Good morning, everyone, and thank you for joining us today for AutoZone's 2025 Annual Meeting of Stockholders. I am Phil Daniele, President and CEO of AutoZone, and I will be presiding at this meeting. Of course, it would not be an official AutoZone meeting if we didn't start our meeting with a Cheer and a Pledge. Daman Payne, will you please lead us in the Cheer and the Pledge?
Three, two, one, who's the best?
AutoZone!
Who's number one?
The customer!
AutoZone is always the customer first! We know our partners are so bright! We have the best merchandise at the right price!
Thank you, Daman. Does anyone have an extra mile or story to share with us?
Hi, everyone. Stephen Thomas, Senior Category Manager, Friction and Hardware, Customer Satisfaction, 12-year AutoZoner. This comes to us from store 2387 out of Kansas City. On Monday, November 10th, 2025, Curtis Porter went out of his way to assist a commercial customer from my store, 2374, that was broken down on the highway in Grandview, Missouri. He was able to get all the parts the customer needed and then take them to the customer on the side of the road. He then stayed with the customer to help him and get back on the road safely. The customer even called me the next day, saying how thankful he was to have AutoZone to rely on when in need.
Now I will turn the meeting over to Jenna Bedsole, our Senior Vice President, General Counsel, and Secretary.
Thank you, Phil.
Ms. Cassandra Shen from Computershare is serving as our Independent Inspector of Elections. A complete list of the holders of record of the company's common stock on October 20th, 2025, which holders are entitled to vote at this meeting, is available here for inspection. Also, I have received an affidavit of mailing from Computershare stating that notice of the meeting was duly given to stockholders of record as of the close of business on October 20th, 2025. Finally, a tabulation of the proxies received from the stockholders indicates that more than a majority of the outstanding shares entitled to vote are represented at this meeting, and a quorum is present.
Thanks, Jenna. I hereby call this meeting to order. As a reminder, it is not necessary for stockholders to vote at this meeting if they have already voted. If you have not voted or would like to change your vote, please raise your hand, and a ballot will be provided to you. Before we proceed to the first order of business, I'd like to recognize our Senior Management Team, the AutoZone Executive Committee, who are with us today. Thank you for your leadership in delivering another great year for our customers, AutoZoners, communities, and our stockholders. Also with us today are my fellow director nominees, whom I will introduce shortly, and Mike Walsh from Ernst & Young LLP, our Independent Auditor. With that, let's proceed to the items of business.
Our first order of business is the election of directors to serve until the next annual meeting of stockholders in 2026. The following directors have been nominated for re-election to the board. The following are at this meeting and present with us today: myself, Phil Daniele, Mike George, Linda Goodspeed, Butch Graves, Brian Hannasch, Gale King, Claire McDonough, George Mrkonic, Bill Rhodes, Jill Soltau, and serving with us virtually today is Constantino Spas Montesinos. The second order of business is the ratification of the appointment of Ernst & Young LLP as the company's Independent Registered Public Accounting Firm for fiscal year 2026. The third order of business is a non-binding advisory vote to approve the compensation of our Named Executive Officers. The Board of Directors unanimously recommends that stockholders vote for each of the director nominees, for Ernst & Young, and for the advisory vote on executive compensation.
Since there are no other matters to properly come before this meeting, we will now proceed with the vote. For those stockholders voting at the meeting, please complete your vote now, and we will collect your ballots. I now declare the polls for the 2025 Annual Meeting of Stockholders are closed. Jenna, has the Inspector of Elections presented the results?
Yes.
The Inspector of Elections has presented her preliminary report. There are present at this meeting in person or by proxy 14,846,704 shares of the company's common stock, representing 89% of the approximate 16.6 million shares outstanding as of October 20th, 2025. Based upon this report, all 11 directors have been re-elected, the appointment of Ernst & Young LLP for fiscal year 2026 has been ratified, and the non-binding advisory vote on executive compensation has been approved. The final vote results will be filed on a current report on Form 8-K.
Since there is no further business, the official business of this meeting is hereby adjourned. At this time, we will open the floor for any questions. As there are none and seeing no questions, I'd like to thank—oh, yes.
I want to know what's the LIFO effect due to the tariffs, and are there any changes in the supply chain, the way we are sourcing the parts? Thank you.
Yeah, well, the LIFO effect is caused predominantly by, you know, incoming cost that's higher than our current inventory. Those charges for the LIFO effect for Q1 was just under $100 million. For Q2, we're thinking it'll be somewhere around $60 million, and that'll continue as we see higher tariffs coming into our cost of goods. I assume that's your question.
Yeah, we've been working on changing our supply chain strategies going back, frankly, since some of the first tariffs came in in 2016 and 2017, and our strategy has been to diversify our sourcing in the number of countries that we source from, as well as in virtually every category. Do we have multiple suppliers for every category so that we reduce the risk and ultimately can control the cost as much as possible on those categories? Ultimately, we'd like to source from countries that have the quality that we need and require to take care of our customers, as well as mitigating the tariff impact and making sure that we have a supply chain that's sustainable so we have product for our customers.
One more question. What's the strategy as far as the international expansion in Mexico, especially?
So, with as we've talked about plenty of times, our strategy, we like our Mexico and our Brazil strategy. Both of them are great businesses for us. As we've said, you know, last year we opened 89 stores in Mexico. We opened, trying to remember the number, seven or eight in Brazil. We'll continue that type of strategy. Ultimately, longer term, domestically, we'd like to open around 300 stores by 2028, and then we'll open another 200 stores internationally to get us to a total number around 500 stores globally by 2028. Those numbers will continue to ratchet up as we get to 2028. There'll be incrementally more this year in 2026 than there were in 2025, more in 2027, and then we'll get to a steady run rate of somewhere around 500 stores globally.
Thank you.
Thank you. Okay. Any other questions?
Great. I'd like to thank our shareholders for your continued confidence in our mission, and I'd like to thank all AutoZoners across the globe for their commitment to living the pledge. Now, let's deliver a great 2026 by focusing on continuing to provide WOW Customer Service. Daman, could you come back up and close us out? Thank you.