EX-99.1 2 orly-20240724xex99d1.htm EX-99.1

Exhibit 99.1

Graphic

FOR IMMEDIATE RELEASE


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, 2024O’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 openings

 

190 to 200

Comparable store sales

 

2.0% to 4.0%

Total revenue

 

$16.6 billion to $16.9 billion

Gross profit as a percentage of sales

 

51.0% to 51.5%

Operating income as a percentage of sales

 

19.6% to 20.1%

Effective income tax rate

 

22.4%

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.