SEC Filing | AutoZone, Inc

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REGISTRATION STATEMENT NO. 333-04087
RULE 424(b)(4)

22,000,000 SHARES

[LOGO]

AUTOZONE, INC.
COMMON STOCK
(PAR VALUE $.01 PER SHARE)
-------------------

Of the 22,000,000 shares of Common Stock offered, 17,600,000 shares are
being offered hereby in the United States and 4,400,000 shares are being offered
in a concurrent international offering outside the United States. The initial
public offering price and the aggregate underwriting discount per share will be
identical for both offerings. See "Underwriting".

All of the shares of Common Stock offered are being sold by Selling
Stockholders of the Company. The Selling Stockholders consist of certain KKR
Partnerships that are limited partnerships affiliated with Kohlberg Kravis
Roberts & Co., L.P. and J.R. Hyde, III, the Chairman of the Board and Chief
Executive Officer of the Company. After the offerings, the KKR Partnerships and
Mr. Hyde will own 10.6% and 8.3%, respectively, of the outstanding shares of
Common Stock (assuming exercise in full of the over-allotment options). See "The
Company" and "Principal and Selling Stockholders". The Company will not receive
any of the proceeds from the sale of the shares offered hereby.

The last reported sales price of the Common Stock, which is listed under the
symbol "AZO", on the New York Stock Exchange on June 6, 1996 was $35.00 per
share. See "Price Range of Common Stock".
-------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-------------------

INITIAL PUBLIC UNDERWRITING PROCEEDS TO SELLING
OFFERING PRICE DISCOUNT(1) STOCKHOLDERS(2)
--------------------- ------------------------ -------------------

Per Share................................. $35.00 $1.05 $33.95
Total(3).................................. $770,000,000 $23,100,000 $746,900,000

- ------------
(1) The Company and the Selling Stockholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933. See "Underwriting".

(2) Before deducting estimated expenses of $600,000 payable by the Selling
Stockholders.

(3) The KKR Partnerships have granted the U.S. Underwriters an option for 30
days to purchase up to an additional 2,640,000 shares of Common Stock at the
initial public offering price per share, less the underwriting discount,
solely to cover over-allotments. Additionally, the KKR Partnerships have
granted the International Underwriters an option for 30 days to purchase up
to an additional 660,000 shares of Common Stock at the initial public
offering price per share, less the underwriting discount, solely to cover
over-allotments. If such options are exercised in full, the total initial
public offering price, underwriting discount and proceeds to Selling
Stockholders will be $885,500,000, $26,565,000 and $858,935,000,
respectively. See "Underwriting".
-------------------

The shares offered hereby are offered severally by the U.S. Underwriters, as
specified herein, subject to receipt and acceptance by them and subject to their
right to reject any order in whole or in part. It is expected that certificates
for the shares will be ready for delivery in New York, New York, on or about
June 12, 1996 against payment therefor in immediately available funds.

GOLDMAN, SACHS & CO. LEHMAN BROTHERS

DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
FURMAN SELZ
MERRILL LYNCH & CO.
SMITH BARNEY INC.
--------------

THE DATE OF THIS PROSPECTUS IS JUNE 6, 1996.

[LOGO]

The following map identifies the locations of the Company's 1,298 stores in 27
states at May 4, 1996:
[For EDGAR filing:Map is shown illustrating the locations of the Company's 1,298
stores in 27 states at May 4, 1996, as follows:

Alabama.......... 69
Arizona.......... 51
Arkansas......... 35
Colorado......... 21
Florida.......... 49
Georgia.......... 83
Illinois......... 37
Indiana.......... 60
Kansas........... 6
Kentucky......... 35
Louisiana........ 65
Michigan......... 9
Mississippi...... 54
Missouri......... 50
New Mexico....... 22
North Carolina... 69
Ohio............. 120
Oklahoma......... 51
Pennsylvania..... 1
South Carolina... 40
Tennessee........ 96
Texas............ 228
Utah............. 15
Virginia......... 19
West Virginia.... 11
Wisconsin........ 1
Wyoming.......... 1
---------
Total........ 1,298
---------
---------

In addition, the map identifies the locations of the Company's 6 distribution
centers in Georgia, Tennessee, Illinois, Louisiana, Texas, Arizona and Ohio.]

oDistribution Centers

-----------------

IN CONNECTION WITH THE OFFERINGS, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK
OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN THE
OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.

AVAILABLE INFORMATION

AutoZone has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement (of which this Prospectus is a part)
under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the shares of Common Stock offered hereby. This Prospectus does not
contain all of the information set forth in the Registration Statement, certain
portions of which have been omitted as permitted by the rules and regulations of
the Commission. Statements contained in this Prospectus as to the contents of
any contract or other document are not necessarily complete, and in each
instance reference is made to the copy of such contract or other document filed
as an exhibit to the Registration Statement, each such statement being qualified
in all respects by such reference and the exhibits and schedules thereto. For
further information regarding AutoZone and the shares of Common Stock offered
hereby, reference is hereby made to the Registration Statement and the exhibits
and schedules thereto which may be obtained from the Public Reference Section of
the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates.

AutoZone is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Commission. The Registration Statement, the exhibits and schedules forming a
part thereof and the reports, proxy statement and other information filed by
AutoZone with the Commission in accordance with the Exchange Act can be
inspected and copied at the Public Reference Section of the Commission, 450
Fifth Street, N.W., Washington, D.C. 20549, and at the following regional
offices of the Commission: Seven World Trade Center, 13th Floor, New York, New
York 10048 and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Copies of such material can be obtained from the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.
In addition, AutoZone's Common Stock is listed on the New York Stock Exchange
and similar information concerning AutoZone can be inspected and copied at the
New York Stock Exchange, 20 Broad Street, New York, New York 10005.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The documents listed below have been filed by the Company with the
Commission and are incorporated by reference herein:

a. Annual Report on Form 10-K for the fiscal year ended August 26, 1995
(the "1995 10-K").

b. Proxy Statement dated November 15, 1995 (the "1995 Proxy
Statement").

c. Quarterly Reports on Form 10-Q for the quarters ended November 18,
1995, February 10, 1996 and May 4, 1996.

d. Current Reports on Form 8-K dated September 21, 1995 and March 5,
1996.

All documents filed by the Company pursuant to Section 13(a), 13(c), 14 and
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the Common Stock shall be deemed to be
incorporated by reference herein and to be part hereof from the date of filing
such documents.

Any statement contained herein or in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein,
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein, modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.

Copies of all documents which are incorporated by reference (not including
the exhibits to such documents, unless such exhibits are specifically
incorporated by reference in such documents) will be provided without charge to
each person, including any beneficial owner, to whom this Prospectus is
delivered, upon written or oral request. Copies of this Prospectus, as amended
or supplemented from time to time, and any other documents (or parts of
documents) that constitute part of this Prospectus under Section 10(a) of the
Securities Act will also be provided without charge to each such person upon
written or oral request. Requests should be directed to AutoZone, Inc.,
Attention: Shareholder Relations, 123 South Front Street, Memphis, Tennessee
38103, telephone (901) 495-7185.

THE COMPANY

AutoZone, Inc. is a leading specialty retailer of automotive parts and
accessories, focusing primarily on "Do-It-Yourself" ("D-I-Y") customers. The
Company began operations in 1979 and, at May 4, 1996, operated 1,298 stores in
27 states, primarily located in the Sunbelt and Midwest regions of the United
States. Each AutoZone store carries an extensive product line, including new and
remanufactured automotive hard parts, such as alternators, starters, water
pumps, brake shoes and pads, carburetors, clutches and engines; maintenance
items, such as oil, antifreeze, transmission, brake and power steering fluids,
engine additives, protectants and waxes; and accessories, such as car stereos
and floor mats. The Company carries parts for domestic and foreign cars, vans
and light trucks. The Company is implementing a commercial sales program which
provides prompt delivery of parts and other products to local repair garages,
dealers and service stations. This program was offered in 519 of the Company's
stores at May 4, 1996. AutoZone does not perform automotive repairs or
installations.

AutoZone has experienced significant growth due to the opening of new stores
and increases in comparable store sales. Net sales have increased from $818.0
million in the Company's 1991 fiscal year to $1,808.1 million in the 1995 fiscal
year, and net income has increased from $44.2 million to $138.8 million during
such period. In addition, the number of stores has increased from 538 at the
beginning of the 1991 fiscal year to 1,298 at May 4, 1996, representing an
increase in total store square footage from 3.0 million to 8.6 million square
feet during such period. A major element of the Company's business strategy is
continued store expansion, including the opening of stores in new market areas.
AutoZone opened 210 net new stores during its 1995 fiscal year and intends to
open 257 net new stores in its 1996 fiscal year (including 155 net new stores
opened through May 4, 1996) and a substantial number of additional stores in
succeeding fiscal years. See "Business--Store Development and Expansion
Strategy."

AutoZone is dedicated to a marketing and merchandising strategy to provide
customers with superior service, value and parts selection at conveniently
located, well-designed stores. The Company has implemented this strategy
primarily through knowledgeable and motivated store personnel trained to
emphasize prompt and courteous customer service, through an everyday low price
policy and by maintaining an extensive product line with an emphasis on
automotive hard parts. AutoZone's stores are generally situated in
high-visibility locations and provide a distinctive merchandise presentation in
an attractive store environment.

Approximately 26.1% of the Company's shares of Common Stock outstanding
prior to the offerings is held by three limited partnerships (the "KKR
Partnerships"), the general partner of each of which is KKR Associates, a New
York limited partnership and an affiliate of Kohlberg Kravis Roberts & Co., L.P.
("KKR"), and approximately 9.6% is held by Mr. Hyde, the Chairman of the Board
and Chief Executive Officer of the Company (together with the KKR Partnerships,
the "Selling Stockholders"). After giving effect to the sale of shares of the
Company's Common Stock by the Selling Stockholders in the offerings and assuming
exercise in full of the over-allotment options, approximately 10.6% of the
Common Stock will be held by the KKR Partnerships and approximately 8.3% by Mr.
Hyde. The limited partnership agreements pursuant to which the KKR Partnerships
were organized are, by their terms, to dissolve on December 31, 1996 unless
amended by all of the limited partners to extend the term beyond such date.
There can be no assurance that KKR Associates will seek such amendments, or, if
sought, that they will be approved by the limited partners. In the event of the
winding up and dissolution of the KKR Partnerships, KKR Associates will have
sole discretion regarding the disposition of such Common Stock, including public
or private sales of such Common Stock, the distribution of such Common Stock to
the limited partners of the KKR Partnerships, or a combination of the foregoing.
In addition to the shares held by the Selling Stockholders, KKR Associates owns
2.7% of the Common Stock. See "Principal and Selling Stockholders."

The Company's executive offices are located at 123 South Front Street,
Memphis, Tennessee 38103, and its telephone number is (901) 495-6500.

References in this Prospectus to "AutoZone" or the "Company" include the
Company's direct and indirect wholly-owned subsidiaries, unless the context
otherwise requires. See "Business-- Introduction."

SELECTED FINANCIAL DATA

The following table sets forth selected financial and other operating
information of AutoZone. The selected financial data for the five fiscal years
during the period ended August 26, 1995 have been derived from the audited
financial statements of AutoZone, which in the case of the three most recent
fiscal years are incorporated by reference in the 1995 Form 10-K, which is
incorporated by reference herein. The selected financial data for the thirty-six
weeks ended May 6, 1995 and May 4, 1996 have been derived from its unaudited
financial statements and includes, in the opinion of the Company's management,
all adjustments necessary to present fairly the data for such periods. The
results for the thirty-six weeks ended May 4, 1996 are not necessarily
indicative of the results to be expected for the 53 weeks ending August 31, 1996
or for any future period. The data provided below should be read in conjunction
with the separate financial statements and notes thereto, incorporated by
reference herein.

THIRTY-SIX WEEKS ENDED
FISCAL YEAR ENDED AUGUST(1)
--------------------------------------------------------------- --------------------------
1991 1992 1993 1994 1995 MAY 6, MAY 4,
(53 WEEKS) (52 WEEKS) (52 WEEKS) (52 WEEKS) (52 WEEKS) 1995 1996
---------- ----------- ----------- ----------- ----------- ------------ ------------

(IN THOUSANDS, EXCEPT PER SHARE DATA AND SELECTED OPERATING DATA)
INCOME STATEMENT DATA:
Net sales........................ $817,962 $1,002,327 $1,216,793 $1,508,029 $1,808,131 $ 1,179,307 $ 1,413,042
Cost of sales, including
warehouse and delivery
expenses....................... 491,261 602,956 731,971 886,068 1,057,033 694,318 828,322
Operating, selling, general and
administrative expenses........ 247,355 295,701 344,060 431,219 523,440 347,266 425,467
---------- ----------- ----------- ----------- ----------- ------------ ------------
Operating profit................. 79,346 103,670 140,762 190,742 227,658 137,723 159,253
Interest income (expense)--net... (7,295) 818 2,473 2,244 623 623 (727)
---------- ----------- ----------- ----------- ----------- ------------ ------------
Income before income taxes....... 72,051 104,488 143,235 192,986 228,281 138,346 158,526
Income taxes..................... 27,900 41,200 56,300 76,600 89,500 54,462 58,800
---------- ----------- ----------- ----------- ----------- ------------ ------------
Net income....................... $ 44,151 $ 63,288 $ 86,935 $ 116,386 $ 138,781 $ 83,884 $ 99,726
---------- ----------- ----------- ----------- ----------- ------------ ------------
---------- ----------- ----------- ----------- ----------- ------------ ------------
Net income per share............. $ 0.33 $ 0.43 $ 0.59 $ 0.78 $ 0.93 $ 0.56 $ 0.66
---------- ----------- ----------- ----------- ----------- ------------ ------------
---------- ----------- ----------- ----------- ----------- ------------ ------------
Average shares outstanding,
including common stock
equivalents.................... 134,656 145,940 147,608 148,726 149,302 149,057 150,508
---------- ----------- ----------- ----------- ----------- ------------ ------------
---------- ----------- ----------- ----------- ----------- ------------ ------------
SELECTED OPERATING DATA:
Number of stores (at period
end)........................... 598 678 783 933 1,143 1,059 1,298
Total store square footage (at
period end) (000s)(2).......... 3,458 4,043 4,839 5,949 7,480 6,832 8,583
Percentage increase in square
footage(2)..................... 14% 17% 20% 23% 26% 15% 15%
Average net sales per store
(000s)(2)...................... $ 1,408 $ 1,570 $ 1,666 $ 1,758 $ 1,742 $ 1,184 $ 1,158
Average net sales per store
square foot(2)................. $ 246 $ 267 $ 274 $ 280 $ 269 $ 185 $ 176
Percentage increase in comparable
store net sales(3)............. 12% 15% 9% 9% 6% 6% 5%
BALANCE SHEET DATA (AT PERIOD
END):
Current assets................... $233,439 $ 279,350 $ 378,467 $ 424,402 $ 447,822 $ 426,096 $ 592,692
Current liabilities.............. 177,632 207,080 286,136 339,029 417,549 373,000 589,762
Working capital.................. 55,807 72,270 92,331 85,373 30,273 53,096 2,930
Total assets..................... 397,776 501,048 696,547 882,102 1,111,778 1,022,536 1,404,008
Total debt....................... 7,246 7,057 4,458 4,252 13,503 16,832 97,775
Shareholders' equity............. 204,628 278,120 396,613 528,377 684,710 622,480 794,875

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(1) The Company's fiscal year consists of 52 or 53 weeks ending on the last
Saturday in August.
(2) Total store square footage is based on the Company's standard store formats
including normal selling, office, stockroom and receiving space, but
excluding excess space not utilized in a store's operations. Average net
sales per store and average net sales per store square foot are based on the
average of beginning and ending number of stores and store square footage
and are not weighted to take into consideration the actual dates of store
openings or expansions. For fiscal 1991, average net sales per store and
average net sales per store square foot have been adjusted to exclude net
sales for the fifty-third week.
(3) Comparable store net sales data is calculated based on the change in net
sales of all stores opened as of the beginning of the preceding full fiscal
year. Increases for fiscal 1991 and fiscal 1992 have been adjusted to
exclude the effect of the fifty-third week in fiscal 1991.

PRICE RANGE OF COMMON STOCK

The Company's Common Stock is listed on the New York Stock Exchange under
the symbol AZO. The following table sets forth the high and low closing sale
prices for the Company's Common Stock for the calendar quarters indicated as
reported by the New York Stock Exchange Composite Tape. These sales prices have
been adjusted to reflect a two-for-one stock split during the second calendar
quarter of 1994.

HIGH LOW
------- -------

1994
- ----------------------------------------------------------------
First Quarter................................................... $30 3/4 $26 15/16
Second Quarter.................................................. 30 1/4 23 3/4
Third Quarter................................................... 25 5/8 22 1/4
Fourth Quarter.................................................. 27 21 3/4

1995
- ----------------------------------------------------------------
First Quarter................................................... 26 7/8 23 3/8
Second Quarter.................................................. 26 22
Third Quarter................................................... 27 5/8 25
Fourth Quarter.................................................. 30 1/8 24 3/4

1996
- ----------------------------------------------------------------
First Quarter................................................... 34 24 1/8
Second Quarter (through June 6)................................. 37 1/2 32 3/8

The last reported sale price of the Common Stock on the New York Stock
Exchange Composite Tape as of a recent date is set forth on the cover page of
this Prospectus.

DIVIDEND POLICY

AutoZone has not declared or paid any cash dividends on its Common Stock
since its incorporation in May 1986 and does not currently intend to declare or
pay any dividends. Any determination to pay dividends in the future will be at
the discretion of the Company's Board of Directors and will be dependent upon
AutoZone's results of operations, financial condition, capital expenditures,
working capital requirements, any contractual restrictions and other factors
deemed relevant by the Board of Directors.

CAPITALIZATION

The following table sets forth the capitalization of AutoZone at May 4,
1996:

(IN THOUSANDS)

Short-term borrowings(1)............................................................ $ 97,775
-----------
-----------
Long-term debt...................................................................... $ --
Shareholders' equity:
Common Stock, par value $.01 per share; 200,000,000 shares authorized; 149,891,533
shares outstanding(2)........................................................... 1,499
Additional paid-in capital........................................................ 231,981
Retained earnings................................................................. 561,395
-----------
Total shareholders' equity.................................................... 794,875
-----------
Total capitalization........................................................ $ 794,875
-----------
-----------

- ------------
(1) Consists of borrowings under the revolving credit agreements.
(2) Excludes 9,584,727 shares of Common Stock underlying stock options
outstanding at May 4, 1996 at an average exercise price of $17.03 per share.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

The following table sets forth income statement data of AutoZone expressed
as a percentage of net sales for the periods indicated:

THIRTY-SIX WEEKS ENDED
FISCAL YEAR ENDED
------------------------------------------- ------------------------
AUGUST 28, AUGUST 27, AUGUST 26, MAY 6, MAY 4,
1993 1994 1995 1995 1996
------------- ------------- ------------- ----------- -----------

Net sales............................................... 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of sales, including warehouse and delivery
expenses.............................................. 60.2 58.8 58.5 58.9 58.6
----- ----- ----- ----- -----
Gross profit............................................ 39.8 41.2 41.5 41.1 41.4
Operating, selling, general and administrative
expenses.............................................. 28.3 28.6 28.9 29.4 30.1
----- ----- ----- ----- -----
Operating profit........................................ 11.5 12.6 12.6 11.7 11.3
Interest income--net.................................... 0.2 0.1 -- -- --
Income taxes............................................ 4.6 5.0 4.9 4.6 4.2
----- ----- ----- ----- -----
Net income.............................................. 7.1% 7.7% 7.7% 7.1% 7.1%
----- ----- ----- ----- -----
----- ----- ----- ----- -----

THIRTY-SIX WEEKS ENDED MAY 4, 1996 COMPARED TO THIRTY-SIX WEEKS ENDED MAY 6,
1995

Net sales for the thirty-six weeks ended May 4, 1996 increased by $233.7
million, or 19.8%, over net sales for the comparable period for fiscal 1995.
This increase was due to a comparable store net sales increase of 5% (which was
primarily due to sales growth in the Company's newer stores) and increases in
net sales for stores opened since the beginning of fiscal 1995. For the twelve
weeks ended May 4, 1996, comparable store net sales increased by 8%, which was
primarily due to sales growth in the Company's newer stores and the added sales
of the Company's commercial sales program.

Gross profit for the thirty-six weeks ended May 4, 1996 was $584.7 million,
or 41.4% of net sales, compared with $485.0 million, or 41.1% of net sales,
during the comparable period for fiscal 1995. The increase in the gross profit
percentage was due primarily to efficiencies in distribution costs and favorable
results of second quarter physical inventories.

Operating, selling, general and administrative expenses for the thirty-six
weeks ended May 4, 1996 increased by $78.2 million over such expenses for the
comparable period for fiscal 1995, and increased as a percentage of net sales
from 29.4% to 30.1%. The increase in the expense ratio was due primarily to
operating costs of the Company's second call center in Houston and start-up
costs of the Company's commercial sales program (which program is still being
implemented and has been unprofitable to date). During the thirty-six week
period ending May 4, 1996, the Company increased the number of stores
participating in the commercial sales program from three to 519.

The Company's effective income tax rate decreased from 39.4% of pre-tax
income for the thirty-six weeks ended May 6, 1995 to 37.1% for the thirty-six
weeks ended May 4, 1996. The decrease in the effective income tax rate is due to
a reduction in state income taxes.

FISCAL 1995 COMPARED TO FISCAL 1994

Net sales for fiscal 1995 increased by $300.1 million, or 19.9%, over net
sales for fiscal 1994. This increase was due to a comparable store net sales
increase of 6%, which was primarily due to sales growth in the Company's newer
stores, and an increase in net sales of $214.1 million for stores opened since
the beginning of fiscal 1994. At August 26, 1995, the Company had 1,143 stores
in operation, a net increase of 210 stores, or approximately 26% in new store
square footage for the year.

Gross profit for fiscal 1995 was $751.1 million, or 41.5% of net sales,
compared with $622.0 million, or 41.2% of net sales, for fiscal 1994. The
increase in gross profit was due primarily to improved leveraging of warehouse
and delivery expenses.

Operating, selling, general and administrative expenses for fiscal 1995
increased by $92.2 million over such expenses for fiscal 1994, and increased as
a percentage of net sales from 28.6% to 28.9%. The

increase in the expense ratio was primarily due to expenses incurred in
connection with the introduction of the call center and flexogram programs (see
"Business--Marketing and Merchandising Strategy") and increased net advertising
expenses.

Net interest income for fiscal 1995 was $0.6 million compared with $2.2
million for fiscal 1994. The decrease in interest income was primarily due to
lower levels of invested cash. At August 26, 1995, the Company had short-term
borrowings, net of short-term investments, of $10.8 million compared with
short-term investments, net of short-term borrowings, of $53.9 million at August
27, 1994.

AutoZone's effective income tax rate was 39.2% of pre-tax income for fiscal
1995 and 39.7% for fiscal 1994. The decrease in the tax rate was primarily due
to a change in the effective state tax rate due to expansion in lower tax rate
states.

FISCAL 1994 COMPARED TO FISCAL 1993

Net sales for fiscal 1994 increased by $291.2 million or 23.9% over net
sales for fiscal 1993. This increase was due to a comparable store net sales
increase of 9%, which was principally attributable to higher unit sales of the
Company's products, and an increase in net sales of $193.3 million for stores
opened since the beginning of fiscal 1993. At August 27, 1994, the Company had
933 stores in operation, a net increase of 150 stores, or approximately 23% in
new store square footage for the year.

Gross profit for fiscal 1994 was $622.0 million, or 41.2% of net sales,
compared with $484.8 million, or 39.8% of net sales for fiscal 1993. The
increase in gross profit was due primarily to a relative increase in sales of
higher margin automotive parts and a $10.3 million change in the LIFO provision.

Operating, selling, general and administrative expenses for fiscal 1994
increased by $87.2 million over such expenses for fiscal 1993, and increased as
a percentage of net sales from 28.3% to 28.6%. The increase in the expense ratio
was primarily due to higher store payroll, the introduction of a satellite
system and a store call center, and lower advertising rebates from vendors.

Net interest income for fiscal 1994 was $2.2 million compared with $2.5
million for fiscal 1993. The decrease in net investment income was primarily due
to lower levels of invested cash. Short-term investments totaled $54.1 million
at August 27, 1994 compared with $82.8 million at August 28, 1993.

AutoZone's effective income tax rate was 39.7% of pre-tax income for fiscal
1994 and 39.3% for fiscal 1993. The increase in the tax rate was primarily due
to the federal Omnibus Budget Reconciliation Act of 1993 being in effect for the
entire year.

LIQUIDITY AND CAPITAL RESOURCES

The Company's primary capital requirements have been the funding of its
continued new store expansion program and the resultant increase in distribution
centers and inventory requirements. The Company has opened 760 stores and
constructed six new distribution centers from the beginning of fiscal 1991 to
May 4, 1996. The Company has financed this growth through a combination of
internally generated funds and, to a lesser degree, borrowings. Net cash
provided by operating activities was $117.0 million in fiscal 1993, $128.3
million in fiscal 1994, $180.1 million in fiscal 1995, $90.2 million during the
thirty-six weeks ended May 6, 1995 and $78.6 million during the thirty-six weeks
ended May 4, 1996. The comparative decrease in cash provided by operations
during the thirty-six weeks ended May 4, 1996 is due primarily to increased
inventory due to forward buying, opening of the new Zanesville, Ohio
distribution center and opening of new stores, which was offset by higher net
income, depreciation and leverage of accounts payable.

Capital expenditures were $120.6 million in fiscal 1993, $173.0 million in
fiscal 1994, $258.1 million in fiscal 1995, $166.8 million during the thirty-six
weeks ended May 6, 1995 and $183.2 million during the thirty-six weeks ended May
4, 1996. During the thirty-six weeks ended May 4, 1996 the Company opened 155
net new stores and completed construction of a new 550,000 square foot
distribution center in Zanesville, Ohio, which commenced operations in February
1996. The Company completed the construction of and relocation to its new
Memphis headquarters in October 1995. Construction commitments, which primarily
related to new stores, totaled approximately $63 million at May 4, 1996.

The Company's new store development program requires significant working
capital, principally for inventories. Historically, the Company has negotiated
extended payment terms from suppliers, minimizing the working capital required
by its expansion. The Company believes that it will be able to continue
financing much of its inventory growth by favorable payment terms from
suppliers, but there can be no assurance that the Company will be successful in
doing so. The Company also may negotiate shorter payment terms in exchange for
other concessions.

The Company anticipates that it will rely primarily on internally generated
funds to support its capital expenditures and working capital requirements. The
balance of such requirements will be funded through short-term borrowings. The
Company has revolving credit agreements with several banks providing for lines
of credit in an aggregate maximum amount of $125 million, including an increase
of $50 million in January 1996. These credit agreements contain a covenant
limiting the amount of debt the Company may incur relative to its net worth. At
May 4, 1996, the Company had borrowings outstanding under these credit
agreements of $97.8 million.

At August 26, 1995, the Company had outstanding stock options covering
9,503,981 shares of Common Stock. Assuming all such options become vested and
are exercised, such options would result in proceeds of $140.4 million to the
Company. Such proceeds constitute an additional source for liquidity and capital
resources for the Company. For fiscal 1995 and for the thirty-six weeks ended
May 4, 1996, proceeds from sales of stock under stock option and employee stock
purchase plans were $17.6 million and $14.4 million, respectively, including
related tax benefits.

INFLATION

The Company does not believe its operations have been materially affected by
inflation. The Company has been successful, in many cases, in mitigating the
effects of merchandise cost increases principally due to economies of scale
resulting from increased volumes of purchases, selective forward buying and the
use of alternative suppliers.

SEASONALITY AND QUARTERLY PERIODS

The Company's business is somewhat seasonal in nature, with the highest
sales occurring in the summer months of June through August, in which average
weekly per store sales historically have run about 20% to 30% higher than in the
slowest months of December through February. The Company's business is also
affected by weather conditions. Extremely hot or extremely cold weather tends to
enhance sales by causing parts to fail and spurring sales of seasonal products.
Mild or rainy weather tends to soften sales as parts' failure rates are lower in
mild weather and elective maintenance is deferred during periods of rainy
weather.

Each of the first three quarters of AutoZone's fiscal year consists of
twelve weeks and the fourth quarter generally consists of sixteen weeks (except
for the fourth quarter of fiscal 1991 which had, and the fourth quarter of
fiscal 1996 which will have, seventeen weeks). Because the fourth quarter
contains the seasonally high sales volume months of June, July and August and
consists of sixteen weeks compared to twelve weeks for each of the first three
quarters, the Company's fourth quarter represents a disproportionate share of
the annual net sales and net income. For fiscal 1994 and 1995, the fourth
quarter represented 34.7% and 34.8%, respectively, of annual net sales and 38.9%
and 39.6%, respectively, of net income.

The following table sets forth quarterly unaudited financial information for
fiscal 1994 and 1995 and for the first, second and third quarters of fiscal 1996
(in thousands, except per share data):

SIXTEEN WEEKS
TWELVE WEEKS ENDED ENDED
------------------------------------------- ---------------
NOVEMBER 20, FEBRUARY 12, MAY 7, AUGUST 27,
1993 1994 1994 1994
-------------- -------------- ----------- ---------------

Net sales.......................................... $ 322,846 $ 303,203 $ 358,159 $ 523,821
Gross profit....................................... 131,110 124,115 146,521 220,215
Operating profit................................... 35,794 34,239 46,512 74,197
Income before income taxes......................... 36,620 34,735 46,808 74,823
Net income......................................... 22,020 20,935 28,208 45,223
Net income per share............................... 0.15 0.14 0.19 0.30

NOVEMBER 19, FEBRUARY 11, MAY 6, AUGUST 26,
1994 1995 1995 1995
-------------- -------------- ----------- ---------------

Net sales.......................................... $ 389,763 $ 364,061 $ 425,483 $ 628,824
Gross profit....................................... 158,818 149,080 177,091 266,109
Operating profit................................... 45,408 39,201 53,114 89,935
Income before income taxes......................... 45,834 39,398 53,114 89,935
Net income......................................... 27,634 23,836 32,414 54,897
Net income per share............................... 0.19 0.16 0.22 0.37

NOVEMBER 18, FEBRUARY 10, MAY 4,
1995 1996 1996
-------------- -------------- -----------

Net sales.......................................... $ 463,029 $ 425,838 $ 524,175
Gross profit....................................... 193,220 176,033 215,531
Operating profit................................... 55,397 43,424 60,432
Income before income taxes......................... 55,397 43,424 59,705
Net income......................................... 34,797 27,324 37,605
Net income per share............................... 0.23 0.18 0.25

MERGER WITH ALLDATA CORPORATION

On March 29, 1996, Alldata Corporation ("Alldata") became a wholly owned
subsidiary of AutoZone in a stock-for-stock merger accounted for as a pooling of
interests. Under the terms of the merger agreement, AutoZone issued
approximately 1.7 million shares of Common Stock and stock options covering
approximately 200,000 shares of Common Stock. Financial information of Alldata
has been included in the results of operations from the date of acquisition, and
is included in the balance sheet as of May 4, 1996. Financial statements for
periods prior to the date of combination have not been restated as the effect is
not material to AutoZone's financial condition and results of operations. The
assets and liabilities of Alldata were approximately $17.4 million and $21.4
million, respectively, at the date of combination.

BUSINESS

INTRODUCTION

AutoZone is a leading specialty retailer of automotive parts and
accessories, focusing primarily on D-I-Y customers. The Company began operations
in 1979 and, at May 4, 1996, operated 1,298 stores in 27 states, primarily
located in the Sunbelt and Midwest regions of the United States. Each AutoZone
store carries an extensive product line, including new and remanufactured
automotive hard parts, such as alternators, starters, water pumps, brake shoes
and pads, carburetors, clutches and engines; maintenance items, such as oil,
antifreeze, transmission, brake and power steering fluids, engine additives,
protectants and waxes; and accessories, such as car stereos and floor mats. The
Company carries parts for domestic and foreign cars, vans and light trucks. The
Company is implementing a commercial sales program which provides prompt
delivery of parts and other products to local repair garages, dealers and
service stations. This program was offered in 519 of the Company's stores at May
4, 1996. AutoZone does not perform automotive repairs or installations.

AutoZone is dedicated to a marketing and merchandising strategy to provide
customers with superior service, value and parts selection at conveniently
located, well-designed stores. The Company has implemented this strategy
primarily with knowledgeable and motivated store personnel trained to emphasize
prompt and courteous customer service, through an everyday low price policy and
by maintaining an extensive product line with an emphasis on automotive hard
parts. AutoZone's stores are generally situated in high-visibility locations and
provide a distinctive merchandise presentation in an attractive store
environment.

At May 4, 1996, AutoZone had 1,298 stores located in the following 27
states:

MARKETING AND MERCHANDISING STRATEGY

AutoZone's marketing and merchandising strategy is to provide customers with
superior service, value and parts selection at conveniently located,
well-designed stores. Key elements of this strategy are as follows:

CUSTOMER SERVICE

The Company believes that D-I-Y consumers place a significant value on
customer service. As a result, the Company emphasizes customer service as the
most important element in its marketing and merchandising strategy. The Company
attempts to promote a corporate culture which "always puts customers first" and
emphasizes knowledgeable and courteous service. To do so, the Company employs
parts personnel with technical expertise to advise customers regarding the
correct part type and application, utilizes a wide range of training methods to
educate and motivate its store personnel, and provides store personnel with
significant opportunities for promotion and incentive compensation. Customer
service is enhanced by electronic parts catalogs which assist in the selection
of parts; free testing of starters, alternators, batteries and sensors and
actuators; and liberal return and warranty policies. AutoZone stores are
generally open from 8 a.m. to 9 or 10 p.m. (with some open to midnight) on
Monday through Saturday and are typically open from 9 a.m. to 6 p.m. on Sunday.

The Company recently implemented a number of programs to enhance customer
service. AutoZone installed a satellite system for all of its stores which,
among other things, enables the

Company to speed credit card and check approval processes and locate parts at
neighboring AutoZone stores. The Company has opened call centers in Memphis and
Houston to support the sales staff at high volume stores. Call center personnel
handle inquiries and orders, enabling store personnel to concentrate on serving
in-store customers without having to field telephone calls. In addition, the
Company initiated a "flexogram" inventory management program which matches the
hard parts inventory of each store to the automobile population in each sales
area.

In March 1996, Alldata became a wholly owned subsidiary of AutoZone in a
stock-for-stock merger. Alldata has developed a database system that provides
comprehensive and up-to-date automotive diagnostic, service and repair
information which it will continue to market to professional repair shops. In
addition, the Company plans to integrate certain limited information from the
Alldata database, such as technical service bulletins, recall information and
specifications, into its electronic catalog.

PRODUCT SELECTION

The Company offers a wide selection of automotive parts and other products
designed to cover a broad range of specific vehicle applications. AutoZone's
stores generally carry between 16,000 and 19,000 SKUs. Each AutoZone store
carries the same basic product line with some regional and local differences
based on climate, demographics and age and type of vehicle registration. The
Company's "flexogram" program enables the Company to tailor its hard parts
inventory to the makes and models of the automobiles in each store's trade area.
In addition to brand name products, the Company sells a number of products,
including batteries and engines, under the "AutoZone" name and a selection of
automotive hard parts, including starters, alternators, water pumps, brakes and
filters under its private label names. In addition to products stocked in
stores, the Company offers a range of products, consisting principally of
automotive hard parts, through its Express Parts program. The Express Parts
program provides air-freight delivery of lower turnover products to AutoZone's
stores.

PRICING

The Company employs an everyday low price strategy and attempts to be the
price leader in hard parts categories. Management believes that its prices
overall compare favorably to those of its competitors. The Company's pricing
strategy is supported through newspaper, radio and television advertising as
well as through in-store promotional signage and displays.

COMMERCIAL SALES PROGRAM

AutoZone is implementing a commercial sales program which provides prompt
delivery of parts and other products to local repair garages, dealers and
service stations. This program was offered in 519 of the Company's stores at May
4, 1996. AutoZone expects that the program will be available in nearly all of
its stores by the end of calendar 1996. Commercial customers generally pay the
same every day low prices for parts and other products as paid by AutoZone's
D-I-Y customers. The Company anticipates that the commercial sales program will
result in an expansion of its customer base at a relatively modest incremental
capital investment. The Company believes that the program, when fully
implemented, should enhance its future financial performance. There can be no
assurance, however, that the Company will complete implementation of the
commercial sales program by year-end 1996 or that such implementation will
enhance the Company's results of operations and financial condition in future
fiscal years.

STORE DESIGN AND VISUAL MERCHANDISING

AutoZone seeks to design and build stores with a high visual impact.
AutoZone stores are designed to have an industrial "high tech" appearance by
utilizing colorful exterior signage, exposed beams and ductwork, and brightly
lighted interiors. Merchandise in stores is attractively displayed, typically
utilizing diagonally placed gondolas for maintenance and accessory products as
well as specialized shelving for batteries and, in many stores, oil products.
The Company employs a uniform ("planogrammed") store layout system to promote
consistent merchandise presentation in all of its stores. In-store signage and
special displays are used extensively to aid customers in locating merchandise
and promoting products.

STORE DEVELOPMENT AND EXPANSION STRATEGY

The following table sets forth the Company's store development activities
during the past five fiscal years and the thirty-six weeks ended May 4, 1996:

FISCAL YEAR THIRTY-SIX
------------------------------------------------------------- WEEKS ENDED
1991 1992 1993 1994 1995 MAY 4, 1996
----------- ----------- ----------- ----------- --------- ---------------

Beginning Stores................................. 538 598 678 783 933 1,143
New Stores....................................... 60 82 107 151 210 155
Replaced Stores(1)............................... 4 14 20 20 29 22
Closed Stores(1)................................. (4) (16) (22) (21) (29) (22)
--- --- --- --- --------- -----
Ending Stores.................................... 598 678 783 933 1,143 1,298
--- --- --- --- --------- -----
--- --- --- --- --------- -----

----------------

(1) Replaced stores are either relocations or conversions of existing
smaller stores to larger formats. Closed stores include replaced stores.

The Company opened 210 net new stores in fiscal 1995, representing an
increase in total square footage from fiscal 1994 of approximately 26%. For the
thirty-six week period ended May 4, 1996, the Company opened 155 net new stores
and plans to open an additional 102 net new stores by the end of fiscal 1996.

The Company believes that expansion opportunities exist both in markets
which it does not currently serve and in markets in which it can achieve a
larger presence. The Company attempts to obtain high visibility in sites in high
traffic locations and undertakes substantial research prior to entering new
markets. Key factors in selecting new site and market locations include
population, demographics, vehicle profile and number and strength of
competitors' stores. The Company generally seeks to open new stores within or
contiguous to existing market areas and attempts to cluster development in new
urban markets in a relatively short period of time in order to achieve economies
of scale in advertising and distribution costs. The Company may also expand its
operations through acquisitions of existing stores from third parties. The
Company regularly evaluates potential acquisition candidates in new as well as
existing market areas.

AutoZone's net sales have grown significantly in the past several years,
increasing from $818.0 million in fiscal 1991 to $1,808.1 million in fiscal
1995. The continued growth and financial performance of the Company will be
dependent, in large part, upon management's ability to open new stores on a
profitable basis in existing and new markets and also upon its ability to
continue to increase sales in existing stores. There can be no assurance that
the Company will continue to be able to open and operate new stores on a timely
and profitable basis or will continue to attain increases in comparable store
sales.

STORE OPERATIONS

STORE FORMATS

Substantially all of AutoZone's stores are based on standard store formats
resulting in generally consistent appearance, merchandising and product mix.
Although the smaller store formats were generally used by the Company for its
earlier stores, the Company has increasingly used larger format stores, starting
with its 8,100 square foot store introduced in 1987, its 6,600 square foot store
introduced in 1991 and its 7,700 square foot store introduced in 1993. In fiscal
1996, the 6,600 square foot and larger store formats are expected to account for
more than 85% of new and replacement stores. Total store space as of May 4, 1996
was as follows:

TOTAL STORE
STORE FORMAT NUMBER OF STORES SQUARE FOOTAGE(1)
- ---------------------------------------------------------------- ------------------- ------------------

8,100 sq. ft.................................................... 182 1,474,200
7,700 sq. ft.................................................... 288 2,217,600
6,600 sq. ft.................................................... 372 2,455,200
5,400 sq. ft.................................................... 437 2,359,800
4,000 sq. ft.................................................... 19 76,000
----- ----------
Total....................................................... 1,298 8,582,800
----- ----------
----- ----------

----------------
(1) Total store square footage is based on the Company's standard store
formats, including normal selling, office, stockroom and receiving space,
but excluding excess space not utilized in a store's operations.

Approximately 85% to 90% of each store is selling space, of which
approximately 30% to 40% is dedicated to automotive parts inventory. The parts
inventory area is fronted by a counter staffed by knowledgeable parts personnel
and equipped with proprietary electronic parts catalogs. The remaining selling
space contains gondolas for accessories, maintenance items, including oil and
air filters, additives and waxes, and other parts together with specifically
designed shelving for batteries and, in many stores, oil products.

Approximately 80% of the Company's stores are freestanding, with the balance
principally located within strip shopping centers. Freestanding large format
stores typically have parking for approximately 45 to 50 cars on a lot of
approximately 3/4 to one acre. The Company's 5,400 and 4,000 square foot stores
typically have parking for approximately 25 to 40 cars and are usually located
on a lot of approximately 1/2 to 3/4 acre.

STORE PERSONNEL AND TRAINING

While subject to fluctuation based on seasonal volumes and actual store
sales, the 4,000, 5,400 and 6,600 square foot stores typically employ 12 to 18
persons, including a manager and an assistant manager, and the larger stores
typically employ 14 to 23 persons. The Company generally hires personnel with
prior automotive experience. Although the Company relies primarily on on-the-job
training, it also provides formal training programs, which include regular store
meetings on specific sales and product issues, standardized training manuals and
a specialist program under which store personnel can obtain Company
certification in one of several areas of technical expertise. The Company is
testing a multimedia training program that will permit store personnel to train
at their own pace. The Company supplements training with frequent store visits
by management.

The Company provides financial incentives to store managers through an
incentive compensation program and through participation in the Company's stock
option plan. In addition, AutoZone's growth has provided opportunities for the
promotion of qualified employees. Management believes these opportunities are an
important factor in AutoZone's ability to attract, motivate and retain quality
personnel.

The Company supervises store operations primarily through approximately 198
area advisors who report to one of 27 district managers, who, in turn, report to
one of six regional managers. Purchasing, merchandising, advertising,
accounting, cash management and other store support functions are centralized in
the Company's corporate and administrative headquarters in Memphis, Tennessee.
The Company believes that such centralization enhances consistent execution of
the Company's merchandising and marketing strategy at the store level.

STORE AUTOMATION

In order to assist store personnel in providing a high level of customer
service, all stores have proprietary electronic parts catalogs that provide
parts information based on the make, model and year of an automobile. The
catalog display screens are placed on the hard parts inventory counter so that
both employees and customers can view the screen. In addition, the Company's
satellite system enables the Company to speed up credit card and check approval
processes and locate parts at neighboring AutoZone stores.

All stores utilize the Company's computerized Store Management System, which
includes scanning and point-of-sale data collection terminals. The Store
Management System provides productivity benefits, including lower administrative
requirements and improved personnel scheduling at the store level, as well as
enhanced merchandising information and improved inventory control. The Company
believes the Store Management System also enhances customer service through
faster processing of transactions and simplified warranty and product return
procedures.

PURCHASING AND DISTRIBUTION

Merchandise is selected and purchased for all stores at the Company's
headquarters in Memphis. No one class of product accounts for as much as 10% of
the Company's total sales. In fiscal 1995, the Company purchased products from
approximately 200 suppliers and no single supplier accounted for more than 6% of
the Company's total purchases. During fiscal 1995, the Company's ten largest
suppliers accounted for approximately 29% of the Company's purchases. The
Company generally has no long-term contracts for the purchase of merchandise.
Management believes that AutoZone's relationships with suppliers are excellent.
Management also believes that alternative sources of supply exist, at similar
cost, for substantially all types of product sold.

Substantially all of the Company's merchandise is shipped by vendors to the
Company's distribution centers. Orders are typically placed by stores on a
weekly basis with orders shipped from the warehouse in leased trucks operated by
the Company on the following day.

COMPETITION

The Company competes principally in the D-I-Y and, more recently, the
commercial automotive aftermarket. Although the number of competitors and the
level of competition experienced by AutoZone's stores vary by market area, the
automotive aftermarket is highly fragmented and generally very competitive. The
Company believes that the largest share of the automotive aftermarket is held by
independently owned jobber stores which, while principally selling to commercial
accounts, have significant D-I-Y sales. The Company also competes with other
automotive specialty retailing chains and, in certain product categories, such
as oil and filters, with discount and general merchandise stores. The principal
competitive factors which affect the Company's business are store location,
customer service, product selection and quality, and price. While AutoZone
believes that it competes effectively in its various geographic areas, certain
of its competitors have substantial resources or have been operating longer in
particular geographic areas.

TRADEMARKS

The Company has registered several service marks and trademarks in the
United States Patent and Trademark office, including its service mark "AutoZone"
and its trademarks "AutoZone", "Duralast", "Valucraft", "Ultra Spark", "Albany"
and "Alldata". The Company believes that the "AutoZone" service mark and
trademarks have become an important component in its merchandising and marketing
strategy.

EMPLOYEES

At May 4, 1996, the Company employed approximately 26,000 persons,
approximately 17,300 of whom were employed full-time. Approximately 84% of the
Company's employees were employed in stores or in direct field supervision,
approximately 7% in distribution centers and approximately 9% in corporate and
support functions.

The Company's employees currently are not members of any unions. The Company
has never experienced any material labor disruption. Management believes that
its labor relations are generally good.

PROPERTIES

The following table sets forth certain information concerning AutoZone's
principal properties:

SQUARE NATURE OF
LOCATION PRIMARY USE FOOTAGE OCCUPANCY
- ------------------- ----------------------------------------- --------- -----------

Memphis, TN Corporate and Administrative Offices 360,000 Owned
Lavonia, GA Distribution Center 421,700 Owned
Lexington, TN Distribution Center 341,000 Owned
Danville, IL Distribution Center 304,500 Owned
Memphis, TN Express Parts Warehouse 233,100 Leased
Lafayette, LA Distribution Center 464,000 Owned
San Antonio, TX Distribution Center 217,000 Owned
Phoenix, AZ Distribution Center 212,000 Owned
Zanesville, OH Distribution Center 550,000 Owned

The Company relocated its headquarters in Memphis, Tennessee, in October
1995 and completed the sale of its former headquarters in December 1995.
AutoZone opened a new distribution center in Zanesville, Ohio, in February 1996.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources." The lease on the Express Parts
warehouse in Memphis expires in February 1997. AutoZone also rents additional
warehouse space, various district offices and training and other office
facilities, which are not material in the aggregate.

At May 4, 1996, AutoZone leased 508 and owned 790 of its 1,298 stores.
Original lease terms generally range from five to 20 years with renewal options.
Leases on 295 stores that are currently operating expire prior to the end of
fiscal 2001; however, leases on 275 of such stores contain renewal options.

LEGAL PROCEEDINGS

AutoZone is a party to various claims and lawsuits arising in the ordinary
course of business. The Company does not believe that such claims and lawsuits,
singly or in the aggregate, will have a material adverse effect on its business,
properties, results of operations, financial condition or prospects.

MANAGEMENT

The following table lists AutoZone's executive officers as of May 4, 1996.
The title of each executive officer includes the words "Customer Satisfaction"
which reflects AutoZone's commitment to customer service as part of its
marketing and merchandising strategy. Officers are elected by and serve at the
discretion of the Board of Directors.

NAME AGE POSITION
- ------------------------------------------ --- --------------------------------------------------------------

J.R. Hyde, III............................ 53 Chairman and Chief Executive Officer
Customer Satisfaction
Johnston C. Adams, Jr. ................... 48 Vice Chairman and Chief Operating Officer
Customer Satisfaction
Thomas S. Hanemann........................ 59 President
Customer Satisfaction
Timothy D. Vargo.......................... 45 Vice Chairman
Customer Satisfaction
Lawrence E. Evans......................... 52 Executive Vice President-Development
Customer Satisfaction
Robert J. Hunt............................ 47 Executive Vice President-Finance and
Chief Financial Officer
Customer Satisfaction
Shawn P. McGhee........................... 33 Executive Vice President-Merchandising
Customer Satisfaction
Anthony Dean Rose, Jr. ................... 35 Senior Vice President-Advertising
Customer Satisfaction
Stephen W. Valentine...................... 33 Senior Vice President-Systems Technology and Support
Customer Satisfaction
Michael E. Butterick...................... 44 Vice President-Controller
Customer Satisfaction
Harry L. Goldsmith........................ 44 Vice President, Secretary and General Counsel
Customer Satisfaction

The Company's Board of Directors consists of Mr. Hyde, Mr. Adams, Mr.
Hanemann, Mr. Vargo, Andrew M. Clarkson, John E. Moll, James F. Keegan, Ronald
Terry, Henry R. Kravis, Robert I. MacDonnell, Michael W. Michelson and George R.
Roberts. Messrs. Kravis, MacDonnell, Michelson and Roberts are general partners
of KKR. See "Principal and Selling Stockholders."

PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth certain information regarding the beneficial
ownership of AutoZone's outstanding Common Stock as of May 4, 1996 , and as
adjusted to reflect the sale of 25,300,000 shares by the Selling Stockholders in
the offerings (assuming exercise in full of the over-allotment options), by (i)
any person or group known by the Company to be the beneficial owner of more than
five percent of the Company's Common Stock (including the Selling Stockholders)
and (ii) all directors and executive officers of AutoZone as a group (including
Mr. Hyde). Except as indicated by the notes to the following table, the holders
listed below have sole voting power and investment power over the shares
beneficially held by them and the beneficial ownership is direct. The address of
KKR Associates is 9 West 57th Street, New York, New York 10019; the address of
Mr. Hyde is 123 South Front Street, Memphis, Tennessee 38103; the address of
Provident Investment Counsel, Inc. is 300 North Lake Avenue, Pasadena,
California 91101; and the address of The Prudential Insurance Company of America
is Prudential Plaza, Newark, New Jersey 07102.

BENEFICIAL OWNERSHIP
AS OF BENEFICIAL OWNERSHIP
MAY 4, 1996 (1) SHARES AFTER OFFERING (1)
------------------------- BEING -------------------------
NAME OF BENEFICIAL OWNER SHARES PERCENT OFFERED SHARES PERCENT
- ---------------------------------------------------- ------------ ----------- ------------ ------------ -----------

KKR Associates(2)................................... 43,208,488 28.8% 23,300,000 19,908,488 13.3%
J.R. Hyde, III(3)................................... 14,379,946 9.6% 2,000,000 12,379,946 8.3%
The Prudential Insurance Company of America(4)...... 9,236,278 6.2% -- 9,236,278 6.2%
Provident Investment Counsel, Inc.(5)............... 8,426,972 5.6% -- 8,426,972 5.6%
Henry R. Kravis(2)(6)............................... -- -- -- -- --
Robert I. MacDonnell(2)(7).......................... -- -- -- -- --
Michael W. Michelson(2)............................. -- -- -- -- --
George R. Roberts(2)(8)............................. -- -- -- -- --
All directors and executive officers as a group,
including Mr. Hyde (other than as set forth in
relation to KKR Associates) (19 persons).......... 17,155,722 11.4% 2,000,000 15,155,722 10.1%

- -------------
(1) For purposes of this table, "beneficial ownership" includes any shares which
such person has the right to acquire within 60 days of May 4, 1996. For
purposes of computing the percentage of outstanding shares held by each
person or group of persons named above on a given date, any security which
such person or persons has the right to acquire within 60 days after such
date is deemed to be outstanding, but is not deemed to be outstanding in
computing the percentage ownership of any other person.

(2) Includes (i) 39,158,272 shares (26.1%) owned of record by three limited
partnerships of which KKR Associates is the sole general partner and as to
which it possesses sole voting and investment power, and (ii) 4,050,216
shares (2.7%) owned by KKR Associates. Messrs. Kravis, Roberts, MacDonnell,
Michelson, Saul A. Fox, Edward A. Gilhuly, Perry Golkin, James H. Greene,
Jr., Paul E. Raether, Clifton S. Robbins, Scott M. Stuart and Michael T.
Tokarz, as general partners of KKR Associates, a limited partnership, may be
deemed to share beneficial ownership of the shares. Messrs. Kravis, Roberts,
MacDonnell and Michelson are members of AutoZone's Board of Directors. The
foregoing persons disclaim beneficial ownership of the shares owned by the
three limited partnerships. Not included in the number of shares listed are
140,000 shares held in trust for the family of Mr. Raether and for which Mr.
Raether's spouse acts as co-trustee, 20,000 shares held in trust for the
family of Mr. Gilhuly and for which Mr. Gilhuly acts as co-trustee, 2,000
shares owned by Mr. Golkin, 40,000 shares owned jointly by Mr. Greene and
his wife and 40,000 shares owned by Mr. Tokarz.

(3) Includes 570,000 shares which are held in trusts for which Mr. Hyde is a
trustee, and 345,000 shares held by a charitable foundation for which Mr.
Hyde is an officer and a director. Does not include 2,000 shares owned by
Mr. Hyde's spouse.

(4) All information regarding The Prudential Insurance Company of America
("Prudential") is based upon the Schedule 13G filed by Prudential dated
February 14, 1996. Prudential may have direct or indirect voting and/or
investment discretion over 9,236,278 shares which are held for the benefit
of its clients by its separate accounts, externally managed accounts,
registered investment companies, subsidiaries and/or other affiliates.
Prudential has sole voting and investment power over 856,300 shares, shares
the power to vote 7,294,078

shares, and shares the investment power over 8,379,978 shares. Prudential's
filing of the Schedule 13G should not be construed as an admission that
Prudential is for the purposes of Section 13 or 16 of the Securities
Exchange Act, the beneficial owner of these shares.

(5) All information regarding Provident Investment Counsel, Inc. ("Provident")
is based upon the Schedule 13G filed by Provident dated February 7, 1996.
Provident is a registered investment adviser and has direct beneficial
ownership of the shares listed as a result of Provident's discretionary
authority to buy, sell, and vote shares of such common stock for its
investment advisory clients. Provident has the sole power to vote 6,486,847
shares and no power to vote 1,940,125 shares. Provident has sole dispositive
power for all of the shares.

(6) Does not include 120,000 shares held by Mr. Kravis as a trustee of an
irrevocable trust created by Mr. Roberts for the benefit of Mr. Roberts'
children (the "Roberts Trust"). As co-trustee, Mr. Kravis shares the
authority to vote and dispose of the shares, but has no economic interest in
such shares. Does not include 120,000 shares held in an irrevocable trust
created by Mr. Kravis for the benefit of his children with respect to which
Mr. Kravis disclaims any beneficial ownership.

(7) Does not include 120,000 shares held in an irrevocable trust created by Mr.
MacDonnell for the benefit of Mr. MacDonnell's children (the "MacDonnell
Trust") with respect to which Mr. MacDonnell disclaims any beneficial
ownership.

(8) Does not include 120,000 shares held by Mr. Roberts as a trustee of the
MacDonnell Trust. As co-trustee, Mr. Roberts shares the authority to vote
and dispose of the shares, but has no economic interest in such shares. Does
not include 120,000 shares held in the Roberts Trust with respect to which
Mr. Roberts disclaims any beneficial ownership.

After the offerings and assuming exercise in full of the over-allotment
options, approximately 10.6% of the outstanding Common Stock will be held by the
KKR Partnerships and approximately 8.3% by Mr. Hyde. The KKR Partnerships
consist of three limited partnerships of which KKR Associates is the general
partner. KKR Associates has sole voting and investment power with respect to the
shares held by the KKR Partnerships. In addition to the shares held by the KKR
Partnerships, KKR Associates owns 2.7% of the Common Stock. Consequently, KKR
Associates and its general partners, four of whom are also directors of
AutoZone, will be able to significantly influence AutoZone and any action
requiring stockholder approval.

The Company, the Selling Stockholders and certain stockholders, directors
and executive officers of the Company have agreed not to sell or otherwise
dispose of, directly or indirectly, any shares of capital stock of the Company,
except for the shares to be sold in the offerings, for a period of at least 60
days from the date of this Prospectus without the prior written consent of the
U.S. Underwriters and the International Managers.

No prediction can be made as to the effect, if any, that future sales of
shares, or the availability of shares for future sales, will have on the market
price of the Common Stock prevailing from time to time. Sales of substantial
amounts of Common Stock (including shares issued upon the exercise of stock
options), or the perception that such sales could occur, could adversely affect
prevailing market prices for the Common Stock.

DESCRIPTION OF CAPITAL STOCK

GENERAL

AutoZone is incorporated in the State of Nevada and pursuant to its Articles
of Incorporation, as amended (the "Articles"), the authorized capital stock of
AutoZone consists of 200,000,000 shares of Common Stock, par value $.01 per
share, and 1,000,000 shares of Preferred Stock, par value $.01 per share. At the
close of business on May 4, 1996, AutoZone had outstanding 149,891,533 shares of
Common Stock. There are no outstanding shares of Preferred Stock. All
outstanding shares of Common Stock are fully paid and nonassessable.

COMMON STOCK

Each holder of Common Stock is entitled to one vote for each share owned of
record on matters voted upon by stockholders, and a majority vote is required
for all action to be taken by stockholders, except that, subject to certain
limited exceptions, under Nevada law any director may be removed from office by
the vote of stockholders representing not less than two-thirds of the voting
power of the issued and outstanding Common Stock. In the event of a liquidation,
dissolution or winding-up of AutoZone, the holders of Common Stock are entitled
to share equally and ratably in the assets of AutoZone, if any, remaining after
the payment of all debts and liabilities of AutoZone and the liquidation
preference of any outstanding preferred stock. The Common Stock has no
preemptive rights, no cumulative voting rights and no redemption, sinking fund
or conversion provisions.

Holders of Common Stock are entitled to receive dividends if, as, and when
declared by the Board of Directors out of funds legally available therefor,
subject to the dividend and liquidation rights of any preferred stock that may
be issued and subject to any dividend restrictions that may be contained in
future credit facilities. No dividend or other distribution (including
redemptions or repurchases of shares of capital stock) may be made if after
giving effect to such distribution, AutoZone would not be able to pay its debts
as they become due in the usual course of business, or AutoZone's total assets
would be less than the sum of its total liabilities plus the amount that would
be needed, if AutoZone were to be dissolved at the time of distribution to
satisfy the preferential rights upon dissolution of stockholders whose
preferential rights are superior to those receiving the distribution. AutoZone
does not currently intend to pay dividends on shares of Common Stock. See
"Dividend Policy."

The Nevada Revised Statutes Chapter 78 (the "Nevada Code") contains
provisions restricting the ability of a Nevada corporation to engage in business
combinations with an interested stockholder. Under the Nevada Code, except under
certain circumstances, business combinations with interested stockholders are
not permitted for a period of three years following the date such stockholder
becomes an interested stockholder. The Nevada Code defines an interested
stockholder, generally, as a person who is the beneficial owner, directly or
indirectly, of 10% of the outstanding shares of a Nevada corporation. In
addition, the Nevada Code generally disallows the exercise of voting rights with
respect to "control shares" of an "issuing corporation" held by an "acquiring
person," unless such voting rights are conferred by a majority vote of the
disinterested stockholders. "Control shares" are those outstanding voting shares
of an issuing corporation which an acquiring person and those persons acting in
association with an acquiring person (i) acquire or offer to acquire in an
acquisition of a controlling interest and (ii) acquire within ninety days
immediately preceding the date when the acquiring person became an acquiring
person. An "issuing corporation" is a corporation organized in Nevada which has
two hundred or more stockholders, at least one hundred of whom are stockholders
of record and residents of Nevada, and which does business in Nevada directly or
through an affiliated corporation. The Nevada Code also permits directors to
resist a change or potential change in control of the corporation if the
directors determine that the change or potential change is opposed to or not in
the best interest of the corporation. As a result, AutoZone's Board of Directors
may have considerable discretion in considering and responding to unsolicited
offers to purchase a controlling interest in AutoZone.

The Common Stock is listed on the New York Stock Exchange.

The transfer agent and registrar for the Common Stock is First Chicago Trust
Company of New York.

PREFERRED STOCK

The Board of Directors of AutoZone is authorized, without further
stockholder action, to divide any or all shares of the authorized Preferred
Stock into series and to fix and determine the designations, preferences, and
relative, participating, optional or other special rights, and qualifications,
limitations or restrictions thereon, of any series so established, including
voting powers, dividend rights, liquidation preferences, redemption rights and
conversion privileges. As of the date of this Prospectus, the Board of Directors
has not authorized any series of Preferred Stock and there are no plans,
agreements, or understandings for the issuance of any shares of Preferred Stock.

CERTAIN UNITED STATES TAX CONSEQUENCES
TO NON-UNITED STATES HOLDERS

GENERAL

The following is a general discussion of the material United States federal
income and estate tax consequences of the ownership and disposition of Common
Stock by a holder who is not a United States person (a "Non-U.S. Holder"). For
this purpose, the term "Non-U.S. Holder" is defined as any person who is, as to
the United States, a foreign corporation, a non-resident alien individual, a
non-resident fiduciary of a foreign estate or trust, or a foreign partnership
one or more of the members of which is, for United States federal income tax
purposes, a foreign corporation, a non-resident alien individual or a
non-resident fiduciary of a foreign estate or trust. This discussion does not
address all aspects of United States federal income and estate taxes and does
not deal with foreign, state and local consequences that may be relevant to such
Non-U.S. Holders in light of their personal circumstances. Furthermore, this
discussion is based on current provisions of the Internal Revenue Code of 1986,
as amended (the "Code"), existing and proposed regulations promulgated
thereunder and administrative and judicial interpretations thereof, all of which
are subject to change. EACH PROSPECTIVE PURCHASER OF COMMON STOCK IS ADVISED TO
CONSULT A TAX ADVISOR WITH RESPECT TO CURRENT AND POSSIBLE FUTURE TAX
CONSEQUENCES OF ACQUIRING, HOLDING AND DISPOSING OF COMMON STOCK AS WELL AS ANY
TAX CONSEQUENCES THAT MAY ARISE UNDER THE LAWS OF ANY UNITED STATES STATE, LOCAL
OR OTHER TAXING JURISDICTION.

An individual may, subject to certain exceptions, be deemed to be a resident
alien (as opposed to a non-resident alien) by virtue of being present in the
United States on at least 31 days in the calendar year and for an aggregate of
at least 183 days during a three-year period ending in the current calendar year
(counting for such purposes all of the days present in the current year,
one-third of the days present in the immediately preceding year, and one-sixth
of the days present in the second proceeding year). Resident aliens are subject
to United States federal tax as if they were United States citizens and
residents.

DIVIDENDS

The Company does not currently intend to pay dividends on shares of Common
Stock. See "Dividend Policy." In the event that dividends are paid on shares of
Common Stock, except as described below, such dividends paid to a Non-U.S.
Holder of Common Stock will be subject to withholding of United States federal
income tax at a 30% rate or such lower rate as may be specified by an applicable
income tax treaty, unless the dividends are effectively connected with the
conduct of a trade or business of the Non-U.S. Holder within the United States.
If the dividend is effectively connected with the conduct of a trade or business
of the Non-U.S. Holder within the United States, the dividend would be subject
to United States federal income tax on a net income basis at applicable
graduated individual or corporate rates and would be exempt from the 30%
withholding tax described above. Any such effectively connected dividends
received by a foreign corporation may, under certain circumstances, be subject
to an additional "branch profits tax" at a 30% rate or such lower rate as may be
specified by an applicable income tax treaty.

Under current United States Treasury regulations, dividends paid to an
address outside the United States are presumed to be paid to a resident of such
country (unless the payor has knowledge to the contrary) for purposes of the
withholding discussed above, and, under the current interpretation of United
States Treasury regulations, for purposes of determining the applicability of a
tax treaty rate. Under proposed United States Treasury regulations, not
currently in effect, however, a Non-U.S. Holder of Common Stock who wishes to
claim the benefit of an applicable treaty rate would be required to satisfy
applicable certification and other requirements. Certain certification and
disclosure requirements must be complied with in order to be exempt from
withholding under the effectively connected income exemption discussed above.

A Non-U.S. Holder of Common Stock that is eligible for a reduced rate of
United States withholding tax pursuant to a tax treaty may obtain a refund of
any excess amounts currently withheld by filing an appropriate claim for refund
with the United States Internal Revenue Service (the "Service").

GAIN ON DISPOSITION OF COMMON STOCK

A Non-U.S. Holder generally will not be subject to United States federal
income tax on any gain recognized on a disposition of a share of Common Stock
unless (i) subject to the exception discussed below, the Company is or has been
a "United States real property holding corporation" (a "USRPHC") within the
meaning of Section 897(c)(2) of the Code at any time within the shorter of the
five-year period preceding such disposition or such Non-U.S. Holder's holding
period (the "Required Holding Period"), (ii) the gain is effectively connected
with the conduct of a trade or business within the United States of the Non-U.S.
Holder and, if a tax treaty applies, attributable to a permanent establishment
maintained by the Non-U.S. Holder, (iii) the Non-U.S. Holder is an individual
who holds the share of Common Stock as a capital asset and is present in the
United States for 183 days or more in the taxable year of the disposition and
either (a) such individual has a "tax home" (as defined for United States
federal income tax purposes) in the United States or (b) the gain is
attributable to an office or other fixed place of business maintained in the
United States by such individual, or (iv) the Non-U.S. Holder is subject to tax
pursuant to the Code provisions applicable to certain United States expatriates.
If an individual Non-U.S. Holder falls under clauses (ii) or (iv) above, he or
she will be taxed on his or her net gain derived from the sale under regular
United States federal income tax rates. If the individual Non-U.S. Holder falls
under clauses (iii) above, he or she will be subject to a flat 30% tax on the
gain derived from the sale which may be offset by United States capital losses
(notwithstanding the fact that he or she is not considered a resident of the
United States). If a Non-U.S. Holder that is a foreign corporation falls under
clause (ii) above, it will be taxed on its gain under regular graduated United
States federal income tax rates and, in addition, will under certain
circumstances be subject to the branch profits tax equal to 30% of its
"effectively connected earnings and profits" within the meaning of the Code for
the taxable year, as adjusted for certain items, unless it qualifies for a lower
rate under an applicable income tax treaty.

A corporation is generally a USRPHC if the fair market value of its United
States real property interests equals or exceeds 50% of the sum of the fair
market value of its worldwide real property interests plus its other assets used
or held for use in a trade or business. While not free from doubt, the Company
believes that it is currently a USRPHC; however, a Non-U.S. Holder would
generally not be subject to tax or withholding in respect of such tax, on gain
from a sale or other disposition of Common Stock by reason of the Company's
USRPHC status if the Common Stock is regularly traded on an established
securities market ("regularly traded") during the calendar year in which such
sale or disposition occurs provided that such holder does not own, actually or
constructively, Common Stock with a fair market value in excess of 5% of the
fair market value of all Common Stock outstanding at any time during the
Required Holding Period. The Company believes that the Common Stock will be
treated as regularly traded.

If the Company is or has been a USRPHC within the Required Holding Period,
and if a Non-U.S. Holder owns in excess of 5% of the fair market value of Common
Stock (as described in the preceding paragraph), such Non-U.S. Holder of Common
Stock will be subject to United States federal income tax at regular graduated
rates under certain rules ("FIRPTA tax") on gain recognized on a sale or other
disposition of such Common Stock. In addition, if the Common Stock were not
treated as regularly traded and the Company does not provide certification that
it is not (and has not been during a specified period) a USRPHC for United
States federal income tax purposes, a Non-U.S. Holder (without regard to its
ownership percentage) is subject to withholding in respect of FIRPTA tax at a
rate of 10% of the amount realized on a sale or other disposition of Common
Stock and will be further subject to FIRPTA tax in excess of the amounts
withheld. Any amount withheld pursuant to such withholding tax will be either
(i) refunded to a Non-U.S. Holder if the Company is not a USRPHC for United
States federal income tax purposes and such Non-U.S. Holder files an appropriate
claim for refund with the Service, or (ii) creditable against such Non-U.S.
Holder's United States federal income tax liability. Non-U.S. Holders are urged
to consult their tax advisors concerning the potential applicability of these
provisions.

FEDERAL ESTATE TAXES

Common Stock owned, or treated as owned, by a non-resident alien individual
(as specifically determined for United States federal estate tax purposes) at
the time of death will be included in such holder's gross estate for United
States federal estate tax purposes, unless an applicable estate tax treaty
provides otherwise.

UNITED STATES INFORMATION REPORTING AND BACKUP WITHHOLDING TAX

The Company must report annually to the Service and to each Non-U.S. Holder
the amount of dividends paid to such holder and the tax withheld with respect to
such dividends. These information reporting requirements apply regardless of
whether withholding is required. Copies of the information returns reporting
such dividends and withholding may also be made available to the tax authorities
in the country in which the Non-U.S. Holder resides under the provisions of an
applicable income tax treaty.

United States backup withholding tax (which generally is a withholding tax
imposed at the rate of 31% on certain payments to persons that fail to furnish
certain information under the United States information reporting requirements)
generally will not apply to (a) the payment of dividends paid on Common Stock to
a Non-U.S. Holder at an address outside the United States (unless the payor has
knowledge that the payee is a U.S. person) or (b) the payment of the proceeds of
the sale of Common Stock to or through the foreign office of a foreign broker.
In the case of the payment of proceeds from such a sale of Common Stock through
a foreign office of a broker that is a United States person or a "U.S. related
person," however, information reporting (but not backup withholding) is required
with respect to the payment unless the broker has documentary evidence in its
files that the owner in a Non-U.S. Holder and certain other requirements are met
or the holder otherwise establishes an exemption. For this purpose, a "U.S.
related person" is (i) a "controlled foreign corporation for United States
federal income tax purposes, or (ii) a foreign person 50% or more of whose gross
income from all sources for the three-year period ending with the close of its
taxable year preceding the payment (or for such part of the period that the
broker has been in existence) is derived from activities that are effectively
connected with the conduct of a United States trade or business. The payment of
the proceeds of a sale of shares of Common Stock to or through a United States
office of a broker is subject to information reporting and possible backup
withholding unless the owner certifies its non-United States status under
penalties of perjury or otherwise establishes an exemption. Any amounts withheld
under the backup withholding rules from a payment to a Non-U.S. Holder will be
allowed as a refund or a credit against such Non-U.S. Holder's United States
federal income tax liability, provided that the required information is
furnished to the Service.

The United States Treasury has recently issued proposed regulations
regarding the withholding and information reporting rules discussed above. In
general, the proposed regulations do not alter the substantive withholding and
information reporting requirements but unify current certification procedures
and forms and clarify and modify reliance standards. If finalized in their
current form, the proposed regulations would generally be effective for payments
made after December 31, 1997, subject to certain transition rules.

UNDERWRITING

Subject to the terms and conditions of the U.S. Underwriting Agreement, the
Selling Stockholders have severally agreed to sell to each of the U.S.
Underwriters named below, and each of such U.S. Underwriters has severally
agreed to purchase from the Selling Stockholders, the respective number of
shares of Common Stock set forth opposite its name below:

NUMBER OF
SHARES OF
COMMON
U.S. UNDERWRITER STOCK
- ----------------------------------------------------------------------------------------- -------------

Goldman, Sachs & Co. .................................................................... 2,933,334
Lehman Brothers Inc. .................................................................... 2,933,334
Donaldson, Lufkin & Jenrette Securities Corporation...................................... 2,933,333
Furman Selz LLC .........................................................................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated .................................................................. 2,933,333
Smith Barney Inc. ....................................................................... 2,933,333
-------------
Total.......................................................................... 17,600,000
-------------
-------------

Under the terms and conditions of the U.S. Underwriting Agreement, the U.S.
Underwriters are committed to take and pay for all of the shares offered hereby,
if any are taken.

The U.S. Underwriters propose to offer the shares of Common Stock in part
directly to the public at the initial public offering price set forth on the
cover page of this Prospectus, and in part to certain securities dealers at such
price less a concession of $0.62 per share. The U.S. Underwriters may allow, and
such dealers may reallow, a concession not in excess of $0.10 per share to
certain brokers and dealers. After the shares of Common Stock are released for
sale to the public, the offering price and the other selling terms may from time
to time be varied by the representatives.

AutoZone and the Selling Stockholders have entered into an underwriting
agreement (the "International Underwriting Agreement") with the underwriters of
the international offering (the "International Underwriters") providing for the
concurrent offer and sale of 4,400,000 shares of Common Stock in an
international offering outside the United States. The initial public offering
price and aggregate underwriting discounts per share for the offerings will be
identical. The closing of the offering made hereby is a condition to the closing
of the international offering, and vice versa. The representatives of the
International Underwriters are Goldman Sachs International and Lehman Brothers.

Pursuant to an agreement between the U.S. and international underwriting
syndicates (the "Agreement Between") relating to the offerings, each of the U.S.
Underwriters named herein has agreed, as a part of the distribution of the
shares offered hereby and subject to certain exceptions, it will (a) offer, sell
or deliver shares of Common Stock, directly or indirectly, only in the United
States of America (including the States and the District of Columbia), its
territories, its possessions and other areas subject to its jurisdiction (the
"United States") and to U.S. persons, which term shall mean, for purposes of
this paragraph: (i) any individual who is a resident of the United States or
(ii) any corporation, partnership or other entity organized in or under the laws
of the United States or any political subdivision thereof and whose office most
directly involved with the purchase is located in the United States, and (b)
cause any dealer to whom it may sell such shares at any concession to agree to
observe a similar restriction. Each of the International Underwriters has agreed
pursuant to the Agreement Between that, as a part of the distribution of the
shares offered as part of the international offering, and subject to certain
exceptions, it will (i) not, directly or indirectly, offer, sell or deliver
shares of Common Stock (a) in the United States or to any U.S. persons or (b) to
any person who it believes intends to reoffer, resell or deliver the shares in
the United States or to any U.S. persons and (ii) cause any dealer to whom it
may sell such shares at any concession to agree to observe a similar
restriction.

Pursuant to the Agreement Between, sales may be made between the U.S.
Underwriters and the International Underwriters of such number of shares of
Common Stock as may be mutually agreed. The price of any shares so sold shall be
the initial public offering price, less an amount not greater than the selling
concession.

The KKR Partnerships have severally granted the U.S. Underwriters an option
exercisable for 30 days after the date of this Prospectus to purchase up to an
aggregate of 2,640,000 additional shares of Common Stock, solely to cover
over-allotments, if any. If the U.S. Underwriters exercise such over-allotment
option, the Underwriters have severally agreed, subject to certain conditions,
to purchase approximately the same percentage thereof that the number of shares
to be purchased by each of them, as shown in the foregoing table, bears to the
17,600,000 shares of Common Stock offered hereby. The KKR Partnerships have
granted the International Underwriters a similar option exercisable for up to an
aggregate of 660,000 additional shares of Common Stock.

Each U.S. Underwriter and International Underwriter has represented and
agreed that (i) it has not offered or sold and, prior to the date six months
after the date of issue of the shares of Common Stock, will not offer or sell
any shares of Common Stock to persons in the United Kingdom except to persons
whose ordinary activities involve them in acquiring, holding, managing or
disposing of investments (as principal or agent) for the purposes of their
businesses or otherwise in circumstances which have not resulted and will not
result in an offer to the public in the United Kingdom within the meaning of the
Public Offers of Securities Regulations 1995; (ii) it has complied and will
comply with all applicable provisions of the Financial Services Act 1986 with
respect to anything done by it in relation to the Common Stock in, from or
otherwise involving the United Kingdom, and (iii) it has only issued or passed
on, and will only issue or pass on to any person in the United Kingdom, any
investment advertisement (within the meaning of the Financial Services Act 1986)
relating to the shares of Common Stock if that person falls within Article 11(3)
of the Financial Services Act 1986 (Investment Advertisements) (Exemptions)
Order 1995.

Purchasers of the shares offered hereby may be required to pay stamp taxes
and other charges in accordance with the laws and practices of the country of
purchase in addition to the offering price set forth on the cover page hereof.

Certain of the U.S. Underwriters and International Underwriters have
provided from time to time, and expect to provide in the future, investment
banking services to the Company and its affiliates (including certain of the
Selling Stockholders) for which such U.S. Underwriters and International
Underwriters have received and will receive customary fees and commissions.

The Company, the Selling Stockholders and certain stockholders, directors
and executive officers of the Company have agreed, with certain exceptions, not
to sell or otherwise dispose of, directly or indirectly, any shares of capital
stock of the Company, except for the shares to be sold in the offerings, for a
period of at least 60 days from the date of this Prospectus without the prior
written consent of the U.S. Underwriters and the International Underwriters.

The Company and the Selling Stockholders have agreed to indemnify the U.S.
Underwriters and the International Underwriters against certain liabilities,
including liabilities under the Securities Act, or to contribute to payments
that the U.S. Underwriters and the International Underwriters may be required to
make in respect thereof.

LEGAL MATTERS

Certain legal matters in connection with the sale of the shares of Common
Stock offered hereby will be passed upon for AutoZone and for the Selling
Stockholders by Latham & Watkins, Los Angeles, California, and Schreck, Jones,
Bernhard, Woloson & Godfrey, Las Vegas, Nevada. Certain partners of Latham &
Watkins, members of their families, related persons and others own, and through
the Selling Stockholders, have an indirect interest in, less than 1% of the
Common Stock. Such persons do not have the power to vote or dispose of shares
which are indirectly held, some of which shares will be sold in the offerings.
Certain legal matters in connection with the offerings will be passed upon for
the U.S. Underwriters and the International Underwriters by Simpson Thacher &
Bartlett (a partnership which includes professional corporations), New York, New
York. Simpson Thacher & Bartlett renders legal services to KKR on a regular
basis.

EXPERTS

The financial statements and related schedules of AutoZone as of August 26,
1995 and August 27, 1994 and for each year in the three year period ended August
26, 1995, included or incorporated by reference in the Annual Report on Form
10-K have been audited by Ernst & Young LLP, independent auditors, as set forth
in their reports thereon included or incorporated by reference therein and
incorporated herein by reference. Such financial statements are incorporated
herein by reference in reliance upon such report given upon the authority of
such firm as experts in accounting and auditing.

- ---------------------------------------------
---------------------------------------------
- ---------------------------------------------
---------------------------------------------

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO
WHICH IT RELATES OR ANY OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY
SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.

-------------------

TABLE OF CONTENTS

PAGE
-----

Available Information............................. 3
Incorporation of Certain Documents by Reference... 3
The Company....................................... 4
Selected Financial Data........................... 5
Price Range of Common Stock....................... 6
Dividend Policy................................... 6
Capitalization.................................... 7
Management's Discussion and Analysis of Financial
Condition and Results of Operations.............. 8
Business.......................................... 12
Management........................................ 18
Principal and Selling Stockholders................ 19
Description of Capital Stock...................... 21
Certain United States Tax Consequences to
Non-United States Holders........................ 23
Underwriting...................................... 26
Legal Matters..................................... 28
Experts........................................... 28

22,000,000 SHARES
AUTOZONE, INC.
COMMON STOCK
(PAR VALUE $.01 PER SHARE)

-------------------

[LOGO]

--------------

GOLDMAN, SACHS & CO.
LEHMAN BROTHERS

DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
FURMAN SELZ
MERRILL LYNCH & CO.
SMITH BARNEY INC.

- ---------------------------------------------
---------------------------------------------
- ---------------------------------------------
---------------------------------------------

[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]
REGISTRATION STATEMENT NO. 333-04087
RULE 424(b)(4)
22,000,000 SHARES

[LOGO]

AUTOZONE, INC.
COMMON STOCK
(PAR VALUE $.01 PER SHARE)
-------------------

Of the 22,000,000 shares of Common Stock offered, 4,400,000 shares are being
offered hereby in an international offering outside the United States and
17,600,000 shares are being offered in a concurrent offering in the United
States. The initial public offering price and the aggregate underwriting
discount per share will be identical for both offerings. See "Underwriting".

All of the shares of Common Stock offered hereby are being sold by Selling
Stockholders of the Company. The Selling Stockholders consist of certain KKR
Partnerships that are limited partnerships affiliated with Kohlberg Kravis
Roberts & Co., L.P. and J.R. Hyde, III, the Chairman of the Board and Chief
Executive Officer of the Company. After the offerings, the KKR Partnerships and
Mr. Hyde will own 10.6% and 8.3%, respectively, of the outstanding shares of
Common Stock (assuming exercise in full of the over-allotment options). See "The
Company" and "Principal and Selling Stockholders". The Company will not receive
any of the proceeds from the sale of the shares offered hereby.

INITIAL PUBLIC UNDERWRITING PROCEEDS TO SELLING
OFFERING PRICE DISCOUNT(1) STOCKHOLDERS(2)
--------------------- --------------------------- -------------------

Per Share........... $35.00 $1.05 $33.95
Total(3)............ $770,000,000 $23,100,000 $746,900,000

- -------------
(1) The Company and the Selling Stockholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933. See "Underwriting".

(2) Before deducting estimated expenses of $600,000 payable by the Selling
Stockholders.

(3) The KKR Partnerships have granted the U.S. Underwriters an option for 30
days to purchase up to an additional 660,000 shares of Common Stock at the
initial public offering price per share, less the underwriting discount,
solely to cover over-allotments. Additionally, the KKR Partnerships have
granted the U.S. Underwriters an option for 30 days to purchase up to an
additional 2,640,000 shares of Common Stock at the initial public offering
price per share, less the underwriting discount, solely to cover
over-allotments. If such options are exercised in full, the total initial
public offering price, underwriting discount and proceeds to Selling
Stockholders will be $885,500,000, $26,565,000 and $858,935,000,
respectively. See "Underwriting".
---------------------

The shares offered hereby are offered severally by the International
Underwriters, as specified herein, subject to receipt and acceptance by them and
subject to their right to reject any order in whole or in part. It is expected
that certificates for the shares will be ready for delivery in New York, New
York, on or about June 12, 1996 against payment therefor in immediately
available funds.

GOLDMAN SACHS INTERNATIONAL LEHMAN BROTHERS

DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
FURMAN SELZ
MERRILL LYNCH INTERNATIONAL
SMITH BARNEY INC.

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THE DATE OF THIS PROSPECTUS IS JUNE 6, 1996.

[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]

UNDERWRITING

Subject to the terms and conditions of the International Underwriting
Agreement, the Selling Stockholders have severally agreed to sell to each of the
International Underwriters named below, and each of such International
Underwriters has severally agreed to purchase from the Selling Stockholders the
respective number of shares of Common Stock set forth opposite its name below:

NUMBER OF
SHARES OF
COMMON
INTERNATIONAL UNDERWRITER STOCK
- ------------------------------------------------------------ -----------

Goldman Sachs International................................. 733,334
Lehman Brothers International (Europe)...................... 733,334
Donaldson, Lufkin & Jenrette Securities Corporation......... 733,333
Furman Selz LLC............................................. 733,333
Merrill Lynch International................................. 733,333
Smith Barney Inc............................................ 733,333
-----------
Total............................................. 4,400,000
-----------
-----------

Under the terms and conditions of the International Underwriting Agreement,
the International Underwriters are committed to take and pay for all of the
shares offered hereby, if any are taken.

The International Underwriters propose to offer the shares of Common Stock
in part directly to the public at the initial public offering price set forth on
the cover page of this Prospectus, and in part to certain securities dealers at
such price less a concession of $0.62 per share. The International Underwriters
may allow, and such dealers may reallow, a concession not in excess of $0.10 per
share to certain brokers and dealers. After the shares of Common Stock are
released for sale to the public, the offering price and the other selling terms
may from time to time be varied by the representatives.

AutoZone and the Selling Stockholders have entered into an underwriting
agreement ("U.S. Underwriting Agreement") with the underwriters of the U.S.
offering (the "U.S. Underwriters") providing for the concurrent offer and sale
of 17,600,000 shares of Common Stock in an offering. The initial public offering
price and aggregate underwriting discount per share for the offerings will be
identical. The closing of the offering made hereby is a condition to the closing
of the U.S. offering, and vice versa. The representatives of the U.S.
Underwriters are Goldman, Sachs & Co. and Lehman Brothers.

Pursuant to an agreement between the U.S. and international underwriting
syndicates (the "Agreement Between") relating to the offerings, each of the
International Underwriters named herein has agreed that, as a part of the
distribution of the shares offered hereby and subject to certain exceptions, it
will (a) not offer, sell or deliver shares of Common Stock, directly or
indirectly, in the United States of America (including the States and the
District of Columbia), its territories, its possessions and other areas subject
to its jurisdiction (the "United States") or to U.S. persons, which term shall
mean, for purposes of this paragraph: (i) any individual who is a resident of
the United States or (ii) any corporation, partnership or other entity organized
in or under the laws of the United States or any political subdivision thereof
and whose office most directly involved with the purchase is located in the
United States, and (b) cause any dealer to whom it may sell such shares at any
concession to agree to observe a similar restriction. Each of the U.S.
Underwriters has agreed pursuant to the Agreement Between that, as a part of the
distribution of the shares offered as a part of the U.S. offering, and subject
to certain exceptions, it will offer, sell or deliver the shares of Common Stock
offered, directly or indirectly, only in the United States and to U.S. persons.

[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]

The KKR Partnerships have severally granted the International Underwriters
an option exercisable for 30 days after the date of this Prospectus to purchase
up to an aggregate of 660,000 additional shares of Common Stock, solely to cover
over-allotments, if any. If the International Underwriters exercise such
over-allotment option, the International Underwriters have severally agreed,
subject to certain conditions, to purchase approximately the same percentage
thereof that the number of shares to be purchased by each of them, as shown in
the foregoing table, bears to the 4,400,000 shares of Common Stock offered
hereby. The KKR Partnerships have granted the U.S. Underwriters a similar option
exercisable for up to an aggregate of 2,640,000 additional shares of Common
Stock.

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[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]

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TABLE OF CONTENTS

PAGE
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22,000,000 SHARES

AUTOZONE, INC.

COMMON STOCK

(PAR VALUE $.01 PER SHARE)

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[LOGO]

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GOLDMAN SACHS INTERNATIONAL

LEHMAN BROTHERS

DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
FURMAN SELZ

MERRILL LYNCH INTERNATIONAL

SMITH BARNEY INC.

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