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O’Reilly Automotive, Inc. Reports First Quarter 2018 Results

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SPRINGFIELD, Mo., April 25, 2018 (GLOBE NEWSWIRE) -- O’Reilly Automotive, Inc. (the “Company” or “O’Reilly”) (Nasdaq:

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), a leading retailer in the automotive aftermarket industry, today announced record revenues and earnings for its first quarter ended March 31, 2018. 

1st Quarter Financial Results
Greg Henslee, O’Reilly’s CEO, commented, “Our Team’s dedication to excellent customer service drove a 3.4% increase in comparable store sales, which was above the mid-point of our guidance for the first quarter, and our relentless focus on profitable growth translated this top-line performance into a 5% increase in operating profit dollars and a 28% increase in diluted earnings per share for the first quarter.  I would like to thank Team O’Reilly for their hard work and unwavering commitment to providing unsurpassed levels of service to our customers every day and for their contributions to our ongoing success.”

Sales for the first quarter ended March 31, 2018, increased $126 million, or 6%, to $2.28 billion from $2.16 billion for the same period one year ago.  Gross profit for the first quarter increased to $1.20 billion (or 52.6% of sales) from $1.13 billion (or 52.5% of sales) for the same period one year ago, representing an increase of 6%.  Selling, general and administrative expenses for the first quarter increased to $778 million (or 34.1% of sales) from $728 million (or 33.8% of sales) for the same period one year ago, representing an increase of 7%.  Operating income for the first quarter increased to $423 million (or 18.5% of sales) from $403 million (or 18.7% of sales) for the same period one year ago, representing an increase of 5%.

Net income for the first quarter ended March 31, 2018, increased $40 million, or 15%, to $305 million (or 13.4% of sales) from $265 million (or 12.3% of sales) for the same period one year ago.  Diluted earnings per common share for the first quarter increased 28% to $3.61 on 85 million shares versus $2.83 on 93 million shares for the same period one year ago.

Mr. Henslee concluded, “We believe the long-term drivers for demand in our industry remain intact, including a growing and aging vehicle fleet that is driven over three trillion miles each year; but more importantly, we are very confident in our ability to continue to gain market share by providing consistently high levels of service to our customers, and we are well positioned to build on the improved trends we drove in the first quarter.”

Share Repurchase Program
During the first quarter ended March 31, 2018, the Company repurchased 2.2 million shares of its common stock, at an average price per share of $251.08, for a total investment of $549 million.  Subsequent to the end of the first quarter and through the date of this release, the Company repurchased an additional 0.4 million shares of its common stock, at an average price per share of $235.25, for a total investment of $87 million.  The Company has repurchased a total of 68.8 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 $140.55, for a total aggregate investment of $9.67 billion.  As of the date of this release, the Company had approximately $1.08 billion remaining under its current share repurchase authorizations. 

1st Quarter Comparable Store Sales Results
Comparable store sales are calculated based on the change in sales for stores open at least one year and exclude sales of specialty machinery, sales to independent parts stores and sales to Team Members.  Comparable store sales increased 3.4% for the first quarter ended March 31, 2018, on top of 0.8% for the same period one year ago.

2nd Quarter and Updated Full-Year 2018 Guidance
The table below outlines the Company’s guidance for selected second quarter and updated full-year 2018 financial data:

  For the Three Months Ending
June 30, 2018
  For the Year Ending
December 31, 2018
Comparable store sales 2% to 4%   2% to 4%
Total revenue     $9.4 billion to $9.6 billion
Gross profit as a percentage of sales     52.5% to 53.0%
Operating income as a percentage of sales     18.5% to 19.0%
Effective income tax rate     23% to 24%
Diluted earnings per share (1) $3.95 to $4.05   $15.30 to $15.40
Capital expenditures     $490 million to $520 million
Free cash flow (2)     $1.1 billion to $1.2 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)   Calculated as net cash provided by operating activities, less capital expenditures and excess tax benefit from share-based compensation payments for the period.

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 selected financial information below.

Earnings Conference Call Information
The Company will host a conference call on Thursday, April 26, 2018, 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 (847) 619-6397; the conference call identification number is 46648810.  A replay of the conference call will be available on the Company’s website through Thursday, April 25, 2019.

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, 2018, the Company operated 5,097 stores in 47 states.

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