[X]    Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934

        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 - 89,483,123 shares as of June 7, 2003.

PART I. FINANCIAL INFORMATION

Item 1.   Financial Statements
 
 

See Notes to Condensed Consolidated Financial Statements

    See Notes to Condensed Consolidated Financial Statements

    See Notes to Condensed Consolidated Financial Statements

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.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.  Operating results for the thirty-six weeks ended May 10, 2003, are not necessarily indicative of the results that may be expected for the fiscal year ending August 30, 2003. For further information, refer to the consolidated financial statements and footnotes included in the Company's annual report on Form 10-K for the year ended August 31, 2002.
 

Note B-Adoption of New Accounting Standards

        On September 1, 2002, the Company adopted Statement of Financial Accounting Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" (SFAS 144).  SFAS 144 supersedes Statement No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," but retains many of its fundamental provisions.  Additionally, SFAS 144 expands the scope of discontinued operations to include more disposal transactions.  The adoption of SFAS 144 did not have a significant impact on the Company's Consolidated Financial Statements.

        In November 2002 the Financial Accounting Standards Board issued Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others" (FIN 45).  FIN 45 elaborates on the disclosures that must be made by a guarantor in its interim and annual financial statements about its obligations under certain guarantees and indemnities.  It also clarifies that a guarantor is required to recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee.  The disclosure requirements of FIN 45 are effective for financial statements of interim or annual periods ending after December 15, 2002, and its recognition requirements are applicable for guarantees issued or modified after December 31, 2002.  FIN 45 applies to product warranties offered by the Company.  The Company does not expect the adoption of FIN 45 to have significant impact on its Consolidated Financial Statements.  Refer to Note K for the Company's interim disclosures.

        On December 31, 2002, the Company adopted Statement of Financial Accounting Standards No. 146, "Accounting for Costs Associated with Exit or Disposal Activities" (SFAS 146).  SFAS 146 nullifies Emerging Issues Task Force Issue No. 94-3, "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)" and requires that a liability for the cost associated with an exit or disposal activity be recognized when the liability is incurred, as opposed to the date of an entity's commitment to an exit plan.  The adoption of SFAS 146 did not have a significant impact on the Company's Consolidated Financial Statements.

        On December 31, 2002, the Financial Accounting Standards Board issued Statement No. 148, "Accounting for Stock-Based Compensation -- Transition and Disclosure" (SFAS 148).  SFAS 148 amends Statement No. 123, "Accounting for Stock-Based Compensation," to provide alternative methods of transition to the Statement's fair value method of accounting for stock-based employee compensation.  SFAS 148 also amends the disclosure provisions of SFAS 123 and APB Opinion No. 28, "Interim Financial Reporting," to require disclosure in the summary of significant accounting policies of the effects of an entity's accounting policy with respect to stock-based employee compensation on reported net income and earnings per share in annual and interim financial statements.  Refer to Note C for the Company's interim disclosures.

        In January 2003, the Financial Accounting Standards Board issued Interpretation No. 46, "Consolidation of Variable Interest Entities" (FIN 46).  FIN 46 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 applies immediately to variable interest entities created after January 31, 2003, and to variable interest entities in which an enterprise obtains an interest after that date.  FIN 46 applies to the Company's existing $30 million synthetic lease facility, and will be effective for the Company's first quarter in fiscal 2004.  The Company is currently evaluating the impact of FIN 46 and does not expect its adoption to have a significant impact on its Consolidated Financial Statements.

        In March 2003, the Emerging Issues Task Force (EITF) reached final consensus on EITF Issue No. 02-16, "Accounting by a Customer (including a Reseller) for Cash Consideration Received from a Vendor" (EITF 02-16).  Under EITF 02-16, cash consideration received from a vendor is presumed to be a reduction of the purchase cost of merchandise and should be reflected as a reduction of cost of sales or revenue as prescribed in the consensus.  The new guidance should be applied to new arrangements, including modifications of existing arrangements, entered into after December 31, 2002, to the extent vendor funds will be applied as a reduction of the purchase cost of inventories.  During the quarter, the Company reflected the new guidance for new and modified vendor agreements.  As a result, cost of sales was $13.0 million less and operating, selling, general and administrative expenses were $15.6 million higher as a result of the new guidance, resulting in a pretax charge of $2.6 million ($0.02 per share).  The Company will continue to reflect the new guidance for all new and modified arrangements.

        In April 2003, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 149, "Amendment of Statement 133 on Derivative Instruments and Hedging Activities" (SFAS 149).  SFAS 149 amends and clarifies financial accounting and reporting for derivative instruments, including certain derivative instruments embedded in other contracts and for hedging activities under SFAS 133, "Accounting for Derivative Instruments and Hedging Activities."  SFAS 149 is generally effective for contracts entered into or modified after June 30, 2003, and should be applied prospectively.  The Company does not expect the adoption of SFAS 149 to have a significant impact on its Consolidated Financial Statements.

        In May 2003, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity" (SFAS 150).  SFAS 150 establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity.  It requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances).  Many of these instruments were previously classified as equity.  SFAS 150 applies to the Company's use of equity forward agreements to repurchase common stock and would require the Company to record any forward purchase obligations as a liability on the balance sheet.  The guidance in SFAS 150 is generally effective for all financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003.  Subsequent to the end of the quarter, the Company settled all outstanding forward purchase contracts and, therefore, does not expect the adoption of SFAS 150 to have a significant impact on its Consolidated Financial Statements.
 

Note C-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 31, 2002.  The Company accounts for those plans under the recognition and measurement principles of APB Opinion No. 125, "Accounting for Stock Issued to Employees," and related interpretations.  No stock-based employee compensation cost is reflected in net income, as options are typically granted under those plans at an exercise price equal to the market value of the underlying common stock on the date of grant.  The following table illustrates the effect on net income and earnings per share if the Company had applied the fair value recognition provisions of SFAS 123 to stock-based employee compensation.
 
 
 

Note D-Inventories

        Inventories are stated at the lower of cost or market using the last-in, first-out (LIFO) method.  An actual valuation of inventory under the LIFO method can be made only at the end of each year based on the inventory levels and costs at that time. Accordingly, interim LIFO calculations must necessarily be based on management's estimates of expected year end inventory levels and costs.  The balance of the LIFO reserve was zero for all periods presented.
 

Note E-Financing Arrangements

        The Company's long term debt as of May 10, 2003, and August 31, 2002, consisted of the following:
 
 
 

        The Company maintains $950 million of revolving credit facilities with a group of banks.  Of the $950 million, $300 million was scheduled to expire in May 2003 but, subsequent to the end of the quarter, was renewed for one year to May 18, 2004.  The remaining $650 million expires in May 2005.  The 364-day facility expiring in May 2004 includes a renewal feature, as well as an option to extend the maturity date of the then-outstanding debt by one year.  The credit facilities exist largely to support commercial paper borrowings and other short term unsecured bank loans.  Outstanding commercial paper at May 10, 2003, of $265.0 million and the 6% Notes due November 2003 are classified as long term as the Company has the ability and intention to refinance them on a long term basis.  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 option of the Company.  The Company has agreed to observe certain covenants under the terms of its credit agreements, including limitations on total indebtedness, restrictions on liens and minimum fixed charge coverage.  As of May 10, 2003, the Company was in compliance with all covenants.

        On October 1, 2002, the Company filed a shelf registration with the Securities and Exchange Commission that allows the Company to sell up to $500 million in debt securities.  On October 16, 2002, the Company issued $300 million of 5.875% Senior Notes under the registration statement.  The Senior Notes mature in October 2012, and interest is payable semi-annually on April 15 and October 15.  A portion of the proceeds from the Senior Notes was used to prepay a $115 million unsecured bank term loan due December 2003 and to repay a portion of the Company's outstanding commercial paper borrowings.

        On June 3, 2003, the Company issued $200 million of 4.375% Senior Notes remaining under the shelf registration filed in October 2002.  The Senior Notes mature in June 2013, and interest is payable semi-annually on June 1 and December 1.  The proceeds were used to repay a portion of the Company's outstanding commercial paper borrowings.
 

Note F-Stockholders' Equity

        As of May 10, 2003, the Company's Board of Directors had authorized the Company to repurchase up to $2.8 billion of common stock in the open market.  Since fiscal 1998, the Company has repurchased a total of 66.2 million shares at an aggregate cost of $2.4 billion.  In addition to these purchases, at times, the Company has utilized equity forward contracts to facilitate its repurchase of common stock.  At May 10, 2003, the Company held equity forward contracts that relate to the purchase of approximately 4.0 million shares of common stock at an average cost of $73.69 per share, all of which were scheduled to mature in fiscal 2003.  During fiscal 2003, the Company has repurchased $589.9 million of common stock, including shares under forward purchase contracts.  The Company, at its option, may settle the forward contracts in cash or common stock.  The Company has historically settled all similar contracts in cash.  In accordance with the provisions of Emerging Issues Task Force Issue 00-19, "Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company's Own Stock," these contracts qualify as equity instruments and are not reflected in the Company's Consolidated Balance Sheets.  Due to fluctuations in the Company's stock price, when the Company settles these forward contracts, the settlement price may be above or below the market price of the underlying common stock.  Subsequent to the end of the quarter, the Company purchased 4.0 million shares in settlement of all remaining forward contracts outstanding at May 10, 2003, and as of June 7, 2003, the Company had purchased 0.7 million shares in the open market at an average cost of $85 per share.
 

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:
 
 

Note H-Restructuring and Impairment Charges

        In fiscal 2001, AutoZone recorded restructuring and impairment charges of $156.8 million.  Total remaining accrued obligations for restructuring charges were $15.0 million at May 10, 2003, and consisted primarily of accrued lease obligations.  The following table presents a summary of the activity in accrued lease obligations:
 
 

Stockholders

Memphis, Tennessee

            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

I, Steve Odland, certify that:
 

The following exhibits are filed as part of this report: