AutoZone (AZO) Risk Factor Changes

The U.S.

cost, pricing, or competitive conditions, disrupt supply chains, impact the broader macroeconomic environment and consumer sentiment or otherwise negatively impact our business, financial condition and results of oper…

Although we believe we compete effectively, our competitors may have greater financial resources allowing them to invest more in their businesses, greater sourcing capabilities allowing them to sell merchandise at low…

The rapid evolution and increased adoption of AI, including generative and agentic AI, may create new or heightened risks for our business.

During fiscal 2025, new global trade tariffs were announced on imports to the United States, including additional tariffs on various countries from which the Company directly or indirectly imports and/or sources merch…

announced, and further changes are expected to be made in the future, including in response to pending litigation, which may include additional sector-based tariffs or other measures.

Although we are a leading distributor of automotive parts and other products in the commercial market, we must effectively compete against national, regional and local auto parts chains, independently owned parts stores,

private debt and would likely significantly increase our overall borrowing costs and adversely affect our earnings.

Our business is subject to a variety of risks and uncertainties.

the number of older vehicles in service.

rising fuel and energy prices.

technological advances.

larger stores with more merchandise, longer operating histories with deeper customer relationships, more frequent customer visits, more effective advertising and more successful utilization of data analytics, artifici…

We have increased annual revenues in the past five fiscal years from $14.6 billion in fiscal 2021 to $20.3 billion in fiscal 2026, with a compounded annual growth rate of approximately seven percent.

We have increased our store count in the past five fiscal years, growing from 6,767 stores at August 28, 2021 to 8,031 stores at August 29, 2026, a compounded annual growth rate of approximately three percent.

If we cannot profitably increase our market share in the commercial automotive parts business, our sales growth may be limited.

Although we are a leading distributor of automotive parts and other products in the commercial market, we must effectively compete against national, regional and local auto parts chains, independently owned parts stor…

We believe much of our brand value lies in the quality of the approximately 132,000 AutoZoners employed in our stores, distribution centers, store support centers and ALLDATA.

In the U.S., over the last few years there has been an increase in workers exercising their right to form or join a union, both generally and in the retail industry.

Disruptions in our supply chain and other factors affecting the distribution of our merchandise could adversely impact our business and results of operations.

Our short-term and long-term debt is rated investment grade by the major rating agencies.

Significant changes in macroeconomic and geopolitical factors could materially adversely affect our financial condition and results of operations.

We have announced certain aspirations and goals related to corporate responsibility matters, such as our intention to reduce certain GHG emissions over time.

Governmental and societal attention to corporate responsibility matters, including expanding mandatory and voluntary reporting of GHG emissions and other sustainability metrics, and disclosure topics such as climate c…

We may be unable to achieve the goals and aspirations set forth in our Corporate Responsibility report, particularly with respect to the reduction of GHG emissions, or otherwise meet the expectations of our stakeholde…

Our short-term and long-term debt is rated investment grade by the major rating agencies.

The cost to remediate and respond to a cyber incident involving unauthorized use, access, damage or loss of systems, data or other information could be significant.

While we have not experienced a material breach of our information systems or data to date, unauthorized parties have in the past gained access and exfiltrated data, and will continue to attempt to do so as the result…

critical infrastructure outages, facility damage, physical theft, telecommunications failures, malware, security incidents, malicious cyber-attacks, including the use of malicious codes, worms, phishing, spyware, deni…

We rely extensively on information technology systems, some of which are managed or provided by third-party service providers, to collect, analyze, process, store, manage, transmit and protect key business processes,…

of critical infrastructure systems, banking systems or utility services and other disasters or the threat of any of them, may negatively impact the hours and operations of our stores, distribution centers, store suppo…

Our expansion into international markets may also be adversely affected by local laws and customs, U.S.

In addition, we have made, and plan to continue to make, significant investments in our supply chain, such as the construction of multiple new distribution centers which began operations in fiscal 2025 and the executi…

wholesalers, jobbers, repair shops, auto dealers, online retailers and others in order to increase our commercial market share.

Achieving our store development and expansion goals, domestically and in international markets, will depend upon our ability to identify and obtain suitable sites for new and expanded stores in a timely manner and at…

We have increased our store count in the past five fiscal years, growing from 6,549 stores at August 29, 2020 to 7,657 stores at August 30, 2025, a compounded annual growth rate of approximately three percent.

We have increased annual revenues in the past five fiscal years from $12.6 billion in fiscal 2020 to $18.9 billion in fiscal 2025, with a compounded annual growth rate of approximately eight percent.

failure or perceived failure to meet these expectations could adversely affect public perception of our business, employee morale or customer or shareholder support.

borrowing terms.

liability due to claims arising from customers, financial institutions, AutoZoners, regulatory authorities, payment card issuers and others.

to achieve our store expansion goals, manage our growth effectively, successfully integrate the planned new stores into our operations or operate our new, remodeled and expanded stores profitably.

Our ability to grow depends in part on new store openings, existing store remodels and expansions and effective utilization of our existing supply chain and hub network.

private debt and would likely significantly increase our overall borrowing costs and adversely affect our earnings.

Business interruptions including war or acts of terrorism, political or civil unrest, unusual or severe weather conditions such as hurricanes, tornadoes, windstorms, fires, earthquakes and floods, public health crises…

The various risks we face in our U.S.

Although we are a leading distributor of automotive parts and other products in the commercial market, we must effectively compete against national, regional and local auto parts chains, independently owned parts stores,

announced, and further changes are expected to be made in the future, including in response to pending litigation, which may include additional sector-based tariffs or other measures.

During fiscal 2025, new global trade tariffs were announced on imports to the United States, including additional tariffs on various countries from which the Company directly or indirectly imports and/or sources merch…

The current global economic and geopolitical landscape has increased uncertainty about key areas of doing business internationally and may have a negative impact on our business.