AZOAutoZone

announced, The U.S. has recently enacted and further changes are expected proposed to be made in the future, including in response to pending litigation, which may include additional sector-based tariffs or other measures. Additionally, enact significant new tariffs, and the current administration has directed various federal agencies to further evaluate key aspects of U.S. trade policy and amid ongoing discussion and commentary regarding further potentially significant changes to U.S. trade policies, enforcement priorities, sanctions, treaties and tariffs. As a result In February 2026, the U.S. Supreme Court invalidated tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”). In response to the U.S. Supreme Court’s decision, the U.S. President issued an executive order imposing tariffs pursuant to Section 122 of these ongoing developments, the Trade Act of 1974 for 150 days, effective on February 24, 2026, and the outlook on further trade policy actions is unclear. These actions have led to significant volatility and uncertainty in global markets. Uncertainty regarding the scope, duration and administration of trade measures has in the past contributed to, and may in the future continue to contribute to, variability in costs and cash flows. There continues to exist significant uncertainty continues with respect to about the future economic and political relationship relationships between the U.S. and other countries. The ultimate impact of Company directly or indirectly imports merchandise from various countries, and newly proposed tariffs and other trade policies any additional tariffs on the Company’s business will depend on several factors, including whether additional or incremental U.S. tariffs products sourced from these or other measures are announced, revised, or rescinded, to what extent other countries implement tariffs or other measures in response, the overall magnitude and duration of these measures and could materially increase our ability to mitigate the impacts of such measures more effectively than our competitors. costs. These developments, or the perception that any of them could occur, may have a material effect on global economic conditions, the stability of global financial markets, markets or global trade, and may impact the Company’s product cost, pricing, or competitive conditions, disrupt supply chains, impact the broader macroeconomic environment and consumer sentiment or otherwise negatively impact the Company’s business, financial condition and results of operations.

The primary source of our liquidity is our cash flows realized through the sale of automotive parts, products and accessories. We believe that our cash generated from operating activities, available cash reserves and available credit, supplemented with our long-term borrowings will provide ample liquidity to fund our operations while allowing us to make strategic investments to support growth initiatives and return excess cash to shareholders stockholders in the form of share repurchases. As of August 30, 2025, 29, 2026, we held $271.8 $326.1 million of cash and cash equivalents, as well as $2.2 billion in undrawn capacity on our revolving credit facility, without giving effect to commercial paper borrowings. We believe our sources of liquidity will continue to be adequate to fund our operations and investments to grow our business, repay our debt as it becomes due and fund our share repurchases over the short-term and long-term. In addition, we believe we have the ability to obtain alternative sources of financing, if necessary. However, decreased demand for our products or changes in customer buying patterns would negatively impact our ability to generate cash from operating activities. Decreased demand or changes in buying patterns could also impact our ability to meet the debt covenants of our credit agreements and, therefore, negatively impact the funds available under our Revolving Credit Agreement. In the event our liquidity is insufficient, we may be required to limit our spending. All of our material borrowing arrangements are described in greater detail in “Note I – Financing” in the Notes to Consolidated Financial Statements.