• O’Reilly Automotive, Inc. Reports First Quarter 2024 Results

    Source: Nasdaq GlobeNewswire / 24 Apr 2024 15:30:45   America/Chicago

    • First quarter comparable store sales growth of 3.4%
    • 11% increase in first quarter diluted earnings per share to $9.20
    • Completed the acquisition of Groupe Del Vasto in January

    SPRINGFIELD, Mo., April 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 and earnings for its first quarter ended March 31, 2024.

    1st Quarter Financial Results
    Brad Beckham, O’Reilly’s CEO, commented, “We are pleased to report a solid start to 2024, highlighted by a 3.4% comparable store sales increase, which was on top of the very strong 10.8% comparable store sales increase from the first quarter last year. Our comparable store sales increase was comprised of solid growth in both professional and DIY, which grew mid-single digit and low-single digit, respectively, in the quarter. Our team’s continued strong execution drove an 11% increase in diluted earnings per share, and is a clear demonstration of Team O’Reilly’s commitment to our culture values of hard work and excellent customer service. I would like to thank each of our over 90,000 Team Members for their ongoing dedication to O’Reilly’s success.”

    Sales for the first quarter ended March 31, 2024, increased $268 million, or 7%, to $3.98 billion from $3.71 billion for the same period one year ago. Gross profit for the first quarter increased 8% to $2.03 billion (or 51.2% of sales) from $1.89 billion (or 51.0% of sales) for the same period one year ago. Selling, general and administrative expenses for the first quarter increased 9% to $1.28 billion (or 32.2% of sales) from $1.17 billion (or 31.7% of sales) for the same period one year ago. Operating income for the first quarter increased 5% to $752 million (or 18.9% of sales) from $717 million (or 19.3% of sales) for the same period one year ago.

    Net income for the first quarter ended March 31, 2024, increased $30 million, or 6%, to $547 million (or 13.8% of sales) from $517 million (or 13.9% of sales) for the same period one year ago. Diluted earnings per common share for the first quarter increased 11% to $9.20 on 59 million shares versus $8.28 on 62 million shares for the same period one year ago.

    Mr. Beckham concluded, “During the first quarter, we opened 37 stores across 20 U.S. states and Mexico and continue to be extremely pleased with the performance of our new stores. Additionally, we began operating 23 stores in Canada after closing on the acquisition of Vast Auto in January. With the talented and experienced Vast Auto team now officially a part of Team O’Reilly, we are very pleased with the early momentum we have generated in Canada. We remain excited about the future opportunities we have before us in the Canadian market and throughout North America and look forward to growing our market share in new and existing markets as the industry leader in excellent customer service.”

    1st 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 three months ended March 31, 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 3.4% for the first quarter ended March 31, 2024, on top of 10.8% for the same period one year ago.  

    Share Repurchase Program
    During the first quarter ended March 31, 2024, the Company repurchased 0.3 million shares of its common stock, at an average price per share of $1,029.24, for a total investment of $270 million.   Excise tax on shares repurchased, assessed at one percent of the fair market value of shares repurchased, was $2.7 million for the three months ended March 31, 2024. Subsequent to the end of the first quarter and through the date of this release, the Company repurchased an additional 0.1 million shares of its common stock, at an average price per share of $1,102.00, for a total investment of $79 million. The Company has repurchased a total of 94.4 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 $249.17, for a total aggregate investment of $23.53 billion.   As of the date of this release, the Company had approximately $2.22 billion remaining under its current share repurchase authorizations.

    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 openings 190 to 200
    Comparable store sales 3.0% to 5.0%
    Total revenue $16.8 billion to $17.1 billion
    Gross profit as a percentage of sales 51.0% to 51.5%
    Operating income as a percentage of sales 19.7% to 20.2%
    Effective income tax rate 22.4%
    Diluted earnings per share (1) $41.35 to $41.85
    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
       


    (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, April 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 193896. A replay of the conference call will be available on the Company’s website through Thursday, April 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 March 31, 2024, the Company operated 6,217 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,” 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)
              
      March 31, 2024 March 31, 2023 December 31, 2023
         (Unaudited)    (Unaudited)    (Note)
    Assets         
    Current assets:         
    Cash and cash equivalents $ 89,264  $59,872  $279,132 
    Accounts receivable, net   437,821   346,037   375,049 
    Amounts receivable from suppliers   139,267   128,758   140,443 
    Inventory   4,805,164   4,543,980   4,658,367 
    Other current assets   128,181   109,347   105,311 
    Total current assets   5,599,697   5,187,994   5,558,302 
              
    Property and equipment, at cost   8,555,556   7,649,066   8,312,367 
    Less: accumulated depreciation and amortization   3,360,351   3,090,010   3,275,387 
    Net property and equipment   5,195,205   4,559,056   5,036,980 
              
    Operating lease, right-of-use assets   2,227,783   2,166,646   2,200,554 
    Goodwill   1,009,857   892,094   897,696 
    Other assets, net   180,512   167,026   179,463 
    Total assets $ 14,213,054  $12,972,816  $13,872,995 
              
    Liabilities and shareholders’ deficit         
    Current liabilities:         
    Accounts payable $ 6,117,068  $6,055,992  $6,091,700 
    Self-insurance reserves   130,974   136,723   128,548 
    Accrued payroll   127,704   111,324   138,122 
    Accrued benefits and withholdings   174,125   132,022   174,650 
    Income taxes payable   147,645   117,790   7,860 
    Current portion of operating lease liabilities   399,245   375,451   389,536 
    Other current liabilities   791,633   427,006   730,937 
    Total current liabilities   7,888,394   7,356,308   7,661,353 
              
    Long-term debt   5,288,632   4,927,678   5,570,125 
    Operating lease liabilities, less current portion   1,900,200   1,854,533   1,881,344 
    Deferred income taxes   321,323   249,903   295,471 
    Other liabilities   205,703   209,411   203,980 
              
    Shareholders’ equity (deficit):         
    Common stock, $0.01 par value:         
    Authorized shares – 245,000,000         
    Issued and outstanding shares –         
    58,982,123 as of March 31, 2024, and         
    61,038,936 as of March 31, 2023, and         
    59,072,792 as of December 31, 2023   590   610   591 
    Additional paid-in capital   1,410,756   1,305,276   1,352,275 
    Retained deficit   (2,849,108)  (2,952,797)  (3,131,532)
    Accumulated other comprehensive income   46,564   21,894   39,388 
    Total shareholders’ deficit   (1,391,198)  (1,625,017)  (1,739,278)
              
    Total liabilities and shareholders’ deficit $ 14,213,054  $12,972,816  $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
    (In thousands, except per share data)
           
      For the Three Months Ended
      March 31, 
         2024    2023
    Sales $ 3,976,240  $3,707,864 
    Cost of goods sold, including warehouse and distribution expenses   1,942,068   1,817,535 
    Gross profit   2,034,172   1,890,329 
           
    Selling, general and administrative expenses   1,281,691   1,173,684 
    Operating income   752,481   716,645 
           
    Other income (expense):      
    Interest expense   (57,148)  (44,572)
    Interest income   1,656   868 
    Other, net   3,401   4,479 
    Total other expense   (52,091)  (39,225)
           
    Income before income taxes   700,390   677,420 
    Provision for income taxes   153,152   160,535 
    Net income $ 547,238  $516,885 
           
    Earnings per share-basic:      
    Earnings per share $ 9.27  $8.36 
    Weighted-average common shares outstanding – basic   59,017   61,840 
           
    Earnings per share-assuming dilution:      
    Earnings per share $ 9.20  $8.28 
    Weighted-average common shares outstanding – assuming dilution   59,454   62,398 
             


    O’REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
    (In thousands)
           
      For the Three Months Ended
      March 31, 
      2024
     2023
    Operating activities:      
    Net income $ 547,238  $516,885 
    Adjustments to reconcile net income to net cash provided by operating activities:      
    Depreciation and amortization of property, equipment and intangibles   109,648   93,747 
    Amortization of debt discount and issuance costs   1,593   1,215 
    Deferred income taxes   2,374   3,393 
    Share-based compensation programs   7,022   7,435 
    Other   2,997   29 
    Changes in operating assets and liabilities:      
    Accounts receivable   (36,954)  (2,610)
    Inventory   (92,042)  (179,481)
    Accounts payable   6,107   172,701 
    Income taxes payable   140,025   145,441 
    Other   16,207   (44,991)
    Net cash provided by operating activities   704,215   713,764 
           
    Investing activities:      
    Purchases of property and equipment   (249,240)  (223,268)
    Proceeds from sale of property and equipment   3,853   2,704 
    Other, including acquisitions, net of cash acquired   (155,366)  (956)
    Net cash used in investing activities   (400,753)  (221,520)
           
    Financing activities:      
    Proceeds from borrowings on revolving credit facility   30,000   1,216,000 
    Payments on revolving credit facility     (661,000)
    Net payments of commercial paper   (310,805)   
    Repurchases of common stock   (270,019)  (1,111,461)
    Net proceeds from issuance of common stock   57,815   15,146 
    Other   (569)  (354)
    Net cash used in financing activities   (493,578)  (541,669)
           
    Effect of exchange rate changes on cash   248   714 
    Net decrease in cash and cash equivalents   (189,868)  (48,711)
    Cash and cash equivalents at beginning of the period   279,132   108,583 
    Cash and cash equivalents at end of the period $ 89,264  $59,872 
           
    Supplemental disclosures of cash flow information:      
    Income taxes paid $ 9,798  $9,696 
    Interest paid, net of capitalized interest   34,671   26,531 
             


    O’REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
    SELECTED FINANCIAL INFORMATION
    (Unaudited)
            
      For the Twelve Months Ended
      March 31, 
    Adjusted Debt to EBITDAR: 2024 2023
    (In thousands, except adjusted debt to EBITDAR ratio)      
    GAAP debt $ 5,288,632 $4,927,678
    Add:Letters of credit   137,848  116,688
     Unamortized discount and debt issuance costs   28,368  27,322
     Six-times rent expense   2,587,056  2,404,986
    Adjusted debt $ 8,041,904 $7,476,674
           
    GAAP net income $ 2,376,934 $2,207,655
    Add:Interest expense   214,244  167,451
     Provision for income taxes   650,786  635,159
     Depreciation and amortization   424,962  368,757
     Share-based compensation expense   27,098  27,360
     Rent expense (i)   431,176  400,831
    EBITDAR $ 4,125,200 $3,807,213
           
    Adjusted debt to EBITDAR   1.95  1.96
     


    (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 March 31, 2024 and 2023 (in thousands):

      

            
      For the Twelve Months Ended
      March 31,
      2024 2023
    Total lease cost, per ASC 842 $510,208 $476,439
    Less:Variable non-contract operating lease components, related to property taxes and insurance  79,032  75,608
    Rent expense $431,176 $400,831


             
      March 31, 
      2024 2023
    Selected Balance Sheet Ratios:        
    Inventory turnover (1)   1.7   1.7 
    Average inventory per store (in thousands) (2) $ 773  $754 
    Accounts payable to inventory (3)   127.3%  133.3%


            
       For the Three Months Ended
       March 31, 
       2024 2023
    Reconciliation of Free Cash Flow (in thousands):      
    Net cash provided by operating activities $ 704,215 $713,764
    Less:Capital expenditures   249,240  223,268
     Excess tax benefit from share-based compensation payments   16,120  4,378
    Free cash flow $ 438,855 $486,118


           
      For the Three Months Ended
      March 31, 
         2024 2023
    Revenue Disaggregation (in thousands):     
    Sales to do-it-yourself customers$ 2,001,986 $1,918,467
    Sales to professional service provider customers   1,869,740  1,711,964
    Other sales, sales adjustments, and sales from the acquired Vast Auto stores   104,514  77,433
    Total sales $ 3,976,240 $3,707,864


             
      For the Three Months Ended  For the Twelve Months Ended
      March 31,  March 31, 
         2024 2023    2024 2023
    Store Count:        
    Beginning domestic store count  6,095 5,929   5,986  5,811 
    New stores opened  36 59   146  179 
    Stores closed  (2)  (1) (4)
    Ending domestic store count  6,131 5,986   6,131  5,986 
             
    Beginning Mexico store count  62 42   43  27 
    New stores opened  1 1   20  16 
    Ending Mexico store count  63 43   63  43 
             
    Beginning Canada store count       
    Stores acquired  23    23   
    Ending Canada store count  23    23   
             
    Total ending store count  6,217 6,029   6,217  6,029 


                 
      For the Three Months Ended  For the Twelve Months Ended
      March 31,  March 31, 
         2024 2023 2024 2023
    Store and Team Member Information:            
    Total employment   90,601  89,125      
    Square footage (in thousands) (4)   47,143  45,117      
    Sales per weighted-average square foot (4)(5) $ 82.59 $81.09 $ 341.62 $328.29
    Sales per weighted-average store (in thousands) (4)(6) $ 634 $611 $ 2,601 $2,467


    (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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