Inventory Turnover › AutoZone
AutoZone Inventory Turnover: Why the Best Auto-Parts Retailer Turns So Slowly
AutoZone, Inc. (AZO) reported 1.4x inventory turnover in fiscal 2025 (year ended August 30, 2025), down from 1.5x in FY24. That is near the bottom of the retail range, the opposite end from Costco. It is also entirely deliberate. All figures from the company 10-K filings on SEC EDGAR.
Quick answer: AutoZone's fiscal 2025 and 2024 10-K inventory turnover ratio
Fiscal 2025 (10-K)
1.4x for the year ended August 30, 2025. $8.97B cost of sales over roughly $6.59B average inventory ($6.16B opening, $7.03B closing). About 268 days of inventory on hand.
Fiscal 2024 (10-K)
1.5x for the year ended August 31, 2024. $8.67B cost of sales over roughly $5.96B average inventory. About 251 days on hand.
Turnover = cost of sales / average inventory (mean of opening and closing balance-sheet merchandise inventory). Days on hand = 365 / turnover. Figures taken from AutoZone's 10-K filings on SEC EDGAR (CIK 0000866787), verified August 2026.
FY22 - FY25 turnover history
| Fiscal Year | Cost of sales | Inv (start) | Inv (end) | Turnover | Days on hand |
|---|---|---|---|---|---|
| FY22 (ended Aug 27, 2022) | $7.78B | $4.64B | $5.64B | 1.5x | 241 |
| FY23 (ended Aug 26, 2023) | $8.39B | $5.64B | $5.76B | 1.5x | 248 |
| FY24 (ended Aug 31, 2024) | $8.67B | $5.76B | $6.16B | 1.5x | 251 |
| FY25 (ended Aug 30, 2025) | $8.97B | $6.16B | $7.03B | 1.4x | 268 |
Turnover rounds to one decimal; days-on-hand carries the finer trend. FY22-FY24 all round to 1.5x while days-on-hand drifted from 241 to 251 as the inventory base grew.
Why turnover is structurally low
1. Availability is the product
A DIY customer or a repair shop needs the one specific part their vehicle takes, today. AutoZone wins that sale by having it in stock. That means carrying tens of thousands of SKUs across engine, brake, electrical and body categories, spanning decades of vehicle model-years. Most of those parts sell a handful of times a year. Deep, slow-moving assortment is the point, and slow assortment turns slowly.
2. Mega-hubs push inventory up, not down
AutoZone's growth strategy is the mega-hub, a large store stocking 100,000+ SKUs that same-day replenishes satellite stores nearby. Building out that network raised merchandise inventory roughly 14% in FY25, faster than cost of sales grew, which is why turnover eased from 1.5x to 1.4x and days on hand rose to 268. The company is deliberately investing in more stock to widen the availability moat.
3. High margin pays for slow turns
AutoZone earned a gross margin near 52.6% in fiscal 2025 ($18.94B revenue, $8.97B cost of sales). A part that turns once a year at a 50%+ margin generates far more gross profit per dollar of inventory than a grocery item turning 15 times at a thin margin. GMROI, not turnover alone, is the fair lens for a high-margin parts retailer.
The real moat: negative working capital
The number that makes AutoZone's low turnover irrelevant to its cash position is accounts payable. In fiscal 2025 AutoZone owed vendors $8.03B against merchandise inventory of $7.03B. Payables exceed the entire inventory position, a ratio of about 114%. Vendors finance more than 100% of the stock on the shelf.
In practice AutoZone sells a large share of a part's cost before its own payment to the vendor comes due. Inventory can sit for 268 days without tying up AutoZone's cash, because it is the supplier's cash funding it. That is a negative cash-conversion cycle reached from the opposite direction to Costco: Costco gets there through 13x velocity, AutoZone through vendor payment terms on slow-moving stock.
| Fiscal Year | Accounts payable | Merchandise inventory | AP / inventory |
|---|---|---|---|
| FY22 | $7.30B | $5.64B | 130% |
| FY23 | $7.20B | $5.76B | 125% |
| FY24 | $7.36B | $6.16B | 120% |
| FY25 | $8.03B | $7.03B | 114% |
Accounts payable and merchandise inventory from the same fiscal-year 10-K balance sheets (SEC EDGAR, CIK 0000866787). The ratio has narrowed from 130% to 114% as the mega-hub build grew inventory faster than payables, but vendors still finance the whole book.
What benchmarking against AutoZone teaches
The lesson is that turnover is a means, not a goal. AutoZone would post a much higher ratio if it thinned its assortment, and it would lose the sales that depend on having the odd part in stock. For a hard-parts retailer, the right questions are:
- What is your GMROI? A high-margin item can justify slow turns; a low-margin one cannot. Turnover in isolation flatters grocery and penalises parts unfairly.
- Who finances the inventory? If payables cover the stock, slow turnover does not consume working capital. Measure the cash-conversion cycle, not just the turn.
- Does availability drive the sale? Where being in stock is the value proposition, depth of assortment is an asset to protect, not a turnover drag to cut.
Compare your own ratio to the auto-parts sector band, not to a blended retail-wide average or to a warehouse club. A 1.4x turn is excellent for aftermarket parts and would be a crisis for a supermarket.
Frequently asked questions
What is AutoZone's inventory turnover ratio in fiscal 2025?
AutoZone turned its inventory 1.4x in fiscal 2025, the year ended August 30, 2025. That is $8.97B of cost of sales divided by roughly $6.59B average merchandise inventory (the mean of the $6.16B opening and $7.03B closing balances) from its 10-K. It is among the lowest turnover in US retail, and by design.
Why is AutoZone's inventory turnover so low?
Availability is the product. A hard-parts retailer wins when it has the exact part a repair needs in stock, so AutoZone carries tens of thousands of slow-moving SKUs, most of which sell a handful of times a year. Turnover of roughly 1.4x (about 268 days of inventory) is the cost of that in-stock promise. It is a deliberate trade of velocity for assortment, not a sign of weak inventory management.
How can AutoZone be a great business with such low turnover?
Two things offset the slow turns. First, gross margin is high (about 52.6% in fiscal 2025), so each slow-moving part earns far more per turn than a grocery item. Second, AutoZone runs on negative working capital: its accounts payable ($8.03B in FY25) exceed its entire merchandise inventory ($7.03B), so vendors finance more than 100% of the stock on the shelf. AutoZone effectively sells parts before it has paid for them, which is why low turnover does not tie up its own cash.
How is AutoZone's inventory turnover calculated from the 10-K?
Divide cost of sales by average merchandise inventory, where average inventory is the mean of the opening and closing balance-sheet inventory for the fiscal year. Both figures come from AutoZone's 10-K on SEC EDGAR (CIK 0000866787); AutoZone tags cost of sales as CostOfGoodsAndServicesSold and inventory as InventoryFinishedGoodsNetOfReserves in its XBRL data.
Is AutoZone's turnover higher or lower than OReilly and Advance Auto Parts?
All three run structurally low. On their latest fiscal 2025 10-Ks, OReilly Automotive turned about 1.6x, AutoZone 1.4x, and Advance Auto Parts 1.3x. The whole aftermarket parts sector sits near the bottom of the retail turnover range because deep parts availability, not velocity, is the moat.