O’Reilly Automotive, Inc. Reports Second Quarter 2024 Results


  • Second quarter comparable store sales growth of 2.3%
  • 7% increase in year-to-date earnings per share to $19.75
  • $1.7 billion net cash provided by operating activities year-to-date

SPRINGFIELD, Mo., July 24, 2024 (GLOBE NEWSWIRE) -- O’Reilly Automotive, Inc. (the “Company” or “O’Reilly”) (Nasdaq: ORLY), a leading retailer in the automotive aftermarket industry, today announced record revenue for its second quarter ended June 30, 2024.

2nd Quarter Financial Results 
Brad Beckham, O’Reilly’s CEO, commented, “I would like to thank all of Team O’Reilly for their tremendous hard work and unwavering commitment to providing excellent customer service and taking care of our customers every day. Our comparable store sales results were below our expectations for the second quarter, as the soft demand environment we experienced at the beginning of the quarter persisted through May. Sales trends improved in June, in line with our expectations, aided by strong performance in summer weather-related categories in many of our markets. Against this challenging backdrop, our Team generated a second quarter comparable store sales increase of 2.3%, on top of a 9.0% increase last year, driven by solid, mid-single digit growth in our professional business. Our Team of Professional Parts People continues to be relentlessly focused on delivering unsurpassed levels of service to our customers, while also prudently managing expenses.”

Sales for the second quarter ended June 30, 2024, increased $203 million, or 5%, to $4.27 billion from $4.07 billion for the same period one year ago. Gross profit for the second quarter increased 4% to $2.17 billion (or 50.7% of sales) from $2.09 billion (or 51.3% of sales) for the same period one year ago. Selling, general and administrative expenses (“SG&A”) for the second quarter increased 6% to $1.30 billion (or 30.5% of sales) from $1.23 billion (or 30.3% of sales) for the same period one year ago. Operating income for the second quarter increased 1% to $863 million (or 20.2% of sales) from $854 million (or 21.0% of sales) for the same period one year ago.

Net income for the second quarter ended June 30, 2024, decreased $5 million, or 1%, to $623 million (or 14.6% of sales) from $627 million (or 15.4% of sales) for the same period one year ago. Diluted earnings per common share for the second quarter increased 3% to $10.55 on 59 million shares versus $10.22 on 61 million shares for the same period one year ago.

Year-to-Date Financial Results 
Mr. Beckham concluded, “Based on our results so far this year, we are updating our full-year comparable store sales guidance from a range of 3.0% to 5.0% to a range of 2.0% to 4.0%. Despite the challenges we have seen in the demand environment in the first half of 2024, we believe our industry’s long-term drivers for demand remain strong. More importantly, we remain confident in our Team’s ability to grow market share by continuously providing exceptional service, supported by best-in-class inventory availability. We continue to be pleased with our new store performance and our Team’s ability to further grow share with expansion in both new and existing markets. During the first half of 2024, we opened 64 new stores in the U.S. and Mexico, and we continue to expect to hit our target of 190 to 200 net, new store openings this year.”

Sales for the first six months of 2024 increased $472 million, or 6%, to $8.25 billion from $7.78 billion for the same period one year ago. Gross profit for the first six months of 2024 increased 6% to $4.20 billion (or 50.9% of sales) from $3.98 billion (or 51.1% of sales) for the same period one year ago. SG&A for the first six months of 2024 increased 7% to $2.59 billion (or 31.4% of sales) from $2.41 billion (or 30.9% of sales) for the same period one year ago. Operating income for the first six months of 2024 increased 3% to $1.62 billion (or 19.6% of sales) from $1.57 billion (or 20.2% of sales) for the same period one year ago.

Net income for the first six months of 2024 increased $26 million, or 2%, to $1.17 billion (or 14.2% of sales) from $1.14 billion (or 14.7% of sales) for the same period one year ago. Diluted earnings per common share for the first six months of 2024 increased 7% to $19.75 on 59 million shares versus $18.49 on 62 million shares for the same period one year ago.

2nd 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, as well as sales from Leap Day in the six months ended June 30, 2024. 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 2.3% for the second quarter ended June 30, 2024, on top of 9.0% for the same period one year ago. Comparable store sales increased 2.8% for the six months ended June 30, 2024, on top of 9.8% for the same period one year ago.

Share Repurchase Program 
During the second quarter ended June 30, 2024, the Company repurchased 0.8 million shares of its common stock, at an average price per share of $1,012.14, for a total investment of $794 million. During the first six months of 2024, the Company repurchased 1.0 million shares of its common stock, at an average price per share of $1,016.43, for a total investment of $1.06 billion. Excise tax on shares repurchased, assessed at one percent of the fair market value of shares repurchased, was $10.6 million for the six months ended June 30, 2024. Subsequent to the end of the second quarter and through the date of this release, the Company repurchased an additional 0.2 million shares of its common stock, at an average price per share of $1,036.84, for a total investment of $224 million. The Company has repurchased a total of 95.3 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 $256.59, for a total aggregate investment of $24.47 billion. As of the date of this release, the Company had approximately $1.28 billion remaining under its current share repurchase authorization.

Updated Full-Year 2024 Guidance 
The table below outlines the Company’s updated guidance for selected full-year 2024 financial data:

  
 For the Year Ending
 December 31, 2024
Net, new store openings190 to 200
Comparable store sales2.0% to 4.0%
Total revenue$16.6 billion to $16.9 billion
Gross profit as a percentage of sales51.0% to 51.5%
Operating income as a percentage of sales19.6% to 20.1%
Effective income tax rate22.4%
Diluted earnings per share (1)$40.75 to $41.25
Net cash provided by operating activities$2.7 billion to $3.1 billion
Capital expenditures$900 million to $1.0 billion
Free cash flow (2)$1.8 billion to $2.1 billion
  

As previously announced, the Company completed the acquisition of Groupe Del Vasto in Canada (“Vast Auto”) in January of 2024, and the results of Vast Auto’s operations have been included in the Company’s consolidated financial statements since the acquisition date. The above updated consolidated guidance for selected full-year 2024 financial data includes expected impacts from Vast Auto’s operations, including an updated estimate of 30 basis points of dilution to gross profit as a percentage of sales but an unchanged estimate of 15 basis points of dilution to operating income as a percentage of sales for the full-year 2024.

(1)  Weighted-average shares outstanding, assuming dilution, used in the denominator of this calculation, includes share repurchases made by the Company through the date of this release.

(2)  Free cash flow is a non-GAAP financial measure. The table below reconciles Free cash flow guidance to Net cash provided by operating activities guidance, the most directly comparable GAAP financial measure:

  For the Year Ending
(in millions) December 31, 2024
Net cash provided by operating activities $2,715 to $3,125
Less:Capital expenditures  900 to  1,000
 Excess tax benefit from share-based compensation payments  15 to  25
Free cash flow $1,800 to $2,100
         

Non-GAAP Information
This release contains certain financial information not derived in accordance with United States generally accepted accounting principles (“GAAP”). These items include adjusted debt to earnings before interest, taxes, depreciation, amortization, share-based compensation, and rent (“EBITDAR”) and free cash flow. The Company does not, nor does it suggest investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, GAAP financial information. The Company believes that the presentation of adjusted debt to EBITDAR and free cash flow provide meaningful supplemental information to both management and investors that is indicative of the Company’s core operations. The Company has included a reconciliation of this additional information to the most comparable GAAP measure in the table above and the selected financial information below.

Earnings Conference Call Information
The Company will host a conference call on Thursday, July 25, 2024, at 10:00 a.m. Central Time to discuss its results as well as future expectations. Investors may listen to the conference call live on the Company’s website at www.OReillyAuto.com by clicking on “Investor Relations” and then “News Room.” Interested analysts are invited to join the call. The dial-in number for the call is (888) 506-0062 and the conference call identification number is 298734. A replay of the conference call will be available on the Company’s website through Thursday, July 24, 2025.

About O’Reilly Automotive, Inc.
O’Reilly Automotive, Inc. was founded in 1957 by the O’Reilly family and is one of the largest specialty retailers of automotive aftermarket parts, tools, supplies, equipment, and accessories in the United States, serving both the do-it-yourself and professional service provider markets. Visit the Company’s website at www.OReillyAuto.com for additional information about O’Reilly, including access to online shopping and current promotions, store locations, hours and services, employment opportunities, and other programs. As of June 30, 2024, the Company operated 6,244 stores across 48 U.S. states, Puerto Rico, Mexico, and Canada.

Forward-Looking Statements
The Company claims the protection of the safe-harbor for forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can identify these statements by forward-looking words such as “estimate,” “may,” “could,” “will,” “believe,” “expect,” “would,” “consider,” “should,” “anticipate,” “project,” “plan,” “intend,” “guidance,” “target,” or similar words. In addition, statements contained within this press release that are not historical facts are forward-looking statements, such as statements discussing, among other things, expected growth, store development, integration and expansion strategy, business strategies, future revenues, and future performance. These forward-looking statements are based on estimates, projections, beliefs, and assumptions and are not guarantees of future events and results. Such statements are subject to risks, uncertainties, and assumptions, including, but not limited to, the economy in general; inflation; consumer debt levels; product demand; a public health crisis; the market for auto parts; competition; weather; tariffs; availability of key products and supply chain disruptions; business interruptions, including terrorist activities, war and the threat of war; failure to protect our brand and reputation; challenges in international markets; volatility of the market price of our common stock; our increased debt levels; credit ratings on public debt; damage, failure, or interruption of information technology systems, including information security and cyber-attacks; historical growth rate sustainability; our ability to hire and retain qualified employees; risks associated with the performance of acquired businesses; and governmental regulations. Actual results may materially differ from anticipated results described or implied in these forward-looking statements. Please refer to the “Risk Factors” section of the annual report on Form 10-K for the year ended December 31, 2023, and subsequent Securities and Exchange Commission filings, for additional factors that could materially affect the Company’s financial performance. Forward-looking statements speak only as of the date they were made, and the Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by applicable law.

For further information contact:Investor Relations Contacts
 Mark Merz (417) 829-5878
 Eric Bird (417) 868-4259
  
 Media Contact
 Sonya Cox (417) 829-5709
  


O’REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
          
  June 30, 2024 June 30, 2023 December 31, 2023
     (Unaudited)    (Unaudited)    (Note)
Assets         
Current assets:         
Cash and cash equivalents $ 145,042  $57,880  $279,132 
Accounts receivable, net   475,596   374,714   375,049 
Amounts receivable from suppliers   144,303   138,666   140,443 
Inventory   4,788,686   4,626,410   4,658,367 
Other current assets   125,861   113,597   105,311 
Total current assets   5,679,488   5,311,267   5,558,302 
          
Property and equipment, at cost   8,730,297   7,872,672   8,312,367 
Less: accumulated depreciation and amortization   3,434,610   3,170,474   3,275,387 
Net property and equipment   5,295,687   4,702,198   5,036,980 
          
Operating lease, right-of-use assets   2,240,314   2,185,196   2,200,554 
Goodwill   1,000,074   897,128   897,696 
Other assets, net   177,619   180,834   179,463 
Total assets $ 14,393,182  $13,276,623  $13,872,995 
          
Liabilities and shareholders’ deficit         
Current liabilities:         
Accounts payable $ 6,226,238  $6,219,838  $6,091,700 
Self-insurance reserves   125,859   131,781   128,548 
Accrued payroll   143,194   127,333   138,122 
Accrued benefits and withholdings   186,715   150,453   174,650 
Income taxes payable   89,344   233,507   7,860 
Current portion of operating lease liabilities   401,713   380,618   389,536 
Other current liabilities   950,145   450,169   730,937 
Total current liabilities   8,123,208   7,693,699   7,661,353 
          
Long-term debt   5,397,774   4,873,702   5,570,125 
Operating lease liabilities, less current portion   1,912,036   1,870,392   1,881,344 
Deferred income taxes   335,600   260,642   295,471 
Other liabilities   207,956   205,661   203,980 
          
Shareholders’ equity (deficit):         
Common stock, $0.01 par value:         
Authorized shares – 245,000,000         
Issued and outstanding shares –         
58,238,711 as of June 30, 2024, and         
60,402,359 as of June 30, 2023, and         
59,072,792 as of December 31, 2023   582   604   591 
Additional paid-in capital   1,415,799   1,330,270   1,352,275 
Retained deficit   (3,008,665)  (2,994,418)  (3,131,532)
Accumulated other comprehensive income   8,892   36,071   39,388 
Total shareholders’ deficit   (1,583,392)  (1,627,473)  (1,739,278)
          
Total liabilities and shareholders’ deficit $ 14,393,182  $13,276,623  $13,872,995 

Note: The balance sheet at December 31, 2023, has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by United States generally accepted accounting principles for complete financial statements.

 
O’REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per share data)
             
  For the Three Months Ended  For the Six Months Ended
  June 30,  June 30, 
     2024     2023     2024     2023 
Sales $ 4,272,201  $4,068,991  $ 8,248,441  $7,776,855 
Cost of goods sold, including warehouse and distribution expenses   2,104,141   1,982,409    4,046,209   3,799,944 
Gross profit   2,168,060   2,086,582    4,202,232   3,976,911 
             
Selling, general and administrative expenses   1,304,762   1,232,809    2,586,453   2,406,493 
Operating income   863,298   853,773    1,615,779   1,570,418 
             
Other income (expense):                
Interest expense   (54,831)  (49,587)   (111,979)  (94,159)
Interest income   1,528   760    3,184   1,628 
Other, net   1,561   4,186    4,962   8,665 
Total other expense   (51,742)  (44,641)   (103,833)  (83,866)
             
Income before income taxes   811,556   809,132    1,511,946   1,486,552 
Provision for income taxes   188,708   181,767    341,860   342,302 
Net income $ 622,848  $627,365  $ 1,170,086  $1,144,250 
             
Earnings per share-basic:                
Earnings per share $ 10.61  $10.32  $ 19.88  $18.66 
Weighted-average common shares outstanding – basic   58,679   60,817    58,849   61,324 
             
Earnings per share-assuming dilution:                
Earnings per share $ 10.55  $10.22  $ 19.75  $18.49 
Weighted-average common shares outstanding – assuming dilution   59,044   61,366    59,250   61,878 


 
O’REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
       
  For the Six Months Ended
  June 30, 
     2024     2023 
Operating activities:        
Net income $ 1,170,086  $1,144,250 
Adjustments to reconcile net income to net cash provided by operating activities:        
Depreciation and amortization of property, equipment and intangibles   222,885   191,673 
Amortization of debt discount and issuance costs   3,201   2,431 
Deferred income taxes   18,175   13,507 
Share-based compensation programs   14,229   14,571 
Other   5,215   75 
Changes in operating assets and liabilities:        
Accounts receivable   (79,475)  (31,443)
Inventory   (85,137)  (257,337)
Accounts payable   117,582   335,299 
Income taxes payable   81,228   261,208 
Other   185,085   (22,865)
Net cash provided by operating activities   1,653,074   1,651,369 
       
Investing activities:        
Purchases of property and equipment   (474,607)  (460,942)
Proceeds from sale of property and equipment   7,528   7,056 
Investment in tax credit equity investments     (4,149)
Other, including acquisitions, net of cash acquired   (155,376)  (1,971)
Net cash used in investing activities   (622,455)  (460,006)
       
Financing activities:        
Proceeds from borrowings on revolving credit facility   30,000   2,776,000 
Payments on revolving credit facility   (30,000)  (1,976,000)
Net payments of commercial paper   (173,500)   
Principal payments on long-term debt     (300,000)
Payment of debt issuance costs     (24)
Repurchases of common stock   (1,063,791)  (1,791,451)
Net proceeds from issuance of common stock   73,790   48,680 
Other   (569)  (354)
Net cash used in financing activities   (1,164,070)  (1,243,149)
       
Effect of exchange rate changes on cash   (639)  1,083 
Net decrease in cash and cash equivalents   (134,090)  (50,703)
Cash and cash equivalents at beginning of the period   279,132   108,583 
Cash and cash equivalents at end of the period $ 145,042  $57,880 
       
Supplemental disclosures of cash flow information:        
Income taxes paid $ 80,401  $65,361 
Interest paid, net of capitalized interest   110,449   88,924 


 
O’REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
SELECTED FINANCIAL INFORMATION
(Unaudited)
        
  For the Twelve Months Ended
  June 30, 
Adjusted Debt to EBITDAR:    2024    2023
(In thousands, except adjusted debt to EBITDAR ratio)        
GAAP debt $ 5,397,774 $4,873,702
Add:Letters of credit   137,501  111,428
 Unamortized discount and debt issuance costs   27,226  26,298
 Six-times rent expense   2,625,438  2,455,938
Adjusted debt $ 8,187,939 $7,467,366
       
GAAP net income $ 2,372,417 $2,258,260
Add:Interest expense   219,488  179,654
 Provision for income taxes   657,727  636,388
 Depreciation and amortization   440,273  381,561
 Share-based compensation expense   27,169  28,327
 Rent expense (i)   437,573  409,323
EBITDAR $ 4,154,647 $3,893,513
       
Adjusted debt to EBITDAR   1.97  1.92

(i)   The table below outlines the calculation of Rent expense and reconciles Rent expense to Total lease cost, per ASC 842, the most directly comparable GAAP financial measure, for the twelve months ended June 30, 2024 and 2023 (in thousands):

  For the Twelve Months Ended
  June 30, 
  2024 2023
Total lease cost, per ASC 842    $520,327 $485,805
Less:Variable non-contract operating lease components, related to property taxes and insurance  82,754  76,482
Rent expense $437,573 $409,323


  June 30, 
     2024 2023
Selected Balance Sheet Ratios:          
Inventory turnover (1)   1.7  1.7
Average inventory per store (in thousands) (2) $ 767 $762
Accounts payable to inventory (3)   130.0%  134.4%


   For the Three Months Ended  For the Six Months Ended
   June 30,  June 30, 
      2024    2023    2024    2023
Reconciliation of Free Cash Flow (in thousands):                
Net cash provided by operating activities $ 948,859 $937,605 $ 1,653,074 $1,651,369
Less:Capital expenditures   225,367  237,674   474,607  460,942
 Excess tax benefit from share-based compensation payments   5,258  14,612   21,378  18,990
 Investment in tax credit equity investments    4,149    4,149
Free cash flow $ 718,234 $681,170 $ 1,157,089 $1,167,288


  For the Three Months Ended  For the Six Months Ended
  June 30,  June 30, 
     2024    2023    2024    2023
Revenue Disaggregation (in thousands):           
Sales to do-it-yourself customers$ 2,149,044 $2,130,002 $ 4,151,030 $4,048,469
Sales to professional service provider customers   1,999,704  1,853,364   3,869,444  3,565,328
Other sales, sales adjustments, and sales from the acquired Vast Auto stores   123,453  85,625   227,967  163,058
Total sales $ 4,272,201 $4,068,991 $ 8,248,441 $7,776,855


  For the Three Months Ended  For the Six Months Ended  For the Twelve Months Ended
  June 30,  June 30,  June 30, 
     2024    2023    2024   2023     2024     2023 
Store Count:            
Beginning domestic store count  6,131 5,986  6,095 5,929   6,027  5,873 
New stores opened  21 41  57 100   126  158 
Stores closed    (2)  (1) (4)
Ending domestic store count  6,152 6,027  6,152 6,027   6,152  6,027 
             
Beginning Mexico store count  63 43  62 42   44  27 
New stores opened  6 1  7 2   25  17 
Ending Mexico store count  69 44  69 44   69  44 
             
Beginning Canada store count  23        
Stores acquired    23    23   
Ending Canada store count  23   23    23   
             
Total ending store count  6,244 6,071  6,244 6,071   6,244  6,071 


  For the Three Months Ended  For the Twelve Months Ended
  June 30,  June 30, 
     2024    2023    2024    2023
Store and Team Member Information:            
Total employment   91,874  90,670       
Square footage (in thousands) (4)   47,500  45,622      
Sales per weighted-average square foot (4)(5) $ 87.88 $88.12 $ 341.51 $334.21
Sales per weighted-average store (in thousands) (4)(6) $ 677 $665 $ 2,613 $2,516

(1) Calculated as cost of goods sold for the last 12 months divided by average inventory. Average inventory is calculated as the average of inventory for the trailing four quarters used in determining the denominator. 
(2) Calculated as inventory divided by store count at the end of the reported period. 
(3) Calculated as accounts payable divided by inventory. 
(4) Represents O’Reilly’s U.S. and Puerto Rico operations only. 
(5) Calculated as sales less jobber sales, divided by weighted-average square footage. Weighted-average square footage is determined by weighting store square footage based on the approximate dates of store openings, acquisitions, expansions, or closures. 
(6) Calculated as sales less jobber sales, divided by weighted-average stores. Weighted-average stores is determined by weighting stores based on their approximate dates of openings, acquisitions, or closures.



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