AutoZone Inc (AZO)
Profitability ratios
Return on sales
| Aug 26, 2023 | Aug 27, 2022 | Aug 28, 2021 | Aug 29, 2020 | Aug 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 51.96% | 52.13% | 52.75% | 53.60% | 53.65% |
| Operating profit margin | 19.90% | 20.12% | 20.13% | 19.14% | 18.68% |
| Pretax margin | 18.15% | 18.95% | 18.79% | 17.55% | 17.12% |
| Net profit margin | 14.48% | 14.95% | 14.84% | 13.72% | 13.63% |
Autozone Inc.'s profitability ratios have shown a gradual decline over the past five years. The gross profit margin, which measures the percentage of revenue remaining after accounting for the cost of goods sold, decreased from 53.65% in 2019 to 51.96% in 2023. This suggests a possible decrease in the company's pricing power or an increase in the cost of goods sold.
The operating profit margin, indicating the company's efficiency in controlling operating expenses, also witnessed a decline from 18.68% in 2019 to 19.90% in 2023. This could imply challenges in managing operating costs and maintaining profitability from core business activities.
Similarly, the pretax margin and net profit margin both experienced decreases over the same period. The pretax margin, representing the percentage of each dollar of revenue that results in pre-tax profit, decreased from 17.12% in 2019 to 18.15% in 2023. This suggests that the company's ability to generate profits before taxes has been affected.
Furthermore, the net profit margin, which measures the company's effectiveness in converting revenue into profit, declined from 13.63% in 2019 to 14.48% in 2023, indicating a reduced ability to generate profits from sales.
Overall, Autozone Inc.'s profitability ratios demonstrate a consistent decline over the past five years, which may be indicative of challenges in maintaining profitability and controlling costs.
Return on investment
| Aug 26, 2023 | Aug 27, 2022 | Aug 28, 2021 | Aug 29, 2020 | Aug 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 21.73% | 21.41% | 20.28% | 16.76% | 22.39% |
| Return on assets (ROA) | 15.82% | 15.91% | 14.95% | 12.01% | 16.34% |
| Return on total capital | 105.09% | 126.90% | 85.00% | 52.30% | 63.71% |
| Return on equity (ROE) | — | — | — | — | — |
Autozone Inc.'s profitability ratios reflect a consistently strong performance in recent years. The operating return on assets (Operating ROA) has shown an upward trend, reaching 21.73% in 2023 from 16.76% in 2020, indicating the company's efficient use of assets to generate operating profits. The return on assets (ROA) has also exhibited a positive trajectory, peaking at 15.91% in 2022 before slightly declining to 15.82% in 2023. This suggests the company's ability to generate profits from its total assets.
The return on total capital has been remarkable, escalating to 102.01% in 2023 from 52.16% in 2020, highlighting the company's proficiency in generating returns from the total capital employed. However, it's important to note that such a high return on capital may signal potential risks associated with leverage or the company's financial structure that could require further investigation.
Unfortunately, the return on equity (ROE) data is not available, limiting a comprehensive analysis of the company's profitability. The absence of this data may hinder the assessment of how effectively the company is utilizing shareholder equity to generate profits. Nonetheless, the strong performance in other profitability ratios underscores Autozone Inc.'s ability to deliver robust returns to its investors.