AutoZone 2000 Annual Report Download - page 4

In a year that marked the most celebrated New
Year’s rollover in our nation’s history, AutoZone closed
out FY00 with a little less fanfare but plenty of things
to celebrate.
Most notable were our record sales of $4.48 billion.
Also, EPS climbed to $2.00, up 23% from FY99.
We entered FY00 with high expectations for reaping
the benefits from our recent acquisitions. And we’re
proud to announce we were able to realize those plans.
Our assimilated Chief stores led the way with a 31% same
store sales increase for the year. The Express locations
from Pep Boys achieved 30% same store sales increases,
and Auto Palace stores were up 15%.
Acquired stores weren’t the only areas of the
company that showed strong sales growth. Our stores in
Mexico, which grew from 6
locations to 13 in FY00, are
attracting DIYers in record
numbers. In fact, sales at
the average store in Mexico
are much higher than for
stores of similar maturity in
the United States. We’re
planning to continue our
expansion pace in Mexico
in FY01, and our first store
in Mexico’s interior is already in the pipeline.
Relentless focus on improving returns in FY00 also
paid off in big ways. After-tax return on capital reached
its inflection point as we came in at 13.3%, up from
12.8% in FY99. This marked the end of the downward
trend which began as we first rolled out our commercial
program and ended as we completed the conversions of
our acquired stores. Our goal is to reach a 14% after-tax
return on capital in FY01 and 15% in FY02. Return on
equity increased from 19% to 23% in FY00. These are
significant indicators that we’ve got things headed in
the right direction.
We’re very pleased with the $513 million of cash
generated by operations, an increase of over
$200 million from last year. This represents cash we can
invest in other things. In this case it was used to help us
buy back $608 million in stock, bringing cumulative
totals in the share repurchase program to $1.15 billion,
including forward purchase contracts. We plan to
continue the repurchase of our stock in FY01.
We forged ahead in store expansion, opening 204
net new stores in the United States, bringing our total to
2,915 at the end of FY00. We’ve raised the bar when it
comes to finding the most profitable real estate possible,
and we’re confident this approach, though more time
consuming, will pay off in the long run. Next year we’re
targeting 175 new stores in the United States with
continued focus on more
highly profitable sites.
One particular new
site that opened during
FY00 has created a lot of
excitement – and it didn’t
officially open until late in
the fiscal year. The address
is www.autozone.com, and it
sold its first part August 11,
2000. AutoZone has had a
web site for years, but in FY00 it was converted into a
fully functional e-commerce site capable of serving
customers across the country – even in markets lacking an
AutoZone presence. If you haven’t visited our site lately,
we invite you to look us up.
We continued rolling out our commercial program
during FY00. We ended the year with 1,486 stores
delivering parts to professional technicians. Our
$397 million in commercial sales was enough to place
AutoZone at number three in that business.
At ALLDATA, the news is very encouraging. Sales
topped $50 million for the first time, and our customer
To our stockholders,
customers and AutoZoners,
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John Adams Tim Vargo