O REILLY AUTOMOTIVE INC Quarterly Report for Q1 Ended Mar 31, 2016

Summary

O'Reilly Automotive, Inc. (ORLY) reported a strong first quarter for 2016, demonstrating robust sales growth and improved profitability. Sales increased by 10% year-over-year, driven by a 6.1% rise in comparable store sales and contributions from new store openings. This top-line growth translated into a significant increase in operating income, up 19%, and net income, which grew by 20% to $255.4 million. The company also saw a healthy expansion in its gross profit margin to 52.4% and improved operating leverage with SG&A expenses as a percentage of sales decreasing. Financially, the company maintained a strong liquidity position, with a substantial increase in cash and cash equivalents due to robust operating activities and financing activities, including significant debt issuance. O'Reilly continued its aggressive share repurchase program, reflecting confidence in its financial health and commitment to returning value to shareholders. The company's consistent store expansion strategy remains on track, with 52 net new stores opened during the quarter, supporting future growth prospects.

Key Highlights

• 1Sales increased by 10% to $2.10 billion in Q1 2016 compared to $1.90 billion in Q1 2015.
• 2Comparable store sales increased by 6.1% in Q1 2016.
• 3Net income grew by 20% to $255.4 million, with diluted EPS rising 26% to $2.59.
• 4Gross profit margin improved to 52.4% from 51.9% year-over-year.
• 5Selling, general, and administrative expenses (SG&A) as a percentage of sales decreased to 32.4% from 33.5%.
• 6The company opened 52 net new stores during the quarter, continuing its expansion strategy.
• 7Cash flow from operations increased significantly to $488.2 million, supporting investments and share repurchases.

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