01—Abstract
Summary
Summary of the 10-K filed February 26, 2016. Cited figures are marked; the original filing is the authoritative source.
O'Reilly Automotive Inc. (ORLY) reported a strong performance in its 2015 fiscal year, reflecting continued growth driven by its dual-market strategy serving both DIY (Do-It-Yourself) and professional service provider customers.
The company expanded its store footprint significantly, opening 205 net new stores, bringing the total to 4,571 locations across 44 states. This expansion, combined with a robust comparable store sales increase of 7.5%, led to a substantial rise in both sales and profitability. Key financial highlights include a 10% increase in sales, reaching $7.97 billiona, and a 20% increase in net income to $931 million.
Operating income also saw a significant increase of 19%, reaching $1.51 billionb, with operating margin improving to 19.0% of sales. The company continued its focus on operational efficiency and customer service, supported by its extensive distribution network and technically proficient "Professional Parts People". Shareholder value was further enhanced through a substantial share repurchase program, with the company buying back approximately 4.9 million shares for $1.1 billion during the year.
02—Key points
Key Highlights
- Achieved a 10% increase in sales to $7.97 billion in fiscal year 2015.
- Reported a 20% year-over-year increase in net income to $931 million.
- Expanded store network by 205 net new stores, reaching a total of 4,571 locations.
- Delivered strong comparable store sales growth of 7.5%.
- Increased operating income by 19% to $1.51 billion, improving operating margin to 19.0%.
- Returned significant capital to shareholders through share repurchases totaling $1.1 billion for the year.
- Maintained a strong focus on customer service and operational efficiency through its "dual market strategy" and skilled workforce.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2015, O Reilly Automotive Inc kept $0.12.
- Revenue$7.97B100.0%
- Cost of revenue−$3.80B47.7%
- Gross profit$4.16B52.3%
- Operating costs−$2.65B33.2%
- Operating income$1.51B19.0%
- Interest, other & tax−$582.8M7.3%
- Net income$931.2M11.7%
Where FY2015 revenue went
$7.97B- Cost of revenue: $3.80B, 48% of revenue
- SG&A: $2.65B, 33% of revenue
- Net income: $931.2M, 12% of revenue
- Interest, other & tax: $582.8M, 7.3% of revenue
Kept 12% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2015filed February 26, 2016Financial Statements
FY2015 against FY2014
| Line item | FY2015FY2014 | Change |
|---|---|---|
| Revenue | $7.97B$7.22B | +10.4% |
| Cost of Revenue | $3.80B$3.51B | +8.5% |
| Gross Profit | $4.16B$3.71B | +12.2% |
| SG&A Expenses | $2.65B$2.44B | +8.6% |
| Operating Income | $1.51B$1.27B | +19.2% |
| Interest Expense | $57.13M$53.29M | +7.2% |
| Net Income | $931.22M$778.18M | +19.7% |
| EPS (Basic) | $0.62$0.50 | +24.9% |
| EPS (Diluted) | $0.61$0.49 | +24.9% |
| Shares Outstanding (Basic) | 1.50B1.56B | −4.1% |
| Shares Outstanding (Diluted) | 1.52B1.59B | −4.3% |
05—Questions
Frequently Asked Questions
What is O'Reilly's core business strategy?
O'Reilly Automotive Inc. operates a "dual market strategy," serving both Do-It-Yourself (DIY) customers and professional service providers. This strategy leverages an extensive product line, superior customer service, technically proficient store personnel, and a strategic distribution network to capture market share in the automotive aftermarket industry.
How did O'Reilly perform financially in 2015?
In 2015, O'Reilly demonstrated robust financial performance with sales increasing by 10% to $7.97 billion and net income growing by 20% to $931 million. Operating income saw a significant 19% increase to $1.51 billion, reflecting improved operational efficiency and strong comparable store sales growth.
What is the company's approach to growth?
O'Reilly's growth strategy primarily involves aggressively opening new stores to consolidate the fragmented automotive aftermarket, growing sales in existing stores through enhanced customer service and product availability, and selectively pursuing strategic acquisitions. The company also focuses on continually enhancing store design and its e-commerce website.
How does O'Reilly manage its inventory and supply chain?
The company utilizes a strategic regional tiered distribution network, comprising 26 distribution centers and 297 hub stores, to provide stores with same-day or overnight access to a broad inventory. This network is designed for efficient inventory control and management, ensuring high product availability for customers.
06—Continue