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O’Reilly Automotive Reports 2nd Quarter 2017 Results

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OReilly-Logo-300x154.pngO’Reilly Automotive Inc. has announced record revenues and earnings for its second quarter ended June 30, 2017.

Sales for the second quarter increased $114 million, or 5 percent, to $2.29 billion from $2.18 billion for the same period one year ago. Gross profit for the second quarter increased to $1.20 billion (or 52.4 percent of sales) from $1.13 billion (or 51.8 percent of sales) for the same period one year ago, representing an increase of 6 percent.

Net income for the second quarter increased $25 million, or 10 percent, to $283 million (or 12.3 percent of sales) from $258 million (or 11.8 percent of sales) for the same period one year ago. Diluted earnings per common share for the second quarter increased 17 percent to $3.10 on 91 million shares versus $2.65 on 97 million shares for the same period one year ago.

The company adopted a new share-based compensation accounting standard during the first quarter of this year, which requires excess tax benefits from share-based compensation payments to be recorded in the income statement. O’Reilly’s second quarter ended June 30, 2017, diluted earnings per common share of $3.10 includes a 9-cent benefit from the adoption of the new accounting standard and a 6-cent benefit from the reduction in legal accruals.

Greg Henslee, O’Reilly’s CEO, commented, “As we announced in our press release earlier this month, we faced a more challenging sales environment during the second quarter than expected, resulting in a disappointing second quarter comparable store sales increase of 1.7 percent. While there are several factors that drive demand in our industry that can result in soft performance in any given period, it is clear that we continue to face headwinds from a second consecutive unseasonably mild winter, which did not generate the rate of parts failure we would normally expect through this point of the year, combined with continued soft consumer demand across our industry. During difficult market conditions, such as the ones we faced in the first half of this year, our team remains absolutely dedicated to providing consistently high levels of service to our customers. Our long-term commitment to exceptional customer service is the key to our past and future success, and I would like to thank Team O’Reilly for their relentless dedication to taking care of every customer who calls or walks through our doors every day.”

Year-to-Date Financial Results

Sales for the first six months of 2017 increased $174 million, or 4 percent, to $4.45 billion from $4.27 billion for the same period one year ago. Gross profit for the first six months of 2017 increased to $2.33 billion (or 52.4 percent of sales) from $2.22 billion (or 52.1 percent of sales) for the same period one year ago, representing an increase of 5 percent. SG&A for the first six months of 2017 increased to $1.47 billion (or 33.1 percent of sales) from $1.38 billion (or 32.3 percent of sales) for the same period one year ago, representing an increase of 6 percent.

Operating income for the first six months of 2017 increased to $861 million (or 19.4 percent of sales) from $844 million (or 19.7 percent of sales) for the same period one year ago, representing an increase of 2 percent. The company’s results for the six months ended June 30, 2016, included a benefit from one additional day due to Leap Day in February 2016.

Net income for the first six months of 2017 increased $35 million, or 7 percent, to $548 million from $513 million for the same period one year ago. Diluted earnings per common share for the first six months of 2017 increased 13 percent to $5.93 on 92 million shares versus $5.24 on 98 million shares for the same period one year ago. The company’s first six months of 2017 diluted earnings per common share of $5.93 includes a 32-cent benefit from the adoption of the new accounting standard.

Henslee said, “We opened 105 net, new stores during the first half of 2017, and we are well-positioned to hit our target of 190 net, new store openings by the end of the year. We continue to be pleased with the performance of our new stores and remain very confident in our opportunities to grow in existing and new market areas. While our comparable store sales growth for the first half of 2017 is below our expectations, we continue to strongly believe in the long-term strength of our industry, supported by a growing and aging vehicle fleet, which has now reached an average age of 11.6 years, and steady, sustained increases in annual miles driven, now trending at over 3.2 trillion miles per year. More importantly, we remain extremely confident in our ability to increase our market share, driven by our team’s ability to provide industry-leading parts availability and unsurpassed technical knowledge and service levels to our customers.”

Source: http://www.aftermarketnews.com/oreilly-automotive-reports-2nd-quarter-2017-results/

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