01—Abstract
Summary
Summary of the 10-K filed February 26, 2021. Cited figures are marked; the original filing is the authoritative source.
O'Reilly Automotive Inc. (ORLY) demonstrated robust performance for the fiscal year ended December 31, 2020, navigating the challenges posed by the COVID-19 pandemic with strong sales growth and operational efficiency.
The company's dual market strategy, serving both DIY and professional service providers, proved resilient, with comparable store sales increasing by 10.9%a. This growth was driven by a combination of increased average ticket values and recovering transaction counts throughout the latter half of the year, supported by government stimulus measures and a consumer preference for repairing existing vehicles. The company continued its expansion, opening 155 net new domestic stores and one in Mexico, underscoring its commitment to market penetration and growth.
Financially, O'Reilly maintained a strong liquidity position, ending the year with a substantial cash balance and managing its debt effectively. The company's strategic focus on customer service, inventory availability, and a technically proficient workforce remains a key differentiator in the competitive automotive aftermarket industry.
02—Key points
Key Highlights
- Achieved a 14% increase in sales, reaching $11.60 billion for the year ended December 31, 2020.
- Reported a 10.9% increase in comparable store sales, demonstrating strong performance in existing locations.
- Continued store expansion by opening 155 net new domestic stores and 1 new store in Mexico.
- Maintained a strong liquidity position with significant cash and cash equivalents and managed debt effectively, including issuing new senior notes and repaying existing ones.
- Operating income increased by 26% to $2.42 billion, reflecting improved operational leverage and expense control.
- Navigated the COVID-19 pandemic by implementing health and safety protocols, deemed an essential service, and resuming its share repurchase program.
- Demonstrated effective management of selling, general, and administrative (SG&A) expenses, which decreased as a percentage of sales due to strong revenue growth.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2020, O Reilly Automotive Inc kept $0.15.
- Revenue$11.60B100.0%
- Cost of revenue−$5.52B47.6%
- Gross profit$6.09B52.4%
- Operating costs−$3.67B31.6%
- Operating income$2.42B20.8%
- Interest, other & tax−$667.0M5.7%
- Net income$1.75B15.1%
Where FY2020 revenue went
$11.60B- Cost of revenue: $5.52B, 48% of revenue
- SG&A: $3.67B, 32% of revenue
- Net income: $1.75B, 15% of revenue
- Interest, other & tax: $667.0M, 5.7% of revenue
Kept 15% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2020filed February 26, 2021Financial Statements
FY2020 against FY2019
| Line item | FY2020FY2019 | Change |
|---|---|---|
| Revenue | $11.60B$10.15B | +14.3% |
| Cost of Revenue | $5.52B$4.76B | +16.1% |
| Gross Profit | $6.09B$5.39B | +12.8% |
| SG&A Expenses | $3.67B$3.47B | +5.5% |
| Operating Income | $2.42B$1.92B | +26.0% |
| Interest Expense | $161.13M$139.97M | +15.1% |
| Net Income | $1.75B$1.39B | +26.0% |
| EPS (Basic) | $1.58$1.20 | +31.4% |
| EPS (Diluted) | $1.57$1.19 | +31.6% |
| Shares Outstanding (Basic) | 1.11B1.15B | −4.1% |
| Shares Outstanding (Diluted) | 1.12B1.17B | −4.3% |
05—Questions
Frequently Asked Questions
What was O'Reilly's sales performance in 2020?
O'Reilly Automotive Inc. reported a 14% increase in sales for the year ended December 31, 2020, reaching $11.60 billion. This growth was primarily driven by a 10.9% increase in comparable store sales and the opening of new stores.
How did the company manage its operations during the COVID-19 pandemic?
O'Reilly was deemed an essential service provider and implemented various health and safety measures for customers and employees. The company also temporarily suspended its share repurchase program but resumed it later in the year, supported by government stimulus and a return to more normal operations.
What is O'Reilly's strategy for growth?
O'Reilly's growth strategy focuses on aggressively opening new stores, growing sales in existing stores through superior customer service, selectively pursuing strategic acquisitions, and continually enhancing store design and location. Their 'dual market strategy' serving both DIY and professional customers is a core component of this approach.
How is O'Reilly's financial health and liquidity?
The company maintained a strong financial position, with total debt increasing slightly to $4.12 billion but with a healthy fixed charge coverage ratio of 5.93x and a leverage ratio of 1.92x as of December 31, 2020. They ended the year with a substantial cash balance of $465.6 million, indicating good liquidity.
06—Continue