0001558370-20-011748 | 10-K | XBRL Viewer

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Cover Page - USD ($)	12 Months Ended
Cover Page - USD ($)	Aug. 29, 2020	Oct. 19, 2020	Feb. 15, 2020
Cover [Abstract]
Document Type	10-K
Document Annual Report	true
Document Transition Report	false
Document Period End Date	Aug. 29, 2020
Entity File Number	1-10714
Entity Registrant Name	AUTOZONE, INC
Entity Incorporation, State or Country Code	NV
Entity Tax Identification Number	62-1482048
Entity Address, Address Line One	123 South Front Street
Entity Address, City or Town	Memphis
Entity Address, State or Province	TN
Entity Address, Postal Zip Code	38103
City Area Code	901
Local Phone Number	495-6500
Title of 12(b) Security	Common Stock
Trading Symbol	AZO
Security Exchange Name	NYSE
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		23,175,554
Entity Public Float			$ 24,661,503,822
Current Fiscal Year End Date	--08-29
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	FY
Entity Central Index Key	0000866787
Amendment Flag	false

Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Aug. 29, 2020	Aug. 31, 2019	Aug. 25, 2018
Income Statement [Abstract]
Net sales	$ 12,631,967	$ 11,863,743	$ 11,221,077
Cost of sales, including warehouse and delivery expenses	5,861,214	5,498,742	5,247,331
Gross profit	6,770,753	6,365,001	5,973,746
Operating, selling, general and administrative expenses	4,353,074	4,148,864	4,162,890
Operating profit	2,417,679	2,216,137	1,810,856
Interest expense, net	201,165	184,804	174,527
Income before income taxes	2,216,514	2,031,333	1,636,329
Income tax expense	483,542	414,112	298,793
Net income	$ 1,732,972	$ 1,617,221	$ 1,337,536
Weighted average shares for basic earnings per share	23,540	24,966	26,970
Effect of dilutive stock equivalents	553	532	454
Weighted average shares for diluted earnings per share	24,093	25,498	27,424
Basic earnings per share	$ 73.62	$ 64.78	$ 49.59
Diluted earnings per share	$ 71.93	$ 63.43	$ 48.77

Consolidated Statements of Comprehensive Income - USD ($)
$ in Thousands

12 Months Ended

Aug. 29, 2020

Aug. 31, 2019

Aug. 25, 2018

Statement of Comprehensive Income [Abstract]

Net income

$ 1,732,972

$ 1,617,221

$ 1,337,536

Other comprehensive loss:

Pension liability adjustments, net of taxes

^[1],[2]

72,376

Foreign currency translation adjustments

(66,723)

(36,699)

(53,085)

Unrealized gains (losses) on marketable debt securities, net of taxes

^[3]

1,254

1,464

(862)

Net derivative activities, net of taxes

^[4]

(19,461)

1,718

323

Total other comprehensive (loss) income

(84,930)

(33,517)

18,752

Comprehensive income

$ 1,648,042

$ 1,583,704

$ 1,356,288

[1]	On December 19, 2017, the Board approved a resolution to terminate both of the Company’s pension plans, effective March 15, 2018. During the fourth quarter of 2018, the Company completed the termination and no longer has any remaining defined benefit pension obligation.
[2]	Pension liability adjustments are presented net of taxes of $46,523 in 2018, which includes $13,122 related to the adoption of ASU 2018-02 - Income Statement - Reporting Comprehensive Income: Reclassification of Certain Tax effects from Accumulated Other Comprehensive Income (ASU 2018-02).
[3]	Unrealized gains on marketable debt securities are presented net of taxes of $336 and $389 in 2020 and 2019, respectively. Unrealized losses on marketable debt securities are presented net of tax benefit of $234 in 2018.
[4]	Net derivative activities are presented net of tax benefit of $6,164 in 2020. Net derivative activities are presented net of taxes of $530 in 2019 and $1,882 in 2018, which includes $1,367 related to the adoption of ASU 2018-02.

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Aug. 29, 2020	Aug. 31, 2019	Aug. 25, 2018
Pension liability adjustments, taxes			$ 46,523
Unrealized gains (losses) on marketable debt securities, net of taxes	$ 336	$ 389	(234)
Net derivative activities, tax (benefit)	$ (6,164)	$ 530	1,882
Accounting Standards Update 2018-02
Pension liability adjustments, taxes			13,122
Net derivative activities, tax (benefit)			$ 1,367

Consolidated Balance Sheets - USD ($) $ in Thousands	Aug. 29, 2020	Aug. 31, 2019
Current assets:
Cash and cash equivalents	$ 1,750,815	$ 176,300
Accounts receivable	364,774	308,995
Merchandise inventories	4,473,282	4,319,113
Other current assets	223,001	224,277
Total current assets	6,811,872	5,028,685
Property and equipment:
Land	1,205,228	1,147,709
Buildings and improvements	4,020,271	3,895,559
Equipment	2,158,251	1,991,042
Leasehold improvements	586,839	552,018
Construction in progress	165,953	126,868
Property and equipment	8,136,542	7,713,196
Less: Accumulated depreciation and amortization	(3,627,321)	(3,314,445)
Property and equipment, net	4,509,221	4,398,751
Operating lease right-of-use assets	2,581,677
Goodwill	302,645	302,645
Deferred income taxes	27,843	26,861
Other long-term assets	190,614	138,971
Other long-term assets, total	3,102,779	468,477
Assets	14,423,872	9,895,913
Current liabilities:
Accounts payable	5,156,324	4,864,912
Current portion of operating lease liabilities	223,846
Accrued expenses and other	827,668	621,932
Income taxes payable	75,253	25,297
Total current liabilities	6,283,091	5,512,141
Long-term debt	5,513,371	5,206,344
Operating lease liabilities, less current portion	2,501,560
Deferred income taxes	354,186	311,980
Other long-term liabilities	649,641	579,299
Commitments and contingencies
Stockholders' deficit:
Preferred stock, authorized 1,000 shares; no shares issued
Common stock, par value $.01 per share, authorized 200,000 shares; 23,697 shares issued and 23,376 shares outstanding as of August 29, 2020; 25,445 shares issued and 24,038 shares outstanding as of August 31, 2019	237	254
Additional paid-in capital	1,283,495	1,264,448
Retained deficit	(1,450,970)	(1,305,347)
Accumulated other comprehensive loss	(354,252)	(269,322)
Treasury stock, at cost	(356,487)	(1,403,884)
Total stockholders' deficit	(877,977)	(1,713,851)
Liabilities and Stockholders' Deficit	$ 14,423,872	$ 9,895,913

Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands	Aug. 29, 2020	Aug. 31, 2019
Common Stock [Member]
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	200,000	200,000
Common stock, shares issued	23,697	25,445
Common stock, shares outstanding	23,376	24,038
Preferred Stock
Preferred stock, shares authorized	1,000	1,000
Preferred stock, shares issued	0	0

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Aug. 29, 2020	Aug. 31, 2019	Aug. 25, 2018
Cash flows from operating activities:
Net income	$ 1,732,972	$ 1,617,221	$ 1,337,536
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property and equipment and intangibles	397,466	369,957	345,084
Amortization of debt origination fees	10,730	8,162	8,393
Deferred income taxes	51,077	35,051	(124,261)
Share-based compensation expense	44,835	43,255	43,674
Pension plan contributions			(11,596)
Pension termination charges (refund)	0	(6,796)	130,263
Asset impairment			193,162
Changes in operating assets and liabilities:
Accounts receivable	(58,564)	(48,512)	7,534
Merchandise inventories	(184,174)	(394,147)	(188,782)
Accounts payable and accrued expenses	531,131	464,176	319,609
Income taxes payable	90,172	(10,489)	(6,438)
Other, net	104,463	50,635	26,114
Net cash provided by operating activities	2,720,108	2,128,513	2,080,292
Cash flows from investing activities:
Capital expenditures	(457,736)	(496,050)	(521,788)
Proceeds from sale of assets			35,279
Purchase of marketable debt securities	(90,949)	(55,538)	(104,536)
Proceeds from sale of marketable debt securities	84,237	53,140	69,644
Investment in tax credit equity investments	(45,190)
Proceeds (payments) from disposal of capital assets and other, net	11,763	6,602	(459)
Net cash used in investing activities	(497,875)	(491,846)	(521,860)
Cash flows from financing activities:
Net (payments) proceeds of commercial paper	(1,030,000)	(295,300)	170,200
Proceeds from issuance of debt	1,850,000	750,000
Repayment of debt	(500,000)	(250,000)	(250,000)
Net proceeds from sale of common stock	68,392	188,819	89,715
Purchase of treasury stock	(930,903)	(2,004,896)	(1,592,013)
Repayment of principal portion of finance lease liabilities	(52,158)	(53,307)	(49,004)
Other, net	(48,967)	(9,404)	(1,052)
Net cash used in financing activities	(643,636)	(1,674,088)	(1,632,154)
Effect of exchange rate changes on cash	(4,082)	(4,103)	(1,724)
Net increase (decrease) in cash and cash equivalents	1,574,515	(41,524)	(75,446)
Cash and cash equivalents at beginning of period	176,300	217,824	293,270
Cash and cash equivalents at end of period	1,750,815	176,300	217,824
Supplemental cash flow information:
Interest paid, net of interest cost capitalized	161,864	153,371	163,965
Income taxes paid	339,486	383,871	427,161
Leased assets obtained in exchange for new finance lease liabilities	115,867	$ 147,699	$ 98,782
Leased assets obtained in exchange for new operating lease liabilities	$ 425,018

Consolidated Statements of Stockholders' Deficit - USD ($) shares in Thousands, $ in Thousands	Common Stock [Member]	Additional Paid-In Capital [Member]	Retained Deficit [Member]	Accumulated Other Comprehensive Loss [Member]	Treasury Stock [Member]	Total
Balance at Aug. 26, 2017	$ 287	$ 1,086,671	$ (1,642,387)	$ (254,557)	$ (618,391)	$ (1,428,377)
Balance, Shares at Aug. 26, 2017	28,735
Net income			1,337,536			1,337,536
Total other comprehensive income				18,752		18,752
Purchase of treasury stock					(1,592,013)	(1,592,013)
Retirement of treasury shares	$ (15)	(60,500)	(918,462)		978,977
Retirement of treasury shares, shares	(1,512)
Issuance of common stock under stock options and stock purchase plans	$ 3	89,712				89,715
Issuance of common stock under stock options and stock purchase plans, Shares	307
Adoption of ASU 2018-02			14,489			14,489
Share-based compensation expense		39,543				39,543
Balance at Aug. 25, 2018	$ 275	1,155,426	(1,208,824)	(235,805)	(1,231,427)	(1,520,355)
Balance, shares at Aug. 25, 2018	27,530
Cumulative effect of adoption of ASU 2014-09			(6,773)			(6,773)
Balance at August 25, 2018, as adjusted	$ 275	1,155,426	(1,215,597)	(235,805)	(1,231,427)	(1,527,128)
Balance at August 25, 2018, as adjusted, shares	27,530
Net income			1,617,221			1,617,221
Total other comprehensive income				(33,517)		(33,517)
Purchase of treasury stock					(2,004,896)	(2,004,896)
Retirement of treasury shares	$ (26)	(125,442)	(1,706,971)		1,832,439
Retirement of treasury shares, shares	(2,563)
Issuance of common stock under stock options and stock purchase plans	$ 5	195,185				195,190
Issuance of common stock under stock options and stock purchase plans, Shares	478
Share-based compensation expense		39,279				39,279
Balance at Aug. 31, 2019	$ 254	1,264,448	(1,305,347)	(269,322)	(1,403,884)	(1,713,851)
Balance, shares at Aug. 31, 2019	25,445
Net income			1,732,972			1,732,972
Total other comprehensive income				(84,930)		(84,930)
Purchase of treasury stock					(930,903)	(930,903)
Retirement of treasury shares	$ (19)	(99,686)	(1,878,595)		1,978,300
Retirement of treasury shares, shares	(1,912)
Issuance of common stock under stock options and stock purchase plans	$ 2	74,985				74,987
Issuance of common stock under stock options and stock purchase plans, Shares	164
Share-based compensation expense		43,748				43,748
Balance at Aug. 29, 2020	$ 237	$ 1,283,495	$ (1,450,970)	$ (354,252)	$ (356,487)	$ (877,977)
Balance, shares at Aug. 29, 2020	23,697

Consolidated Statements of Stockholders' Deficit (Parenthetical) - shares shares in Thousands	12 Months Ended
	Aug. 29, 2020	Aug. 31, 2019	Aug. 25, 2018
Statement of Stockholders' Equity [Abstract]
Purchase of treasury stock, shares	826	2,182	2,398

Significant Accounting Policies

12 Months Ended

Aug. 29, 2020

Significant Accounting Policies

Significant Accounting Policies

Note A – Significant Accounting Policies

Business: AutoZone, Inc. (“AutoZone” or the “Company”) is the leading retailer, and a leading distributor, of automotive replacement parts and accessories in the Americas. At the end of fiscal 2020, the Company operated 5,885 stores in the U.S., 621 stores in Mexico and 43 stores in Brazil. Each store carries an extensive product line for cars, sport utility vehicles, vans and light trucks, including new and remanufactured automotive hard parts, maintenance items, accessories and non-automotive products. At the end of fiscal 2020, 5,007 of the domestic stores had a commercial sales program that provides commercial credit and prompt delivery of parts and other products to local, regional and national repair garages, dealers, service stations and public sector accounts. The Company also had commercial programs in all stores in Mexico and Brazil. The Company also sells the ALLDATA brand automotive diagnostic and repair software through www.alldata.com and www.alldatadiy.com. Additionally, the Company sells automotive hard parts, maintenance items, accessories, and non-automotive products through www.autozone.com, and its commercial customers can make purchases through www.autozonepro.com. The Company also provides product information on its Duralast branded products through www.duralastparts.com. The Company does not derive revenue from automotive repair or installation services.

Fiscal Year: The Company’s fiscal year consists of 52 or 53 weeks ending on the last Saturday in August. Fiscal 2020 and 2018 represented 52 weeks and 2019 represented 53 weeks.

Basis of Presentation: The Consolidated Financial Statements include the accounts of AutoZone, Inc. and its wholly owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation.

Variable Interest Entities: The Company invests in certain tax credit funds that promote renewable energy and generate a return primarily through the realization of federal tax credits. The deferral method is used to account for the tax attributes of these investments.

The Company considers its investment in these tax credit funds as an investment in a variable interest entity (“VIE”). The Company evaluates the investment in any VIE to determine whether it is the primary beneficiary. The Company considers a variety of factors in identifying the entity that holds the power to direct matters that most significantly impact the VIE’s economic performance including, but not limited to, the ability to direct financing, leasing, construction and other operating decisions and activities. As of August 29, 2020, the Company held tax credit equity investments that were deemed to be VIE’s and determined that it was not the primary beneficiary of the entities, as it did not have the power to direct the activities that most significantly impacted the entity and accounted for this investment using the equity method. The Company’s maximum exposure to losses is limited to its net investment, which was $6.5 million as of August 29, 2020, and was included within the Other long-term assets caption in the accompanying Consolidated Balance Sheets.

Use of Estimates: Management of the Company has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent liabilities to prepare these financial statements. Actual results could differ from those estimates.

Cash and Cash Equivalents: Cash equivalents consist of investments with original maturities of 90 days or less at the date of purchase. Cash equivalents include proceeds due from credit and debit card transactions with settlement terms of less than five days. Credit and debit card receivables included within cash and cash equivalents were $63.7 million at August 29, 2020 and $59.4 million at August 31, 2019.

Cash balances are held in various locations around the world. Cash and cash equivalents of $62.4 million and $49.9 million were held outside of the U.S. as of August 29, 2020, and August 31, 2019, respectively, and were generally utilized to support the liquidity needs in foreign operations.

Accounts Receivable: Accounts receivable consists of receivables from commercial customers and vendors, and is presented net of an allowance for uncollectible accounts. AutoZone routinely grants credit to certain of its commercial customers. The risk of credit loss in its trade receivables is substantially mitigated by the Company’s credit evaluation process, short collection terms and sales to a large number of customers, as well as the low dollar value per transaction for most of its sales. Allowances for potential credit losses are determined based on historical experience and current evaluation of the composition of accounts receivable. Historically, credit losses have been within management’s expectations, and the balance of the allowance for uncollectible accounts was $10.0 million at August 29, 2020, and $8.5 million at August 31, 2019.

Merchandise Inventories: Merchandise inventories include related purchasing, storage and handling costs. Inventory cost has been determined using the last-in, first-out (“LIFO”) method stated at the lower of cost or market for domestic inventories and the weighted average cost method stated at the lower of cost or net realizable value for Mexico and Brazil inventories. Due to historical price deflation on the Company’s merchandise purchases, the Company has exhausted its LIFO reserve balance. The Company’s policy is to not write up inventory in excess of replacement cost. The difference between LIFO cost and replacement cost, which will be reduced upon experiencing price inflation on the Company’s merchandise purchases, was $357.0 million at August 29, 2020, and $404.9 million at August 31, 2019.

Marketable Debt Securities: The Company invests a portion of its assets held by the Company’s wholly owned insurance captive in marketable debt securities and classifies them as available-for-sale. The Company includes these debt securities within the Other current assets and Other long-term assets captions in the accompanying Consolidated Balance Sheets and records the amounts at fair market value, which is determined using quoted market prices at the end of the reporting period. A discussion of marketable debt securities is included in “Note E – Fair Value Measurements” and “Note F – Marketable Debt Securities.”

Property and Equipment: Property and equipment is stated at cost. Property consists of land, which includes finance leases – real estate, buildings and improvements, equipment, which includes finance leases – vehicles, and construction in progress. Depreciation and amortization are computed principally using the straight-line method over the following estimated useful lives: buildings, 40 to 50 years; building improvements, 5 to 15 years; equipment, including software, 3 to 10 years; and leasehold improvements, over the shorter of the asset’s estimated useful life or the remaining lease term, which includes any reasonably assured renewal periods. Depreciation and amortization include amortization of assets under finance lease.

Impairment of Long-Lived Assets: The Company evaluates the recoverability of its long-lived assets whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. When such an event occurs, the Company compares the sum of the undiscounted expected future cash flows of the asset (asset group) with the carrying amounts of the asset. If the undiscounted expected future cash flows are less than the carrying value of the assets, the Company measures the amount of impairment loss as the amount by which the carrying amount of the assets exceeds the fair value of the assets.

Goodwill: The cost in excess of fair value of identifiable net assets of businesses acquired is recorded as goodwill. Goodwill has not been amortized since fiscal 2001, but an analysis is performed at least annually to compare the fair value of the reporting unit to the carrying amount to determine if any impairment exists. The Company performs its annual impairment assessment in the fourth quarter of each fiscal year, unless circumstances dictate more frequent assessments. Refer to “Note N – Goodwill and Intangibles” for additional disclosures regarding the Company’s goodwill and impairment assessment.

Intangible Assets: Intangible assets consist of customer relationships purchased relating to ALLDATA operations. Amortizing intangible assets are amortized over periods ranging from 3 to 10 years. Refer to “Note N – Goodwill and Intangibles” and “Note M – Sale of Assets” for additional disclosures regarding the Company’s intangible assets and impairment assessment.

Derivative Instruments and Hedging Activities: AutoZone is exposed to market risk from, among other things, changes in interest rates, foreign exchange rates and fuel prices. From time to time, the Company uses various derivative instruments to reduce such risks. To date, based upon the Company’s current level of foreign operations, no derivative instruments have been utilized to reduce foreign exchange rate risk. All of the Company’s hedging activities are governed by guidelines that are authorized by AutoZone’s Board of Directors (the “Board”). Further, the Company does not buy or sell derivative instruments for trading purposes.

AutoZone’s financial market risk results primarily from changes in interest rates. At times, AutoZone reduces its exposure to changes in interest rates by entering into various interest rate hedge instruments such as interest rate swap contracts, treasury lock agreements and forward-starting interest rate swaps. All of the Company’s interest rate hedge instruments are designated as cash flow hedges. Refer to “Note H – Derivative Financial Instruments” for additional disclosures regarding the Company’s derivative instruments and hedging activities. Cash flows related to these instruments designated as qualifying hedges are reflected in the accompanying Consolidated Statements of Cash Flows in the same categories as the cash flows from the items being hedged. Accordingly, cash flows relating to the settlement of interest rate derivatives hedging the forecasted issuance of debt have been reflected upon settlement as a component of financing cash flows. The resulting gain or loss from such settlement is deferred to Accumulated Other Comprehensive Loss and reclassified to interest expense over the term of the underlying debt. This reclassification of the deferred gains and losses impacts the interest expense recognized on the underlying debt that was hedged and is therefore reflected as a component of operating cash flows in periods subsequent to settlement.

Foreign Currency: The Company accounts for its Mexican, Brazilian, Canadian, European, Chinese and German operations using the local market currency and converts its financial statements from these currencies to U.S. dollars. The cumulative loss on currency translation is recorded as a component of Accumulated Other Comprehensive Loss (Refer to “Note G – Accumulated Other Comprehensive Loss” for additional information regarding the Company’s Accumulated Other Comprehensive Loss.)

Self-Insurance Reserves: The Company retains a significant portion of the risks associated with workers’ compensation, general liability, product liability, property and vehicle insurance. The Company obtains third party insurance to limit the exposure related to certain of these risks. The reserve for the Company’s liability associated with these risks totaled $288.6 million and $207.0 million at August 29, 2020 and August 31, 2019, respectively.

The assumptions made by management in estimating its self-insurance reserves include consideration of historical cost experience, judgments about the present and expected levels of cost per claim and retention levels. The Company utilizes various methods, including analyses of historical trends and use of a specialist, to estimate the costs to settle reported claims and claims incurred but not yet reported. The actuarial methods develop estimates of the future ultimate claim costs based on claims incurred as of the balance sheet date. When estimating these liabilities, the Company considers factors, such as the severity, duration and frequency of claims, legal costs associated with claims, healthcare trends and projected inflation of related factors.

The Company’s liabilities for workers’ compensation, general and product liability, property and vehicle claims do not have scheduled maturities; however, the timing of future payments is predictable based on historical patterns and is relied upon in determining the current portion of these liabilities. Accordingly, the Company reflects the net present value of the obligations it determines to be long-term using the risk-free interest rate as of the balance sheet date.

Leases: The Company leases certain retail stores, distribution centers and vehicles under various non-callable leases. Leases are categorized at their commencement date and lease-related assets and liabilities are recognized for all leases with an initial term of 12 months or greater. The exercise of lease renewal options is at the Company’s sole discretion. The Company evaluates renewal options at commencement and on an ongoing basis and includes options that are reasonably certain to exercise in its expected lease terms when classifying leases and measuring lease liabilities. Lease components are not separated from the non-lease components (typically fixed common-area maintenance costs at its retail store locations) for all classes of leased assets, except vehicles which contain variable non-lease components that are expensed as incurred. The Company uses the stated borrowing rate in determining the present value of the lease payments over the lease term for vehicles. The Company’s incremental borrowing rate is used to determine the present value of the lease payments over the lease term for substantially all the operating and financing leases for retail stores, distribution centers and other real estate, as these leases typically do not have a stated borrowing rate. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Effective in fiscal 2020, the Company adopted Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842). Refer to “Note A – Recently Adopted Accounting Pronouncements”. Prior to the adoption of Topic 842, the Company accounted for leases under Topic 840 and recognized rent expense on a straight-line basis over the course of the lease term, which included any reasonably assured renewal periods, beginning on the date the Company took physical possession of the property. Differences between the calculated expense and cash payments was recorded as a liability within the Accrued expenses and other and Other long-term liabilities captions in the accompanying Consolidated Balance Sheets, based on the terms of the lease. Deferred rent approximated $159.9 million as of August 31, 2019. Refer to Note O – Leases for additional disclosures regarding the Company’s leases.

Financial Instruments: The Company has financial instruments, including cash and cash equivalents, accounts receivable, other current assets and accounts payable. The carrying amounts of these financial instruments approximate fair value because of their short maturities. A discussion of the carrying values and fair values of the Company’s debt is included in “Note I – Financing,” marketable debt securities is included in “Note F – Marketable Debt Securities,” and derivatives is included in “Note H – Derivative Financial Instruments.”

Income Taxes: The Company accounts for income taxes under the liability method. Deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Our effective tax rate is based on income by tax jurisdiction, statutory rates and tax saving initiatives available to the Company in the various jurisdictions in which we operate.

The Company recognizes liabilities for uncertain income tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step requires the Company to estimate and measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. The Company reevaluates these uncertain tax positions on a quarterly basis or when new information becomes available to management. These reevaluations are based on factors including, but not limited to, changes in facts or circumstances, changes in tax law, successfully settled issues under audit, expirations due to statutes and new audit activity. Such a change in recognition or measurement could result in the recognition of a tax benefit or an increase to the tax accrual.

The Company classifies interest related to income tax liabilities, and if applicable, penalties, as a component of Income tax expense. The income tax liabilities and accrued interest and penalties that are expected to be payable within one year of the balance sheet date are presented within the Accrued expenses and other caption in the accompanying Consolidated Balance Sheets. The remaining portion of the income tax liabilities and accrued interest and penalties are presented within the Other long-term liabilities caption in the accompanying Consolidated Balance Sheets because payment of cash is not anticipated within one year of the balance sheet date. Refer to “Note D – Income Taxes” for additional disclosures regarding the Company’s income taxes.

Sales and Use Taxes: Governmental authorities assess sales and use taxes on the sale of goods and services. The Company excludes taxes collected from customers in its reported sales results; such amounts are included within the Accrued expenses and other caption until remitted to the taxing authorities.

Dividends: The Company currently does not pay a dividend on its common stock. The ability to pay dividends is subject to limitations imposed by Nevada law. Under Nevada law, any future payment of dividends would be dependent upon the Company’s financial condition, capital requirements, earnings and cash flow.

Revenue Recognition: The Company’s primary source of revenue is derived from the sale of automotive aftermarket parts and merchandise to its retail and commercial customers. Revenue is recognized when performance obligations under the terms of a contract with a customer are satisfied, in an amount representing the consideration the Company expects to receive in exchange for selling products to its customers. Sales are recorded net of variable consideration in the period incurred, including discounts, sales incentives and rebates, sales taxes and estimated sales returns. Sales returns are based on historical return rates. The Company may enter into contracts that include multiple combinations of products and services, which are accounted for as separate performance obligations and do not require significant judgment.

The Company’s performance obligations are typically satisfied when the customer takes possession of the merchandise. Revenue from retail customers is recognized when the customer leaves our store with the purchased products, typically at the point of sale or for E-commerce orders when the product is shipped. Revenue from commercial customers is recognized upon delivery, typically same-day. Payment from retail customers is at the point of sale and payment terms for commercial customers are based on the Company’s pre-established credit requirements and generally range from 1 to 30 days. Discounts, sales incentives and rebates are treated as separate performance obligations, and revenue allocated to these performance obligations is recognized as the obligations to the customer are satisfied. Additionally, the Company estimates and records gift card breakage as redemptions occur. The Company offers diagnostic and repair information software used in the automotive repair industry through ALLDATA. This revenue is recognized as services are provided. Revenue from these services are recognized over the life of the contract. See “Note R – Revenue Recognition” for further discussion.

A portion of the Company’s transactions include the sale of auto parts that contain a core component. The core component represents the recyclable portion of the auto part. Customers are not charged for the core component of the new part if a used core is returned at the point of sale of the new part; otherwise the Company charges customers a specified amount for the core component. The Company refunds that same amount upon the customer returning a used core to the store at a later date. The Company does not recognize sales or cost of sales for the core component of these transactions when a used part is returned or expected to be returned from the customer.

Vendor Allowances and Advertising Costs: The Company receives various payments and allowances from its vendors through a variety of programs and arrangements. Monies received from vendors include rebates, allowances and promotional funds. The amounts to be received are subject to the terms of the vendor agreements, which generally do not state an expiration date, but are subject to ongoing negotiations that may be impacted in the future based on changes in market conditions, vendor marketing strategies and changes in the profitability or sell-through of the related merchandise.

Rebates and other miscellaneous incentives are earned based on purchases or product sales and are accrued ratably over the purchase or sale of the related product. These monies are generally recorded as a reduction of merchandise inventories and are recognized as a reduction to cost of sales as the related inventories are sold.

For arrangements that provide for reimbursement of specific, incremental, identifiable costs incurred by the Company in selling the vendors’ products, the vendor funds are recorded as a reduction to Operating, selling, general and administrative expenses in the period in which the specific costs were incurred.

The Company expenses advertising costs as incurred. Advertising expense, net of vendor promotional funds, was $77.6 million in fiscal 2020, $87.5 million in fiscal 2019 and $95.2 million in fiscal 2018. Vendor promotional funds, which reduced advertising expense, amounted to $39.4 million in fiscal 2020, $32.2 million in fiscal 2019 and $25.3 million in fiscal 2018.

Cost of Sales and Operating, Selling, General and Administrative Expenses: The following illustrates the primary costs classified in each major expense category:

Cost of Sales

●

Total cost of merchandise sold, including:

o

Freight expenses associated with moving merchandise inventories from the Company’s vendors to the distribution centers;

o

Vendor allowances that are not reimbursements for specific, incremental and identifiable costs

●

Costs associated with operating the Company’s supply chain, including payroll and benefits, warehouse occupancy, transportation and depreciation; and

●

Inventory shrinkage

Operating, Selling, General and Administrative Expenses

●

Payroll and benefits for store, field leadership and store support employees;

●

Occupancy of store and store support facilities;

●

Depreciation and amortization related to store and store support assets;

●

Transportation associated with field leadership, commercial sales force and deliveries from stores;

●

Advertising;

●

Self-insurance; and

●

Other administrative costs, such as credit card transaction fees, legal costs, supplies and travel and lodging

Warranty Costs: The Company or the vendors supplying its products provides the Company’s customers limited warranties on certain products that range from 30 days to lifetime. In most 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, which are often funded by vendor allowances, are recorded within the Accrued expenses and other caption in the Consolidated Balance Sheets. For vendor allowances that are in excess of the related estimated warranty expense for the vendor’s products, the excess is recorded in inventory and recognized as a reduction to cost of sales as the related inventory is sold.

Shipping and Handling Costs: The Company does not generally charge customers separately for shipping and handling. Substantially all the costs the Company incurs to ship products to our stores are included in cost of sales.

Pre-opening Expenses: Pre-opening expenses, which consist primarily of payroll and occupancy costs, are expensed as incurred.

Earnings per Share: Basic earnings per share is based on the weighted average outstanding common shares. Diluted earnings per share is based on the weighted average outstanding common shares adjusted for the effect of common stock equivalents, which are primarily stock options. There were 169,460, 90,314 and 847,279 stock options excluded for the year ended August 29, 2020, August 31, 2019 and August 25, 2018, respectively because they would have been anti-dilutive.

Share-Based Payments: Share-based payments include stock option grants, restricted stock, restricted stock units, stock appreciation rights and other transactions under the Company’s equity incentive plans. The Company recognizes compensation expense for its share-based payments over the requisite service period based on the fair value of the awards. The Company uses the Black-Scholes option pricing model to calculate the fair value of stock options. The value of restricted stock is based on the stock price of the award on the grant date. See “Note B – Share-Based Payments” for further discussion.

Risk and Uncertainties: In fiscal 2020, one class of similar products accounted for approximately 12 percent of the Company’s total revenues, and one vendor supplied approximately 12 percent of the Company’s total purchases. No other class of similar products accounted for 10 percent or more of total revenues, and no other individual vendor provided more than 10 percent of total purchases.

Recently Adopted Accounting Pronouncements:

In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02, Leases (Topic 842), and subsequently amended this update by issuing additional ASU’s that provided clarification and further guidance for areas identified as potential implementation issues. ASU 2016-02 requires a two-fold approach for lessee accounting, under which a lessee will account for leases as finance leases or operating leases. For all leases with original terms greater than 12 months, both lease classifications will result in the lessee recognizing a right-of-use asset and a corresponding lease liability on its balance sheet, with differing methodologies for income statement recognition. This guidance also requires certain quantitative and qualitative disclosures about leasing arrangements. ASU 2016-02 and its amendments were effective for interim and annual reporting periods beginning after December 15, 2018, and early adoption was permitted. The ASU’s transition provisions could be applied under a modified retrospective approach to each prior reporting period presented in the financial statements or only at the beginning of the period of adoption using the alternative transition method.

The Company adopted this standard and its amendments as of September 1, 2019, using the modified retrospective transition method. Under this method, existing leases were recorded at the adoption date, comparative periods were not restated and prior period amounts were not adjusted and continue to be reported under the accounting standards in effect for the prior periods. In addition, the Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed the carry forward of prior lease identification under Accounting Standards Codification (“ASC”) Topic 840. The Company made the accounting policy election for short-term leases resulting in lease payments being recorded as an expense on a straight-line basis over the lease term. The Company also elected the practical expedient to not separate lease components from the non-lease components (typically fixed common-area maintenance costs at its retail store locations) for all classes of leased assets, except vehicles. The Company chose not to elect the hindsight practical expedient to determine the reasonably certain lease term for existing leases. Adoption of the leasing standard resulted in operating lease right-of-use assets of approximately $2.5 billion and operating lease liabilities of approximately $2.7 billion as of September 1, 2019. Existing prepaid and deferred rent were netted and recorded as an offset to our gross operating lease right-of-use assets. There was no adjustment to the opening balance of retained earnings upon adoption. The standard did not have a material impact on the Company’s Condensed Consolidated Statements of Income, Condensed Consolidated Statements of Cash Flows or covenant compliance under its existing credit agreement. Refer to “Note O – Leases”.

In June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. ASU 2018-07 aims to simplify the accounting for share-based payments to nonemployees by aligning it with the accounting for share-based payments to employees, with certain exceptions. The Company adopted this standard beginning with its first quarter ending November 23, 2019. The Company determined that the provisions of ASU 2018-07 did not have an impact on its Condensed Consolidated Statements of Income, Condensed Consolidated Balance Sheets or Condensed Consolidated Statements of Cash Flows.

Recently Issued Accounting Pronouncements:

In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other Internal Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. The amendments in this update align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. ASU 2018-15 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. The Company will adopt this standard beginning with its first quarter ending November 21, 2020. The Company does not expect a material effect on its Condensed Consolidated Statements of Income, Condensed Consolidated Balance Sheets or Condensed Consolidated Statements of Cash Flows.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments which was subsequently amended in November 2018 through ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments Credit Losses. ASU 2016-13 will require entities to estimate lifetime expected credit losses for trade and other receivables, net investments in leases, financial receivables, debt securities, and other instruments, which will result in earlier recognition of credit losses.

Further, the new credit loss model will affect how entities estimate their allowance for loss receivables that are current with respect to their payment terms. ASU 2016-13 will be effective for the Company at the beginning of its fiscal 2021 year. The Company will adopt this standard beginning its first quarter ending November 21, 2020. The Company does not expect a material effect on its Condensed Consolidated Statements of Income, Condensed Consolidated Balance Sheets or Condensed Consolidated Statements of Cash Flows.

Share-Based Payments

12 Months Ended

Aug. 29, 2020

Share-Based Payments

Share-Based Payments

Note B – Share-Based Payments

Overview of Share-Based Payment Plans

The Company has several active and inactive equity incentive plans under which the Company has been authorized to grant share-based awards to key employees and non-employee directors. Awards under these plans have been in the form of restricted stock, restricted stock units, stock options, stock appreciation rights and other awards as defined by the plans. The Company also has an Employee Stock Purchase Plan that allows employees to purchase Company shares at a discount subject to certain limitations. The Company also has an Executive Stock Purchase Plan which permits all eligible executives to purchase AutoZone’s common stock at a discount up to twenty-five percent of his or her annual salary and bonus.

Amended and Restated AutoZone, Inc. 2011 Equity Incentive Award Plan

On December 15, 2010, the Company’s stockholders approved the 2011 Equity Incentive Award Plan (the “2011 Plan”), allowing the Company to provide equity-based compensation to non-employee directors and employees for their service to AutoZone or its subsidiaries or affiliates. Prior to the Company’s adoption of the 2011 Plan, equity-based compensation was provided to employees under the 2006 Stock Option Plan and to non-employee directors under the 2003 Director Compensation Plan (the “2003 Comp Plan”).

During fiscal 2016, the Company’s stockholders approved the Amended and Restated AutoZone, Inc. 2011 Equity Incentive Award Plan (the “Amended 2011 Equity Plan”). The Amended 2011 Equity Plan imposes a maximum limit on the compensation, measured as the sum of any cash compensation and the aggregate grant date fair value of awards granted under the Amended 2011 Equity Plan, which may be paid to non-employee directors for such service during any calendar year. The Amended 2011 Equity Plan also applies a ten-year term on the Amended 2011 Equity Plan through December 16, 2025 and extends the Company’s ability to grant incentive stock options through October 7, 2025.

AutoZone, Inc. Director Compensation Program

During fiscal 2020, the Company adopted the 2020 Director Compensation Program (the “Program”), which states that non-employee directors will receive their compensation in awards of restricted stock units under the 2018 Equity Incentive Award Plan, with an option for a certain portion of a director’s compensation to be paid in cash at the non-employee director’s election. The Program replaced the 2018 Director Compensation Program. Under the Program, restricted stock units are granted January 1 of each year (the “Grant Date”). The number of restricted stock units is determined by dividing the amount of the annual retainer by the fair market value of the shares of common stock as of the Grant Date. The restricted stock units are fully vested on January 1 of each year and are paid in shares of the Company’s common stock on the fifth anniversary of the Grant Date or the date the non-employee director ceases to be a member of the Board (“Separation from Service”), whichever occurs first. Non-employee directors may elect to defer receipt of the restricted stock units until their Separation from Service. The cash portion of the award, if elected, is paid ratably over each calendar quarter.

Total share-based compensation expense (a component of Operating, selling, general and administrative expenses) was $44.8 million for fiscal 2020, $43.3 million for fiscal 2019 and $43.7 million for fiscal 2018. As of August 29, 2020, share-based compensation expense for unvested awards not yet recognized in earnings is $42.0 million and will be recognized over a weighted average period of 1.7 years.

General terms and methods of valuation for the Company’s share-based awards are as follows:

Stock Options

The Company grants options to purchase common stock to certain of its employees under its plan at prices equal to the market value of the stock on the date of grant. Options have a term of 10 years or 10 years and one day from grant date. Employee options generally vest in equal annual installments on the first, second, third and fourth anniversaries of the grant date and generally have 30 or 90 days after the service relationship ends, or one year after death, to exercise all vested options. The fair value of each option grant is separately estimated for each vesting date. The fair value of each option is amortized into compensation expense on a straight-line basis between the grant date for the award and each vesting date.

The Company has estimated the fair value of all stock option awards as of the date of the grant by applying the Black-Scholes-Merton multiple-option pricing valuation model. The following table presents the weighted average for key assumptions used in determining the fair value of options granted and the related share-based compensation expense:


	Year Ended
	August 29,		August 31,		August 25,
	2020		2019		2018
Expected price volatility	22	%	21	%	20	%
Risk-free interest rate	1.4	%	3.0	%	1.9	%
Weighted average expected lives (in years)	5.5		5.6		5.1
Forfeiture rate	10	%	10	%	10	%
Dividend yield	0	%	0	%	0	%

The following methodologies were applied in developing the assumptions used in determining the fair value of options granted:

Expected price volatility – This is a measure of the amount by which a price has fluctuated or is expected to fluctuate. The Company uses actual historical changes in the market value of its stock to calculate the volatility assumption as it is management’s belief that this is the best indicator of future volatility. The Company calculates daily market value changes from the date of grant over a past period representative of the expected life of the options to determine volatility. An increase in the expected volatility will increase compensation expense.

Risk-free interest rate – This is the U.S. Treasury rate for the week of the grant having a term equal to the expected life of the option. An increase in the risk-free interest rate will increase compensation expense.

Expected lives – This is the period of time over which the options granted are expected to remain outstanding and is based on historical experience. Separate groups of employees that have similar historical exercise behavior are considered separately for valuation purposes. Options granted have a maximum term of ten years or ten years and one day. An increase in the expected life will increase compensation expense.

Forfeiture rate – This is the estimated percentage of options granted that are expected to be forfeited or canceled before becoming fully vested. This estimate is based on historical experience at the time of valuation and reduces expense ratably over the vesting period. An increase in the forfeiture rate will decrease compensation expense. This estimate is evaluated periodically based on the extent to which actual forfeitures differ, or are expected to differ, from the previous estimate.

Dividend yield – The Company has not made any dividend payments nor does it have plans to pay dividends in the foreseeable future. An increase in the dividend yield will decrease compensation expense.

The weighted average grant date fair value per share of options granted was $252.54 during fiscal 2020, $208.37 during fiscal 2019 and $129.12 during fiscal 2018. The intrinsic value of options exercised was $101.9 million in fiscal 2020, $227.4 million in fiscal 2019 and $123.1 million in fiscal 2018. The total fair value of options vested was $39.1 million in fiscal 2020, $34.5 million in fiscal 2019 and $35.7 million in fiscal 2018.

The Company generally issues new shares when options are exercised. The following table summarizes information about stock option activity for the year ended August 29, 2020:


				Weighted
				Average
				Remaining	Aggregate
		Weighted		Contractual	Intrinsic
	Number	Average		Term	Value
	of Shares	Exercise Price		(in years)	(in thousands)

Outstanding – August 31, 2019	1,349,311	$	601.36
Granted	188,824		1,061.57
Exercised	(146,705)		472.37
Cancelled	(6,444)		735.42
Outstanding – August 29, 2020	1,384,986		677.15	5.82	$	709,085

Exercisable	882,668		587.27	4.65		531,234
Expected to vest	452,086		835.08	7.88		160,066
Available for future grants	348,293

Restricted Stock Units

Restricted stock unit awards are valued at the market price of a share of the Company’s stock on the date of grant and vest ratably on an annual basis over a four-year service period and are payable in shares of common stock on the vesting date. Compensation expense for grants of employee restricted stock units is recognized on a straight-line basis over the four-year service period, less estimated forfeitures, which are consistent with stock option forfeiture assumptions.

As of August 29, 2020, total unrecognized stock-based compensation expense related to nonvested restricted stock unit awards, net of estimated forfeitures, was approximately $9.0 million, before income taxes, which we expect to recognize over an estimated weighted average period of 2.7 years.

Transactions related to restricted stock units for the fiscal year ended August 29, 2020 are as follows:


		Weighted-
	Number	Average Grant
	of Shares	Date Fair Value
Nonvested at August 31, 2019	10,049	$	773.61
Granted	8,735		1,086.61
Vested	(4,183)		945.58
Canceled or forfeited	(441)		942.76
Nonvested at August 29, 2020	14,160	$	910.63

Stock Appreciation Rights

At August 29, 2020, the Company had $5.7 million and at August 31, 2019, the Company had $11.2 million of accrued compensation expense related to 4,822 and 10,206 outstanding units, respectively, issued under the 2003 Comp Plan and prior plans. As directors retire, this balance will be reduced. No additional shares of stock or units will be issued in future years under the 2003 Comp Plan or prior plans.

Employee Stock Purchase Plan and Executive Stock Purchase Plan

The Company recognized $3.1 million in compensation expense related to the discount on the selling of shares to employees and executives under the various share purchase plans in fiscal 2020, $2.8 million in fiscal 2019 and $2.1 million in fiscal 2018. Under the Employee Plan, 10,525, 11,011 and 14,523 shares were sold to employees in fiscal 2020, 2019 and 2018, respectively. The Company repurchased 8,287, 17,201 and 11,816 shares in fiscal 2020, 2019 and 2018, respectively all at market value from employees electing to sell their stock. Purchases under the Executive Plan were 1,204, 1,483 and 1,840 shares in fiscal 2020, 2019 and 2018, respectively. Issuances of shares under the Employee Plan are netted against repurchases and such repurchases are not included in share repurchases disclosed in “Note K – Stock Repurchase Program.” At August 29, 2020, 142,241 shares of common stock were reserved for future issuance under the Employee Plan, and 235,361 shares of common stock were reserved for future issuance under the Executive Plan.

Accrued Expenses and Other

12 Months Ended

Aug. 29, 2020

Accrued Expenses and Other

Accrued Expenses and Other

Note C – Accrued Expenses and Other

Accrued expenses and other consisted of the following:


	August 29,		August 31,
(in thousands)	2020		2019

Accrued compensation, related payroll taxes and benefits	$	321,071	$	170,321
Property, sales, and other taxes		121,196		122,372
Medical and casualty insurance claims (current portion)		112,746		89,250
Finance lease liabilities		67,498		56,246
Accrued interest		63,503		48,147
Accrued gift cards		43,876		38,658
Accrued sales and warranty returns		32,356		34,310
Other		65,422		62,628
	$	827,668	$	621,932

The Company retains a significant portion of the insurance risks associated with workers’ compensation, employee health, general, product liability, property and vehicle insurance. A portion of these self-insured losses is managed through a wholly owned insurance captive. The Company maintains certain levels for stop-loss coverage for each self-insured plan in order to limit its liability for large claims. The retained limits per claim type are $2.0 million for workers’ compensation, $5.0 million for auto liability, $21.5 million for property, $0.7 million for employee health, and $1.0 million for general and product liability.

Income Taxes

12 Months Ended

Aug. 29, 2020

Income Taxes

Income Taxes

Note D – Income Taxes

The components of income from continuing operations before income taxes are as follows:


		Year Ended
	August 29,		August 31,		August 25,
(in thousands)	2020		2019		2018

Domestic	$	1,960,320	$	1,745,625	$	1,412,963
International		256,194		285,708		223,366
	$	2,216,514	$	2,031,333	$	1,636,329

The provision for income tax expense consisted of the following:


	Year Ended
	August 29,		August 31,		August 25,
(in thousands)	2020		2019		2018

Current:
Federal	$	324,156	$	274,504	$	328,963
State		47,880		45,457		36,389
International		60,429		59,100		57,702
		432,465		379,061		423,054
Deferred:
Federal		43,706		25,757		(131,926)
State		12,544		6,914		8,167
International		(5,173)		2,380		(502)
		51,077		35,051		(124,261)
Income tax expense	$	483,542	$	414,112	$	298,793

A reconciliation of the provision for income taxes to the amount computed by applying the federal statutory tax rate to income before income taxes is as follows:


	Year Ended
	August 29,		August 31,		August 25,
(in thousands)	2020		2019		2018

Federal tax at statutory U.S. income tax rate	21.0	%	21.0	%	25.9	%
State income taxes, net	2.2	%	2.0	%	1.9	%
Transition tax	—		—		1.6	%
Share-based compensation	(0.7)	%	(1.8)	%	(1.6)	%
Impact of tax reform	—		(0.4)	%	(9.6)	%
Global intangible lower-taxed income (“GILTI”)	1.0	%	1.3	%	—
Foreign Tax Credits	(1.1)	%	(1.1)	%	—
Other	(0.6)	%	(0.6)	%	0.1	%
Effective tax rate	21.8	%	20.4	%	18.3	%

On December 22, 2017, the Tax Cuts and Jobs Act (“Tax Reform”) was enacted into law. Tax Reform significantly revises the U.S. federal corporate income tax by, among other things, lowering the statutory federal corporate rate from 35% to 21%, eliminating certain deductions, imposing a mandatory one-time transition tax on accumulated earnings of foreign subsidiaries, and changing how foreign earnings are subject to U.S. federal tax. Also in December 2017, the SEC issued Staff Accounting Bulletin No. 118 (“SAB 118”) to address the application of GAAP in situations when the registrant does not have the necessary information available, prepared or analyzed in reasonable detail to complete the accounting for certain income tax effects of Tax Reform.

During the year ended August 25, 2018, the Company recorded provisional tax benefit of $131.5 million related to Tax Reform, comprised of $157.3 million remeasurement of its net DTA, offset by $25.8 million of transition tax. During the year ended August 31, 2019, the Company completed its analysis of Tax Reform and recorded adjustments to the previously-recorded provisional amounts, resulting in an $8.8 million tax benefit, primarily related to transition tax.

For the year ended August 29, 2020, August 31, 2019, and August 25, 2018, the Company recognized excess tax benefits from stock option exercises of $20.9 million, $46.0 million, and $31.3 million, respectively.

Beginning with the year ending August 31, 2019, the Company is subject to GILTI which is imposed on foreign earnings. The Company has made the election to record this tax as a period cost, thus has not adjusted the deferred tax assets or liabilities of its foreign subsidiaries for the new tax. Net impacts for GILTI are included in the provision for income taxes for the years ended August 31, 2019 and August 29, 2020. Significant components of the Company’s deferred tax assets and liabilities were as follows:


	August 29,		August 31,
(in thousands)	2020		2019

Deferred tax assets:
Net operating loss and credit carryforwards	$	41,437	$	42,958
Accrued benefits		88,226		58,900
Operating lease liabilities		617,002		—
Other		69,788		59,237
Total deferred tax assets		816,453		161,095
Less: Valuation allowances		(28,373)		(23,923)
Net deferred tax assets		788,080		137,172
Deferred tax liabilities:
Property and equipment		(173,696)		(114,956)
Inventory		(298,585)		(259,827)
Prepaid expenses		(55,827)		(46,487)
Operating lease assets		(581,381)		—
Other		(4,934)		(1,021)
Total deferred tax liabilities		(1,114,423)		(422,291)
Net deferred tax liabilities	$	(326,343)	$	(285,119)

For the year ended August 31, 2019, the Company held the assertion, with few exceptions, that current and accumulated earnings from foreign operations were not indefinitely reinvested. During the year ended August 29, 2020, the Company asserted indefinite reinvestment for other basis differences and accumulated earnings through fiscal 2020 between its Luxembourg parent and Mexico subsidiaries. In addition, the Company has maintained its assertion of indefinite reinvestment of earnings between its Dutch parent and Puerto Rican subsidiary. Where necessary, withholding tax provisions resulting from foreign distributions of current and accumulated earnings have been considered in the Company’s provision for income taxes.

The Company maintains its assertion related to other basis differences in foreign subsidiaries. It is impracticable for the Company to determine the amount of unrecognized deferred tax liability on these indefinitely reinvested basis differences.

At August 29, 2020 and August 31, 2019, the Company had deferred tax assets of $32.2 million and $29.9 million, respectively, from net operating loss (“NOL”) carryforwards available to reduce future taxable income totaling approximately $247.1 million and $226.3 million, respectively. Certain NOLs have no expiration date and others will expire, if not utilized, in various years from fiscal 2021 through 2040. At August 29, 2020 and August 31, 2019, the Company had deferred tax assets for income tax credit carryforwards of $9.2 million and $13.0 million, respectively. Income tax credit carryforwards will expire, if not utilized, in various years from fiscal 2021 through 2037.

At August 29, 2020 and August 31, 2019, the Company had a valuation allowance of $28.4 million and $23.9 million, respectively, on deferred tax assets associated with NOL and tax credit carryforwards for which management has determined it is more likely than not that the deferred tax asset will not be realized. Management believes it is more likely than not that the remaining deferred tax assets will be fully realized.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:


	August 29,		August 31,
(in thousands)	2020		2019

Beginning balance	$	30,892	$	26,077
Additions based on tax positions related to the current year		8,512		8,621
Additions for tax positions of prior years		946		2,115
Reductions for tax positions of prior years		(4,124)		(1,219)
Reductions due to settlements		—		(1,918)
Reductions due to statute of limitations		(4,284)		(2,784)
Ending balance	$	31,942	$	30,892

Included in the August 29, 2020 and the August 31, 2019 balances are $18.9 million and $16.8 million, respectively, of unrecognized tax benefits that, if recognized, would reduce the Company’s effective tax rate. The balances above also include amounts of $10.5 million and $11.9 million for August 29, 2020 and the August 31, 2019, respectively, that are accounted for as reductions to deferred tax assets for NOL carryforwards and tax credit carryforwards. It is anticipated that in the event the associated uncertain tax positions are disallowed, the NOL carryforwards and tax credit carryforwards would be utilized to settle the liability.

The Company accrues interest on unrecognized tax benefits as a component of income tax expense. Penalties, if incurred, would be recognized as a component of income tax expense. The Company had $1.6 million and $1.4 million accrued for the payment of interest and penalties associated with unrecognized tax benefits at August 29, 2020 and August 31, 2019, respectively.

The Company files U.S. federal, U.S. state and local, and international income tax returns. With few exceptions, the Company is no longer subject to U.S. federal, U.S. state and local, or Non-U.S. examinations by tax authorities for fiscal year 2013 and prior. The Company is typically engaged in various tax examinations at any given time by U.S. federal, U.S. state and local, and Non-U.S. taxing jurisdictions. As of August 29, 2020, the Company estimates that the amount of unrecognized tax benefits could be reduced by approximately $1.5 million over the next twelve months as a result of tax audit settlements. While the Company believes that it is adequately accrued for possible audit adjustments, the final resolution of these examinations cannot be determined at this time and could result in final settlements that differ from current estimates.

Fair Value Measurements

12 Months Ended

Aug. 29, 2020

Fair Value Measurements

Fair Value Measurements

Note E – Fair Value Measurements

The Company defines fair value as the price received to transfer an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In accordance with ASC 820, Fair Value Measurements and Disclosures, the Company uses the fair value hierarchy, which prioritizes the inputs used to measure fair value. The hierarchy, as defined below, gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three levels of the fair value hierarchy are set forth below:

Level 1 inputs — unadjusted quoted prices in active markets for identical assets or liabilities that the Company can access at the measurement date.

Level 2 inputs — inputs other than quoted market prices included within Level 1 that are observable, either directly or indirectly, for the asset or liability.

Level 3 inputs — unobservable inputs for the asset or liability, which are based on the Company’s own assumptions as there is little, if any, observable activity in identical assets or liabilities.

Marketable Debt Securities Measured at Fair Value on a Recurring Basis

The Company’s marketable debt securities measured at fair value on a recurring basis were as follows:


	August 29, 2020
(in thousands)	Level 1		Level 2		Level 3		Fair Value

Other current assets	$	75,651	$	467	$	—	$	76,118
Other long-term assets		58,792		12,329		—		71,121
	$	134,443	$	12,796	$	—	$	147,239


	August 31, 2019
(in thousands)	Level 1		Level 2		Level 3		Fair Value

Other current assets	$	65,344	$	2,614	$	—	$	67,958
Other long-term assets		65,573		5,395		—		70,968
	$	130,917	$	8,009	$	—	$	138,926

At August 29, 2020, the fair value measurement amounts for assets and liabilities recorded in the accompanying Consolidated Balance Sheet consisted of short-term marketable debt securities of $76.1 million, which are included within Other current assets and long-term marketable debt securities of $71.1 million, which are included in Other long-term assets. The Company’s marketable debt securities are typically valued at the closing price in the principal active market as of the last business day of the quarter or through the use of other market inputs relating to the debt securities, including benchmark yields and reported trades.

A discussion on how the Company’s cash flow hedges are valued is included in “Note H – Derivative Financial Instruments,” while the fair values of the marketable debt securities by asset class are described in “Note F – Marketable Debt Securities.”

Non-Financial Assets Measured at Fair Value on a Non-Recurring Basis

Certain non-financial assets and liabilities are required to be measured at fair value on a non-recurring basis in certain circumstances, including the event of impairment. These non-financial assets and liabilities could include assets and liabilities acquired in an acquisition as well as goodwill, intangible assets and property, plant and equipment that are determined to be impaired. At August 29, 2020, the Company did not have any other significant non-financial assets or liabilities that had been measured at fair value on a non-recurring basis subsequent to initial recognition.

Financial Instruments not Recognized at Fair Value

The Company has financial instruments, including cash and cash equivalents, accounts receivable, other current assets and accounts payable. The carrying amounts of these financial instruments approximate fair value because of their short maturities. A discussion of the carrying values and fair values of the Company’s debt is included in “Note I – Financing.”

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Marketable Debt Securities

12 Months Ended

Aug. 29, 2020

Marketable Debt Securities

Marketable Debt Securities

Note F – Marketable Debt Securities

The Company’s basis for determining the cost of a security sold is the “Specific Identification Model.” Unrealized gains (losses) on marketable debt securities are recorded in Accumulated Other Comprehensive Loss. The Company’s available-for-sale marketable debt securities consisted of the following:


	August 29, 2020
	Amortized		Gross		Gross
	Cost		Unrealized		Unrealized		Fair
(in thousands)	Basis		Gains		Losses		Value

Corporate debt securities	$	46,652	$	970	$	(4)	$	47,618
Government bonds		44,594		1,172		—		45,766
Mortgage-backed securities		4,842		75		—		4,917
Asset-backed securities and other		48,798		143		(3)		48,938
	$	144,886	$	2,360	$	(7)	$	147,239


	August 31, 2019
	Amortized		Gross		Gross
	Cost		Unrealized		Unrealized		Fair
(in thousands)	Basis		Gains		Losses		Value

Corporate debt securities	$	36,998	$	29	$	(19)	$	37,008
Government bonds		45,741		763		—		46,504
Mortgage-backed securities		2,089		2		(15)		2,076
Asset-backed securities and other		53,345		—		(7)		53,338
	$	138,173	$	794	$	(41)	$	138,926

The marketable debt securities held at August 29, 2020, had effective maturities ranging from less than one year to approximately three years. The Company did not realize any material gains or losses on its marketable debt securities during fiscal 2020, 2019 or 2018.

Included above in total marketable debt securities are $30.1 million and $89.2 million of marketable debt securities transferred by the Company’s insurance captive to a trust account to secure its obligations to an insurance company related to future workers’ compensation and casualty losses as of August 29, 2020 and August 31, 2019, respectively.

Accumulated Other Comprehensive Loss

12 Months Ended

Aug. 29, 2020

Equity

Accumulated Other Comprehensive Loss

Note G – Accumulated Other Comprehensive Loss

Accumulated Other Comprehensive Loss includes certain adjustments to pension liabilities, foreign currency translation adjustments, certain activity for interest rate swaps and treasury rate locks that qualify as cash flow hedges and unrealized gains (losses) on available-for-sale debt securities. Changes in Accumulated Other Comprehensive Loss consisted of the following:


			Net
			Unrealized
	Foreign		Gain (Loss)
(in thousands)	Currency⁽²⁾		on Securities			Derivatives			Total

Balance at August 25, 2018	$	(228,899)	$	(873)		$	(6,033)		$	(235,805)
Other Comprehensive (Loss) income before reclassifications		(36,699)		1,498			—			(35,201)
Amounts reclassified from Accumulated Other Comprehensive Loss⁽¹⁾		—		(34)	⁽³⁾		1,718	⁽⁴⁾		1,684
Balance at August 31, 2019		(265,598)		591			(4,315)			(269,322)
Other Comprehensive (Loss) income before reclassifications		(66,723)		1,117			(28,197)			(93,803)
Amounts reclassified from Accumulated Other Comprehensive Loss⁽¹⁾		—		137	⁽³⁾		8,736	⁽⁴⁾		8,873
Balance at August 29, 2020	$	(332,321)	$	1,845		$	(23,776)		$	(354,252)

(1)	Amounts in parentheses indicate debits to Accumulated Other Comprehensive Loss.

(2)	Foreign currency is shown net of U.S. tax to account for foreign currency impacts of certain undistributed non-U.S. subsidiaries earnings. Other foreign currency is not shown net of additional U.S. tax as other basis differences of non-U.S. subsidiaries are intended to be permanently reinvested.

(3)

Represents realized gains on marketable debt securities, net of taxes of $38 in fiscal 2020 and realized gains on marketable debt securities, net of tax benefit of $9 in fiscal 2019, which is recorded in Operating, selling, general, and administrative expenses on the Consolidated Statements of Income. See “Note F – Marketable Debt Securities” for further discussion.

(4)	Represents gains and losses on derivatives, net of tax benefit of $6,164 in fiscal 2020 and net of taxes of $530 in fiscal 2019, which is recorded in Interest expense, net, on the Consolidated Statements of Income. See “Note H – Derivative Financial Instruments” for further discussion.

Derivative Financial Instruments

12 Months Ended

Aug. 29, 2020

Derivative Financial Instruments

Derivative Financial Instruments

Note H – Derivative Financial Instruments

The Company periodically uses derivatives to hedge exposures to interest rates. The Company does not hold or issue financial instruments for trading purposes. For transactions that meet the hedge accounting criteria, the Company formally designates and documents the instrument as a hedge at inception and quarterly thereafter assesses the hedges to ensure they are effective in offsetting changes in the cash flows of the underlying exposures. Derivatives are recorded in the Company’s Consolidated Balance Sheet at fair value, determined using available market information or other appropriate valuation methodologies. In accordance with ASC Topic 815, Derivatives and Hedging, to the extent our derivatives are effective in offsetting the variability of the hedged cash flows, changes in the derivatives’ fair value are not included in current earnings but are included in Accumulated Other Comprehensive Loss, net of tax.

At August 29, 2020, the Company had $31.2 million recorded in Accumulated Other Comprehensive Loss related to net realized losses associated with terminated interest rate swap and treasury rate lock derivatives which were designated as hedging instruments. Net losses are amortized into Interest expense over the remaining life of the associated debt. During fiscal 2020, the Company reclassified $2.6 million of net losses from Accumulated Other Comprehensive Loss to Interest expense. During 2019, the Company reclassified $2.2 million of net losses from Accumulated Other Comprehensive Loss to Interest expense. The Company expects to reclassify $3.7 million of net losses from Accumulated Other Comprehensive Loss to Interest expense over the next 12 months.

Financing

12 Months Ended

Aug. 29, 2020

Financing

Financing

Note I – Financing

The Company’s debt consisted of the following:


	August 29,		August 31,
(in thousands)	2020		2019

4.000% Senior Notes due November 2020, effective interest rate of 4.43%	$	—	$	500,000
2.500% Senior Notes due April 2021, effective interest rate of 2.62%		250,000		250,000
3.700% Senior Notes due April 2022, effective interest rate of 3.85%		500,000		500,000
2.875% Senior Notes due January 2023, effective interest rate of 3.21%		300,000		300,000
3.125% Senior Notes due July 2023, effective interest rate of 3.26%		500,000		500,000
3.125% Senior Notes due April 2024, effective interest rate 3.32%		300,000		300,000
3.250% Senior Notes due April 2025, effective interest rate 3.36%		400,000		400,000
3.625% Senior Notes due April 2025, effective interest rate 3.78%		500,000		—
3.125% Senior Notes due April 2026, effective interest rate of 3.28%		400,000		400,000
3.750% Senior Notes due June 2027, effective interest rate of 3.83%		600,000		600,000
3.750% Senior Notes due April 2029, effective interest rate of 3.86%		450,000		450,000
4.000% Senior Notes due April 2030, effective interest rate 4.09%		750,000		—
1.650% Senior Notes due January 2031, effective interest rate of 2.19%		600,000		—
Commercial paper, weighted average interest rate of 2.28% at August 31, 2019		—		1,030,000
Total debt before discounts and debt issuance costs		5,550,000		5,230,000
Less: Discounts and debt issuance costs		36,629		23,656
Long-term debt	$	5,513,371	$	5,206,344

The Company entered into a Master Extension, New Commitment and Amendment Agreement dated as of November 18, 2017 (the “Extension Amendment”) to the Third Amended and Restated Credit Agreement dated as of November 18, 2016, as amended, modified, extended or restated from time to time (the “Revolving Credit Agreement”). Under the Extension Amendment: (i) the Company’s borrowing capacity under the Revolving Credit Agreement was increased from $1.6 billion to $2.0 billion; (ii) the maximum borrowing under the Revolving Credit Agreement may, at the Company’s option, subject to lenders approval, be increased from $2.0 billion to $2.4 billion; (iii) the termination date of the Revolving Credit Agreement was extended from November 18, 2021 until November 18, 2022; and (iv) the Company has the option to make one additional written request of the lenders to extend the termination date then in effect for an additional year. Under the Revolving Credit Agreement, the Company may borrow funds consisting of Eurodollar loans, base rate loans or a combination of both. Interest accrues on Eurodollar loans at a defined Eurodollar rate, defined as LIBOR plus the applicable percentage, as defined in the Revolving Credit Agreement, depending upon the Company’s senior, unsecured, (non-credit enhanced) long-term debt ratings. Interest accrues on base rate loans as defined in the Revolving Credit Agreement.

On April 3, 2020, the Company entered into a 364-Day Credit Agreement (the “364-Day Credit Agreement”) to augment the Company’s access to liquidity due to current macroeconomic conditions and supplement the Company’s existing Revolving Credit Agreement. The 364-Day Credit Agreement provides for loans in the aggregate principal amount of up to $750 million. The 364-Day Credit Agreement will terminate, and all amounts borrowed under the 364-Day Credit Agreement will be due and payable, on April 2, 2021. Revolving loans under the 364-Day Credit Agreement may be base rate loans, Eurodollar loans, or a combination of both, at the Company’s election.

As of August 29, 2020, the Company had no outstanding borrowings under each of the revolving credit agreements and $1.7 million of outstanding letters of credit under the Revolving Credit Agreement.

Under its revolving credit agreement, covenants include restrictions on liens, a maximum debt to earnings ratio, a minimum fixed charge coverage ratio and a change of control provision that may require acceleration of the repayment obligations under certain circumstances.

The Revolving Credit Agreement requires that the Company’s consolidated interest coverage ratio as of the last day of each quarter shall be no less than 2.5:1. This ratio is defined as the ratio of (i) consolidated earnings before interest, taxes and rents to (ii) consolidated interest expense plus consolidated rents. The Company’s consolidated interest coverage ratio as of August 29, 2020 was 6.1:1.

As of August 29, 2020, the $250 million 2.500% Senior Notes due April 2021 are classified as long-term in the accompanying Consolidated Balance Sheets as the Company has the ability and intent to refinance the notes on a long-term basis through available capacity in its revolving credit agreements. As of August 29, 2020, the Company had $2.748 billion of availability, before giving effect to commercial paper borrowings, under its $2.750 billion revolving credit agreements which would allow the Company to replace these short-term obligations with long-term financing facilities.

The Company also maintains a letter of credit facility that allows it to request the participating bank to issue letters of credit on its behalf up to an aggregate amount of $25 million. The letter of credit facility is in addition to the letters of credit that may be issued under the Revolving Credit Agreement. As of August 29, 2020, the Company had $25.0 million in letters of credit outstanding under the letter of credit facility which expires in June 2022.

In addition to the outstanding letters of credit issued under the committed facilities discussed above, the Company had $220.3 million in letters of credit outstanding as of August 29, 2020. These letters of credit have various maturity dates and were issued on an uncommitted basis.

On August 14, 2020, the Company issued $600 million in 1.650% Senior Notes due January 2031 under its automatic shelf registration statement on Form S-3, filed with the SEC on April 4, 2019 (File No. 333-230719) (the “2019 Shelf Registration”). The 2019 Shelf Registration allows the Company to sell an indeterminate amount in debt securities to fund general corporate purposes, including repaying, redeeming or repurchasing outstanding debt and for working capital, capital expenditures, new store openings, stock repurchases and acquisitions. Proceeds from the debt issuance were used for general corporate purposes, including the repayment of the $500 million in 4.000% Senior Notes due in November 2020 that were callable at par in August 2020.

On March 30, 2020, the Company issued $500 million in 3.625% Senior Notes due April 2025 and $750 million in 4.000% Senior Notes due April 2030 under the 2019 Shelf Registration. Proceeds from the debt issuance were used to repay a portion of the outstanding commercial paper borrowings and for other general corporate purposes.

On April 18, 2019, the Company issued $300 million in 3.125% Senior Notes due April 2024 and $450 million in 3.750% Senior Notes due April 2029 under the 2019 Shelf Registration. Proceeds from the debt issuance were used to repay a portion of the outstanding commercial paper borrowings, the $250 million in 1.625% Senior Notes due in April 2019 and for other general corporate purposes.

All Senior Notes are subject to an interest rate adjustment if the debt ratings assigned to the Senior Notes are downgraded (as defined in the agreements). Further, the Senior Notes contain a provision that repayment of the Senior Notes may be accelerated if the Company experiences a change in control (as defined in the agreements). The Company’s borrowings under its senior notes contain minimal covenants, primarily restrictions on liens. All of the repayment obligations under its borrowing arrangements may be accelerated and come due prior to the scheduled payment date if covenants are breached or an event of default occurs.

As of August 29, 2020, the Company was in compliance with all covenants related to its borrowing arrangements.

All of the Company’s debt is unsecured. Scheduled maturities of debt are as follows:


	Scheduled
(in thousands)	Maturities

2021	$	250,000
2022		500,000
2023		800,000
2024		300,000
2025		900,000
Thereafter		2,800,000
Subtotal		5,550,000
Discount and debt issuance costs		36,629
Total Debt	$	5,513,371

The fair value of the Company’s debt was estimated at $6.081 billion as of August 29, 2020, and $5.419 billion as of August 31, 2019, based on the quoted market prices for the same or similar issues or on the current rates available to the Company for debt of the same terms (Level 2). Such fair value is greater than the carrying value of debt by $567.5 million at August 29, 2020, which reflects face amount, adjusted for any unamortized debt issuance costs and discounts. At August 31, 2019, the fair value was greater than the carrying value of debt by $212.7 million.

Interest Expense

12 Months Ended

Aug. 29, 2020

Interest Expense.

Interest Expense

Note J – Interest Expense

Net interest expense consisted of the following:


	Year Ended
	August 29,		August 31,		August 25,
(in thousands)	2020		2019		2018

Interest expense	$	208,021	$	193,671	$	181,668
Interest income		(5,689)		(7,396)		(5,636)
Capitalized interest		(1,167)		(1,471)		(1,505)
	$	201,165	$	184,804	$	174,527

Stock Repurchase Program

12 Months Ended

Aug. 29, 2020

Equity

Stock Repurchase Program

Note K – Stock Repurchase Program

During 1998, the Company announced a program permitting the Company to repurchase a portion of its outstanding shares not to exceed a dollar maximum established by the Board. On October 7, 2019, the Board voted to authorize the repurchase of an additional $1.25 billion of its common stock in connection with its ongoing share repurchase program. Since the inception of the repurchase program in 1998, the Board has authorized $23.15 billion in share repurchases. The Company has $795.9 million remaining under the Board’s authorization to repurchase its common stock.

The Company’s share repurchase activity consisted of the following:


	Year Ended
	August 29,		August 31,		August 25,
(in thousands)	2020		2019		2018

Amount	$	930,903	$	2,004,896	$	1,592,013
Shares		826		2,182		2,398

During fiscal year 2020, the Company retired 1.9 million shares of treasury stock which had previously been repurchased under the Company’s share repurchase program. The retirement increased Retained deficit by $1.879 billion and decreased Additional paid-in capital by $99.7 million. During the comparable prior year period, the Company retired 2.6 million shares of treasury stock, which increased Retained deficit by $1.707 billion and decreased Additional paid-in capital by $125.4 million.

During fiscal 2020, the Company temporarily ceased share repurchases to conserve liquidity in response to the uncertainty related to COVID-19. While the Company restarted share repurchases during the first quarter of fiscal year 2021, the Company will continue to evaluate current and expected business conditions and adjust the level of share repurchases as the Company deems appropriate.

Subsequent to August 29, 2020, the Company has repurchased 269,795 shares of common stock at an aggregate cost of $314.4 million. Considering the cumulative repurchases subsequent to August 29, 2020, the Company has $481.5 million remaining under the Board’s authorization to repurchase its common stock.

Pension and Savings Plans

12 Months Ended

Aug. 29, 2020

Pension and Savings Plans

Pension and Savings Plans

Note L – Pension and Savings Plans

Prior to January 1, 2003, substantially all full-time employees were covered by a defined benefit pension plan. The benefits under the plan were based on years of service and the employee’s highest consecutive five-year average compensation. On January 1, 2003, the plan was frozen, resulting in pension plan participants earning no new benefits under the plan formula and no new participants joining the pension plan.

On January 1, 2003, the Company’s supplemental defined benefit pension plan for certain highly compensated employees was also frozen, resulting in pension plan participants earning no new benefits under the plan formula and no new participants joining the pension plan.

On December 19, 2017, the Board of Directors approved a resolution to terminate both of the Company’s pension plans, effective March 15, 2018. The Company offered plan participants the option to receive an annuity purchased from an insurance carrier or a lump-sum cash payment based on a number of factors. During the fourth quarter of 2018, the Company contributed $11.4 million to the pension plans to ensure that sufficient assets were available for the lump-sum payments and annuity purchases, completed the transfer of all lump sum payments, transferred all remaining benefit obligations related to the pension plans to a highly rated insurance company, and recognized $130.3 million of non-cash pension termination charges in Operating, selling, general and administrative expenses in the Consolidated Statements of Income. During fiscal 2019, the Company received a refund of $6.8 million related primarily to annuity purchase overpayments, recorded in Operating, selling, general and administrative expenses, net within the Consolidated statements of income. No refunds or expenses related to pension termination occurred in fiscal 2020. There are no actuarial assumptions reflected in any pension plans estimates. The Company will no longer have any remaining defined pension benefit obligation and thus no periodic pension benefit expense.

Net periodic benefit expense consisted of the following:


	Year Ended
	August 25
(in thousands)	2018⁽¹⁾

Interest cost	$	10,356
Expected return on plan assets		(18,997)
Recognized net actuarial losses		10,736
Settlement loss		130,263
Net periodic benefit expense	$	132,358

(1) The pension plans were terminated in fiscal 2018.

The Company has a 401(k) plan that covers all domestic employees who meet the plan’s participation requirements. The plan features include Company matching contributions, immediate 100% vesting of Company contributions and a savings option up to 25% of qualified earnings. The Company makes matching contributions, per pay period, up to a specified percentage of employees’ contributions as approved by the Board. The Company made matching contributions to employee accounts in connection with the 401(k) plan of $29.8 million in fiscal 2020, $25.8 million in fiscal 2019 and $23.1 million in fiscal 2018.

Sale of Assets

12 Months Ended

Aug. 29, 2020

Sale of Assets

Sale of Assets

Note M – Sale of Assets

During the second quarter of fiscal 2018, the Company determined that the approximate fair value less costs to sell its IMC and AutoAnything businesses was significantly lower than the carrying value of the net assets based on recent offers received and recorded impairment charges totaling $193.2 million within Operating, selling, general and administrative expenses in its Condensed Consolidated Statements of Income.

The Company recorded an impairment charge of $93.6 million for its IMC business, which was reflected as a component of Auto Parts Locations in its segment reporting in fiscal 2018. Impairment charges for AutoAnything, which were reflected as a component of the Other category in the Company’s segment reporting, totaled $99.6 million in fiscal 2018.

During the third quarter of fiscal 2018, the Company completed the IMC and AutoAnything sales for total consideration that approximated the remaining net book value at the closing date.

Goodwill and Intangibles

12 Months Ended

Aug. 29, 2020

Goodwill and Intangibles

Goodwill and Intangibles

Note N – Goodwill and Intangibles

The Company had approximately $302.6 million of goodwill, which is allocated to the Auto Parts Locations operating segment at August 29, 2020 and August 31, 2019. The Company performs its annual goodwill and intangibles impairment test in the fourth quarter of each fiscal year. In the fourth quarter of fiscal 2020 and 2019, the Company concluded its remaining goodwill was not impaired.

The carrying amounts of intangible assets are included in Other long-term assets as follows:


	August 29, 2020
	Estimated	Gross				Net
	Useful	Carrying		Accumulated		Carrying
(in thousands)	Life	Amount		Amortization		Amount

Amortizing intangible assets:
Customer relationships	3-10 years		29,376		(27,933)		1,443
Total intangible assets other than goodwill		$	29,376	$	(27,933)	$	1,443


	August 31, 2019
	Estimated	Gross				Net
	Useful	Carrying		Accumulated		Carrying
(in thousands)	Life	Amount		Amortization		Amount

Amortizing intangible assets:
Technology	3-5 years	$	870	$	(870)	$	—
Customer relationships	3-10 years		29,376		(23,760)		5,616
Total intangible assets other than goodwill		$	30,246	$	(24,630)	$	5,616

Amortization expense of intangible assets for the years ended August 29, 2020 and August 31, 2019 was $4.2 million, respectively.

Total future amortization expense for intangible assets that have finite lives, based on the existing intangible assets and their current estimated useful lives as of August 29, 2020, is estimated to be $1.4 million for fiscal 2021 and none thereafter.

Leases

12 Months Ended

Aug. 29, 2020

Leases

Leases

Note O – Leases

The Company adopted ASU 2016-02, Leases (Topic 842), beginning with its first quarter ended November 23, 2019 which requires leases to be recognized on the balance sheet. Leases with an original term of 12 months or less are not recognized in the Company’s Condensed Consolidated Balance Sheets, and the lease expense related to these short-term leases is recognized over the lease term. The Company aggregates lease and non-lease components, which includes fixed common-area maintenance costs at its retail store locations, for all classes of leased assets, except vehicles. The Company’s vehicle leases typically include variable non-lease components, such as maintenance and fuel charges. The Company excludes these variable non-lease components from vehicle lease payments for the purpose of calculating the right-of-use assets and liabilities. These variable lease payments are expensed as incurred.

The Company’s leases primarily relate to its retail stores, distribution centers and vehicles under various non-callable leases. Leases are categorized at their commencement date, which is the date the Company takes possession or control of the underlying asset. Most of the Company’s leases are operating leases; however, certain land and vehicles are leased under finance leases. The leases have varying terms and expire at various dates through 2040. Retail leases typically have initial terms of between one and 20 years, with one to six optional renewal periods of one to five years each. Finance leases for vehicles typically have original terms between one and five years, and finance leases for real estate leases typically have terms of 20 or more years. The exercise of lease renewal options is at the Company’s sole discretion. The Company evaluates renewal options at lease commencement and on an ongoing basis and includes options that are reasonably certain to exercise in its expected lease terms when classifying leases and measuring lease liabilities. The Company subleases certain properties that are not used in its operations. Sublease income was not significant for the periods presented. Certain lease agreements require variable payments based upon actual costs of common-area maintenance, real estate taxes and insurance. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The Company’s finance leases for vehicles have a stated borrowing rate which it uses in determining the present value of the lease payments over the lease term. Substantially all the operating leases and finance leases for real estate do not provide a stated borrowing rate. Accordingly, the Company uses its incremental borrowing rate at commencement or modification date in determining the present value of lease payments over the lease term. For operating leases that commenced prior to the date of adoption of the new standard, the Company used the incremental borrowing rate that corresponded to the remaining lease term as of the date of adoption.

Lease-related assets and liabilities recorded on the Condensed Consolidated Balance Sheet are as follows:


(in thousands)	Classification	August 29, 2020

Assets:
Operating	Operating lease right-of-use assets	$	2,581,677
Finance	Property and equipment		327,006
Total lease assets		$	2,908,683
Liabilities:
Current:
Operating	Current portion of operating lease liabilities	$	223,680
Finance	Accrued expenses and other		67,498
Noncurrent:
Operating	Operating lease liabilities, less current portion		2,501,726
Finance	Other long-term liabilities		155,855
Total lease liabilities		$	2,948,759

Accumulated amortization related to finance lease assets was $107.3 million as of August 29, 2020.

Lease costs for finance and operating leases are as follows:



		For year ended
(in thousands)	Statement of Income Location	August 29, 2020

Finance lease cost:
Amortization of lease assets	Depreciation and amortization	$	55,920
Interest on lease liabilities	Interest expense, net		4,355
Operating lease cost⁽¹⁾	Selling, general and administrative expenses		355,230
Total lease cost		$	415,505

(1)

Includes short-term leases, variable lease costs and sublease income, which are immaterial.

The future rental payments, inclusive of renewal options that have been included in defining the expected lease term, of our operating and finance lease obligations as of August 29, 2020 having initial or remaining lease terms in excess of one year are as follows:


	Finance		Operating
(in thousands)	Leases		Leases		Total

2021	$	69,013	$	302,890	$	371,903
2022		57,188		324,860		382,048
2023		45,377		307,859		353,236
2024		24,590		284,296		308,886
2025		10,447		259,099		269,546
Thereafter		44,765		2,055,365		2,100,130
Total lease payments		251,380		3,534,369		3,785,749
Less: Interest		(28,027)		(808,963)		(836,990)
Present value of lease liabilities	$	223,353	$	2,725,406	$	2,948,759

The following table summarizes the Company’s lease term and discount rate assumptions:


	August 29, 2020
Weighted-average remaining lease term in years, inclusive of renewal options that are reasonably certain to be exercised
Finance leases – real estate	27
Finance leases – vehicles	3
Operating leases	15
Weighted-average discount rate:
Finance leases – real estate	3.49	%
Finance leases – vehicles	2.29	%
Operating leases	3.46	%

Cash paid for amounts included in the measurement of operating lease liabilities of $352.9 million was reflected in cash flows from operating activities in the consolidated statement of cash flows for fiscal 2020.

As of August 29, 2020, the Company has entered into additional leases which have not yet commenced and are therefore not part of the right-of-use asset and liability. These leases are generally for real estate and have undiscounted future payments of approximately $16.7 million and will commence when the Company obtains possession of the underlying leased asset. Commencement dates are expected to be from fiscal 2021 to fiscal 2022.

Commitments and Contingencies

12 Months Ended

Aug. 29, 2020

Commitments and Contingencies.

Commitments and Contingencies

Note P – Commitments and Contingencies

Construction commitments, primarily for new stores, totaled approximately $50.9 million at August 29, 2020.

The Company had $246.9 million in outstanding standby letters of credit and $56.7 million in surety bonds as of August 29, 2020, which all have expiration periods of less than one year. A substantial portion of the outstanding standby letters of credit (which are primarily renewed on an annual basis) and surety bonds are used to cover reimbursement obligations to our workers’ compensation carriers. There are no additional contingent liabilities associated with these instruments as the underlying liabilities are already reflected in the Consolidated Balance Sheets. The standby letters of credit and surety bonds arrangements have automatic renewal clauses.

Litigation

12 Months Ended

Aug. 29, 2020

Litigation

Litigation

Note Q – Litigation

The Company is involved in various legal proceedings incidental to the conduct of its business, including, but not limited to, several lawsuits containing class-action allegations in which the plaintiffs are current and former hourly and salaried employees who allege various wage and hour violations and unlawful termination practices. The Company does not currently believe that, either individually or in the aggregate, these matters will result in liabilities material to the Company’s financial condition, results of operations or cash flows.

Revenue Recognition

12 Months Ended

Aug. 29, 2020

Revenue Recognition

Revenue Recognition

Note R – Revenue Recognition

The Company adopted ASU 2014-09, Revenue from Contracts with Customers using the modified retrospective method beginning with our first quarter ending in fiscal 2019, November 17, 2018. The cumulative effect of initially applying ASU 2014-09 resulted in an increase to the opening retained deficit balance of $6.8 million, net of taxes at August 26, 2018, and a related adjustment to accounts receivable, other current assets, other long-term assets, other current liabilities and deferred income taxes as of that date. Revenue for periods prior to August 26, 2018 were not adjusted and continue to be reported under the accounting standards in effect for the prior periods.

There were no material contract assets, liabilities or deferred costs recorded on the Consolidated Balance Sheet as of August 29, 2020. Revenue related to unfulfilled performance obligations as of August 29, 2020 and August 31, 2019 is not significant. Refer to “Note S – Segment Reporting” for additional information related to revenue recognized during the period.

Segment Reporting

12 Months Ended

Aug. 29, 2020

Segment Reporting

Segment Reporting

Note S – Segment Reporting

The Company’s operating segments (Domestic Auto Parts, Mexico and Brazil; and IMC results through April 4, 2018) are aggregated as one reportable segment: Auto Parts Locations. The criteria the Company used to identify the reportable segment are primarily the nature of the products the Company sells and the operating results that are regularly reviewed by the Company’s chief operating decision maker to make decisions about the resources to be allocated to the business units and to assess performance. The accounting policies of the Company’s reportable segment are the same as those described in “Note A – Significant Accounting Policies.”

The Auto Parts Locations segment is a retailer and distributor of automotive parts and accessories through the Company’s 6,549 locations in the U.S., Mexico and Brazil. Each location carries an extensive product line for cars,

sport utility vehicles, vans and light trucks, including new and remanufactured automotive hard parts, maintenance items, accessories and non-automotive products.

The Other category reflects business activities of three operating segments that are not separately reportable due to the materiality of these operating segments. The operating segments include ALLDATA, which produces, sells and maintains diagnostic and repair information software used in the automotive repair industry and E-commerce, which includes direct sales to customers through www.autozone.com for sales that are not fulfilled by local stores; and AutoAnything, which includes direct sales to customers through www.autoanything.com, prior to the Company’s sale of substantially all of its assets on February 26, 2018.

The Company evaluates its reportable segment primarily on the basis of net sales and segment profit, which is defined as gross profit. The following table shows segment results for the following fiscal years:


	Year Ended
	August 29,		August 31,		August 25,
(in thousands)	2020		2019		2018

Net Sales
Auto Parts Locations	$	12,405,929	$	11,645,235	$	10,951,498
Other		226,038		218,508		269,579
Total	$	12,631,967	$	11,863,743	$	11,221,077

Segment Profit
Auto Parts Locations	$	6,617,508	$	6,209,229	$	5,805,561
Other		153,245		155,772		168,185
Gross profit		6,770,753		6,365,001		5,973,746
Operating, selling, general and administrative expenses⁽¹⁾		(4,353,074)		(4,148,864)		(4,162,890)
Interest expense, net		(201,165)		(184,804)		(174,527)
Income before income taxes	$	2,216,514	$	2,031,333	$	1,636,329

Segment Assets:
Auto Parts Locations	$	14,303,427	$	9,781,926	$	9,231,021
Other		120,445		113,987		115,959
Total	$	14,423,872	$	9,895,913	$	9,346,980

Capital Expenditures:
Auto Parts Locations	$	432,067	$	479,120	$	499,762
Other		25,669		16,930		22,026
Total	$	457,736	$	496,050	$	521,788

Auto Parts Locations Sales by Product Grouping:
Failure	$	6,088,859	$	5,728,294	$	5,338,890
Maintenance items		4,284,913		4,140,987		3,914,546
Discretionary		2,032,157		1,775,954		1,698,062
Auto Parts Locations net sales	$	12,405,929	$	11,645,235	$	10,951,498

(1)	Operating, selling, general and administrative expenses for fiscal 2018 include $130.3 million related to pension termination charges and $193.2 million related to impairment charges.

Quarterly Summary

12 Months Ended

Aug. 29, 2020

Quarterly Summary

Quarterly Summary

Note T – Quarterly Summary⁽¹⁾

(Unaudited)


							Sixteen
	Twelve Weeks Ended						Weeks Ended
	November 23,		February 15,		May 9,		August 29,
(in thousands, except per share data)	2019		2020		2020		2020⁽²⁾

Net sales	$	2,793,038	$	2,513,663	$	2,779,299	$	4,545,968
Gross profit		1,501,068		1,366,063		1,490,648		2,412,975
Operating profit		500,023		407,938		491,673		1,018,045
Income before income taxes		456,280		363,603		444,223		952,407
Net income		350,338		299,282		342,896		740,457
Basic earnings per share		14.67		12.70		14.66		31.67
Diluted earnings per share		14.30		12.39		14.39		30.93


							Seventeen
	Twelve Weeks Ended						Weeks Ended
	November 17,		February 9,		May 4,		August 31,
(in thousands, except per share data)	2018		2019		2019		2019⁽²⁾

Net sales	$	2,641,733	$	2,450,568	$	2,783,006	$	3,988,435
Gross profit		1,417,474		1,325,107		1,492,020		2,130,400
Operating profit		487,818		400,020		547,523		780,775
Income before income taxes		448,812		358,658		504,284		719,578
Net income⁽³⁾		351,406		294,638		405,949		565,228
Basic earnings per share		13.71		11.71		16.35		23.15
Diluted earnings per share		13.47		11.49		15.99		22.59

(1)	The sum of quarterly amounts may not equal the annual amounts reported due to rounding. In addition, the earnings per share amounts are computed independently for each quarter while full year is based on the annual weighted average shares outstanding.

(2)	The fourth quarter for fiscal 2020 is based on a 16-week period while fiscal 2019 is based on a 17-week period. All other quarters presented are based on a 12-week period.

Significant Accounting Policies (Policies)

12 Months Ended

Aug. 29, 2020

Significant Accounting Policies

Business

Fiscal Year

Fiscal Year: The Company’s fiscal year consists of 52 or 53 weeks ending on the last Saturday in August. Fiscal 2020 and 2018 represented 52 weeks and 2019 represented 53 weeks.

Basis of Presentation

Variable Interest Entities

Use of Estimates

Cash and Cash Equivalents

Accounts Receivable

Merchandise Inventories

Marketable Debt Securities

Property and Equipment

Impairment of Long-Lived Assets

Goodwill

Intangible Assets

Derivative Instruments and Hedging Activities

Foreign Currency

Self-Insurance Reserves

Leases

Financial Instruments

Vendor Allowances and Advertising Costs

Cost of Sales and Operating, Selling, General and Administrative Expenses

Cost of Sales and Operating, Selling, General and Administrative Expenses: The following illustrates the primary costs classified in each major expense category:

Cost of Sales

●

Total cost of merchandise sold, including:

o

Freight expenses associated with moving merchandise inventories from the Company’s vendors to the distribution centers;

o

Vendor allowances that are not reimbursements for specific, incremental and identifiable costs

●

Costs associated with operating the Company’s supply chain, including payroll and benefits, warehouse occupancy, transportation and depreciation; and

●

Inventory shrinkage

Operating, Selling, General and Administrative Expenses

●

Payroll and benefits for store, field leadership and store support employees;

●

Occupancy of store and store support facilities;

●

Depreciation and amortization related to store and store support assets;

●

Transportation associated with field leadership, commercial sales force and deliveries from stores;

●

Advertising;

●

Self-insurance; and

●

Other administrative costs, such as credit card transaction fees, legal costs, supplies and travel and lodging

Warranty Costs

Shipping and Handling Costs

Pre-opening Expenses

Pre-opening Expenses: Pre-opening expenses, which consist primarily of payroll and occupancy costs, are expensed as incurred.

Earnings per Share

Share-Based Payments

Risk and Uncertainties

Recently Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements:

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements:

Share-Based Payments (Tables)

12 Months Ended

Aug. 29, 2020

Share-Based Payments

Weighted Average for Key Assumptions Used in Determining Fair Value of Options Granted and Related Share-Based Compensation Expense

The following table presents the weighted average for key assumptions used in determining the fair value of options granted and the related share-based compensation expense:


	Year Ended
	August 29,		August 31,		August 25,
	2020		2019		2018
Expected price volatility	22	%	21	%	20	%
Risk-free interest rate	1.4	%	3.0	%	1.9	%
Weighted average expected lives (in years)	5.5		5.6		5.1
Forfeiture rate	10	%	10	%	10	%
Dividend yield	0	%	0	%	0	%

Stock Option Activity

The Company generally issues new shares when options are exercised. The following table summarizes information about stock option activity for the year ended August 29, 2020:


				Weighted
				Average
				Remaining	Aggregate
		Weighted		Contractual	Intrinsic
	Number	Average		Term	Value
	of Shares	Exercise Price		(in years)	(in thousands)

Outstanding – August 31, 2019	1,349,311	$	601.36
Granted	188,824		1,061.57
Exercised	(146,705)		472.37
Cancelled	(6,444)		735.42
Outstanding – August 29, 2020	1,384,986		677.15	5.82	$	709,085

Exercisable	882,668		587.27	4.65		531,234
Expected to vest	452,086		835.08	7.88		160,066
Available for future grants	348,293

Schedule of Nonvested Restricted Stock Units Activity

Transactions related to restricted stock units for the fiscal year ended August 29, 2020 are as follows:


		Weighted-
	Number	Average Grant
	of Shares	Date Fair Value
Nonvested at August 31, 2019	10,049	$	773.61
Granted	8,735		1,086.61
Vested	(4,183)		945.58
Canceled or forfeited	(441)		942.76
Nonvested at August 29, 2020	14,160	$	910.63

Accrued Expenses and Other (Tables)

12 Months Ended

Aug. 29, 2020

Accrued Expenses and Other

Accrued Expenses

Accrued expenses and other consisted of the following:


	August 29,		August 31,
(in thousands)	2020		2019

Accrued compensation, related payroll taxes and benefits	$	321,071	$	170,321
Property, sales, and other taxes		121,196		122,372
Medical and casualty insurance claims (current portion)		112,746		89,250
Finance lease liabilities		67,498		56,246
Accrued interest		63,503		48,147
Accrued gift cards		43,876		38,658
Accrued sales and warranty returns		32,356		34,310
Other		65,422		62,628
	$	827,668	$	621,932

Income Taxes (Tables)

12 Months Ended

Aug. 29, 2020

Income Taxes

Components of Income from Continuing Operations

The components of income from continuing operations before income taxes are as follows:


		Year Ended
	August 29,		August 31,		August 25,
(in thousands)	2020		2019		2018

Domestic	$	1,960,320	$	1,745,625	$	1,412,963
International		256,194		285,708		223,366
	$	2,216,514	$	2,031,333	$	1,636,329

Provision for Income Tax Expense

The provision for income tax expense consisted of the following:


	Year Ended
	August 29,		August 31,		August 25,
(in thousands)	2020		2019		2018

Current:
Federal	$	324,156	$	274,504	$	328,963
State		47,880		45,457		36,389
International		60,429		59,100		57,702
		432,465		379,061		423,054
Deferred:
Federal		43,706		25,757		(131,926)
State		12,544		6,914		8,167
International		(5,173)		2,380		(502)
		51,077		35,051		(124,261)
Income tax expense	$	483,542	$	414,112	$	298,793

Reconciliation of Provision for Income Taxes

A reconciliation of the provision for income taxes to the amount computed by applying the federal statutory tax rate to income before income taxes is as follows:


	Year Ended
	August 29,		August 31,		August 25,
(in thousands)	2020		2019		2018

Federal tax at statutory U.S. income tax rate	21.0	%	21.0	%	25.9	%
State income taxes, net	2.2	%	2.0	%	1.9	%
Transition tax	—		—		1.6	%
Share-based compensation	(0.7)	%	(1.8)	%	(1.6)	%
Impact of tax reform	—		(0.4)	%	(9.6)	%
Global intangible lower-taxed income (“GILTI”)	1.0	%	1.3	%	—
Foreign Tax Credits	(1.1)	%	(1.1)	%	—
Other	(0.6)	%	(0.6)	%	0.1	%
Effective tax rate	21.8	%	20.4	%	18.3	%

Significant Components of Company's Deferred Tax Assets and Liabilities

Significant components of the Company’s deferred tax assets and liabilities were as follows:


	August 29,		August 31,
(in thousands)	2020		2019

Deferred tax assets:
Net operating loss and credit carryforwards	$	41,437	$	42,958
Accrued benefits		88,226		58,900
Operating lease liabilities		617,002		—
Other		69,788		59,237
Total deferred tax assets		816,453		161,095
Less: Valuation allowances		(28,373)		(23,923)
Net deferred tax assets		788,080		137,172
Deferred tax liabilities:
Property and equipment		(173,696)		(114,956)
Inventory		(298,585)		(259,827)
Prepaid expenses		(55,827)		(46,487)
Operating lease assets		(581,381)		—
Other		(4,934)		(1,021)
Total deferred tax liabilities		(1,114,423)		(422,291)
Net deferred tax liabilities	$	(326,343)	$	(285,119)

Reconciliation of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:


	August 29,		August 31,
(in thousands)	2020		2019

Beginning balance	$	30,892	$	26,077
Additions based on tax positions related to the current year		8,512		8,621
Additions for tax positions of prior years		946		2,115
Reductions for tax positions of prior years		(4,124)		(1,219)
Reductions due to settlements		—		(1,918)
Reductions due to statute of limitations		(4,284)		(2,784)
Ending balance	$	31,942	$	30,892

Fair Value Measurements (Tables)

12 Months Ended

Aug. 29, 2020

Fair Value Measurements

Company's marketable debt securities measured at Fair Value on Recurring Basis

The Company’s marketable debt securities measured at fair value on a recurring basis were as follows:


	August 29, 2020
(in thousands)	Level 1		Level 2		Level 3		Fair Value

Other current assets	$	75,651	$	467	$	—	$	76,118
Other long-term assets		58,792		12,329		—		71,121
	$	134,443	$	12,796	$	—	$	147,239


	August 31, 2019
(in thousands)	Level 1		Level 2		Level 3		Fair Value

Other current assets	$	65,344	$	2,614	$	—	$	67,958
Other long-term assets		65,573		5,395		—		70,968
	$	130,917	$	8,009	$	—	$	138,926

Marketable Debt Securities (Tables)

12 Months Ended

Aug. 29, 2020

Marketable Debt Securities

Available-for-Sale Marketable Securities


	August 29, 2020
	Amortized		Gross		Gross
	Cost		Unrealized		Unrealized		Fair
(in thousands)	Basis		Gains		Losses		Value

Corporate debt securities	$	46,652	$	970	$	(4)	$	47,618
Government bonds		44,594		1,172		—		45,766
Mortgage-backed securities		4,842		75		—		4,917
Asset-backed securities and other		48,798		143		(3)		48,938
	$	144,886	$	2,360	$	(7)	$	147,239


	August 31, 2019
	Amortized		Gross		Gross
	Cost		Unrealized		Unrealized		Fair
(in thousands)	Basis		Gains		Losses		Value

Corporate debt securities	$	36,998	$	29	$	(19)	$	37,008
Government bonds		45,741		763		—		46,504
Mortgage-backed securities		2,089		2		(15)		2,076
Asset-backed securities and other		53,345		—		(7)		53,338
	$	138,173	$	794	$	(41)	$	138,926

Accumulated Other Comprehensive Loss (Tables)

12 Months Ended

Aug. 29, 2020

Equity

Changes in Accumulated Other Comprehensive Loss


			Net
			Unrealized
	Foreign		Gain (Loss)
(in thousands)	Currency⁽²⁾		on Securities			Derivatives			Total

Balance at August 25, 2018	$	(228,899)	$	(873)		$	(6,033)		$	(235,805)
Other Comprehensive (Loss) income before reclassifications		(36,699)		1,498			—			(35,201)
Amounts reclassified from Accumulated Other Comprehensive Loss⁽¹⁾		—		(34)	⁽³⁾		1,718	⁽⁴⁾		1,684
Balance at August 31, 2019		(265,598)		591			(4,315)			(269,322)
Other Comprehensive (Loss) income before reclassifications		(66,723)		1,117			(28,197)			(93,803)
Amounts reclassified from Accumulated Other Comprehensive Loss⁽¹⁾		—		137	⁽³⁾		8,736	⁽⁴⁾		8,873
Balance at August 29, 2020	$	(332,321)	$	1,845		$	(23,776)		$	(354,252)

(1)	Amounts in parentheses indicate debits to Accumulated Other Comprehensive Loss.

(2)	Foreign currency is shown net of U.S. tax to account for foreign currency impacts of certain undistributed non-U.S. subsidiaries earnings. Other foreign currency is not shown net of additional U.S. tax as other basis differences of non-U.S. subsidiaries are intended to be permanently reinvested.

(3)

(4)	Represents gains and losses on derivatives, net of tax benefit of $6,164 in fiscal 2020 and net of taxes of $530 in fiscal 2019, which is recorded in Interest expense, net, on the Consolidated Statements of Income. See “Note H – Derivative Financial Instruments” for further discussion.

Financing (Tables)

12 Months Ended

Aug. 29, 2020

Financing

Schedule of Debt

The Company’s debt consisted of the following:


	August 29,		August 31,
(in thousands)	2020		2019

4.000% Senior Notes due November 2020, effective interest rate of 4.43%	$	—	$	500,000
2.500% Senior Notes due April 2021, effective interest rate of 2.62%		250,000		250,000
3.700% Senior Notes due April 2022, effective interest rate of 3.85%		500,000		500,000
2.875% Senior Notes due January 2023, effective interest rate of 3.21%		300,000		300,000
3.125% Senior Notes due July 2023, effective interest rate of 3.26%		500,000		500,000
3.125% Senior Notes due April 2024, effective interest rate 3.32%		300,000		300,000
3.250% Senior Notes due April 2025, effective interest rate 3.36%		400,000		400,000
3.625% Senior Notes due April 2025, effective interest rate 3.78%		500,000		—
3.125% Senior Notes due April 2026, effective interest rate of 3.28%		400,000		400,000
3.750% Senior Notes due June 2027, effective interest rate of 3.83%		600,000		600,000
3.750% Senior Notes due April 2029, effective interest rate of 3.86%		450,000		450,000
4.000% Senior Notes due April 2030, effective interest rate 4.09%		750,000		—
1.650% Senior Notes due January 2031, effective interest rate of 2.19%		600,000		—
Commercial paper, weighted average interest rate of 2.28% at August 31, 2019		—		1,030,000
Total debt before discounts and debt issuance costs		5,550,000		5,230,000
Less: Discounts and debt issuance costs		36,629		23,656
Long-term debt	$	5,513,371	$	5,206,344

Scheduled Maturities of Debt

Scheduled maturities of debt are as follows:


	Scheduled
(in thousands)	Maturities

2021	$	250,000
2022		500,000
2023		800,000
2024		300,000
2025		900,000
Thereafter		2,800,000
Subtotal		5,550,000
Discount and debt issuance costs		36,629
Total Debt	$	5,513,371

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.22)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 1A
-URI http://asc.fasb.org/extlink&oid=114775744&loc=d3e28541-108399

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21506-112644

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(e),(f))
-URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690

Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=114775744&loc=d3e28551-108399

Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21521-112644

Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21538-112644

Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 470
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=75038535&loc=d3e64711-112823

Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 55
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=114775985&loc=d3e28878-108400

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21475-112644

+ Details

Interest Expense (Tables)

12 Months Ended

Aug. 29, 2020

Interest Expense.

Net Interest Expense

Net interest expense consisted of the following:


	Year Ended
	August 29,		August 31,		August 25,
(in thousands)	2020		2019		2018

Interest expense	$	208,021	$	193,671	$	181,668
Interest income		(5,689)		(7,396)		(5,636)
Capitalized interest		(1,167)		(1,471)		(1,505)
	$	201,165	$	184,804	$	174,527

Stock Repurchase Program (Tables)

12 Months Ended

Aug. 29, 2020

Equity

Summarize Company's Share Repurchase Activity

The Company’s share repurchase activity consisted of the following:


	Year Ended
	August 29,		August 31,		August 25,
(in thousands)	2020		2019		2018

Amount	$	930,903	$	2,004,896	$	1,592,013
Shares		826		2,182		2,398

Pension and Savings Plans (Tables)

12 Months Ended

Aug. 29, 2020

Pension and Savings Plans

Net Periodic Benefit Expense

Net periodic benefit expense consisted of the following:


	Year Ended
	August 25
(in thousands)	2018⁽¹⁾

Interest cost	$	10,356
Expected return on plan assets		(18,997)
Recognized net actuarial losses		10,736
Settlement loss		130,263
Net periodic benefit expense	$	132,358

(1) The pension plans were terminated in fiscal 2018.

Goodwill and Intangibles (Tables)

12 Months Ended

Aug. 29, 2020

Goodwill and Intangibles

Schedule of Carrying Amounts of Intangible Assets

The carrying amounts of intangible assets are included in Other long-term assets as follows:


	August 29, 2020
	Estimated	Gross				Net
	Useful	Carrying		Accumulated		Carrying
(in thousands)	Life	Amount		Amortization		Amount

Amortizing intangible assets:
Customer relationships	3-10 years		29,376		(27,933)		1,443
Total intangible assets other than goodwill		$	29,376	$	(27,933)	$	1,443


	August 31, 2019
	Estimated	Gross				Net
	Useful	Carrying		Accumulated		Carrying
(in thousands)	Life	Amount		Amortization		Amount

Amortizing intangible assets:
Technology	3-5 years	$	870	$	(870)	$	—
Customer relationships	3-10 years		29,376		(23,760)		5,616
Total intangible assets other than goodwill		$	30,246	$	(24,630)	$	5,616

Leases (Tables)

12 Months Ended

Aug. 29, 2020

Leases

Balance Sheet Information Related to Leases


(in thousands)	Classification	August 29, 2020

Assets:
Operating	Operating lease right-of-use assets	$	2,581,677
Finance	Property and equipment		327,006
Total lease assets		$	2,908,683
Liabilities:
Current:
Operating	Current portion of operating lease liabilities	$	223,680
Finance	Accrued expenses and other		67,498
Noncurrent:
Operating	Operating lease liabilities, less current portion		2,501,726
Finance	Other long-term liabilities		155,855
Total lease liabilities		$	2,948,759

Lease Cost



		For year ended
(in thousands)	Statement of Income Location	August 29, 2020

Finance lease cost:
Amortization of lease assets	Depreciation and amortization	$	55,920
Interest on lease liabilities	Interest expense, net		4,355
Operating lease cost⁽¹⁾	Selling, general and administrative expenses		355,230
Total lease cost		$	415,505

(1)

Includes short-term leases, variable lease costs and sublease income, which are immaterial.

Summary of the Future Maturities of the Company's Lease Liabilities


	Finance		Operating
(in thousands)	Leases		Leases		Total

2021	$	69,013	$	302,890	$	371,903
2022		57,188		324,860		382,048
2023		45,377		307,859		353,236
2024		24,590		284,296		308,886
2025		10,447		259,099		269,546
Thereafter		44,765		2,055,365		2,100,130
Total lease payments		251,380		3,534,369		3,785,749
Less: Interest		(28,027)		(808,963)		(836,990)
Present value of lease liabilities	$	223,353	$	2,725,406	$	2,948,759

Information on Lease Term and Discount Rate


	August 29, 2020
Weighted-average remaining lease term in years, inclusive of renewal options that are reasonably certain to be exercised
Finance leases – real estate	27
Finance leases – vehicles	3
Operating leases	15
Weighted-average discount rate:
Finance leases – real estate	3.49	%
Finance leases – vehicles	2.29	%
Operating leases	3.46	%

Segment Reporting (Tables)

12 Months Ended

Aug. 29, 2020

Segment Reporting

Segment Results


	Year Ended
	August 29,		August 31,		August 25,
(in thousands)	2020		2019		2018

Net Sales
Auto Parts Locations	$	12,405,929	$	11,645,235	$	10,951,498
Other		226,038		218,508		269,579
Total	$	12,631,967	$	11,863,743	$	11,221,077

Segment Profit
Auto Parts Locations	$	6,617,508	$	6,209,229	$	5,805,561
Other		153,245		155,772		168,185
Gross profit		6,770,753		6,365,001		5,973,746
Operating, selling, general and administrative expenses⁽¹⁾		(4,353,074)		(4,148,864)		(4,162,890)
Interest expense, net		(201,165)		(184,804)		(174,527)
Income before income taxes	$	2,216,514	$	2,031,333	$	1,636,329

Segment Assets:
Auto Parts Locations	$	14,303,427	$	9,781,926	$	9,231,021
Other		120,445		113,987		115,959
Total	$	14,423,872	$	9,895,913	$	9,346,980

Capital Expenditures:
Auto Parts Locations	$	432,067	$	479,120	$	499,762
Other		25,669		16,930		22,026
Total	$	457,736	$	496,050	$	521,788

Auto Parts Locations Sales by Product Grouping:
Failure	$	6,088,859	$	5,728,294	$	5,338,890
Maintenance items		4,284,913		4,140,987		3,914,546
Discretionary		2,032,157		1,775,954		1,698,062
Auto Parts Locations net sales	$	12,405,929	$	11,645,235	$	10,951,498

(1)	Operating, selling, general and administrative expenses for fiscal 2018 include $130.3 million related to pension termination charges and $193.2 million related to impairment charges.

Significant Accounting policies - Additional Information (Detail) $ in Thousands	12 Months Ended
	Aug. 29, 2020 USD ($) class store shares	Aug. 31, 2019 USD ($) shares	Aug. 25, 2018 USD ($) shares	Sep. 01, 2019 USD ($)	Aug. 26, 2017 USD ($)
Significant Accounting Policies [Line Items]
Number of stores with commercial sales program \| store	5,007
Description of reporting periods	The Company’s fiscal year consists of 52 or 53 weeks ending on the last Saturday in August. Fiscal 2020 and 2018 represented 52 weeks and 2019 represented 53 weeks.
Cash and cash equivalents	$ 1,750,815	$ 176,300	$ 217,824		$ 293,270
Allowances for uncollectible accounts	10,000	8,500
Unrecorded adjustment for LIFO value in excess of replacement value	357,000	404,900
Self insurance reserve	$ 288,600	207,000
Deferred rent		159,900
Measure of income tax benefit for uncertain income tax positions	more than 50%
Advertising expense, net of vendor promotional funds	$ 77,600	87,500	95,200
Vendor promotional funds, which reduced advertising expense	$ 39,400	32,200	$ 25,300
Limited warranty period, minimum period (Days)	30 days
Products accounted for total revenues	one class of similar products accounted for approximately 12 percent of the Company’s total revenues, and one vendor supplied approximately 12 percent of the Company’s total purchases. No other class of similar products accounted for 10 percent or more of total revenues
Products accounted for total purchases	one vendor supplied approximately 12 percent of the Company’s total purchases. No other class of similar products accounted for 10 percent or more of total revenues
Approximate value of operating lease liabilities	$ 2,725,406
Accounting Standards Update 2016-02 [Member]
Significant Accounting Policies [Line Items]
ROU assets				$ 2,500,000
Approximate value of operating lease liabilities				$ 2,700,000
Cash Equivalents [Member]
Significant Accounting Policies [Line Items]
Maturity period of investments	90 days or less
Settlement term of credit and debit card transaction	less than five days
Credit and debit card receivables included within cash and cash equivalents	$ 63,700	$ 59,400
Product Concentration Risk
Significant Accounting Policies [Line Items]
Number of class of similar products accounted for approximately 13% of the company's total revenues \| class	1
Stock Options [Member]
Significant Accounting Policies [Line Items]
Anti-dilutive shares excluded from the computation of earnings per share \| shares	169,460	90,314	847,279
Minimum [Member]
Significant Accounting Policies [Line Items]
Amortization of intangible assets	3 years
Minimum [Member] \| Building
Significant Accounting Policies [Line Items]
Estimated useful lives	40 years
Minimum [Member] \| Building Improvements
Significant Accounting Policies [Line Items]
Estimated useful lives	5 years
Minimum [Member] \| Equipment
Significant Accounting Policies [Line Items]
Estimated useful lives	3 years
Minimum [Member] \| Product Concentration Risk \| Sales Revenue, Net
Significant Accounting Policies [Line Items]
Concentration risk percentage	10.00%
Minimum [Member] \| Supplier Concentration Risk \| Cost of Goods, Total [Member]
Significant Accounting Policies [Line Items]
Concentration risk percentage	10.00%
Maximum [Member]
Significant Accounting Policies [Line Items]
Amortization of intangible assets	10 years
Maximum [Member] \| Building
Significant Accounting Policies [Line Items]
Estimated useful lives	50 years
Maximum [Member] \| Building Improvements
Significant Accounting Policies [Line Items]
Estimated useful lives	15 years
Maximum [Member] \| Equipment
Significant Accounting Policies [Line Items]
Estimated useful lives	10 years
Maximum [Member] \| Product Concentration Risk \| Sales Revenue, Net
Significant Accounting Policies [Line Items]
Concentration risk percentage	12.00%
Maximum [Member] \| Supplier Concentration Risk \| Cost of Goods, Total [Member]
Significant Accounting Policies [Line Items]
Concentration risk percentage	12.00%
VIE not primary beneficiary \| Other long-term assets
Significant Accounting Policies [Line Items]
Maximum exposure to losses amount	$ 6,500
Stores in the United States Including Puerto Rico [Member]
Significant Accounting Policies [Line Items]
Number of stores \| store	5,885
Brazil [Member]
Significant Accounting Policies [Line Items]
Number of stores \| store	43
Mexico [Member]
Significant Accounting Policies [Line Items]
Number of stores \| store	621
Non-US [Member]
Significant Accounting Policies [Line Items]
Cash and cash equivalents	$ 62,400	$ 49,900

Share-Based Payments - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Aug. 29, 2020	Aug. 31, 2019	Aug. 25, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum percentage of discount on salary and bonus	25.00%
Weighted average grant date fair value of options granted	$ 252.54	$ 208.37	$ 129.12
Share-based compensation expense	$ 44,835	$ 43,255	$ 43,674
Share-based compensation expense for unvested awards not yet recognized in earnings	$ 42,000
Weighted average period recognition of share-based compensation expense for unvested awards	1 year 8 months 12 days
Exercise period of vested options after death	1 year
Intrinsic value of options exercised	$ 101,900	227,400	123,100
Total fair value of options vested	39,100	34,500	35,700
Expense related to the discount on the selling of shares to employees and executives	$ 3,100	$ 2,800	$ 2,100
Shares sold to employees under employee stock purchase plan	10,525	11,011	14,523
Shares purchased from employees at fair value	8,287	17,201	11,816
Common stock reserved for future issuance	142,241
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise period of vested options after service period	90 days
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise period of vested options after service period	30 days
Two Thousand Three Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Accrued director fees	$ 5,700	$ 11,200
Additional shares of stock or units	0
Accrued director fees in shares	4,822	10,206
Executive Stock Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares sold to employees under employee stock purchase plan	1,204	1,483	1,840
Common stock reserved for future issuance	235,361
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Non vested restricted stock unit award	$ 9,000
Estimated weighted average period	2 years 8 months 12 days
Service period	4 years
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Term of options from grant date	10 years or 10 years and one day
2011 Equity Incentive Award Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Debt instrument term	10 years

Share-Based Payments - Weighted Average for Key Assumptions Used in Determining Fair Value of Options Granted and Related Share-Based Compensation Expense (Detail)	12 Months Ended
	Aug. 29, 2020	Aug. 31, 2019	Aug. 25, 2018
Share-Based Payments
Expected price volatility	22.00%	21.00%	20.00%
Risk-free interest rate	1.40%	3.00%	1.90%
Weighted average expected lives (in years)	5 years 6 months	5 years 7 months 6 days	5 years 1 month 6 days
Forfeiture rate	10.00%	10.00%	10.00%
Dividend yield	0.00%	0.00%	0.00%

Share Based Payments - Stock option Activity (Detail) $ / shares in Units, $ in Thousands	12 Months Ended
	Aug. 29, 2020 USD ($) $ / shares shares
Share-Based Payments
Outstanding, Beginning balance, Number of Shares	1,349,311
Granted, Number of Shares	188,824
Exercised, Number of Shares	(146,705)
Cancelled, Number of Shares	(6,444)
Outstanding, Ending balance, Number of Shares	1,384,986
Exercisable, Number of Shares	882,668
Expected to vest, Number of Shares	452,086
Available for future grants, Number of Shares	348,293
Outstanding, Beginning balance, Weighted Average Exercise Price \| $ / shares	$ 601.36
Granted, Weighted Average Exercise Price \| $ / shares	1,061.57
Exercised, Weighted Average Exercise Price \| $ / shares	472.37
Cancelled, Weighted Average Exercise Price \| $ / shares	735.42
Outstanding, Ending balance, Weighted Average Exercise Price \| $ / shares	677.15
Exercisable, Weighted Average Exercise Price \| $ / shares	587.27
Expected to vest, Weighted Average Exercise Price \| $ / shares	$ 835.08
Outstanding , Weighted-Average Remaining Contractual Term	5 years 9 months 25 days
Exercisable, Weighted-Average Remaining Contractual Term	4 years 7 months 24 days
Expected to vest, Weighted-Average Remaining Contractual Term	7 years 10 months 17 days
Outstanding, Aggregate Intrinsic Value \| $	$ 709,085
Exercisable, Aggregate Intrinsic Value \| $	531,234
Expected to vest, Aggregate Intrinsic Value \| $	$ 160,066

Share-Based Payments - Schedule of Nonvested Restricted Stock Units Activity (Detail)	12 Months Ended
	Aug. 29, 2020 $ / shares shares
Share-Based Payments
Nonvested, Beginning balance, Number of Shares \| shares	10,049
Granted, Number of Shares \| shares	8,735
Vested, Number of Shares \| shares	(4,183)
Canceled or forfeited, Number of Shares \| shares	(441)
Nonvested, Ending balance, Number of Shares \| shares	14,160
Nonvested, Beginning balance, Weighted Average Exercise Price \| $ / shares	$ 773.61
Granted, Weighted Average Exercise Price \| $ / shares	1,086.61
Vested, Weighted Average Exercise Price \| $ / shares	945.58
Canceled or forfeited, Weighted Average Exercise Price \| $ / shares	942.76
Nonvested, Ending balance, Weighted Average Exercise Price \| $ / shares	$ 910.63

Accrued Expenses and Other - Accrued Expenses (Detail) - USD ($) $ in Thousands	Aug. 29, 2020	Aug. 31, 2019
Other Income and Expenses [Abstract]
Accrued compensation, related payroll taxes and benefits	$ 321,071	$ 170,321
Property, sales, and other taxes	121,196	122,372
Medical and casualty insurance claims (current portion)	112,746	89,250
Finance lease liabilities	67,498	56,246
Accrued interest	63,503	48,147
Accrued gift cards	43,876	38,658
Accrued sales and warranty returns	32,356	34,310
Other	65,422	62,628
Total	$ 827,668	$ 621,932

Accrued Expenses and Other - Additional Information (Detail) $ in Millions	12 Months Ended
	Aug. 29, 2020 USD ($)
Workers Compensation
Maximum limits per claim for self-insured plan, per annum	$ 2.0
Auto Liability
Maximum limits per claim for self-insured plan, per annum	5.0
Property
Maximum limits per claim for self-insured plan, per annum	21.5
Employee Health
Maximum limits per claim for self-insured plan, per annum	0.7
General Products Liability And Vehicle
Maximum limits per claim for self-insured plan, per annum	$ 1.0

Income Taxes - Components of Income from Continuing Operations (Detail) - USD ($) $ in Thousands	3 Months Ended						4 Months Ended		12 Months Ended
	May 09, 2020	Feb. 15, 2020	Nov. 23, 2019	May 04, 2019	Feb. 09, 2019	Nov. 17, 2018	Aug. 29, 2020	Aug. 31, 2019	Aug. 29, 2020	Aug. 31, 2019	Aug. 25, 2018
Income Taxes
Domestic									$ 1,960,320	$ 1,745,625	$ 1,412,963
International									256,194	285,708	223,366
Income before income taxes	$ 444,223	$ 363,603	$ 456,280	$ 504,284	$ 358,658	$ 448,812	$ 952,407	$ 719,578	$ 2,216,514	$ 2,031,333	$ 1,636,329

Income Taxes - Provision for Income Tax Expense (Detail) - USD ($) $ in Thousands	12 Months Ended
	Aug. 29, 2020	Aug. 31, 2019	Aug. 25, 2018
Current:
Federal	$ 324,156	$ 274,504	$ 328,963
State	47,880	45,457	36,389
International	60,429	59,100	57,702
Total	432,465	379,061	423,054
Deferred:
Federal	43,706	25,757	(131,926)
State	12,544	6,914	8,167
International	(5,173)	2,380	(502)
Total	51,077	35,051	(124,261)
Income tax expense	$ 483,542	$ 414,112	$ 298,793

Income Taxes - Reconciliation of Provision for Income Taxes (Detail)			12 Months Ended
	Dec. 22, 2017	Dec. 21, 2017	Aug. 29, 2020	Aug. 31, 2019	Aug. 25, 2018
Income Taxes
Federal tax at statutory U.S. income tax rate	21.00%	35.00%	21.00%	21.00%	25.90%
State income taxes, net			2.20%	2.00%	1.90%
Transition tax					1.6
Share-based compensation			(0.70%)	(1.80%)	(1.60%)
Impact of tax reform				(0.40%)	(9.60%)
Global intangible lower-taxed income ("GILTI")			1.00%	1.30%
Foreign Tax Credits			(1.10%)	(1.10%)
Other			(0.60%)	(0.60%)	0.10%
Effective tax rate			21.80%	20.40%	18.30%

Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands			12 Months Ended
	Dec. 22, 2017	Dec. 21, 2017	Aug. 29, 2020	Aug. 31, 2019	Aug. 25, 2018
Income Taxes
U.S. corporate income tax rate	21.00%	35.00%	21.00%	21.00%	25.90%
Tax cuts and jobs act of 2017, incomplete accounting, provisional income tax expense (benefit)				$ 8,800	$ 131,500
Tax Cuts And Jobs Act of 2017 incomplete accounting provisional income tax expense benefit					157,300
Tax cuts and jobs act of 2017, transition tax, provisional income tax expense					25,800
Additional excess tax benefits from stock option exercises compared to prior year			$ 20,900	46,000	$ 31,300
Deferred tax assets from net operating loss carryforwards			32,200	29,900
Future taxable income			$ 247,100	226,300
Expiration date of NOLs start year			2021
Expiration date of NOLs end year			2040
Deferred tax assets for income tax credit carryforwards			$ 9,200	13,000
Expiration date of tax credit carryforwards start year			2021
Expiration date of tax credit carryforwards end year			2037
Valuation allowances on deferred tax assets			$ 28,373	23,923
Unrecognized tax benefits, if recognized would reduce effective tax rate, amount			18,900	16,800
Deferred tax assets operating loss carryforwards and tax credits			10,500	11,900
Accrued for payment of interest and penalties associated with unrecognized tax benefits			1,600	$ 1,400
Amount of unrecognized tax benefits that could be reduced over next twelve months			$ 1,500

Income Taxes - Significant Components of Company's Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands	Aug. 29, 2020	Aug. 31, 2019
Deferred tax assets:
Net operating loss and credit carryforwards	$ 41,437	$ 42,958
Accrued benefits	88,226	58,900
Operating lease liabilities	617,002
Other	69,788	59,237
Total deferred tax assets	816,453	161,095
Less: Valuation allowances	(28,373)	(23,923)
Net deferred tax assets	788,080	137,172
Deferred tax liabilities:
Property and equipment	(173,696)	(114,956)
Inventory	(298,585)	(259,827)
Prepaid expenses	(55,827)	(46,487)
Operating lease assets	(581,381)
Other	(4,934)	(1,021)
Total deferred tax liabilities	(1,114,423)	(422,291)
Net deferred tax liabilities	$ (326,343)	$ (285,119)

Income Taxes - Reconciliation of Unrecognized Tax Benefits (Detail) - USD ($) $ in Thousands	12 Months Ended
	Aug. 29, 2020	Aug. 31, 2019
Income Taxes
Beginning balance	$ 30,892	$ 26,077
Additions based on tax positions related to the current year	8,512	8,621
Additions for tax positions of prior years	946	2,115
Reductions for tax positions of prior years	(4,124)	(1,219)
Reductions due to settlements		(1,918)
Reductions due to statute of limitations	(4,284)	(2,784)
Ending balance	$ 31,942	$ 30,892

Fair Value Measurements - Company's marketable debt securities measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands	Aug. 29, 2020	Aug. 31, 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	$ 147,239	$ 138,926
Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other current assets	76,118	67,958
Other long-term assets	71,121	70,968
Total	147,239	138,926
Level 1 [Member] \| Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other current assets	75,651	65,344
Other long-term assets	58,792	65,573
Total	134,443	130,917
Level 2 [Member] \| Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other current assets	467	2,614
Other long-term assets	12,329	5,395
Total	$ 12,796	$ 8,009

Fair Value Measurements - Additional Information (Detail) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands	Aug. 29, 2020	Aug. 31, 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term marketable debt securities	$ 76,118	$ 67,958
Long-term marketable debt securities	$ 71,121	$ 70,968

Marketable Debt Securities - Available-for-Sale Marketable Securities (Detail) - USD ($) $ in Thousands	Aug. 29, 2020	Aug. 31, 2019
Schedule of Available-for-sale Securities [Line Items]
Available-For-Sale Marketable Securities, Amortized Cost Basis	$ 144,886	$ 138,173
Available-For-Sale Marketable Securities, Gross Unrealized Gains	2,360	794
Available-For-Sale Marketable Securities, Gross Unrealized Losses	(7)	(41)
Available-For-Sale Marketable Securities, Fair Value	147,239	138,926
Corporate Debt Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-For-Sale Marketable Securities, Amortized Cost Basis	46,652	36,998
Available-For-Sale Marketable Securities, Gross Unrealized Gains	970	29
Available-For-Sale Marketable Securities, Gross Unrealized Losses	(4)	(19)
Available-For-Sale Marketable Securities, Fair Value	47,618	37,008
Government Bonds [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-For-Sale Marketable Securities, Amortized Cost Basis	44,594	45,741
Available-For-Sale Marketable Securities, Gross Unrealized Gains	1,172	763
Available-For-Sale Marketable Securities, Fair Value	45,766	46,504
Mortgage-Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-For-Sale Marketable Securities, Amortized Cost Basis	4,842	2,089
Available-For-Sale Marketable Securities, Gross Unrealized Gains	75	2
Available-For-Sale Marketable Securities, Gross Unrealized Losses		(15)
Available-For-Sale Marketable Securities, Fair Value	4,917	2,076
Asset-Backed Securities and Other [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-For-Sale Marketable Securities, Amortized Cost Basis	48,798	53,345
Available-For-Sale Marketable Securities, Gross Unrealized Gains	143
Available-For-Sale Marketable Securities, Gross Unrealized Losses	(3)	(7)
Available-For-Sale Marketable Securities, Fair Value	$ 48,938	$ 53,338

Marketable Debt Securities - Additional Information (Detail) - USD ($) $ in Millions	12 Months Ended
	Aug. 29, 2020	Aug. 31, 2019
Marketable Debt Securities
Available for sale securities debt maturity period range	less than one year to approximately three years
Marketable securities transferred	$ 30.1	$ 89.2

Accumulated Other Comprehensive Loss - Changes in Accumulated Other Comprehensive Loss (Detail) - USD ($) $ in Thousands	12 Months Ended
	Aug. 29, 2020	Aug. 31, 2019
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance	$ (1,713,851)	$ (1,520,355)
Balance	(877,977)	(1,713,851)
Foreign Currency [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance	(265,598)	(228,899)
Other Comprehensive (Loss) income before reclassifications	(66,723)	(36,699)
Balance	(332,321)	(265,598)
Net Unrealized Gain (Loss) on Securities [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance	591	(873)
Other Comprehensive (Loss) income before reclassifications	1,117	1,498
Amounts reclassified from Accumulated Other Comprehensive Loss	137	(34)
Balance	1,845	591
Derivatives [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance	(4,315)	(6,033)
Other Comprehensive (Loss) income before reclassifications	(28,197)
Amounts reclassified from Accumulated Other Comprehensive Loss	8,736	1,718
Balance	(23,776)	(4,315)
Accumulated Other Comprehensive Loss [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance	(269,322)	(235,805)
Other Comprehensive (Loss) income before reclassifications	(93,803)	(35,201)
Amounts reclassified from Accumulated Other Comprehensive Loss	8,873	1,684
Balance	$ (354,252)	$ (269,322)

Accumulated Other Comprehensive Loss - Changes in Accumulated Other Comprehensive Loss (Parenthetical) (Detail) - USD ($) $ in Thousands	12 Months Ended
	Aug. 29, 2020	Aug. 31, 2019
Derivatives [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Net derivative activities, taxes	$ (6,164)	$ 530
Reclassified from Accumulated Other Comprehensive Income [Member] \| Net Unrealized Gain (Loss) on Securities [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Unrealized gains (losses) on marketable securities, taxes	$ 38	$ (9)

Derivative Financial Instruments - Additional Information (Detail) - USD ($) $ in Millions	12 Months Ended
	Aug. 29, 2020	Aug. 31, 2019	Aug. 28, 2021
Derivative losses recorded in Accumulated other comprehensive loss	$ 31.2
Net derivative losses amortized into Interest expense	$ 2.6	$ 2.2
Scenario Forecast
Net derivative loss expected to be reclassified over next 12 months			$ 3.7

Financing - Schedule of Debt (Detail) - USD ($) $ in Thousands	Aug. 29, 2020	Aug. 14, 2020	Mar. 30, 2020	Aug. 31, 2019	Apr. 18, 2019
Debt Instrument [Line Items]
Commercial paper				$ 1,030,000
Total debt before discounts and debt issuance costs	$ 5,550,000			5,230,000
Less: Discounts and debt issuance costs	36,629			23,656
Long-term debt	5,513,371			5,206,344
4.000% Senior Notes due November 2020, effective interest rate of 4.43% [Member]
Debt Instrument [Line Items]
Senior notes	0			500,000
2.500% Senior Notes due April 2021, effective interest rate of 2.62% [Member]
Debt Instrument [Line Items]
Senior notes	250,000			250,000
3.700% Senior Notes due April 2022, effective interest rate of 3.85% [Member]
Debt Instrument [Line Items]
Senior notes	500,000			500,000
2.875% Senior Notes due January 2023, effective interest rate of 3.21% [Member]
Debt Instrument [Line Items]
Senior notes	300,000			300,000
3.125% Senior Notes due July 2023, effective interest rate of 3.26% [Member]
Debt Instrument [Line Items]
Senior notes	500,000			500,000
3.125% Senior Notes due April 2024, effective interest rate 3.32%
Debt Instrument [Line Items]
Senior notes	300,000			300,000	$ 300,000
3.250% Senior Notes due April 2025, effective interest rate 3.36% [Member]
Debt Instrument [Line Items]
Senior notes	400,000			400,000
3.625% Senior Notes due April 2025, effective interest rate 3.78%
Debt Instrument [Line Items]
Senior notes	500,000		$ 500,000	0
3.125% Senior Notes due April 2026, effective interest rate of 3.28% [Member]
Debt Instrument [Line Items]
Senior notes	400,000			400,000
3.750% Senior Notes due June 2027, effective interest rate of 3.83% [Member]
Debt Instrument [Line Items]
Senior notes	600,000			600,000
3.750% Senior Notes due April 2029, effective interest rate of 3.86%
Debt Instrument [Line Items]
Senior notes	450,000			450,000	$ 450,000
4.000% Senior Notes due April 2030, effective interest rate 4.09%
Debt Instrument [Line Items]
Senior notes	750,000		$ 750,000	0
1.650% Senior Notes due January 2031, effective interest rate of 2.19%
Debt Instrument [Line Items]
Senior notes	$ 600,000	$ 600,000		$ 0

Financing - Schedule of Debt (Parenthetical) (Detail)	12 Months Ended
Financing - Schedule of Debt (Parenthetical) (Detail)	Aug. 29, 2020	Aug. 31, 2019	Aug. 14, 2020	Mar. 30, 2020
Commercial paper, weighted average interest rate of 2.28% and 2.29% at August 31, 2019 and August 25, 2018, respectively [Member]
Debt Instrument [Line Items]
Stated interest rate percentage		2.28%
4.000% Senior Notes due November 2020, effective interest rate of 4.43% [Member]
Debt Instrument [Line Items]
Stated interest rate percentage	4.00%	4.00%
Effective interest rate		4.43%
Debt instrument maturity, month and year		2020-11
2.500% Senior Notes due April 2021, effective interest rate of 2.62% [Member]
Debt Instrument [Line Items]
Stated interest rate percentage	2.50%	2.50%
Effective interest rate	2.62%	2.62%
Debt instrument maturity, month and year	2021-04	2021-04
3.700% Senior Notes due April 2022, effective interest rate of 3.85% [Member]
Debt Instrument [Line Items]
Stated interest rate percentage	3.70%	3.70%
Effective interest rate	3.85%	3.85%
Debt instrument maturity, month and year	2022-04	2022-04
2.875% Senior Notes due January 2023, effective interest rate of 3.21% [Member]
Debt Instrument [Line Items]
Stated interest rate percentage	2.875%	2.875%
Effective interest rate	3.21%	3.21%
Debt instrument maturity, month and year	2023-01	2023-01
3.125% Senior Notes due July 2023, effective interest rate of 3.26% [Member]
Debt Instrument [Line Items]
Stated interest rate percentage	3.125%	3.125%
Effective interest rate	3.26%	3.26%
Debt instrument maturity, month and year	2023-07	2023-07
3.125% Senior Notes due April 2024, effective interest rate 3.32%
Debt Instrument [Line Items]
Stated interest rate percentage	3.125%	3.125%
Effective interest rate	3.32%	3.32%
Debt instrument maturity, month and year	2024-04	2024-04
3.250% Senior Notes due April 2025, effective interest rate 3.36% [Member]
Debt Instrument [Line Items]
Stated interest rate percentage	3.25%	3.25%
Effective interest rate	3.36%	3.36%
Debt instrument maturity, month and year	2025-04	2025-04
3.625% Senior Notes due April 2025, effective interest rate 3.78%
Debt Instrument [Line Items]
Stated interest rate percentage	3.625%			3.625%
Effective interest rate	3.78%
Debt instrument maturity, month and year	2025-04
3.125% Senior Notes due April 2026, effective interest rate of 3.28% [Member]
Debt Instrument [Line Items]
Stated interest rate percentage	3.125%	3.125%
Effective interest rate	3.28%	3.28%
Debt instrument maturity, month and year	2026-04	2026-04
3.750% Senior Notes due June 2027, effective interest rate of 3.83% [Member]
Debt Instrument [Line Items]
Stated interest rate percentage	3.75%	3.75%
Effective interest rate	3.83%	3.83%
Debt instrument maturity, month and year	2027-06	2027-06
3.750% Senior Notes due April 2029, effective interest rate of 3.86%
Debt Instrument [Line Items]
Stated interest rate percentage	3.75%	3.75%
Effective interest rate	3.86%	3.86%
Debt instrument maturity, month and year	2029-04	2029-04
4.000% Senior Notes due April 2030, effective interest rate 4.09%
Debt Instrument [Line Items]
Stated interest rate percentage	4.00%			4.00%
Effective interest rate	4.09%
Debt instrument maturity, month and year	2030-04
1.650% Senior Notes due January 2031, effective interest rate of 2.19%
Debt Instrument [Line Items]
Stated interest rate percentage	1.65%		1.65%
Effective interest rate	2.19%
Debt instrument maturity, month and year	2031-01

Financing - Additional Information (Detail)			12 Months Ended
Financing - Additional Information (Detail)	Nov. 18, 2017 USD ($)	Nov. 17, 2017 USD ($)	Aug. 29, 2020 USD ($)	Aug. 31, 2019 USD ($)	Aug. 14, 2020 USD ($)	Apr. 03, 2020 USD ($)	Mar. 30, 2020 USD ($)	Apr. 18, 2019 USD ($)
Debt Instrument [Line Items]
Amount available under credit facility			$ 2,750,000,000
Maximum amount available under credit facility						$ 750,000,000
Credit Agreement description			less than one year
Minimum debt covenant interest coverage ratio to be maintained quarterly			2.5
Debt covenant interest coverage ratio			6.1
Remaining borrowing capacity under revolving credit facility			$ 2,748,000,000
Fair value of the Company's debt			6,081,000,000.000	$ 5,419,000,000
Excess (shortfall) of fair value of debt over (from) carrying value			567,500,000	212,700,000
Other Letters Of Credit [Member]
Debt Instrument [Line Items]
Borrowings, outstanding			$ 220,300,000
Third Amended and Restated Credit Agreement [Member]
Debt Instrument [Line Items]
Amount available under credit facility		$ 1,600,000,000
Maximum amount available under credit facility		$ 2,000,000,000.0
Credit facility expiration date		Nov. 18, 2021
Master Extension Agreement [Member]
Debt Instrument [Line Items]
Amount available under credit facility	$ 2,000,000,000.0
Maximum amount available under credit facility	$ 2,400,000,000
Credit facility expiration date	Nov. 18, 2022
Extended expiration of credit facility	1 year
Credit Agreement description			Under the Revolving Credit Agreement, the Company may borrow funds consisting of Eurodollar loans, base rate loans or a combination of both. Interest accrues on Eurodollar loans at a defined Eurodollar rate, defined as LIBOR plus the applicable percentage, as defined in the Revolving Credit Agreement, depending upon the Company’s senior, unsecured, (non-credit enhanced) long-term debt ratings. Interest accrues on base rate loans as defined in the Revolving Credit Agreement.
Letters of credit, outstanding			$ 1,700,000
Letter of Credit
Debt Instrument [Line Items]
Maximum amount available under credit facility			25,000,000
Borrowings, outstanding			25,000,000.0
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Borrowings, outstanding			0
1.650% Senior Notes due January 2031, effective interest rate of 2.19%
Debt Instrument [Line Items]
Long-term debt			$ 600,000,000	0	$ 600,000,000
Stated interest rate percentage			1.65%		1.65%
2.500% Senior Notes due April 2021, effective interest rate of 2.62% [Member]
Debt Instrument [Line Items]
Long-term debt			$ 250,000,000	$ 250,000,000
Stated interest rate percentage			2.50%	2.50%
4.000% Senior Notes due November 2020, effective interest rate of 4.43% [Member]
Debt Instrument [Line Items]
Long-term debt			$ 0	$ 500,000,000
Stated interest rate percentage			4.00%	4.00%
Repayment of debt			$ 500,000,000
3.625% Senior Notes due April 2025, effective interest rate 3.78%
Debt Instrument [Line Items]
Long-term debt			$ 500,000,000	$ 0			$ 500,000,000
Stated interest rate percentage			3.625%				3.625%
4.000% Senior Notes due April 2030, effective interest rate 4.09%
Debt Instrument [Line Items]
Long-term debt			$ 750,000,000	0			$ 750,000,000
Stated interest rate percentage			4.00%				4.00%
3.125% Senior Notes due April 2024, effective interest rate 3.32%
Debt Instrument [Line Items]
Long-term debt			$ 300,000,000	$ 300,000,000				$ 300,000,000
Stated interest rate percentage			3.125%	3.125%
3.750% Senior Notes due April 2029, effective interest rate of 3.86%
Debt Instrument [Line Items]
Long-term debt			$ 450,000,000	$ 450,000,000				$ 450,000,000
Stated interest rate percentage			3.75%	3.75%
1.625% Senior Notes due April 2019, effective interest rate of 1.77% [Member]
Debt Instrument [Line Items]
Stated interest rate percentage			1.625%
Repayment of debt				$ 250,000,000

Financing - Scheduled Maturities of Debt (Detail) - USD ($) $ in Thousands	Aug. 29, 2020	Aug. 31, 2019
Financing
2021	$ 250,000
2022	500,000
2023	800,000
2024	300,000
2025	900,000
Thereafter	2,800,000
Subtotal	5,550,000
Discount and debt issuance costs	36,629	$ 23,656
Long-term debt	$ 5,513,371	$ 5,206,344

Interest Expense - Net Interest Expense (Detail) - USD ($) $ in Thousands	12 Months Ended
	Aug. 29, 2020	Aug. 31, 2019	Aug. 25, 2018
Other Income and Expenses [Abstract]
Interest expense	$ 208,021	$ 193,671	$ 181,668
Interest income	(5,689)	(7,396)	(5,636)
Capitalized interest	(1,167)	(1,471)	(1,505)
Net Interest Expense	$ 201,165	$ 184,804	$ 174,527

Stock Repurchase Program - Additional Information (Detail) - USD ($) shares in Thousands, $ in Thousands		12 Months Ended
	Oct. 07, 2019	Aug. 29, 2020	Aug. 31, 2019	Aug. 25, 2018	Aug. 30, 2020
Stock Repurchase Program 1998
Equity, Class of Treasury Stock [Line Items]
Increase in authorization of stock repurchase, value	$ 1,250,000
Stock repurchase authorized		$ 23,150,000
Remaining value authorized for share repurchases		795,900
Retained Deficit [Member]
Equity, Class of Treasury Stock [Line Items]
Retirement of treasury shares		1,878,595	$ 1,706,971	$ 918,462
Additional Paid-In Capital [Member]
Equity, Class of Treasury Stock [Line Items]
Retirement of treasury shares		$ 99,686	$ 125,442	$ 60,500
Common Stock [Member]
Equity, Class of Treasury Stock [Line Items]
Retirement of treasury shares, shares		1,912	2,563	1,512
Retirement of treasury shares		$ 19	$ 26	$ 15
Subsequent Events [Member]
Equity, Class of Treasury Stock [Line Items]
Remaining value authorized for share repurchases					$ 481,500

Stock Repurchase Program - Share Repurchase Activity (Detail) - USD ($) $ in Thousands		12 Months Ended
	Aug. 30, 2020	Aug. 29, 2020	Aug. 31, 2019	Aug. 25, 2018
Equity, Class of Treasury Stock [Line Items]
Amount		$ 930,903	$ 2,004,896	$ 1,592,013
Shares		826,000	2,182,000	2,398,000
Subsequent Events [Member]
Equity, Class of Treasury Stock [Line Items]
Amount	$ 314,400
Shares	269,795
Remaining value authorized for share repurchases	$ 481,500

Pension and Savings Plans - Additional Information (Detail) - USD ($) $ in Thousands	4 Months Ended	12 Months Ended
	Aug. 25, 2018	Aug. 29, 2020	Aug. 31, 2019	Aug. 25, 2018
Pension and Savings Plans
Consecutive years of highest compensation used to determine defined benefit pension plan benefits		5 years
Annual contributions by the Company to pension plans	$ 11,400
Pension termination charges (refund)	$ 130,300	$ 0	$ (6,796)	$ 130,263
Periodic pension benefit expense		$ 0
Percentage of company matching retirement savings plan contributions that vest immediately		100.00%
Percentage of savings option up to qualified earnings		25.00%
Annual contribution by employer towards 401(k) Plan		$ 29,800	$ 25,800	$ 23,100

Pension and Savings Plans - Net Periodic Benefit Expense (Detail) $ in Thousands	12 Months Ended
	Aug. 25, 2018 USD ($)
Pension and Savings Plans
Interest cost	$ 10,356
Expected return on plan assets	(18,997)
Recognized net actuarial losses	10,736
Settlement loss	130,263
Net periodic benefit expense	$ 132,358

Sale of Assets - Additional Information (Detail) $ in Thousands	12 Months Ended
	Aug. 25, 2018 USD ($)
Business Acquisition [Line Items]
Asset impairment charges	$ 193,162
IMC Businesses \| Auto Parts Locations [Member]
Business Acquisition [Line Items]
Asset impairment charges	93,600
Auto Anything \| Other [Member]
Business Acquisition [Line Items]
Asset impairment charges	$ 99,600

Goodwill and Intangibles - Additional Information (Detail) - USD ($) $ in Thousands	12 Months Ended
	Aug. 29, 2020	Aug. 31, 2019
Goodwill [Line Items]
Goodwill	$ 302,645	$ 302,645
Amortization expense of intangible assets	4,200	4,200
2021	1,400,000
Thereafter	0
Auto Parts Locations [Member]
Goodwill [Line Items]
Goodwill	$ 302,600	$ 302,600

Goodwill and Intangibles - Schedule of Carrying Amounts of Intangible Assets (Detail) - USD ($) $ in Thousands	12 Months Ended
	Aug. 29, 2020	Aug. 31, 2019
Finite Lived And Indefinite Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 29,376	$ 30,246
Accumulated Amortization	(27,933)	(24,630)
Net Carrying Amount	$ 1,443	5,616
Minimum [Member]
Finite Lived And Indefinite Lived Intangible Assets [Line Items]
Estimated Useful Life	3 years
Maximum [Member]
Finite Lived And Indefinite Lived Intangible Assets [Line Items]
Estimated Useful Life	10 years
Technology [Member]
Finite Lived And Indefinite Lived Intangible Assets [Line Items]
Gross Carrying Amount		870
Accumulated Amortization		$ (870)
Technology [Member] \| Minimum [Member]
Finite Lived And Indefinite Lived Intangible Assets [Line Items]
Estimated Useful Life		3 years
Technology [Member] \| Maximum [Member]
Finite Lived And Indefinite Lived Intangible Assets [Line Items]
Estimated Useful Life		5 years
Customer Relationships [Member]
Finite Lived And Indefinite Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 29,376	$ 29,376
Accumulated Amortization	(27,933)	(23,760)
Net Carrying Amount	$ 1,443	$ 5,616
Customer Relationships [Member] \| Minimum [Member]
Finite Lived And Indefinite Lived Intangible Assets [Line Items]
Estimated Useful Life	3 years	3 years
Customer Relationships [Member] \| Maximum [Member]
Finite Lived And Indefinite Lived Intangible Assets [Line Items]
Estimated Useful Life	10 years	10 years

Leases - Additional Information (Detail) $ in Millions	12 Months Ended
Leases - Additional Information (Detail) $ in Millions	Aug. 29, 2020 USD ($)
Renewal Options And Lease term	The leases have varying terms and expire at various dates through 2040. Retail leases typically have initial terms of between one and 20 years, with one to six optional renewal periods of one to five years each.
Lease Accumulated Amortization	$ 107.3
Cash paid for amounts included in the measurement of operating lease liabilities	352.9
Additional leases not yet commenced, undiscounted future payments	$ 16.7
Finance lease term	20 years
Minimum [Member]
Operating lease commencement date	2021
Finance lease term	1 year
Maximum [Member]
Operating lease commencement date	2022
Finance lease term	5 years

Leases - Summary of Lease-related assets and liabilities recorded on the Condensed Consolidated Balance Sheet (Detail) - USD ($) $ in Thousands	Aug. 29, 2020	Aug. 31, 2019
Assets
Operating	$ 2,581,677
Total lease assets	2,908,683
Current
Operating	223,846
Finance	67,498	$ 56,246
Noncurrent
Operating	2,501,560
Total lease liabilities	2,948,759
Operating lease right-of-use assets
Assets
Operating	2,581,677
Property And Equipment
Assets
Finance	327,006
Current portion of operating lease liablities
Current
Operating	223,680
Accrued expenses and other
Current
Finance	67,498
Operating lease liabilities, less current portion
Noncurrent
Operating	2,501,726
Other long-term liabilities
Noncurrent
Finance	$ 155,855

Leases - Lease Cost (Detail) $ in Thousands	12 Months Ended
Leases - Lease Cost (Detail) $ in Thousands	Aug. 29, 2020 USD ($)
Amortization of lease assets	$ 107,300
Total lease cost	415,505
Depreciation and amortization
Amortization of lease assets	55,920
Interest expense, net
Interest on lease liabilities	4,355
Selling, general and administrative expenses
Operating lease cost	$ 355,230

Leases - Summary of future maturities of the Company's lease liabilities (Details) $ in Thousands	Aug. 29, 2020 USD ($)
Leases
2021	$ 69,013
2022	57,188
2023	45,377
2024	24,590
2025	10,447
Thereafter	44,765
Total Lease Payments	251,380
Less: Interest	(28,027)
Present value of lease liabilities	223,353
2021	302,890
2022	324,860
2023	307,859
2024	284,296
2025	259,099
Thereafter	2,055,365
Total Lease Payments	3,534,369
Less: Interest	(808,963)
Present value of lease liabilities	2,725,406
2021	371,903
2022	382,048
2023	353,236
2024	308,886
2025	269,546
Thereafter	2,100,130
Total Lease Payments	3,785,749
Less: Interest	(836,990)
Present value of lease liabilities	$ 2,948,759

Leases - Information on lease term and discount rate (Detail)	12 Months Ended
	Aug. 29, 2020
Weighted-average remaining lease term (years)
Finance leases - real estate	27 years
Finance leases - vehicles	3 years
Operating leases	15 years
Weighted-average discount rate:
Finance leases - real estate	3.49%
Finance leases - vehicles	2.29%
Operating leases	3.46%

Commitments and Contingencies - Additional Information (Detail) $ in Millions	12 Months Ended
	Aug. 29, 2020 USD ($)
Loss Contingencies [Line Items]
Commitment for construction	$ 50.9
Surety bonds	$ 56.7
The period of time before expiration of standby letters of credit and surety bonds	less than one year
Standby Letters of Credit
Loss Contingencies [Line Items]
Borrowings, outstanding	$ 246.9

- Definition

The carrying value as of the balance sheet date of the current and noncurrent portions of long-term obligations drawn from a line of credit, which is a bank's commitment to make loans up to a specific amount. Examples of items that might be included in the application of this element may consist of letters of credit, standby letters of credit, and revolving credit arrangements, under which borrowings can be made up to a maximum amount as of any point in time conditional on satisfaction of specified terms before, as of and after the date of drawdowns on the line. Includes short-term obligations that would normally be classified as current liabilities but for which (a) postbalance sheet date issuance of a long term obligation to refinance the short term obligation on a long term basis, or (b) the enterprise has entered into a financing agreement that clearly permits the enterprise to refinance the short-term obligation on a long term basis and the following conditions are met (1) the agreement does not expire within 1 year and is not cancelable by the lender except for violation of an objectively determinable provision, (2) no violation exists at the BS date, and (3) the lender has entered into the financing agreement is expected to be financially capable of honoring the agreement.

+ References + Details

Revenue Recognition - Additional Information (Detail) - USD ($) $ in Thousands	Aug. 26, 2018	Aug. 25, 2018
Revenue From Contract With Customer [Line Items]
An increase of retained deficit		$ 6,773
Accounting Standards Update 2014-09 [Member]
Revenue From Contract With Customer [Line Items]
An increase of retained deficit	$ 6,800

Segment Reporting - Additional Information (Detail)	12 Months Ended
Segment Reporting - Additional Information (Detail)	Aug. 29, 2020 USD ($)
Segment Reporting
Number of reportable segments	1
Number of automotive parts and accessories locations in the United States, Mexico, and Brazil	6,549
Number of operating segments	3

Segment Reporting - Segment Results (Detail) - USD ($) $ in Thousands	3 Months Ended						4 Months Ended		12 Months Ended
	May 09, 2020	Feb. 15, 2020	Nov. 23, 2019	May 04, 2019	Feb. 09, 2019	Nov. 17, 2018	Aug. 29, 2020	Aug. 31, 2019	Aug. 29, 2020	Aug. 31, 2019	Aug. 25, 2018
Segment Reporting Information [Line Items]
Net sales	$ 2,779,299	$ 2,513,663	$ 2,793,038	$ 2,783,006	$ 2,450,568	$ 2,641,733	$ 4,545,968	$ 3,988,435	$ 12,631,967	$ 11,863,743	$ 11,221,077
Gross profit	1,490,648	1,366,063	1,501,068	1,492,020	1,325,107	1,417,474	2,412,975	2,130,400	6,770,753	6,365,001	5,973,746
Operating, selling, general and administrative expenses									(4,353,074)	(4,148,864)	(4,162,890)
Interest expense, net									(201,165)	(184,804)	(174,527)
Income before income taxes	$ 444,223	$ 363,603	$ 456,280	$ 504,284	$ 358,658	$ 448,812	952,407	719,578	2,216,514	2,031,333	1,636,329
Assets							14,423,872	9,895,913	14,423,872	9,895,913	9,346,980
Capital Expenditures									457,736	496,050	521,788
Auto Parts Locations [Member]
Segment Reporting Information [Line Items]
Net sales									12,405,929	11,645,235	10,951,498
Gross profit									6,617,508	6,209,229	5,805,561
Assets							14,303,427	9,781,926	14,303,427	9,781,926	9,231,021
Capital Expenditures									432,067	479,120	499,762
Auto Parts Locations [Member] \| Failure
Segment Reporting Information [Line Items]
Net sales									6,088,859	5,728,294	5,338,890
Auto Parts Locations [Member] \| Maintenance Items
Segment Reporting Information [Line Items]
Net sales									4,284,913	4,140,987	3,914,546
Auto Parts Locations [Member] \| Discretionary
Segment Reporting Information [Line Items]
Net sales									2,032,157	1,775,954	1,698,062
Other [Member]
Segment Reporting Information [Line Items]
Net sales									226,038	218,508	269,579
Gross profit									153,245	155,772	168,185
Assets							$ 120,445	$ 113,987	120,445	113,987	115,959
Capital Expenditures									$ 25,669	$ 16,930	$ 22,026

Segment Reporting - Segment Results (Parenthetical) (Detail) - USD ($) $ in Thousands	4 Months Ended	12 Months Ended
	Aug. 25, 2018	Aug. 29, 2020	Aug. 31, 2019	Aug. 25, 2018
Segment Reporting
Termination settlement costs	$ 130,300	$ 0	$ (6,796)	$ 130,263
Asset impairment charges				$ 193,162

Quarterly Summary - Quarterly Summary (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended						4 Months Ended		12 Months Ended
	May 09, 2020	Feb. 15, 2020	Nov. 23, 2019	May 04, 2019	Feb. 09, 2019	Nov. 17, 2018	Aug. 29, 2020	Aug. 31, 2019	Aug. 29, 2020	Aug. 31, 2019	Aug. 25, 2018
Quarterly Summary
Net sales	$ 2,779,299	$ 2,513,663	$ 2,793,038	$ 2,783,006	$ 2,450,568	$ 2,641,733	$ 4,545,968	$ 3,988,435	$ 12,631,967	$ 11,863,743	$ 11,221,077
Gross profit	1,490,648	1,366,063	1,501,068	1,492,020	1,325,107	1,417,474	2,412,975	2,130,400	6,770,753	6,365,001	5,973,746
Operating profit	491,673	407,938	500,023	547,523	400,020	487,818	1,018,045	780,775	2,417,679	2,216,137	1,810,856
Income before income taxes	444,223	363,603	456,280	504,284	358,658	448,812	952,407	719,578	2,216,514	2,031,333	1,636,329
Net income	$ 342,896	$ 299,282	$ 350,338	$ 405,949	$ 294,638	$ 351,406	$ 740,457	$ 565,228	$ 1,732,972	$ 1,617,221	$ 1,337,536
Basic earnings per share	$ 14.66	$ 12.70	$ 14.67	$ 16.35	$ 11.71	$ 13.71	$ 31.67	$ 23.15	$ 73.62	$ 64.78	$ 49.59
Diluted earnings per share	$ 14.39	$ 12.39	$ 14.30	$ 15.99	$ 11.49	$ 13.47	$ 30.93	$ 22.59	$ 71.93	$ 63.43	$ 48.77

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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