Summary
O'Reilly Automotive Inc. (ORLY) reported strong performance in the third quarter and first nine months of 2009, driven by robust sales growth and improved profitability, largely attributable to the successful integration of the CSK Auto acquisition. Sales for the nine months increased by 49% year-over-year, reaching $3.67 billion, with comparable store sales showing a healthy 5.3% increase in the third quarter. The company also demonstrated significant operational leverage, with gross profit margins improving to 48.5% in Q3 2009 and SG&A expenses growing at a slower rate than sales, leading to a substantial increase in net income and diluted EPS. Despite the positive financial results, the company continues to navigate the integration of CSK, including the closure and rebranding of acquired stores, which contributed to increased SG&A expenses. The balance sheet reflects growth in inventory and property and equipment, consistent with store expansion and integration efforts. Management's outlook remains cautiously optimistic, citing the increasing average age of vehicles and persistent unperformed maintenance as long-term drivers of demand, while acknowledging potential short-term headwinds from macroeconomic conditions.
Financial Highlights
25 data points| Revenue | $1.26B |
| Cost of Revenue | $647.68M |
| Gross Profit | $610.55M |
| SG&A Expenses | $461.36M |
| Operating Income | $149.20M |
| Interest Expense | $11.09M |
| Net Income | $87.22M |
| EPS (Basic) | $0.04 |
| EPS (Diluted) | $0.04 |
| Shares Outstanding (Basic) | 2.05B |
| Shares Outstanding (Diluted) | 2.08B |
Key Highlights
- 1Sales for the nine months ended September 30, 2009, increased by 49% to $3.67 billion, driven significantly by the acquisition of CSK Auto.
- 2Comparable store sales increased by 5.3% in the third quarter of 2009, indicating organic growth and effective sales strategies.
- 3Gross profit margin improved to 48.5% in Q3 2009 from 45.6% in Q3 2008, attributed to improved product mix, lower acquisition costs, and distribution efficiencies.
- 4Net income for the nine months rose 63% to $235.6 million, with diluted EPS increasing to $1.71 from $1.18 in the prior year period.
- 5The company ended the quarter with $29.5 million in cash and cash equivalents, while managing $703.7 million in total debt and capital lease obligations.
- 6Integration efforts related to the CSK acquisition, including store conversions and administrative consolidations, are ongoing and impacting SG&A expenses.
- 7The company continues to invest in property and equipment, with net capital expenditures of $317.2 million for the nine months, supporting growth and integration initiatives.