AutoZone Reports Financial Results

MEMPHIS, Tenn., Dec. 12, 2002; AutoZone, Inc., today reported sales of $1.219 billion for its first fiscal quarter (12 weeks) ended November 23, 2002, an increase of 4% from fiscal 2002. Excluding the sales of the TruckPro subsidiary which was sold in December, 2001, sales increased 7%. Same store sales, or sales for domestic auto parts stores open at least one year, increased 4.5% during the quarter. Gross margin for the quarter improved by more than one percentage point, while operating expenses, as a percent of sales, declined by more than one percentage point, resulting in a 15.5% operating margin. Net income for the quarter increased 25% to $105 million, while diluted earnings per share increased 37% to $1.04 from $0.76 reported in the year-ago quarter. Return on invested capital for the trailing twelve months increased to 20.6%.

"We are very pleased with our continuing strong performance through the first quarter, even as we anniversary our strong improvements in the prior year," said Steve Odland, Chairman, President and Chief Executive Officer. "We are very encouraged by the 30% sales increase in our AZ Commercial business reflecting our commercial customers' positive response to our high level of service and extensive product offering.

"Our continued focus on controlling costs through relentless expense discipline continues to drive shareholder value. Operating expenses as a percent of sales declined to 29.6% in the first quarter. This rate is the lowest first quarter rate achieved since 1995. The strong, growing cash flow provided by our business, when combined with our high hurdle rates for new investments, should continue to drive improved return on invested capital and shareholder value."

During the quarter, AutoZone opened 31 new stores, replaced one store and closed one store in the U.S. and opened one new store in Mexico. As of November 23, 2002, AutoZone operates 3,098 stores in the U.S. and 40 stores in Mexico.

At the end of the quarter, total share repurchases under the share repurchase program were $2.134 billion, or 62.5 million shares at an average price of $34.14 per share, including $119.8 million, or 1.6 million shares under forward purchase contracts.

In conjunction with its Annual Meeting of Stockholders, AutoZone will host a conference beginning at 8 a.m. (EST) today to discuss the results of the first quarter and the last fiscal year. Investors may listen to the Annual Meeting live and review supporting slides on the AutoZone website, www.autozone.com, by clicking "Investor Relations," and "Conference Calls." The call will also be available by dialing (712) 271-3887. A replay of the Annual Meeting, investor conference and slides will be available on AutoZone's website until January 10, 2003. In addition, a replay will be available by dialing (402) 220-3902 through Thursday, December 19, 2002, at midnight (EST).

As of November 23, 2002, AutoZone sells auto and light truck parts, chemicals and accessories through 3,098 AutoZone stores in 44 states plus the District of Columbia in the U.S. and 40 AutoZone stores in Mexico and also sells the ALLDATA brand automotive diagnostic and repair software. On the web, AutoZone sells diagnostic and repair information through alldatadiy.com, and auto and light truck parts through AutoZone.com.