AutoZone 2010 Annual Report Download - page 5

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The Future
As I mentioned at the outset, we were very pleased with
our results in 2010. As the U.S. economy continues to be
challenged by many constraining factors, we have focused on
what we can control, and our team has executed very well.
Over the last two years, our business has strengthened
significantly. During this time of expansion, we have significantly
improved our profitability, but we have also leveraged our
enhanced performance by increasing our level of investments,
both capital and operating expenses, to improve our offerings
to our customers. As a result, we feel we are well positioned
for the future.
In addition to delivering strong sales and profitability
performance during 2010, we also set a new all-time high in
Return on Invested Capital — ending the year at 27.6%. We
believe we must grow our profitability, but we must accomplish
this goal by being strong stewards of our investors’ capital.
We also remain focused on prudently managing our capital
structure to optimize our returns. During 2010, we repurchased
over $1.1 billion of our stock, in addition to $1.3 billion
repurchased in 2009. At the end of fiscal 2010, AutoZone had
purchased over $8.7 billion of our common stock, equating to
121.7 million shares since this program was initiated in 1998.
We continue to utilize share repurchases as an attractive use
of excess capital.
Our strategy for the future remains remarkably similar to
the past as is reflected in the operating themes of the last
few years. We will continue to ensure we have Great People
Providing Great Service; we will continue to Live the Pledge;
we will continue to Go the Extra Mile for our customers; we will
continue to execute our plan at an extremely high level and in
2011; we will be 1TEAM Going the Extra Mile.
While 2010 marked great success with record Sales, Earnings
Per Share, Operating Cash Flow, and Return on Invested
Capital, these results would not have been possible without
our AutoZoners’ commitment to providing the industry’s
best customer service. Their dedication is what makes our
organization great. I would personally like to thank all our
AutoZoners for delivering a record year in 2010, but I
would also remind everyone that in order to succeed in
the future, we will have to work even harder than we
have in the past. Last year was a great year, but it is
behind us. We have aggressive goals for 2011, and we
believe they are achievable but not easy. We believe our
customers’ need to save money and receive solid advice
has not changed, nor will it. We must be dedicated to
filling that need. I would also like to thank our vendors
for their ongoing commitment to our customers. Finally, I
would like to thank each of you, our stockholders, for the
confidence you have in us by your decision to invest in
our company. We remain committed to managing your
capital wisely, achieving an appropriate return on all
incremental capital projects and returning excess cash
flow through an orderly share repurchase program.
We look forward to updating you on our continued
success well into the future.
Sincerely,
Bill Rhodes
Chairman, President and CEO
Customer Satisfaction
Our culture remains our
key point of differentiation
AZO-AnnualReport-2010-INSIDE-PAGES.indd 3 10/19/10 5:35 PM