O'Reilly Automotive, Inc. Reports Third Quarter 2023 Results
October 26, 2023 at 10:53 am EDT
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SPRINGFIELD, Mo.- O'Reilly Automotive, Inc. (the 'Company' or 'O'Reilly') (Nasdaq: ORLY), a leading retailer in the automotive aftermarket industry, today announced record revenue and earnings for its third quarter ended September 30, 2023.
* Third quarter comparable store sales growth of 8.7%
* 17% increase in third quarter diluted earnings per share to $10.72
* $2.5 billion net cash provided by operating activities year-to-date
3rd Quarter Financial Results
Greg Johnson, O'Reilly's CEO, commented, 'We are pleased to once again report another quarter of strong performance and profitable growth, highlighted by an 8.7% increase in comparable store sales and a 17% increase in diluted earnings per share to $10.72. Team O'Reilly's consistent execution of our proven dual market strategy and dedication to our culture of excellent customer service resulted in another quarter of mid-teen professional and solid DIY comparable store sales growth. Our profitable growth is the direct result of our Team Members' hard work and unwavering commitment to providing the highest level of service in our industry, and I would like to thank each of them for their ongoing contributions to our long-term success.'
Sales for the third quarter ended September 30, 2023, increased $405 million, or 11%, to $4.20 billion from $3.80 billion for the same period one year ago. Gross profit for the third quarter increased 12% to $2.16 billion (or 51.4% of sales) from $1.93 billion (or 50.9% of sales) for the same period one year ago. Selling, general and administrative expenses ('SG&A') for the third quarter increased 12% to $1.26 billion (or 30.1% of sales) from $1.13 billion (or 29.8% of sales) for the same period one year ago. Operating income for the third quarter increased 12% to $897 million (or 21.3% of sales) from $804 million (or 21.2% of sales) for the same period one year ago.
Net income for the third quarter ended September 30, 2023, increased $64 million, or 11%, to $650 million (or 15.5% of sales) from $585 million (or 15.4% of sales) for the same period one year ago. Diluted earnings per common share for the third quarter increased 17% to $10.72 on 61 million shares versus $9.17 on 64 million shares for the same period one year ago.
Year-to-Date Financial Results
Mr. Johnson continued, 'As a result of our strong year-to-date performance and a solid start to the fourth quarter thus far in October, we are raising our full-year 2023 comparable store sales guidance to a range of 7.0% to 8.0%. We face our most challenging sales comparisons of the year in the fourth quarter, as we lap the 9.0% comparable store sales increase in the fourth quarter last year. Our Team has demonstrated the ability to drive sustained robust sales growth on top of increasingly challenging comparisons, and we are very pleased with the compounding share gains we continue to earn quarter after quarter.'
Mr. Johnson concluded, 'Year-to-date, we have opened 140 net, new stores, and we are on track to achieve our goal of 180 to 190 net, new store openings in 2023. We remain very pleased with the performance of our new stores and are confident in our ability to profitably grow in new and existing markets, driven by our Team's ability to gain market share by relentlessly providing industry-leading customer service, supported by best-in-class parts availability. Looking ahead into next year, we are pleased to announce an increase to our expected annual new store openings with our 2024 new store opening target of 190 to 200 net, new store openings.'
Sales for the first nine months of 2023 increased $1.21 billion, or 11%, to $11.98 billion from $10.77 billion for the same period one year ago. Gross profit for the first nine months of 2023 increased 11% to $6.14 billion (or 51.2% of sales) from $5.53 billion (or 51.3% of sales) for the same period one year ago. SG&A for the first nine months of 2023 increased 13% to $3.67 billion (or 30.6% of sales) from $3.26 billion (or 30.2% of sales) for the same period one year ago. Operating income for the first nine months of 2023 increased 9% to $2.47 billion (or 20.6% of sales) from $2.27 billion (or 21.1% of sales) for the same period one year ago.
Net income for the first nine months of 2023 increased $150 million, or 9%, to $1.79 billion (or 15.0% of sales) from $1.64 billion (or 15.3% of sales) for the same period one year ago. Diluted earnings per common share for the first nine months of 2023 increased 16% to $29.20 on 61 million shares versus $25.08 on 66 million shares for the same period one year ago.
3rd Quarter Comparable Store Sales Results
Comparable store sales are calculated based on the change in sales for U.S. stores open at least one year and exclude sales of specialty machinery, sales to independent parts stores, and sales to Team Members. Online sales for ship-to-home orders and pick-up-in-store orders for U.S. stores open at least one year are included in the comparable store sales calculation. Comparable store sales increased 8.7% for the third quarter ended September 30, 2023, on top of 7.6% for the same period one year ago. Comparable store sales increased 9.4% for the nine months ended September 30, 2023, on top of 5.6% for the same period one year ago.
Share Repurchase Program
During the third quarter ended September 30, 2023, the Company repurchased 0.9 million shares of its common stock, at an average price per share of $938.11, for a total investment of $800 million. During the first nine months of 2023, the Company repurchased 3.0 million shares of its common stock, at an average price per share of $874.99, for a total investment of $2.59 billion. Excise tax on shares repurchased, assessed at one percent of the fair market value of net shares repurchased, was $23.8 million for the first nine months of 2023. Subsequent to the end of the third quarter and through the date of this release, the Company repurchased an additional 0.5 million shares of its common stock, at an average price per share of $910.21, for a total investment of $420 million. The Company has repurchased a total of 93.9 million shares of its common stock under its share repurchase program since the inception of the program in January of 2011 and through the date of this release, at an average price of $245.24, for a total aggregate investment of $23.04 billion. As of the date of this release, the Company had approximately $712 million remaining under its current share repurchase authorization.
Updated Full-Year 2023 Guidance: See full release at:
O'Reilly Automotive, Inc. is one of the largest American distributors of automotive parts. The products are sold under own brands (BesTest®, BrakeBest®, Cartek®, Import Direct®, MasterPro®, MicroGard®, Murray®, Omnispark®, O'Reilly Auto Parts®, Precision®, Power Torque®, Super Start®, Syntec® and Ultima®) and third-party brands (AC Delco, Armor All, Bosch, Castrol, Dorman, Fel-Pro, Gates Rubber, Lucas Oil, Mobil1, Monroe, Moog, Pennzoil, Prestone, Standard, STP, Turtle Wax, Valvoline, Wagner et Wix). The group's activity is primarily organized around 3 families of products:
- automotive parts: alternator, starters, water pumps, chassis parts, etc.;
- maintenance products: antifreeze, filters, etc.;
- accessories: primarily automotive carpets and seat covers.
At the end of 2022, the products were marketed through a network of 5,971 stores located in the United States (5,929) and Mexico (42).
O'REILLY AUTOMOTIVE, INC 
