SEC Filing | AutoZone, Inc

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AUTOZONE, INC.

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


[X]		Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934
		For the quarterly period ended February 14, 2004, or


[ ]		Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
		For the transition period from to .

Commission file number 1-10714

AUTOZONE, INC.

(Exact name of registrant as specified in its charter)


Nevada (State or other jurisdiction of incorporation or organization)		62-1482048 (I.R.S. Employer Identification No.)

123 South Front Street
Memphis, Tennessee 38103
(Address of principal executive offices) (Zip Code)

(901) 495-6500
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes [X] No [ ]

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practical date.

Common Stock, $.01 Par Value – 84,245,308 shares outstanding as of March 12, 2004.

TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION
	Item 1. Financial Statements
		CONDENSED CONSOLIDATED STATEMENTS OF INCOME
		CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
		NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Item 3. Quantitative and Qualitative Disclosures About Market Risk
	Item 4. Controls and Procedures
PART II. OTHER INFORMATION
	Item 1. Legal Proceedings
	Item 2. Changes in Securities and Use of Proceeds
	Item 3. Defaults Upon Senior Securities
	Item 4. Submission of Matters to a Vote of Security Holders
	Item 5. Other Information
	Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
EXHIBIT INDEX
EX-10.1 NON-COMPETE AGREEMENT
EX-10.2 SECOND AMENDED & RESTATED PURCHASE PLAN
EX-12.1 RATIO OF EARNINGS TO FIXED CHARGES
EX-15.1 LETTER FROM ERNST & YOUNG LLP
EX-31.1 SECTION 302 CERTIFICATION OF CEO
EX-31.2 SECTION 302 CERTIFICATION OF CFO
EX-32.1 SECTION 906 CERTIFICATION OF CEO
EX-32.2 SECTION 906 CERTIFICATION OF CFO

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

AUTOZONE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands)


					February 14,		August 30,
					2004		2003

				ASSETS
Current assets
	Cash and cash equivalents				$	6,711	$	6,742
	Accounts receivable, net					77,282		43,746
	Merchandise inventories, net					1,487,478		1,511,316
	Prepaid expenses					27,087		19,194
	Deferred income taxes					1,796		3,996

		Total current assets				1,600,354		1,584,994
Property and equipment
	Property and equipment					2,600,663		2,573,160
	Less: Accumulated depreciation and amortization					865,158		857,407

						1,735,505		1,715,753
Other assets
	Cost in excess of net assets acquired					294,348		294,348
	Deferred income taxes					50,099		25,543
	Other assets					21,410		59,828

						365,857		379,719

					$	3,701,716	$	3,680,466

			LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
	Accounts payable				$	1,216,404	$	1,321,905
	Accrued expenses					285,716		313,683
	Income taxes payable					95,717		39,978

		Total current liabilities				1,597,837		1,675,566
Long term debt						1,786,945		1,546,845
Other liabilities						83,057		84,297
Stockholders’ equity						233,877		373,758

					$	3,701,716	$	3,680,466

See Notes to Condensed Consolidated Financial Statements

AUTOZONE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(in thousands, except per share amounts)


	Twelve Weeks Ended				Twenty-four Weeks Ended

	February 14,		February 15,		February 14,		February 15,
	2004		2003		2004		2003

Net sales	$	1,159,236	$	1,120,696	$	2,441,276	$	2,339,331
Cost of sales, including warehouse and delivery expenses		594,925		624,697		1,263,875		1,293,942
Operating, selling, general and administrative expenses		395,785		348,501		793,771		709,565

Operating profit		168,526		147,498		383,630		335,824
Interest expense, net		21,922		19,633		42,182		38,738

Income before income taxes		146,604		127,865		341,448		297,086
Income taxes		54,950		48,590		128,050		112,900

Net income	$	91,654	$	79,275	$	213,398	$	184,186

Weighted average shares for basic earnings per share		86,618		98,446		87,679		98,627
Effect of dilutive stock equivalents		1,410		1,947		1,540		2,173

Adjusted weighted average shares for diluted earnings per share		88,028		100,393		89,219		100,800

Basic earnings per share	$	1.06	$	0.81	$	2.43	$	1.87

Diluted earnings per share	$	1.04	$	0.79	$	2.39	$	1.83

See Notes to Condensed Consolidated Financial Statements

AUTOZONE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)


				Twenty-four Weeks Ended

				February 14,			February 15,
				2004			2003

Cash flows from operating activities
	Net income			$	213,398		$	184,186
	Adjustments to reconcile net income to net cash provided by operating activities
		Depreciation			48,342			50,836
		Amortization of debt origination fees			2,987			2,977
		Increase in accounts receivable, net			(33,536	)		(5,492	)
		Decrease (increase) in merchandise inventories, net			23,838			(114,588	)
		Decrease in current liabilities			(77,729	)		(63,774	)
		Income tax benefit from exercise of options			17,330			19,525
		Other, net			(24,612	)		(22,501	)

			Net cash provided by operating activities		170,018			51,169

Cash flows from investing activities
	Capital expenditures				(69,478	)		(61,832	)
	Proceeds from disposal of capital assets				1,019			8,292

			Net cash used in investing activities		(68,459	)		(53,540	)

Cash flows from financing activities
	Proceeds from issuance of senior notes				500,000			300,000
	Repayment of debt				(430,645	)		(115,675	)
	Net proceeds from (repayments of) commercial paper				170,745			(39,300	)
	Net proceeds from sale of common stock				22,450			22,767
	Purchase of treasury stock				(397,663	)		(159,495	)
	Settlement of interest rate hedge instruments				32,166			—
	Other				1,357			(5,865	)

			Net cash provided by (used in) financing activities		(101,590	)		2,432

Net change in cash and cash equivalents					(31	)		61
Cash and cash equivalents at beginning of period					6,742			6,498

Cash and cash equivalents at end of period				$	6,711		$	6,559

See Notes to Condensed Consolidated Financial Statements

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Note A-Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. Certain prior year amounts have been reclassified to conform to the current year presentation. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the twelve and twenty-four weeks ended February 14, 2004, are not necessarily indicative of the results that may be expected for the fiscal year ending August 28, 2004. For further information, refer to the consolidated financial statements and footnotes included in the annual report on Form 10-K for the year ended August 30, 2003, for AutoZone, Inc. (the “Company”).

Note B-Stock-Based Compensation

The Company has granted options to purchase common stock to some of its employees and directors under various plans, as described more fully in the Company’s annual report on Form 10-K for the fiscal year ended August 30, 2003. The Company accounts for those plans using the intrinsic-value-based recognition method prescribed by Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees,” and related interpretations. Accordingly, no stock-based employee compensation cost is reflected in net income, as options are granted under those plans at an exercise price equal to the market value of the underlying common stock on the date of grant. Statement of Financial Accounting Standards (“SFAS”) No. 123, “Accounting for Stock-Based Compensation,” and SFAS No. 148, “Accounting for Stock-Based Compensation – Transition and Disclosure,” established accounting and disclosure requirements using a fair-value-based method of accounting for stock-based employee compensation plans. As allowed under SFAS No. 123, the Company has elected to continue to apply the intrinsic-value-based method of accounting and has adopted only the disclosure requirements of SFAS No. 123. The following table illustrates the effect on net income and earnings per share had the Company applied the fair-value recognition provisions of SFAS No. 123 to stock-based employee compensation:


		Twelve Weeks Ended						Twenty-four Weeks Ended

(in thousands, except		February 14,			February 15,			February 14,			February 15,
per share amounts)		2004			2003			2004			2003

Net income, as reported		$	91,654		$	79,275		$	213,398		$	184,186
Pro forma compensation expense, net of related tax effects			(3,863	)		(1,801	)		(8,111	)		(7,851	)

Pro forma net income		$	87,791		$	77,474		$	205,287		$	176,335

Earnings per share
	Basic – as reported	$	1.06		$	0.81		$	2.43		$	1.87

	Basic – pro forma	$	1.01		$	0.79		$	2.34		$	1.79

	Diluted – as reported	$	1.04		$	0.79		$	2.39		$	1.83

	Diluted – pro forma	$	1.00		$	0.77		$	2.30		$	1.75

Note C-New Accounting Standards

In January 2003, the Financial Accounting Standards Board issued Interpretation No. 46, “Consolidation of Variable Interest Entities” (“FIN 46”). FIN 46, as revised in December 2003, clarifies the application of Accounting Research Bulletin No. 51, “Consolidated Financial Statements,” to certain entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. FIN 46 requires the consolidation of certain types of entities in which a company absorbs a majority of another entity’s expected losses or residual returns, or both, as a result of ownership, contractual or other financial interests in the other entity. These entities are called variable interest entities. FIN 46 applied immediately to variable interest entities created or acquired after January 31, 2003. For variable interest entities created or acquired prior to February 1, 2003, the provisions of FIN 46 must be applied at the end of periods ending after March 15, 2004. The Company does not expect its adoption to have a significant impact on its consolidated financial position, operating results or cash flows.

Note D-Inventories

Inventories are stated at the lower of cost or market using the last-in, first-out (“LIFO”) method. A valuation of inventory under the LIFO method is made at the end of each fiscal year based on inventory levels and costs at that time. Accordingly, interim LIFO calculations and resulting adjustments are based on management’s estimates of expected year end inventory levels and costs. Due to price deflation on the Company’s merchandise purchases, the Company’s inventory balances are effectively maintained under the first-in, first out method as the Company’s policy is not to write up inventory for favorable LIFO adjustments, resulting in cost of sales being reflected at the higher amount. At August 30, 2003, the cumulative balance

of this unrecorded adjustment was $102 million, which will only be reduced upon experiencing price inflation on our merchandise purchases in the future.

Note E-Financing Arrangements

The Company’s long term debt as of February 14, 2004, and August 30, 2003, consisted of the following:


	February 14,		August 30,
(in thousands)	2004		2003

5.875% Senior Notes due October 2012, effective interest rate of 6.33%	$	300,000	$	300,000
5.5% Senior Notes due November 2015, effective interest rate of 4.86%		300,000		—
4.75% Senior Notes due November 2010, effective interest rate of 4.17%		200,000		—
4.375% Senior Notes due June 2013, effective interest rate of 5.65%		200,000		200,000
6.5% Senior Notes due July 2008		190,000		190,000
7.99% Senior Notes due April 2006		150,000		150,000
6% Senior Notes due November 2003		—		150,000
Bank term loan due November 2004, interest rate of 2.26% at August 30, 2003		—		250,000
Commercial paper, weighted average interest rate of 1.1% at February 14, 2004, and 1.2% at August 30, 2003		438,745		268,000
Other		8,200		38,845

	$	1,786,945	$	1,546,845

The Company maintains $950 million of revolving credit facilities with a group of banks. Of the $950 million, $300 million expires in May 2004. The remaining $650 million expires in May 2005. The portion expiring in May 2004 will be renewed, replaced or the option to extend the maturity date of the then-outstanding debt by one year will be exercised. The credit facilities exist primarily to support commercial paper borrowings, letters of credit and other short term unsecured bank loans. As the available balance is reduced by outstanding letters of credit, the Company had $872.6 million in available capacity under these credit facilities at February 14, 2004. The rate of interest payable under the credit facilities is a function of the London Interbank Offered Rate (LIBOR), the lending bank’s base rate (as defined in the agreement) or a competitive bid rate at the Company’s option.

Commercial paper borrowings are classified as long term, as the Company has the ability and intent to refinance them on a long term basis.

During November 2003, the Company issued $300 million of 5.5% senior notes due November 2015 and $200 million of 4.75% senior notes due November 2010. Interest under both notes is payable in May and November of each year. Proceeds were used to repay a $250 million bank term loan, $150 million in 6% senior notes and to reduce commercial paper borrowings. During November 2003, the Company settled all open interest rate hedge instruments, including interest rate swap contracts, treasury lock agreements and forward starting interest rate swaps.

AutoZone reflects the current fair value of all interest rate hedge instruments on its balance sheet. The related gains or losses on these transactions are deferred in stockholders’ equity as a component of other comprehensive income or loss. Deferred gains and losses are recognized in income in the period in which the related interest rates being hedged are recognized in expense. However, to the extent that the change in value of an interest rate hedge instrument does not perfectly offset the change in the value of the interest rate being hedged, that ineffective portion is immediately recognized in income.

The Company agreed to observe certain covenants under the terms of its borrowing agreements, including limitations on total indebtedness, restrictions on liens and minimum fixed charge coverage. All of the repayment obligations under the Company’s borrowing agreements may be accelerated and come due prior to the scheduled payment date if covenants are breached or an event of default occurs. Additionally, the repayment obligations may be accelerated if AutoZone experiences a change in control (as defined in the agreements) of AutoZone or its Board of Directors. As of February 14, 2004, the Company was in compliance with all covenants and expects to remain in compliance with all covenants.

Note F-Stock Repurchase Program

As of February 14, 2004, the Board of Directors had authorized the Company to repurchase up to $3.3 billion of common stock in the open market. From January 1998 to February 14, 2004, the Company has repurchased a total of 76.7 million shares at an aggregate cost of $3.2 billion; including 4.7 million shares of its common stock at an aggregate cost of $397.7 million during the twenty-four week period ended February 14, 2004.

Note G-Comprehensive Income

Comprehensive income includes foreign currency translation adjustments and changes in the fair value of certain derivative financial instruments that qualify for cash flow hedge accounting. Comprehensive income for all periods presented is as follows:


	Twelve Weeks Ended					Twenty-four Weeks Ended

	February 14,		February 15,			February 14,			February 15,
(in thousands)	2004		2003			2004			2003

Net income, as reported	$	91,654	$	79,275		$	213,398		$	184,186
Foreign currency translation adjustment		287		(7,049	)		(773	)		(6,491	)
Net impact from derivative instruments		288		203			5,377			(2,472	)

Comprehensive income	$	92,229	$	72,429		$	218,002		$	175,223

Note H-Product Warranties

The Company or its vendors supplying the products provide the customers limited warranties on certain products that range from 30-day to lifetime warranties. In many cases, the Company’s vendors are primarily responsible for warranty claims. Warranty costs relating to merchandise sold under warranty not covered by vendors are estimated and recorded as warranty obligations at the time of sale based on each product’s historical return rate. These obligations are recorded as a component of accrued expenses in the accompanying condensed consolidated balance sheets. The Company periodically assesses the adequacy of its recorded warranty liability and adjusts the liability as necessary resulting in income or expense recognition. Changes in the Company’s warranty liability since year-end and for the prior year comparative period are as follows:


	Twenty-four Weeks Ended

	February 14,			February 15,
(in thousands)	2004			2003

Balance at beginning of period	$	78,482		$	82,035
Allowances received from vendors		18,107			51,843
Charge (credit) to earnings		(16,000	)		1,000
Claim settlements		(32,163	)		(44,092	)

Balance at end of period	$	48,426		$	90,786

Note I- Vendor Allowances

Certain vendor allowances are used exclusively for promotions and to partially or fully offset certain other direct expenses. Such vendor funding arrangements entered into on or before December 31, 2002, were recognized as a reduction to operating, selling, general and administrative expenses when earned. However, for such vendor funding arrangements entered into or modified after December 31, 2002, all vendor funds are recognized as a reduction to cost of sales as the inventories are sold in accordance with Emerging Issues Task Force Issue No. 02-16, “Accounting by a Customer (Including a Reseller) for Cash Consideration Received from a Vendor” (“EITF 02-16”). As a result of the adoption of EITF 02-16, cost of sales for the twelve and twenty-four week periods ended February 14, 2004, included $29.6 million and $51.2 million, respectively, in vendor allowances that prior to the accounting change would have been recorded as a reduction to operating, selling, general and administrative expenses.

Note J- Legal Proceedings

The Company was one of multiple defendants in a lawsuit entitled “Coalition for a Level Playing Field, L.L.C., et al., v. AutoZone, Inc., et al.” filed in the U.S. District Court for the Eastern District of New York in February 2000. The case was brought by approximately 225 plaintiffs, which are principally automotive aftermarket warehouse distributors and jobbers. The plaintiffs claimed that the defendants knowingly received volume discounts, rebates, slotting and other allowances, fees, free inventory, sham advertising and promotional payments, a share in the manufacturers’ profits, and excessive payments for services purportedly performed for the manufacturers in violation of the Robinson-Patman Act. Plaintiffs sought unspecified damages (prior to statutory trebling), ranging from several million dollars to $35 million for each plaintiff, and a permanent injunction prohibiting defendants from committing further violations of the Robinson-Patman Act and from opening any further stores to compete with plaintiffs as long as defendants continue to violate the Act. The claims of 22 of the original plaintiffs were tried to a jury verdict in favor of the Company in January 2003. In February 2003, the plaintiffs involved in the trial filed a notice to appeal. In November 2003, the appeals court upheld the jury’s trial decision in favor of the Company.

In July 2003, approximately 200 plaintiffs in the original lawsuit, whose cases had been dismissed without prejudice and with leave to reinstate their claims, filed a notice to be reactivated as parties in the lawsuit and for their claims against the defendants to be reinstated. In September 2003, the previously dismissed plaintiffs filed a “Motion for a Preliminary Injunction (and Related Temporary Restraining Order) Against the AutoZone Defendants as to Payment On Scan Transactions with the Auto Parts Manufacturers.” On February 13, 2004, the U.S. District Court in New York dismissed the case of the approximately 200 remaining plaintiffs, with right to refile.

that, in the aggregate, these other matters will result in liabilities material to the Company’s financial condition, results of operations or cash flows.

Independent Accountants’ Review Report

Stockholders
AutoZone, Inc.

We have reviewed the accompanying condensed consolidated balance sheet of AutoZone, Inc. as of February 14, 2004, the related condensed consolidated statements of income for the twelve week and twenty-four week periods ended February 14, 2004 and February 15, 2003, and the condensed consolidated statements of cash flows for the twenty-four week periods ended February 14, 2004 and February 15, 2003. These financial statements are the responsibility of the Company’s management.

We conducted our reviews in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data, and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with auditing standards generally accepted in the United States, which will be performed for the full year with the objective of expressing an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should be made to the accompanying condensed consolidated financial statements referred to above for them to be in conformity with accounting principles generally accepted in the United States.

We have previously audited, in accordance with auditing standards generally accepted in the United States, the consolidated balance sheet of AutoZone, Inc. as of August 30, 2003, and the related consolidated statements of income, stockholders’ equity, and cash flows for the year then ended (not presented herein) and, in our report dated September 22, 2003, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of August 30, 2003 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.


	/s/ ERNST & YOUNG LLP

Memphis, Tennessee
March 1, 2004

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Overview

We are the nation’s leading retailer of automotive parts and accessories, with most of our sales to do-it-yourself (DIY) customers. At February 14, 2004, we operated 3,299 domestic stores and 55 stores in Mexico, compared with 3,122 domestic stores and 41 stores in Mexico at February 15, 2003. Each of our stores carries an extensive product line for cars, sport utility vehicles, vans and light trucks, including new and remanufactured automotive hard parts, maintenance items and accessories. In many of our domestic stores we also have a commercial sales program that provides commercial credit and prompt delivery of parts and other products to local, regional and national repair garages, dealers and service stations. We also sell the ALLDATA brand diagnostic and repair software. On the web, we sell diagnostic and repair information and auto and light truck parts through www.autozone.com. We do not derive revenue from automotive repair or installation.

Operating results for the twelve and twenty-four weeks ended February 14, 2004, are not necessarily indicative of the results that may be expected for the fiscal year ending August 28, 2004. Each of the first three quarters of our fiscal year consists of 12 weeks, and the fourth quarter consists of 16 to 17 weeks. Additionally, our business is somewhat seasonal in nature, with the highest sales generally occurring in the summer months of June through August and the lowest sales generally occurring in the winter months of December through February.

Twelve Weeks Ended February 14, 2004,
Compared with Twelve Weeks Ended February 15, 2003

Net sales for the twelve weeks ended February 14, 2004, increased $38.5 million to $1.2 billion, or 3.4%, over net sales of $1.1 billion for the comparable prior year period. This increase in sales was primarily driven by sales from new stores as comparable store sales, or sales for domestic stores opened at least one year, were up 0.4% overall. A 10.0% increase in commercial same store sales offset a 1% decrease in retail same store sales for domestic stores. ALLDATA and Mexico sales contributed 0.4 percentage points to the overall increase in net sales.

Gross profit for the twelve weeks ended February 14, 2004, was $564.3 million, or 48.7% of net sales, compared with $496.0 million, or 44.3% of net sales, during the comparable prior year period. Of the 4.4 percentage point gross profit margin improvement over the prior year period, 2.6 percentage points were driven by the change in classification of vendor funding from operating, selling, general and administrative expenses to cost of sales in accordance with Emerging Issues Task Force Issue No. 02-16, “Accounting by a Customer (including a Reseller) for Cash Consideration Received From a Vendor” (“EITF 02-16”). We implemented EITF 02-16 during the quarter ended May 10, 2003. Prior periods are not reclassified for comparability to the current presentation. The remaining 1.8 percentage points of improvement in gross profit margin was primarily attributable to our supply chain initiatives, tailoring merchandise mix, the continued implementation of our Good/Better/Best initiative, cost and funding negotiations with

vendors and adjusting prices where appropriate. We experienced no one-time gain from warranty during the twelve-week period ended February 14, 2004.

Operating, selling, general and administrative expenses for the twelve weeks ended February 14, 2004, increased by $47.3 million over such expenses for the comparable prior year period, and increased as a percentage of net sales from 31.1% to 34.1%. The 3.0 percentage point increase over the prior year period is primarily due to a 2.6 percentage point increase resulting from the implementation of EITF 02-16. The remaining increase is primarily due to an initiative to refresh approximately 200 stores during the quarter and to open 62 incremental commercial sales programs.

Interest expense, net for the twelve weeks ended February 14, 2004, was $21.9 million compared with $19.6 million during the comparable prior year period. This increase was due to higher average borrowing levels over the comparable prior year period. Average borrowings for the twelve weeks ended February 14, 2004, were $1.7 billion, compared with $1.4 billion for the same period of fiscal 2003. Weighted average borrowing rates were 4.6% at both February 14, 2004, and at February 15, 2003.

Our effective income tax rate was 37.5% of pretax income for the twelve weeks ended February 14, 2004, and 38.0% for the comparable prior year period.

Net income for the twelve week period ended February 14, 2004, increased by 15.6% to $91.7 million, and diluted earnings per share increased by 31.9% to $1.04 from $0.79 in the comparable prior year period. The impact on current quarter diluted earnings per share from the stock repurchases since the end of the comparable prior year period was an increase of $0.13.

Twenty-four Weeks Ended February 14, 2004,
Compared with Twenty-four Weeks Ended February 15, 2003

Net sales for the twenty-four weeks ended February 14, 2004, increased $101.9 million to $2.4 billion, or 4.4%, over net sales of $2.3 billion for the comparable prior year period. This increase in sales was primarily driven by sales from new stores as comparable store sales, or sales for domestic stores opened at least one year, were up 1.5% overall. This increase was driven by a 13.3% increase in commercial same store sales, while retail same store sales for domestic stores were flat. ALLDATA and Mexico sales contributed 0.3 percentage points to the overall increase in net sales.

Gross profit for the twenty-four weeks ended February 14, 2004, was $1.2 billion, or 48.2% of net sales, compared with $1.0 billion, or 44.7% of net sales, during the comparable prior year period. Of the 3.5 percentage point gross profit margin improvement over the prior year period, 2.1 percentage points were driven by the change in classification of vendor funding from operating, selling, general and administrative expenses to cost of sales in accordance with EITF 02-16 which we implemented during the quarter ended May 10, 2003. Prior periods are not reclassified for comparability to the current presentation. The remaining 1.4 percentage point of improvement in gross profit margin was primarily attributable to our continued efforts to

minimize our warranty exposure through renegotiating with our vendors, supply chain initiatives, tailoring merchandise mix, the continued implementation of our Good/Better/Best initiative, cost negotiations with vendors and adjusting prices where appropriate. These renegotiations with our vendors resulted in a $16.0 million favorable adjustment to warranty expense during the first quarter of this fiscal year. However, these vendor negotiations created other related offsetting cost increases that resulted in a $14.1 million net pre-tax impact to the first quarter earnings related to warranties.

Operating, selling, general and administrative expenses for the twenty-four weeks ended February 14, 2004, increased by $84.2 million over such expenses for the comparable prior year period, and increased as a percentage of net sales from 30.3% to 32.5%. The 2.2 percentage point increase over the prior year period is primarily due to the 2.1 percentage point increase resulting from the implementation of EITF 02-16.

Interest expense, net for the twenty-four weeks ended February 14, 2004, was $42.2 million compared with $38.7 million during the comparable prior year period. The increase in interest expense was due to higher average borrowing levels over the comparable prior year period. Average borrowings for the twenty-four weeks ended February 14, 2004, were $1.7 billion, compared with $1.4 billion for the comparable prior year period.

Our effective income tax rate was 37.5% of pretax income for the twenty-four weeks ended February 14, 2004, and 38.0% for the comparable prior year period.

Net income for the twenty-four week period ended February 14, 2004, increased by 15.9% to $213.4 million, and diluted earnings per share increased by 30.9% to $2.39 from $1.83 in the comparable prior year period. The impact on reported diluted earnings per share from the stock repurchases since the end of the comparable prior year period was an increase of $0.27.

Liquidity and Capital Resources

The primary source of our liquidity is through the cash flows realized through the sale of automotive parts and accessories. For the twenty-four weeks ended February 14, 2004, our net cash flows from operating activities provided $170.0 million as compared to $51.2 million during the comparable prior year period. This improvement over the comparable prior year period is due primarily to reduced merchandise inventory levels and the increase in net income. In future periods inventory levels will be further reduced through the use of “pay-on-scan” (“POS”) arrangements with certain vendors. Under a POS arrangement, AutoZone will not pay for merchandise supplied by a vendor until that merchandise is ultimately sold to AutoZone’s customers. Revenues under POS arrangements are included in net sales in the income statement. Since we do not own POS inventory until just before it is sold to a customer, inventories under the program are not included on our condensed consolidated balance sheet. Although the amounts involved under these arrangements are immaterial at February 14, 2004, we continue to actively negotiate with our vendors to significantly increase the use of POS arrangements. Also improving cash flows is the year-over-year increase in vendor payables as a result of our ability to extend payment terms with our vendors. In some cases we have entered into arrangements

with some of our vendors and banks that, through our issuance of negotiable instruments to our vendors, the vendors can negotiate the instruments at attractive discount rates due to our credit rating. At February 14, 2004 and August 30, 2003, approximately $276.5 million and $212.5 million, respectively, are payable by us under these arrangements and are included in accounts payable in the accompanying condensed consolidated balance sheets.

Additionally, our net cash flows from investing activities used $68.5 million as compared with $53.5 million used in the comparable prior year period. Capital expenditures for the twenty-four weeks ended February 14, 2004, were $69.5 million compared to $61.8 million for the comparable prior year period. During this twenty-four week period, we opened 80 net new domestic stores, including one store that replaced an existing store, and opened six new stores in Mexico. In the comparable prior year period, we opened 54 net new domestic stores and two stores in Mexico. Capital expenditures for this fiscal year are estimated at $250 million, primarily related to the planned opening of approximately 195 new domestic stores during this year and other initiatives.

Our net cash flows from financing activities for the twenty-four weeks ended February 14, 2004, used $101.6 million as compared to providing $2.4 million in the comparable prior year period. The current period reflects $500.0 million in proceeds from the issuance of senior notes and $170.7 million in net proceeds from commercial paper borrowings, partially offset by debt payments of $430.6 million, as compared to $300.0 million in proceeds from the issuance of senior notes, offset by net commercial paper repayments of $39.3 million and debt payments of $115.7 million in the prior year comparable period. Stock repurchases were $397.7 million in the current period as compared with $159.5 million in stock repurchases in the comparable prior year period. The settlement of interest rate hedge instruments provided $32.2 million during the current period, with no such activity in the comparable prior year period. For the twenty-four weeks ended February 14, 2004, exercises of stock options provided $39.8 million, including $17.3 million in related tax benefits that are reflected in cash flows from operating activities. In the comparable prior year period, exercises of stock options provided $42.3 million, including $19.5 million in related tax benefits. At February 14, 2004, options to purchase 1.7 million shares were exercisable at a weighted average exercise price of $37.

Depending on the timing and magnitude of our future investments (either in the form of leased or purchased properties or acquisitions), we anticipate that we will rely primarily on internally generated funds to support a majority of our capital expenditures, working capital requirements and stock repurchases. The balance will be funded through borrowings. We anticipate that we will be able to obtain such financing in view of our credit rating and favorable experiences in the debt market in the past.

At February 14, 2004, AutoZone had a senior unsecured debt credit rating from Standard & Poor’s of BBB+ and a commercial paper rating of A-2. Moody’s Investors Service had assigned us a senior unsecured debt credit rating of Baa2 and a commercial paper rating of P-2. As of February 14, 2004, Moody’s and Standard & Poor’s had AutoZone listed as having a “negative” and “stable” outlook, respectively. If our credit ratings drop, our interest expense may increase; similarly, we anticipate that our interest expense may decrease if our investment ratings are raised. If our commercial paper ratings drop below current levels, we may have

difficulty continuing to utilize the commercial paper market and our interest expense will increase, as we will then be required to access more expensive bank lines of credit. If our senior unsecured debt ratings drop below investment grade, our access to financing may become more limited.

We maintain $950 million of revolving credit facilities with a group of banks. Of the $950 million, $300 million expires in May 2004. The remaining $650 million expires in May 2005. The portion expiring in May 2004 will be renewed, replaced or the option to extend the maturity date of the then-outstanding debt by one year will be exercised. The credit facilities exist primarily to support commercial paper borrowings, letters of credit and other short term unsecured bank loans. As the available balance is reduced by outstanding letters of credit, we had $872.6 million in available capacity under these credit facilities at February 14, 2004. The rate of interest payable under the credit facilities is a function of the London Interbank Offered Rate (LIBOR), the lending bank’s base rate (as defined in the agreement) or a competitive bid rate at our option.

During November 2003, we issued $300 million of 5.5% senior notes due November 2015 and $200 million of 4.75% senior notes due November 2010. Interest under both notes is payable in May and November of each year. Proceeds were used to repay $250 million in a bank term loan, $150 million in 6% senior notes and to reduce commercial paper borrowings. Also during the quarter ended November 22, 2003, we settled all open interest rate hedge instruments, including interest rate swap contracts, treasury lock agreements and forward starting interest rate swaps.

We have agreed to observe financial covenants under the terms of our borrowing agreements, including limitations on total indebtedness, restrictions on liens and minimum fixed charge coverage. All of the repayment obligations under our borrowing agreements may be accelerated and come due prior to the scheduled payment date if covenants are breached or an event of default occurs. Additionally, the repayment obligations may be accelerated if we experience a change in control (as defined in the agreements) of AutoZone or its Board of Directors. As of February 14, 2004, we were in compliance with all covenants and expect to remain in compliance with all covenants.

As of February 14, 2004, the Board of Directors had authorized us to repurchase up to $3.3 billion of common stock in the open market. From January 1998 to February 14, 2004, we repurchased a total of 76.7 million shares at an aggregate cost of $3.2 billion; including 4.7 million shares of our common stock at an aggregate cost of $397.7 million during the twenty-four week period ended February 14, 2004.

Off-Balance Sheet Arrangements

In conjunction with our commercial sales program, we offer credit to some of our commercial customers. The receivables related to the credit program are sold to a third party at a discount for cash with limited recourse. We have established a reserve for this recourse. At

February 14, 2004, the receivables facility had an outstanding balance of $37.0 million and the balance of the recourse reserve was $5.0 million.

Since fiscal year end, we have issued additional and increased existing stand-by letters of credit that are primarily renewed on an annual basis to cover premium and deductible payments to our workers’ compensation carrier and cancelled some surety bonds. Our total standby letters of credit commitment at February 14, 2004, was $77.4 million compared with $52.8 million at August 30, 2003, and our total surety bonds commitment at February 14, 2004, was $3.9 million compared with $8.1 million at August 30, 2003.

Critical Accounting Policies

As there have been no changes to our critical accounting policies during fiscal 2004, refer to our annual report on Form 10-K for the fiscal year ended August 30, 2003 for a summary of our policies.

Forward-Looking Statements

Certain statements contained in this Quarterly Report on Form 10-Q are forward-looking statements. Forward-looking statements typically use words such as “believe,” “anticipate,” “should,” “intend,” “plan,” “will,” “expect,” “estimate,” “project,” “positioned,” “strategy,” and similar expressions. These are based on our assumptions and assessments made by our management in light of experience and perception of historical trends, current conditions, expected future developments and other factors that we believe to be appropriate. These forward-looking statements are subject to a number of risks and uncertainties, including without limitation, competition; product demand; the economy; the ability to hire and retain qualified employees; consumer debt levels; inflation; gasoline prices; war and the prospect of war, including terrorist activity; and availability of commercial transportation. Forward-looking statements are not guarantees of future performance and actual results; developments and business decisions may differ from those contemplated by such forward-looking statements, and such events could materially and adversely affect our business. Forward-looking statements speak only as of the date made. Except as required by applicable law, we undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Actual results may materially differ from anticipated results. Please refer to the Risk Factors section contained in our Form 10-K for the fiscal year ended August 30, 2003, for more details.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

At February 14, 2004, there had been no material changes since the disclosures in our annual report to our instruments and positions that are sensitive to market risk except for a $109.9 million reduction in variable rate debt, a $350.0 million net increase in fixed rate debt and the settlement of all of our open interest rate hedge instruments, including interest rate swap

contracts, treasury lock agreements and forward starting interest rate swaps. We had $446.9 million of variable rate debt outstanding at February 14, 2004, and $556.8 million outstanding at August 30, 2003, both of which exclude the effect of any interest rate swaps designated and effective as cash flow hedges of such variable rate debt. At these borrowing levels for variable rate debt, a one percentage point increase in interest rates would have had an unfavorable impact on AutoZone’s pretax earnings and cash flows of $4.5 million in fiscal 2004 and $5.3 million in fiscal 2003, which includes the effects of any interest rate swaps. The primary interest rate exposure on variable rate debt is based on LIBOR. We had $1.3 billion and $990.0 million, respectively, of fixed rate debt outstanding at February 14, 2004, and August 30, 2003. A one percentage point increase in interest rates would reduce the fair value of our fixed rate debt by $82.4 million at February 14, 2004, and $47.0 million at August 30, 2003.

Item 4. Controls and Procedures.

As of February 14, 2004, an evaluation was performed under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on that evaluation, our management, including the Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were effective as of February 14, 2004. No significant changes in our internal controls or in other factors have occurred that could significantly affect controls subsequent to February 14, 2004.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

In July 2003, approximately 200 plaintiffs in the original lawsuit, whose cases had been dismissed without prejudice and with leave to reinstate their claims, filed a notice to be

reactivated as parties in the lawsuit and for their claims against the defendants to be reinstated. In September 2003, the previously dismissed plaintiffs filed a “Motion for a Preliminary Injunction (and Related Temporary Restraining Order) Against the AutoZone Defendants as to Payment On Scan Transactions with the Auto Parts Manufacturers.” On February 13, 2004, the U.S. District Court in New York dismissed the case of the approximately 200 remaining plaintiffs, with right to refile.

The Company currently, and from time to time, is involved in various other legal proceedings incidental to the conduct of its business. Although the amount of liability that may result from these proceedings cannot be ascertained, the Company does not currently believe that, in the aggregate, these other matters will result in liabilities material to the Company’s financial condition, results of operations or cash flows.

Item 2. Changes in Securities and Use of Proceeds.

Shares of common stock repurchased by the Company during the quarter ended February 14, 2004, were as follows:

Issuer Repurchases of Equity Securities


					Total Number of		Maximum Dollar
					Shares Purchased		Value that May Yet
	Total Number		Average		as Part of Publicly		Be Purchased
	of Shares		Price Paid		Announced Plans		Under the Plans or
Period	Purchased		per Share		or Programs		Programs

November 23, 2003, to December 20, 2003		1,459,800	$	81.57		74,123,559	$	293,668,163
December 21, 2003, to January 17, 2004		1,705,200		83.93		75,828,759		150,543,917
January 18, 2004, to February 14, 2004		869,300		86.30		76,698,059		75,526,045

Total		4,034,300	$	83.59		76,698,059	$	75,526,045

All of the above repurchases were part of publicly announced plans that were authorized by the Company’s Board of Directors for a maximum of $3.3 billion in common shares. The program was initially announced in January 1998, and was most recently amended in June 2003, to increase the repurchase authorization to $3.3 billion from $2.8 billion. The program does not have an expiration date.

Item 3. Defaults Upon Senior Securities.

Not applicable.

Item 4. Submission of Matters to a Vote of Security Holders.

(a) The Annual Meeting of Stockholders was held on December 11, 2003.

(b) Not applicable.


Nominee	Votes For		Votes Withheld

Charles M. Elson		65,285,337		587,880
Marsha J. Evans		65,260,139		613,078
Earl G. Graves, Jr.		63,450,214		2,423,003
N. Gerry House		65,268,869		604,348
J.R. Hyde, III		64,854,145		1,019,072
Edward S. Lampert		65,057,486		815,731
W. Andrew McKenna		63,475,950		2,397,267
Steve Odland		64,415,900		1,457,317
James J. Postl		63,453,362		2,419,855

2. For the approval of Ernst & Young LLP as independent auditors:


For: Against: Abstain:			61,753,571 3,752,717 366,929

(d) Not applicable.

Item 5. Other Information.

Not applicable.

Item 6. Exhibits and Reports on Form 8-K

(a)

The following exhibits are filed as part of this report:


	3.1	Restated Articles of Incorporation of AutoZone, Inc. incorporated by reference to Exhibit 3.1 to the Form 10-Q for the quarter ended February 13, 1999.

	3.2	Third Amended and Restated By-laws of AutoZone, Inc. incorporated by reference to Exhibit 3.1 to the Form 8-K dated October 1, 2002.

*	10.1	Non-Compete Agreement between Steve Handschuh and AutoZone, Inc., dated January 13, 2004.

*	10.2	Second Amended and Restated Executive Stock Purchase Plan.

	12.1	Computation of Ratio of Earnings to Fixed Charges.

	15.1	Letter Regarding Unaudited Interim Financial Statements.

	31.1	Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

	31.2	Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

	32.1	Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

	32.2	Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

	*	Management contract or compensatory plan or arrangement.

(b)

During the quarter ended February 14, 2004, the Company filed a report on Form 8-K dated December 9, 2003, furnishing a press release regarding the financial results for the quarter ended November 22, 2003.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		AUTOZONE, INC.

		By:		/s/ MICHAEL ARCHBOLD

		Michael Archbold
		Senior Vice President and
		Chief Financial Officer
		(Principal Financial Officer)

		By:		/s/ CHARLIE PLEAS III

		Charlie Pleas III
		Vice President, Controller
		(Principal Accounting Officer)

Dated: March 15, 2004

EXHIBIT INDEX

The following exhibits are filed as part of this report:


	3.1	Restated Articles of Incorporation of AutoZone, Inc. incorporated by reference to Exhibit 3.1 to the Form 10-Q for the quarter ended February 13, 1999.

	3.2	Third Amended and Restated By-laws of AutoZone, Inc. incorporated by reference to Exhibit 3.1 to the Form 8-K dated October 1, 2002.

*	10.1	Non-Compete Agreement between Steve Handschuh and AutoZone, Inc., dated January 13, 2004.

*	10.2	Second Amended and Restated Executive Stock Purchase Plan.

	12.1	Computation of Ratio of Earnings to Fixed Charges.

	15.1	Letter Regarding Unaudited Interim Financial Statements.

	31.1	Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

	31.2	Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

	32.1	Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

	32.2	Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

	*	Management contract or compensatory plan or arrangement.



                                                                    EXHIBIT 10.1

                              NON-COMPETE AGREEMENT

This Non-Compete agreement is entered into this 13th day of January, 2004, by
and between AutoZone, Inc., a Nevada corporation and its various subsidiaries
(collectively "AutoZone") and Steve Handschuh, an individual residing in
Marietta, GA. ("Employee").

                                    RECITALS

     1.  AutoZone is employing Employee as an officer of AutoZone with such
         employment to be "at will" and terminable at any time.

     2.  In connection with his employment with AutoZone, Employee will have
         access to confidential and proprietary information of AutoZone.

Therefore in consideration of such employment by AutoZone and for other good and
valuable consideration received and hereby acknowledged, Employee and AutoZone
agree as follows:

1.   (i) If Employee terminates his employment with AutoZone or (ii) his
employment is terminated by AutoZone for Cause (as defined below) or (iii) his
employment is terminated by AutoZone without Cause and Employee fails to waive
any and all rights to severance pay, then Employee agrees that he will not, for
the period commencing on the termination date of his employment with AutoZone
and continuing for a period of two years, be engaged in or concerned with,
directly or indirectly, any business related to or involved in the retail sale
of auto parts to "DIY" customers, or the wholesale or retail sale of auto parts
to commercial installers in any state, province, territory or foreign country in
which AutoZone operates now or shall operate during the term set forth in this
non-compete agreement (herein called "Competitor"), as an employee, director,
consultant, beneficial or record owner, partner, joint venturer, officer or
agent of the Competitor.

"Cause" shall mean the willful engagement by the Employee in conduct which is
demonstrably or materially injurious to AutoZone, monetarily or otherwise. For
this purpose, no act or failure to act by the Employee shall be considered
"willful" unless done, or omitted to be done, by the Employee not in good faith
and without reasonable belief that his action or omission was in the best
interest of AutoZone.

The parties acknowledge and agree that the time, scope, geographic area and
other provisions of this Non-Compete section have been specifically negotiated
by sophisticated commercial parties and specifically hereby agree that such
time, scope, geographic area and other provisions are reasonable under the
circumstances.

Further, Employee agrees not to hire, for himself or any other entity, encourage
anyone or entity to hire, or entice away from AutoZone any employee of AutoZone
during the term of this non-compete agreement.



2.   Unless otherwise required by law, Employee shall hold in confidence any
proprietary or confidential information obtained by him during his employment
with AutoZone, which shall include, but not be limited to, information regarding
AutoZone's present and future business plans, vendors, systems, operations and
personnel. Confidential information shall not include information: (a) publicly
disclosed by AutoZone; (b) rightfully received by Employee from a third party
without restrictions on disclosure (c) approved for release or disclosure by
AutoZone; or (d) produced or disclosed pursuant to applicable laws, regulation
or court order. Employee acknowledges that all such confidential or proprietary
information is and shall remain the sole property of AutoZone and all
embodiments of such information shall remain with AutoZone.

3.   In the event of breach by Employee of any provision of this Agreement,
Employee acknowledges that such breach will cause irreparable damage to
AutoZone, the exact amount of which will be difficult or impossible to
ascertain, and that remedies at law for any such breach will be inadequate.
Accordingly, AutoZone shall be entitled, in addition to any other rights or
remedies existing in its favor, to obtain, without the necessity for any bond or
other security, specific performance and/or injunctive relief in order to
enforce, or prevent breach of any such provision.

4.   Any waiver of any breach of this Agreement by AutoZone shall not operate or
be construed as a waiver of any subsequent breach by Employee. No waiver shall
be valid unless in writing and signed by an authorized officer of AutoZone.

5.   This Agreement shall be governed and construed by the laws of the State of
Tennessee, without regard to its choice of law rules. The parties agree that the
only proper venue for any dispute under this Agreement shall be in the state or
federal courts located in Shelby County, Tennessee.

6.  Nothing in this agreement shall create any contract for employment and
Employee's employment by AutoZone is "at will" and terminable at any time by
either AutoZone or employee.

         IN WITNESS WHEREOF, the respective parties execute this Agreement.

AUTOZONE, INC.

By: /s/STEVE ODLAND                         /s/ STEVE HANDSCHUH
                                            Employee

Title: Chairman, President & CEO

                                            ____________________________
                                            Date

By: /s/ HARRY L. GOLDSMITH

Title: Sr. V.P., General Counsel & Secretary

                                       2



                                                                    EXHIBIT 10.2

                                 AUTOZONE, INC.
                           SECOND AMENDED AND RESTATED
                          EXECUTIVE STOCK PURCHASE PLAN

         AUTOZONE, INC., a corporation organized under the laws of the State of
Nevada, by resolution of its Board of Directors on October 2, 2001, hereby
adopts the AutoZone, Inc. Executive Stock Purchase Plan (the "Plan"), subject to
the approval of the Plan by the stockholders of the Company as provided in
paragraph 15 of the Plan. The Plan was approved by the stockholders on December
13, 2001. This Plan was Amended and Restated on July 29, 2002, and December 10,
2003, by the Compensation Committee.

         The purposes of the Plan are as follows:

     (1) To assist selected employees of the Company or of a Parent or
Subsidiary of the Company in acquiring a stock ownership interest in the Company
above the maximum amount of stock ownership interest allowable pursuant to the
AutoZone, Inc. Second Amended and Restated Employee Stock Purchase Plan (the
"ESPP"). The Plan is not intended to qualify as an "employee stock purchase
plan" under Section 423 of the Internal Revenue Code of 1986, as amended.

     (2) To help selected employees provide for their future security and to
encourage them to remain in the employment of the Company or of a Parent or
Subsidiary of the Company.

1. DEFINITIONS

         Whenever any of the following terms are used in the Plan with the first
letter or letters capitalized, they shall have the meaning specified below
unless the context clearly indicates to the contrary. The masculine pronoun
shall include the feminine and neuter and the singular shall include the plural
where the context so indicates:

     (a) "Board" shall mean the Board of Directors of the Company.

     (b) "Cause" shall mean the willful engagement by the Employee in conduct
which is demonstrably and materially injurious to the Company, monetarily or
otherwise, as determined by the Committee.

     (c) "Code" shall mean the Internal Revenue Code of 1986, as amended.

     (d) "Committee" shall mean the Compensation Committee of the Board
appointed to administer the Plan pursuant to paragraph 12.

     (e) "Company" shall mean AutoZone, Inc., a Nevada corporation.

     (f) "Date of Exercise" shall mean with respect to any Option (i) the March
31 of the Plan Year in which the Option was granted (in the case of an Option
granted on January 1), (ii) the



June 30 of the Plan Year in which the Option was granted (in the case of an
Option granted on April 1), (iii) the September 30 of the Plan Year in which the
Option was granted (in the case of an Option granted on July 1), (iv) the
December 31 of the Plan Year in which the Option was granted (in the case of an
Option granted on October 1) or (v) such other day, as may be determined by the
Committee, of the Plan Year in which the Option was granted.

     (g) "Date of Grant" shall mean the date upon which an Option is granted, as
set forth in subparagraph 3(a).

     (h) "Disability" shall mean a permanent and total disability within the
meaning of Section 22(e)(3) of the Code, or such other definition as the
Committee shall provide in its discretion.

     (i) "Eligible Compensation" shall mean (i) the Eligible Employee's rate of
pay for the immediately preceding fiscal year based on the base salary plus
annual incentive compensation paid for the fiscal year, if the Eligible Employee
was employed by the Company for the full preceding fiscal year, otherwise (ii)
the Eligible Employee's annualized current salary plus any annual incentive
compensation accrued for the fiscal year as of the Date of Grant.

     (j) "Eligible Employee" shall mean an employee of the Company and those of
any present or future Parent or Subsidiary of the Company incorporated under the
laws of a state of the United States of America who is selected by the Committee
and designated in writing to be eligible to participate in the Plan.

     (k) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.

     (l) "Form" shall mean either a paper form or a form on electronic media,
prepared by the Company.

     (m) "Normal Retirement Date" shall mean a Participant's normal retirement
date as set forth in the AutoZone, Inc. Associate's Pension Plan, as it may be
amended from time to time.

     (n) "Option" shall mean an option granted under the Plan to an Eligible
Employee to purchase shares of the Company's Stock.

     (o) "Option Period" shall mean with respect to any Option the period
beginning upon the Date of Grant and ending upon the Date of Exercise.

     (p) "Option Price" has the meaning set forth in subparagraph 4(b).

     (q) "Parent of the Company" shall mean any corporation, other than the
Company, in an unbroken chain of corporations ending with the Company if, at the
time of the granting of the Option each of the corporations other than the
Company owns stock possessing more than 50% of the total combined voting power
of all classes of stock in one of the other corporations in such chain.

                                       2


     (r) "Participant" shall mean an Eligible Employee who has complied with the
provisions of subparagraph 3(b).

     (s) "Plan" shall mean the AutoZone, Inc. Executive Stock Purchase Plan.

     (t) "Plan Year" shall mean the calendar year beginning on January 1 and
ending on December 31.

     (u) "Restricted Share Option" shall mean an Option for Restricted Shares.

     (v) "Restricted Share Option Price" has the meaning set forth in
subparagraph 4(b)(i).

     (w) "Restricted Shares" has the meaning set forth in subparagraph 4(c)(i).

     (x) "Securities Act" shall mean the Securities Act of 1933, as amended.

     (y) "Stock" shall mean shares of the Company's common stock.

     (z) "Subsidiary of the Company" shall mean any corporation other than the
Company in an unbroken chain of corporations beginning with the Company if, at
the time of the granting of the Option, each of the corporations other than the
last corporation in the unbroken chain owns stock possessing more than 50% of
the total combined voting power of all classes of stock in one of the other
corporations in such chain.

     (aa) "Unvested Share Option" shall mean an Option for Unvested Shares.

     (bb) "Unvested Share Option Price" has the meaning set forth in
subparagraph 4(b)(ii).

     (cc) "Unvested Shares" has the meaning set forth in subparagraph 4(c)(ii).

2. STOCK SUBJECT TO THE PLAN

         Subject to the provisions of paragraph 9 (relating to adjustment upon
changes in the Stock), the Stock which may be sold pursuant to options granted
under the Plan shall not exceed in the aggregate 300,000 shares, and may be
unissued shares or reacquired shares or shares bought on the market for purposes
of the Plan.

3. GRANT OF OPTIONS

         (a) General Statement. Following the effective date of the Plan and
continuing while the Plan remains in force, the Company may offer Options under
the Plan to all Eligible Employees. These Options may be granted four times each
Plan Year on the January 1, the April 1, the July 1, or the October 1 of each
Plan Year, or on such other days as may be determined by the Committee. The term
of each Option shall be for three months and shall end on the March 31 (with
respect to a January 1 Date of Grant), the June 30 (with respect to an April 1
Date of Grant), the September 30 (with respect to a July 1 Date of Grant), or
the December 31 (with respect to an October 1 Date of Grant) of the Plan Year in
which the Option is granted or for

                                       3


such other term or Date of Exercise as may be determined by the Committee. The
Options are granted in consideration of past and future services to the Company.
Each Option shall consist of a Restricted Share Option granted together with an
Unvested Share Option, and exercise of an Option may only occur by exercising
both the Restricted Share Option and the Unvested Share Option together. The
number of shares of the Stock subject to each Restricted Share Option shall be
the whole number quotient of (i) the aggregate payroll deductions authorized by
each Participant in accordance with subparagraph 3(b) for the Option Period
divided by (ii) the Restricted Share Option Price. The number of shares of the
Stock subject to each Unvested Share Option shall be the whole number quotient
of the number of shares subject to the Restricted Share Option for the Option
Period divided by 5.66667.

         (b) Election To Participate; Payroll Deduction Authorization. An
Eligible Employee may participate in the Plan only by payroll deduction. Each
Eligible Employee who elects to participate in the Plan shall deliver to the
Company during the calendar month next preceding either a January 1 Date of
Grant, an April 1 Date of Grant, a July 1 Date of Grant, or an October 1 Date of
Grant, or on such other days as may be determined by the Committee, the properly
completed Form whereby the Eligible Employee gives notice of the election to
participate in the Plan as of the next following Date of Grant, and which shall
designate a stated dollar amount, in $5.00 increments, of Eligible Compensation
to be withheld on each regular payday and or bonus payment date. The stated
dollar amount may not be less than $5.00 and may not exceed 25% of the Eligible
Employee's Eligible Compensation.

         (c) Changes in Payroll Authorization. The payroll deduction
authorization referred to in subparagraph 3(b) may only be changed during the
enrollment period described in subparagraph 3(b) and may not be changed during
the Option Period, except as provided in paragraph 5.

4. EXERCISE OF OPTIONS

         (a) General Statement. Each Participant who has purchased the maximum
number of shares he or she is permitted to purchase pursuant to the
Participant's option granted for the concurrent option period under the ESPP
automatically will be deemed to have exercised the Option on each Date of
Exercise to the extent that the balance then in the Participant's account under
the Plan is sufficient to purchase at the Option Price whole shares of the Stock
subject to the Option. The excess balance, if any, in Participant's account
shall remain in the account and be available for the purchase of Stock on the
following Date of Exercise, provided that no withdrawal from the Plan or
termination of employment has occurred under paragraphs 5 or 6. The Option will
not be exercised and will be deemed canceled if the Participant has not
purchased the maximum number of shares he or she is permitted to purchase
pursuant to the Participant's option granted for the concurrent option period
under the ESPP.

         (b) "Option Price" Defined. The option price per share of the Stock
(the "Option Price") to be paid by each Participant on each exercise of an
Option shall be as follows:

                  (i) The Option Price to be paid by each Participant on each
         exercise of a Restricted Share Option (the "Restricted Share Option
         Price") shall be an amount equal to 100% of the fair market value of
         the Stock on the Date of Exercise. The fair market value

                                       4


         of the Stock as of a given date shall be: (A) the closing price of the
         Stock on the principal exchange on which the Stock is then trading, if
         any, on such date, or, if the Stock was not traded on such date, then
         on the next preceding trading day during which a sale occurred; or (B)
         if such Stock is not traded on an exchange but is quoted on NASDAQ or a
         successor quotation system, (1) the last sales price (if the Stock is
         then listed as a National Market Issue under the NASD National Market
         System) or (2) the mean between the closing representative bid and
         asked prices (in all other cases) for the Stock on such date as
         reported by NASDAQ or such successor quotation system; or (C) if such
         Stock is not publicly traded on an exchange and not quoted on NASDAQ or
         a successor quotation system, the mean between the closing bid and
         asked prices for the Stock on such date as determined in good faith by
         the Committee; or (D) if the Stock is not publicly traded, the fair
         market value established by the Committee acting in good faith.

                  (ii) The Option Price to be paid by each Participant on each
         exercise of an Unvested Share Option (the "Unvested Share Option
         Price") shall be zero.

         (c) Delivery of Share Certificates.

                  (i) For a number of shares of Stock which are purchased upon
         the exercise of a Restricted Share Option (the "Restricted Shares"),
         upon the first anniversary of the Date of Exercise and upon proper
         completion and submission of the proper Form to the Company, the
         Company shall deliver to such Participant a certificate issued in
         Participant's name for such number of shares. The Restricted Shares
         shall not be transferable or assignable by the Participant until the
         first anniversary of the Date of Exercise.

                  (ii) For a number of shares of Stock which are purchased upon
         the exercise of an Unvested Share Option (the "Unvested Shares"),
         subject to the Participant's continued employment with the Company
         except as provided below, on the first anniversary of the Date of
         Exercise and upon the proper completion and submission of the proper
         Form to the Company, the Company shall deliver to such Participant a
         certificate issued in Participant's name for such number of shares. If
         a Participant's employment with the Company is terminated prior to the
         first anniversary of the Date of Exercise, except by reason of the
         Participant's death, Disability, termination by the Company without
         Cause, or retirement on or after the Participant's Normal Retirement
         Date, the Unvested Shares shall be forfeited and the Participant shall
         have no further interest in the Unvested Shares. Upon the termination
         of a Participant's employment with the Company by reason of the
         Participant's death, Disability, termination by the Company without
         Cause, or retirement on or after the Participant's Normal Retirement
         Date, the Unvested Shares shall be vested and upon the proper
         completion and submission of the proper Form to the Company, the
         Company shall deliver to such Participant a certificate issued in
         Participant's name for the Unvested Shares.

                  (iii) In the event the Company is required to obtain from any
         commission or agency authority to issue any such certificate, the
         Company will seek to obtain such authority. The inability of the
         Company to obtain from any such commission or agency

                                       5


         authority which counsel for the Company deems necessary for the lawful
         issuance of any such certificate shall relieve the Company from
         liability to any Participant except to return the amount of the balance
         in the account in cash.

5. WITHDRAWAL FROM THE PLAN

         (a) General Statement. Any Participant may withdraw from the Plan at
any time. A Participant who wishes to withdraw from the Plan must deliver to the
Company a notice of withdrawal in a Form prepared by the Company. The Company,
as soon as practicable following receipt of a Participant's notice of
withdrawal, will refund to the Participant the amount of the balance in the
account under the Plan. Upon receipt of a Participant's notice of withdrawal
from the Plan, automatically and without any further act on the part of the
Participant, the payroll deduction authorization, any interest in the Plan, and
any Option under the Plan shall terminate.

         (b) Participation Following Withdrawal. A Participant who withdraws
from the Plan may participate again in the Plan on the next January 1, April 1,
July 1, or October 1 immediately following the date of withdrawal, or on such
other days as may be determined by the Committee.

         (c) Stock Subject to Plan. Notwithstanding a Participant's withdrawal
from the Plan, any Stock acquired under the Plan shall remain subject to the
terms of the Plan.

6. TERMINATION OF EMPLOYMENT

         (a) Termination of Employment Other Than By Retirement, Death,
Disability, or Without Cause. If the employment of a Participant is terminated
other than by reason of the Participant's (i) retirement on or after the
Participant's Normal Retirement Date, or earlier or later with the consent of
the Committee, (ii) death, (iii) Disability, or (iv) termination by the Company
without Cause, then participation in the Plan automatically shall terminate as
of the date of the termination of employment. As soon as practicable after such
a Participant's termination of employment, the Company will refund the amount of
the balance in that account under the Plan. Upon a Participant's termination of
employment under this subparagraph 6(a), any Option under the Plan shall
terminate.

         (b) Termination of Employment By Retirement, Disability, or Without
Cause. A Participant (i) who retires on or after the Participant's Normal
Retirement Date, or earlier or later with the consent of the Committee, (ii)
whose employment is terminated by reason of the Participant's Disability, or
(iii) whose employment is terminated by the Company without Cause, may by
written notice to the Company request payment of the balance in the account
under the Plan, in which event the Company shall make such payment as soon as
practicable after receiving such notice; upon receipt of such notice, the
Participant's interest in any Option under the Plan shall terminate. If the
Company does not receive such notice prior to the next Date of Exercise, such
Participant's Option will be deemed to have been exercised on such Date of
Exercise.

         (c) Termination of Employment By Death. If the employment of a
Participant is terminated by the Participant's death, the executor of the
Participant's will or the administrator of

                                       6


the Participant's estate by written notice to the Company may request payment of
the balance in the Participant's account under the Plan, in which event the
Company shall make such payment without any interest thereon as soon as
practicable after receiving such notice. Upon receipt of such notice, the
Participant's interest in the Plan and Option under the Plan shall terminate. If
the Company does not receive such notice prior to the next Date of Exercise, the
Participant's Option shall be deemed to have been exercised on such Date of
Exercise.

7. RESTRICTION UPON ASSIGNMENT

         No Option or interest or right therein or part thereof shall be liable
for the debts, contracts or engagements of any Participant or any successor in
interest, nor shall any Option be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means,
whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and attempted disposition thereof shall be
null and void and of no effect; provided, however, that nothing in this
paragraph 7 shall prevent transfers by will or by the applicable laws of descent
and distribution. Except as provided in subparagraph 6(c), an Option may not be
exercised to any extent except by the Participant.

8. NO RIGHTS OF STOCKHOLDER UNTIL OPTION IS EXERCISED

         With respect to shares of the Stock subject to an Option, a Participant
shall not be deemed to be a stockholder of the Company, and shall not have any
of the rights or privileges of a stockholder. A Participant shall have the
rights and privileges of a stockholder of the Company when, but not until, an
Option is exercised.

9. CHANGES IN THE STOCK; ADJUSTMENTS OF AN OPTION

         Whenever any change is made in the Stock or to Options outstanding
under the Plan, by reason of stock dividend or by reason of division,
combination or reclassification of shares, appropriate action will be taken by
the Committee to adjust accordingly the number of shares of the Stock subject to
the Plan and the number and the Option Price of shares of the Stock subject to
the Options outstanding under the Plan.

10. USE OF FUNDS; NO INTEREST PAID

         All funds received or held by the Company under the Plan will be
included in the general funds of the Company free of any trust or other
restriction and may be used for any corporate purpose. No interest will be paid
to any Participant or credited to any account under the Plan with respect to
such funds.

                                       7


11. AMENDMENT OF THE PLAN

         The Committee may amend, suspend or terminate the Plan at any time and
from time to time; provided, however, that approval by the vote of the holders
of more than 50% of the shares of the Company's Stock present in person or by
proxy and entitled to vote at a meeting shall be required to amend the Plan (i)
to increase the number of shares of Stock available under the Plan, (ii) to
decrease the Option Price below a price computed in the manner stated in
subparagraph 4(b), (iii) to materially alter the requirements for eligibility to
participate in the Plan, or (iv) to modify the Plan in a manner requiring
stockholder approval under the Code or the Exchange Act.

12. ADMINISTRATION BY COMMITTEE; RULES AND REGULATIONS

         (a) Administration. The Plan shall be administered by the Compensation
Committee of the Board.

         (b) Duties And Powers of Committee. It shall be the duty of the
Committee to conduct the general administration of the Plan in accordance with
its provisions. The Committee shall have the power to interpret the Plan and the
Options and to adopt such rules for the administration, interpretation and
application of the Plan as are consistent therewith and to interpret, amend or
revoke any such rules. The Board shall have no right to exercise any of the
rights or duties of the Committee under the Plan.

         (c) Majority Rule. The Committee shall act by a majority of its members
in office. The Committee may act either by vote at a meeting or by a memorandum
or other written instrument signed by a majority of the Committee.

         (d) Professional Assistance; Good Faith Actions. The Committee may
employ attorneys, consultants, accountants, appraisers, brokers or other
persons. The Committee, the Company and its officers and directors shall be
entitled to rely upon the advice, opinions or valuations of any such persons.
All actions taken and all interpretations and determinations made by the
Committee in good faith shall be final and binding upon all Participants, the
Company and all other interested persons. No member of the Committee shall be
personally liable for any action, determination or interpretation made in good
faith with respect to the Plan or the Options, and all members of the Committee
shall be fully protected by the Company in respect to any such action,
determination or interpretation.

13. NO RIGHTS AS AN EMPLOYEE

         Nothing in the Plan shall be construed to give any person (including
any Eligible Employee or Participant) the right to remain in the employ of the
Company or a Parent or Subsidiary of the Company or to affect the right of the
Company or a Parent or Subsidiary of the Company to terminate the employment of
any person (including any Eligible Employee or Participant) at any time with or
without cause.

                                       8


14. MERGER, ACQUISITION OR LIQUIDATION OF THE COMPANY

         In the event of the merger or consolidation of the Company into another
corporation, the acquisition by another corporation of all or substantially all
of the Company's assets or 80% or more of the Company's then outstanding voting
stock or the liquidation or dissolution of the Company, the Date of Exercise
with respect to outstanding Options shall be the business day immediately
preceding the effective date of such merger, consolidation, acquisition,
liquidation or dissolution unless the Committee shall, in its sole discretion,
provide for the assumption or substitution of such Options.

15. TERM; APPROVAL BY STOCKHOLDERS

         No Option may be granted during any period of suspension or after
termination of the Plan, and in no event may any Option be granted under the
Plan after December 31, 2006, unless extended by the Board of Directors of the
Company. The Plan will be submitted for the approval of the Company's
stockholders within 12 months after the date of the Board of Directors' initial
adoption of the Plan.

16. EFFECT UPON OTHER PLANS

         The adoption of the Plan shall not affect any other compensation or
incentive plans in effect for the Company or a Parent or Subsidiary of the
Company. Nothing in this Plan shall be construed to limit the right of the
Company or a Parent or Subsidiary of the Company (a) to establish any other
forms of incentives or compensation for employees of the Company or a Parent or
Subsidiary of the Company or (b) to grant or assume options otherwise than under
this Plan in connection with any proper corporate purpose, including, but not by
way of limitation, the grant or assumption of options in connection with the
acquisition, by purchase, lease, merger, consolidation or otherwise, of the
business, stock or assets of any corporation, firm or association.

17. RULE 16b-3 RESTRICTIONS UPON DISPOSITIONS OF STOCK

         The Plan is intended to conform to the extent necessary with all
provisions of the Securities Act, and the Exchange Act and any and all
regulations and rules promulgated by the Securities and Exchange Commission
thereunder, including, without limitation, Rule 16b-3. Notwithstanding anything
herein to the contrary, the Plan shall be administered, and Options shall be
granted and may be exercised, only in such a manner as to conform to such laws,
rules and regulations. To the extent permitted by applicable law, the Plan and
Options granted hereunder shall be deemed amended to the extent necessary to
conform to such laws, rules and regulations.

                                       9


18. NOTICES

         Any notice to be given under the terms of the Plan to the Company shall
be addressed to the Company in care of its Secretary or any designee and any
notice to be given to a Participant shall be addressed to Participant's last
address as reflected in the Company's records and may be given either in writing
or via electronic communication to the extent permitted by law. By a notice
given pursuant to this paragraph 18, either party may hereafter designate a
different address for notices to be given. Any notice which is required to be
given to a Participant shall, if the Participant is then deceased, be given to
the Participant's personal representative if such representative has previously
informed the Company of the representative status and address by notice under
this paragraph 18. Any notice shall have been deemed duly given when received by
the Company or when sent to a Participant by the Company to Participant's last
known mailing address or delivered to an electronic mailbox accessible by
Participant as permitted by law.

19. TITLES

         Titles are provided herein for convenience only and are not to serve as
a basis for interpretation or construction of the Plan.

20.  TAX WITHHOLDING

         (a) Payment of any sums required by federal, state or local tax law
shall be withheld with respect to the issuance, vesting, exercise or payment of
any Restricted Shares, Restricted Share Options or Unvested Shares within the
time limit as required by law for such payment. A Participant may elect to pay
withholding taxes due upon the vesting of the Restricted Shares and Unvested
Shares by having the Company withhold Unvested Shares that have vested and are
issuable to such Participant as Stock (without restriction or risk of
forfeiture).

         (b) Notwithstanding any other provision of the Plan, the number of
shares that may be withheld in order to satisfy the Participant's federal and
state income and payroll tax liabilities with respect to the vesting, exercise
or payment of the Unvested Shares shall be limited to the number of shares that
have a fair market value (as defined below) on the date of withholding equal to
the aggregate amount of such tax liabilities based on the minimum statutory
withholding rates for federal and state tax income and payroll tax purposes that
are applicable to such supplemental taxable income.

         (c) For these purposes, the fair market value of the withheld shares,
as of a given date, shall be: (A) the closing price of the Stock on the
principal exchange on which the Stock is then trading, if any, on such date, or,
if the Stock was not traded on such date, then on the next preceding trading day
during which a sale occurred; or (B) if the Stock is not traded on an exchange
but is quoted on NASDAQ or a successor quotation system, (1) the last sales
price (if the Stock is then listed as a National Market Issue under the NASD
National Market System) or (2) the mean between the closing representative bid
and asked prices (in all other cases) for the Stock on such date as reported by
NASDAQ or such successor quotation system; or (C) if the Stock is not publicly
traded on an exchange and not quoted on NASDAQ or a successor quotation system,
the mean between the closing bid and asked prices for the Stock on such date

                                       10


as determined in good faith by the Committee; or (D) if the Stock is not
publicly traded, the fair market value established by the Committee acting in
good faith.

                                       11


                                                                               .
                                                                               .
                                                                               .

                                                                    EXHIBIT 12.1

                Computation of Ratio of Earnings to Fixed Charges
                          (in thousands, except ratios)



                                                                            Fiscal Year Ended August
                                             --------------------------------------------------------------------------------
                                                1999          2000          2001          2001*         2002          2003
                                             (52 weeks)    (52 weeks)    (52 weeks)    (52 weeks)    (53 weeks)    (52 weeks)
                                             --------------------------------------------------------------------------------
                                                                                                 
Earnings:
  Income before income taxes                 $  387,783    $  435,190    $  287,026    $  443,826    $  691,148    $  833,007
  Fixed charges                                  66,015        97,520       121,141       121,141        98,688       121,129
  Less:  Capitalized interest                    (2,762)       (2,773)       (1,380)       (1,380)         (437)         (791)
                                             --------------------------------------------------------------------------------
      Adjusted earnings                      $  451,036    $  529,937    $  406,787    $  563,587    $  789,399    $  953,345
                                             ================================================================================

Fixed charges:
  Gross interest expense                     $   47,117    $   77,699    $  100,291    $  100,291    $   78,183    $   79,301
  Amortization of debt origination fees           1,206         2,209         2,377         2,377         2,283         7,334
  Interest portion of rent expense               17,692        17,612        18,473        18,473        18,222        34,494
                                             --------------------------------------------------------------------------------
     Total fixed charges                     $   66,015        97,520    $  121,141    $  121,141    $   98,688    $  121,129
                                             ================================================================================

     Ratio of earnings to fixed charges             6.8           5.4           3.4           4.7           8.0           7.9
                                             ================================================================================


                                              Twenty-four week periods ended
                                              ------------------------------
                                                February 14,  February 15,
                                                   2004           2003
                                                -------------------------
                                                        
Earnings:
  Income before income taxes                     $  341,448    $  297,086
  Fixed charges                                      59,349        54,727
  Less:  Capitalized interest                          (284)         (267)
                                                 ------------------------
      Adjusted earnings                          $  400,513    $  351,546
                                                 ========================

Fixed charges:
  Gross interest expense                         $   39,558    $   36,052
  Amortization of debt origination fees               2,987         2,977
  Interest portion of rent expense                   16,804        15,698
                                                 ------------------------
     Total fixed charges                         $   59,349    $   54,727
                                                 ========================

     Ratio of earnings to fixed charges                 6.7           6.4
                                                 ========================


* Excludes the impact of the pretax restructuring and impairment charges of
$156.8 million in fiscal 2001.



                                                                    EXHIBIT 15.1

The Board of Directors and Stockholders
AutoZone, Inc.

We are aware of the incorporation by reference in the following Registration
Statements of AutoZone, Inc. and in the related Prospectuses of our report dated
March 1, 2004, related to the unaudited condensed consolidated interim financial
statements of AutoZone, Inc. that are included in its Form 10-Q for the quarter
ended February 14, 2004:

         Registration Statement (Form S-8 No. 333-42797) pertaining to the
         AutoZone, Inc. Amended and Restated Employee Stock Purchase Plan

         Registration Statement (Form S-8 and S-3 No. 33-41618) pertaining to
         the AutoZone, Inc. Amended and Restated Stock Option Plan

         Registration Statement (Form S-8 No. 333-88245) pertaining to the
         AutoZone, Inc. Second Amended and Restated 1996 Stock Option Plan

         Registration Statement (Form S-8 No. 333-88241) pertaining to the
         AutoZone, Inc. Amended and Restated Director Compensation Plan

         Registration Statement (Form S-8 No. 333-75142) pertaining to the
         AutoZone, Inc. Third Amended and Restated 1998 Director Stock Option
         Plan

         Registration Statement (Form S-8 No. 333-83436) pertaining to a shelf
         registration to sell 15,000,000 shares of common stock owned by certain
         selling stockholders

         Registration Statement (Form S-8 No. 333-75140) pertaining to the
         AutoZone, Inc. Executive Stock Purchase Plan

         Registration Statement (Form S-8 No. 333-103665) pertaining to the
         AutoZone, Inc. 2003 Director Compensation Plan

         Registration Statement (Form S-8 No. 333-103666) pertaining to the
         AutoZone, Inc. 2003 Director Stock Option Plan

                                                           /s/ Ernst & Young LLP

Memphis, Tennessee
March 15, 2004



                                                                    EXHIBIT 31.1

                            CERTIFICATION PURSUANT TO
       RULES 13a-14(a) AND 15D-14(a) UNDER THE SECURITIES EXCHANGE ACT OF
                                      1934,
         AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF
                                      2002

     I, Steve Odland, Chairman, President and Chief Executive Officer of
AutoZone, Inc. ("registrant"), certify that:

     1.  I have reviewed this quarterly report on Form 10-Q of AutoZone, Inc.;

     2.  Based on my knowledge, this report does not contain any untrue
         statement of a material fact or omit to state a material fact necessary
         to make the statements made, in light of the circumstances under which
         such statements were made, not misleading with respect to the period
         covered by this report;

     3.  Based on my knowledge, the financial statements, and other financial
         information included in this report, fairly present in all material
         respects the financial condition, results of operations and cash flows
         of the registrant as of, and for, the periods presented in this report;

     4.  The registrant's other certifying officer(s) and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
         registrant and have:

         a)   Designed such disclosure controls and procedures, or caused such
              disclosure controls and procedures to be designed under our
              supervision, to ensure that material information relating to the
              registrant, including its consolidated subsidiaries, is made known
              to us by others within those entities, particularly during the
              period in which this report is being prepared;

         b)   Evaluated the effectiveness of the registrant's disclosure
              controls and procedures and presented in this report our
              conclusions about the effectiveness of the disclosure controls and
              procedures, as of the end of the period covered by this report
              based on such evaluation; and

         c)   Disclosed in this report any change in the registrant's internal
              control over financial reporting that occurred during the
              registrant's most recent fiscal quarter (the registrant's fourth
              fiscal quarter in the case of an annual report) that has
              materially affected, or is reasonably likely to materially affect,
              the registrant's internal control over financial reporting; and



     5.  The registrant's other certifying officer(s) and I have disclosed,
         based on our most recent evaluation of internal control over financial
         reporting, to the registrant's auditors and the audit committee of the
         registrant's board of directors (or persons performing the equivalent
         functions):

         a)   All significant deficiencies and material weaknesses in the design
              or operation of internal control over financial reporting which
              are reasonably likely to adversely affect the registrant's ability
              to record, process, summarize and report financial information;
              and

         b)   Any fraud, whether or not material, that involves management or
              other employees who have a significant role in the registrant's
              internal control over financial reporting.

March 15, 2004

                                        /s/ STEVE ODLAND
                                        ----------------------------------------
                                        Steve Odland
                                        Chairman, President and
                                        Chief Executive Officer

                                       2



                                                                    EXHIBIT 31.2

                            CERTIFICATION PURSUANT TO
       RULES 13a-14(a) AND 15D-14(a) UNDER THE SECURITIES EXCHANGE ACT OF
                                      1934,
         AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF
                                      2002

     I, Michael G. Archbold, Senior Vice President and Chief Financial Officer
of AutoZone, Inc. ("registrant"), certify that:

     1.  I have reviewed this quarterly report on Form 10-Q of AutoZone, Inc.;

     2.  Based on my knowledge, this report does not contain any untrue
         statement of a material fact or omit to state a material fact necessary
         to make the statements made, in light of the circumstances under which
         such statements were made, not misleading with respect to the period
         covered by this report;

     3.  Based on my knowledge, the financial statements, and other financial
         information included in this report, fairly present in all material
         respects the financial condition, results of operations and cash flows
         of the registrant as of, and for, the periods presented in this report;

     4.  The registrant's other certifying officer(s) and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
         registrant and have:

         a)   Designed such disclosure controls and procedures, or caused such
              disclosure controls and procedures to be designed under our
              supervision, to ensure that material information relating to the
              registrant, including its consolidated subsidiaries, is made known
              to us by others within those entities, particularly during the
              period in which this report is being prepared;

         b)   Evaluated the effectiveness of the registrant's disclosure
              controls and procedures and presented in this report our
              conclusions about the effectiveness of the disclosure controls and
              procedures, as of the end of the period covered by this report
              based on such evaluation; and

         c)   Disclosed in this report any change in the registrant's internal
              control over financial reporting that occurred during the
              registrant's most recent fiscal quarter (the registrant's fourth
              fiscal quarter in the case of an annual report) that has
              materially affected, or is reasonably likely to materially affect,
              the registrant's internal control over financial reporting; and



     5.  The registrant's other certifying officer(s) and I have disclosed,
         based on our most recent evaluation of internal control over financial
         reporting, to the registrant's auditors and the audit committee of the
         registrant's board of directors (or persons performing the equivalent
         functions):

         a)   All significant deficiencies and material weaknesses in the design
              or operation of internal control over financial reporting which
              are reasonably likely to adversely affect the registrant's ability
              to record, process, summarize and report financial information;
              and

         b)   Any fraud, whether or not material, that involves management or
              other employees who have a significant role in the registrant's
              internal control over financial reporting.

March 15, 2004

                                         /s/ MICHAEL G. ARCHBOLD
                                         ---------------------------------------
                                         Michael G. Archbold
                                         Senior Vice President and
                                         Chief Financial Officer

                                        2



                                                                    EXHIBIT 32.1

                            CERTIFICATION PURSUANT TO
                 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of AutoZone, Inc. (the "Company") on
Form 10-Q for the period ended February 14, 2004, as filed with the Securities
and Exchange Commission on the date hereof (the "Report"), I, Steve Odland,
Chairman, President and Chief Executive Officer of the Company, certify,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:

         (i)      the Report fully complies with the requirements of Section
                  13(a) or Section 15(d) of the Securities Exchange Act of 1934;
                  and

         (ii)     the information contained in the Report fairly presents, in
                  all material respects, the financial condition and results of
                  operations of the Company.

March 15, 2004

                                                /s/ STEVE ODLAND
                                                --------------------------------
                                                Steve Odland
                                                Chairman, President and
                                                Chief Executive Officer



                                                                    EXHIBIT 32.2

                            CERTIFICATION PURSUANT TO
                 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of AutoZone, Inc. (the "Company") on
Form 10-Q for the period ended February 14, 2004, as filed with the Securities
and Exchange Commission on the date hereof (the "Report"), I, Michael G.
Archbold, Senior Vice President and Chief Financial Officer of the Company,
certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, that:

         (i)      the Report fully complies with the requirements of Section
                  13(a) or Section 15(d) of the Securities Exchange Act of 1934;
                  and

         (ii)     the information contained in the Report fairly presents, in
                  all material respects, the financial condition and results of
                  operations of the Company.

March 15, 2004

                                              /s/ MICHAEL G. ARCHBOLD
                                              ----------------------------------
                                              Michael G. Archbold
                                              Senior Vice President and
                                              Chief Financial Officer

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