett does, the fixed claims on this business come to $12.8B, of which the leases are 30%. The lease wall above and the debt schedule together are the calendar of what must be paid, and when.

Lease ladder read from the ASC 842 tags in the company’s Aug 30, 2025 annual report and reconciled: the yearly buckets sum to the undiscounted total, which less the imputed interest equals the balance-sheet liability; a ladder that doesn’t tie out is withheld.

How the cash was used, 2016–2025

Over the record, the business generated $25.9B of operating cash; how management split it reads as a cash returner, paying most of what it earns straight back to owners.

Reinvested$7.0B · 27%
Buybacks$23.2B · 89%

Returned to owners$23.2B
107% of the owner earnings the business produced over the span, $0 as dividends and $23.2B as buybacks.
Source of funding−$4.3B
Reinvestment and shareholder returns ran $4.3B beyond the operating cash the business generated, so the gap was financed off the balance sheet: debt rose from $4.9B to $9.5B.
Average price paid for buybacks$1386.76
Across the years where the filing reports a share count, 17M shares were bought for $23.2B, about $1386.76 each. Year to year the price paid ranged from $663.89 (2018) to $3530.62 (2025); its heaviest year, 2022, paid $1963.96 ($4.4B).
Net change in share count−44.3%
The diluted count fell from 30M to 17M, so the buybacks outran the stock issued to staff.
Dividend record—
No dividend line was reported in the filing data over the span; the record here neither confirms nor rules out a payout.

Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.

Management, ownership & pay

read the proxy →

From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.

Fiscal year	Chief executive	Pay, as filed	“Actually paid”	Owner earnings
2021	Mr. Rhodes	$14.8M	$33.5M	$3.1B
2022	Mr. Rhodes	$14.3M	$53.2M	$2.8B
2023	Mr. Rhodes	$18.8M	$37.6M	$2.4B
2024	Mr. Daniele	$9.2M	$15.1M	$2.5B
2024	Mr. Rhodes	$6.0M	$21.1M	$2.5B
2025	Mr. Daniele	$9.6M	$21.3M	$2.5B
2025	Mr. Rhodes	$2.6M	$19.6M	$2.5B

Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Owner earnings are the whole business's, from the record above, for the same fiscal years.

Insider ownership2.6%
The stake all directors and executive officers hold together, per the 2025 proxy: skin in the game, the first thing Munger reads.
CEO pay ratio331:1
What the chief earns for every dollar the median employee makes, per the 2025 proxy. A high ratio alone settles nothing; some businesses are genuinely top-heavy in scarce skill. A runaway figure is where Buffett starts asking whether the board is doing its job.
Stock-based compensation$39M
The slice of the business handed to employees in shares this year, 0% of revenue, equal to 1% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.

Inverting the record

Invert: instead of why AutoZone Inc. is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2016–2025.

None of the 6 tests turned up a mark; each came back clean. A clean panel says only that these particular ways of being wrong are not written into the record.

Each test came back clean

Is it less profitable than it was?
Did the share count rise anyway?
Did debt outgrow the business?
Did reported profit become cash?
Did receivables and inventory outpace sales?
Are "one-time" charges a yearly habit?

Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.

Peers, Auto Dealers & Services

The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

Company	Revenue	Gross margin	Op. margin	ROIC	Owner earn. margin
GPIGroup 1 Automotive	$22.6B	16%	3.9%	13%	3%
CVNACarvana	$20.3B	14%	-0.7%	-3%	-17%
MUSAMurphy USA	$19.4B	90%	3.6%	20%	3%
AZOAutoZone Inc.	$18.9B	53%	19.3%	60%	14%
ABGAsbury Automotive Group Inc	$18.0B	17%	4.8%	14%	4%
ORLYO'Reilly Automotive Inc.	$17.8B	52%	19.6%	51%	15%
CASYCasey's General	$17.6B	67%	4.3%	11%	4%
AAPAdvance Auto Parts	$8.6B	44%	6.1%	13%	4%
Group median	—	48%	4.5%	13%	4%

The price

What a price has to assume.

What the price implies

reverse-DCF

Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what AutoZone Inc. has delivered.

Today’s price $

Through the cycle, AutoZone Inc. earns about $2.7B on its 14.4% median owner-earnings margin. This year’s 13.2% margin runs in line with that. Normalize, below, values the price on that through-cycle figure rather than the latest year.

Base Normalize · through-cycle ($2.7B) Net of stock comp (−$40M) Steady-state · maintenance capex ($2.5B)

—

The assumptions Required return 9% Years of high growth 10 Terminal growth 2.5%

9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.

Enter a price above to run it.

Implied by the price—

Owner-earnings growth · ’21→’25−4%/yr

Owner-earnings growth · ’16→’25+6%/yr

Owner-earnings yield—

P/E (3-yr earnings ’23–’25)—

P/B—

Graham’s price gate—

Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.

Against a high-grade bond: Graham’s yardstick bond yield%

Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.

Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.

Free cash flow $1.6B on 16M shares outstanding, per the 10-Q cover, as of 2026-06-05; net debt $9.2B. The if-converted diluted count is 17M, 4% above the shares outstanding: the dilution overhang (convertibles, options) a buyer inherits. The base is the latest year by default; Normalize values it on the through-cycle median owner-earnings margin (to avoid paying on a peak year). Net of stock comp treats option pay as the expense it is. Capex ($1.4B) runs well above depreciation ($662M), so this is a build-out; Steady-state swaps total capex for maintenance (≈ depreciation), lifting the base to about $2.5B, the cash it would throw off if it stopped expanding. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.

Weigh AZO against another business →

Cite: Owner Scorecard, "AutoZone Inc. (AZO), the owner's record," https://ownerscorecard.com/c/AZO, data as of 2026-07-09.

Manual order: ← AZEK its page in the Manual AZTA →

Industry order: ← AN the Auto Dealers & Services chapter BGSI →