10-QPeriod: Q2 FY2021

O REILLY AUTOMOTIVE INC Quarterly Report for Q2 Ended Jun 30, 2021

Filed August 6, 2021For Securities:ORLY

Summary

O'Reilly Automotive Inc. (ORLY) reported strong financial results for the second quarter and first half of 2021, demonstrating robust sales growth and profitability. Sales increased by 12% for the quarter and 18% for the first half compared to the prior year, driven by strong comparable store sales growth and an expanding store footprint. The company's 'dual market strategy' serving both DIY and professional service providers continues to be effective. Net income saw a healthy increase of 10% for the quarter and 31% for the first half. Earnings per diluted share also showed significant improvement, rising 17% for the quarter and 39% for the first half. The company maintained strong operating income margins and a solid balance sheet, reinforcing its financial health and operational efficiency in a dynamic market environment.

Financial Highlights

46 data points
Beta

Revenue

$3.47B

52.7% Gross Margin

Net Income

$585.45M

16.9% Net Margin

EPS (Diluted)

$0.56

Total Assets

$11.95B

Cash & Equivalents

$631.62M

Free Cash Flow

$694.43M

Financial Statements
Beta
Revenue$3.47B
Cost of Revenue$1.64B
Gross Profit$1.83B
SG&A Expenses$1.03B
Operating Income$795.58M
Interest Expense$37.66M
Net Income$585.45M
EPS (Basic)$0.56
EPS (Diluted)$0.56
Shares Outstanding (Basic)1.04B
Shares Outstanding (Diluted)1.05B

Key Highlights

  • 1Total sales increased by 12% to $3.47 billion for the three months ended June 30, 2021, and by 18% to $6.56 billion for the six months ended June 30, 2021.
  • 2Comparable store sales increased by 9.9% for the three months and 16.5% for the six months ended June 30, 2021.
  • 3Gross profit increased by 12% to $1.83 billion for the three months and 18% to $3.47 billion for the six months ended June 30, 2021.
  • 4Net income increased by 10% to $585 million for the three months and 31% to $1.09 billion for the six months ended June 30, 2021.
  • 5Diluted earnings per share increased by 17% to $8.33 for the three months and 39% to $15.39 for the six months ended June 30, 2021.
  • 6The company executed a new $1.8 billion unsecured revolving credit facility in June 2021, maturing in June 2026, with no outstanding borrowings as of June 30, 2021.
  • 7Share repurchases totaled $399.6 million for the quarter and $1.06 billion for the six months ended June 30, 2021, indicating a strong commitment to returning capital to shareholders.

Frequently Asked Questions

O'Reilly reported a 12% increase in sales for the three months ended June 30, 2021, reaching $3.47 billion, up from $3.09 billion in the same period of 2020. This growth was driven by strong comparable store sales increases and new store openings.

The company leverages its extensive product line, superior inventory availability with regional distribution centers for same-day and overnight access, and strong supplier relationships. While facing some global logistical supply chain pressures and increased distribution costs due to higher volumes, O'Reilly's operational efficiency and scale help mitigate these impacts.

O'Reilly has a robust capital structure. The company recently entered into a new $1.8 billion unsecured revolving credit facility and has a total of $3.9 billion in outstanding senior notes across various maturities. As of June 30, 2021, there were no outstanding borrowings under the revolving credit facility, and the company was in compliance with all debt covenants, indicating strong liquidity and financial flexibility.

The automotive aftermarket industry is driven by factors such as miles driven, the total number and age of vehicles on the road, and consumer spending on vehicle maintenance. O'Reilly benefits from an increasing average vehicle age and a growing total vehicle fleet, as older vehicles typically require more maintenance. The company's 'dual market strategy,' strong customer service, and extensive product availability position it well to capitalize on these industry trends.