On October 23, 2024, O'Reilly Automotive Inc (ORLY, Financial) released its 8-K filing detailing its financial performance for the third quarter ended September 30, 2024. The company, a leading retailer in the automotive aftermarket industry, operates over 6,000 stores across the United States and Mexico, serving both do-it-yourself and professional markets.
Performance Overview
O'Reilly Automotive Inc (ORLY, Financial) reported a 4% increase in sales for the third quarter, reaching $4.36 billion, slightly below the analyst estimate of $4.425 billion. The company's diluted earnings per share (EPS) rose by 6% to $11.41, falling short of the analyst estimate of $11.61. The comparable store sales growth was 1.5%, reflecting the challenges posed by broad-based consumer pressures and a soft demand environment.
Brad Beckham, O’Reilly’s CEO, commented, “Our comparable store sales increased 1.5% in the third quarter, as we faced broad-based consumer pressures and a soft demand environment on both the professional and DIY sides of our business. While our third quarter results were below our expectations, we are pleased with our Team’s unwavering dedication to our customers and their ability to still deliver positive comparable store sales results in tough conditions.”
Financial Achievements and Challenges
Despite the challenging environment, O'Reilly Automotive Inc (ORLY, Financial) achieved a gross profit increase of 4% to $2.25 billion, maintaining a gross margin of 51.6%. However, selling, general, and administrative expenses rose by 7% to $1.35 billion, impacting the operating income, which remained flat at $897 million. The net income for the quarter increased by 2% to $665 million.
The company's year-to-date performance showed a 5% increase in sales to $12.61 billion and a 2% rise in net income to $1.84 billion. The diluted EPS for the first nine months of 2024 increased by 7% to $31.14.
Key Financial Metrics
O'Reilly Automotive Inc (ORLY, Financial) reported $2.4 billion in net cash provided by operating activities year-to-date. The company also repurchased 0.5 million shares of its common stock during the third quarter, totaling an investment of $541 million. The balance sheet showed total assets of $14.58 billion and total liabilities of $14.58 billion, with a shareholders' deficit of $1.44 billion.
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Sales | $4.36 billion | $4.20 billion |
| Gross Profit | $2.25 billion | $2.16 billion |
| Net Income | $665 million | $650 million |
| Diluted EPS | $11.41 | $10.72 |
Analysis and Outlook
O'Reilly Automotive Inc (ORLY, Financial) continues to demonstrate resilience in a challenging market, with a focus on gaining market share in its professional business segment. The company's robust distribution network and commitment to customer service are key differentiators in the fragmented automotive aftermarket industry. However, rising SG&A expenses and a soft demand environment pose challenges that could impact future profitability.
The company has updated its full-year 2024 guidance, projecting total revenue between $16.6 billion and $16.8 billion, with diluted EPS ranging from $40.60 to $41.10. O'Reilly Automotive Inc (ORLY, Financial) remains confident in its long-term growth prospects, supported by strong industry fundamentals and strategic initiatives.
Explore the complete 8-K earnings release (here) from O'Reilly Automotive Inc for further details.
