AZOAutoZone

We note that you use average debt, net of average excess cash, in the calculation of invested capital and debt, net of excess cash, in the reconciliation of adjusted debt. Please tell us how you define and calculate average excess cash and excess cash. Please also tell us your basis for presenting average debt, net of average excess cash and presenting debt, net of excess cash.

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We note your response to our prior comment #1. We understand that the “excess cash” arose as a result of unique circumstances related COVID-19. We further note your belief that in post-pandemic periods you do not expect to maintain excess cash and therefore do not expect to present debt or average debt, net of excess cash or average excess cash, respectively.

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However, it is not appropriate to present and label your amounts as “debt” and “average debt” with titles that are similar to GAAP titles. If you present these measures in future filings, please revise your disclosure accordingly. Please refer to Item 10(e)(1)(ii)(E) of Regulation S-K for further guidance.

In future filings, the Company will not present debt or average debt, net of excess cash or average excess cash.

Please let us know if you have any further questions or if we can clarify any other issue that you may have.

Yours truly,

AutoZone, Inc. Read in the reply ↗

We note per the risk factor on page 13 that the development of new commercial programs is one of the factors driving annual revenue growth. We also note that total commercial sales increased 21.1% in the fourth quarter of 2019 as compared to the fourth quarter of 2018, and represented 22% of total sales (per your Q4 2019 Earnings Call).

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Please tell us your consideration of separately quantifying the amount of sales, cost of sales, and gross margin derived from your commercial programs, as well as discussing the factors causing changes in these amounts between reporting periods, in addition to discussing the impact of these operations on total gross profit and cost of sales.

As of August 31, 2019, over 85% of the Company’s domestic stores have sales to commercial customers (commercial programs). Sales to domestic commercial customers have been a significant driver of our domestic same store sales growth rates over the last several years as we have increased our focus on growing these sales. In discussing our Results of Operations within

Management’s Discussion and Analysis we have quantified the dollar and percent increase of our domestic commercial sales growth in discussing our sales results.

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We have not quantified the total domestic commercial sales in any given year, but in response to this comment we will start quantifying domestic commercial sales in future filings as that information is routinely provided as part of our earnings releases.

We do not separately disclose the cost of sales nor gross margin for commercial programs as we do not separately calculate a cost of sales in accordance with the U.S. generally accepted accounting principles for sales to commercial customers. We know that the direct product cost portion of cost of sales would be the same whether the product is sold to a retail or a commercial customer;

however, the gross margin will be lower when sold to a commercial customer due to the typically lower sales price.

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We note that a separate discussion and analysis of cost of sales is not provided. We also note from your fourth quarter 2019 earnings call that products sold in the commercial business have a lower margin than products sold in the retail business.

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In light of this, please expand your disclosure to provide a separate discussion and analysis on cost of sales, including separate quantification and discussion of changes in the significant components comprising cost of sales. Please note that in periods when total cost of sales does not materially vary from the prior period, the impacts of material variances in components of the cost of sales that offset each other should still be separately quantified and discussed. Refer to Item 303(a)(3) of Regulation S-K.

As noted in response to the first question, we do not separately calculate a cost of sales in accordance with the U.S. generally accepted accounting principles for sales to commercial customers. As such, the lower selling price on products sold to commercial customers lowers our overall gross margin. We believe that discussing our business performance by discussing the significant components of gross margin versus cost of sales is more beneficial to the reader and in future filings the

Company will indicate any material change in the significant components of gross margin even if changes in

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those components offset.

Please let us know if you have any further questions or if we can clarify any other issue that you may have.

Yours truly,

By:

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