8-KEarnings & ResultsExhibits & Filings

O REILLY AUTOMOTIVE INC 8-K Report, Financial Results (Oct 26, 2006)

Filed October 26, 2006For Securities:ORLY

Summary

O'Reilly Automotive, Inc. (ORLY) reported record revenues and earnings for the third quarter of 2006, marking their 52nd consecutive quarter of record performance since going public. The company announced product sales of $597 million, a 10.0% increase year-over-year, and a 11.6% rise in gross profit to $263 million. Despite a challenging macroeconomic environment in the aftermarket industry, O'Reilly demonstrated strong operational execution, achieving a 12.6% operating margin and a 13.5% increase in adjusted diluted earnings per share (EPS) to $0.42. The company also highlighted its continued expansion strategy, adding 41 new stores in the third quarter, primarily in regions served by its new distribution centers in Indianapolis and Atlanta. O'Reilly plans to open approximately 44 additional stores in the fourth quarter. This strategic growth, combined with a focus on core business fundamentals and customer service, positions the company for sustained performance in the automotive aftermarket sector.

Key Highlights

  • 1Reported record third quarter revenues of $597 million, up 10.0% from the prior year.
  • 2Achieved a 13.5% increase in adjusted diluted earnings per share (EPS) to $0.42, excluding a one-time tax benefit from Q3 2005.
  • 3Demonstrated strong gross profit growth of 11.6% to $263 million, with gross margin improving to 44.1% from 43.5%.
  • 4Expanded store base by opening 41 new stores in Q3 2006, with plans for approximately 44 more in Q4 2006.
  • 5Comparable store sales increased by 3.6% for the third quarter, indicating healthy performance in existing locations.
  • 6Maintained a robust operating margin of 12.6%, underscoring operational efficiency.
  • 7CEO Greg Henslee noted strong margins and comparable store sales growth despite a challenging aftermarket industry environment.

Frequently Asked Questions

O'Reilly reported record third quarter product sales of $597 million, up 10.0% year-over-year. Gross profit increased 11.6% to $263 million. Adjusted diluted earnings per share (EPS) rose 13.5% to $0.42, excluding a prior year tax benefit. Net income was $47.9 million.

The company opened 41 new stores in the third quarter of 2006, primarily in regions served by its new distribution centers in Indianapolis and Atlanta. O'Reilly anticipates opening an additional 44 stores in the fourth quarter.

The report highlights 'adjusted' earnings per share to provide a clearer view of ongoing operational performance. For the third quarter of 2005, net income and EPS included a one-time, non-cash tax benefit of $6.1 million ($0.05 per share). The adjusted figures exclude this benefit to allow for more direct comparison with current performance.

O'Reilly reported comparable store sales growth of 3.6% for the third quarter of 2006. This indicates that stores open for at least one year experienced a sales increase of 3.6% during the period.