Company Overview - O'Reilly Automotive (ORLY) shares have increased by approximately 0.9% since the last earnings report, underperforming the S&P 500 [1] Earnings Estimates - Fresh estimates for O'Reilly Automotive have trended upward over the past month [2] - The stock has a Zacks Rank of 3 (Hold), indicating expectations for an in-line return in the coming months [4] VGM Scores - O'Reilly Automotive has a strong Growth Score of A, but a low Momentum Score of F, and a Value Score of D, placing it in the bottom 40% for the value investment strategy [3] Industry Performance - O'Reilly Automotive is part of the Zacks Automotive - Retail and Wholesale - Parts industry, where Genuine Parts (GPC) has seen an 8.4% increase in the past month [5] - Genuine Parts reported revenues of $5.87 billion for the last quarter, reflecting a year-over-year increase of 1.4% [5] - Genuine Parts is expected to post earnings of $2.08 per share for the current quarter, indicating a year-over-year decline of 14.8% [6]

Group 1: Company Overview - O'Reilly Automotive is primarily a retailer of auto parts, serving both do-it-yourself and professional markets, with approximately 6,400 stores across North America [2] Group 2: Growth Strategies - The company plans to open around 200 new locations in 2025, and same-store sales increased by 3.6% in the first quarter of 2025, contributing to reasonable top-line growth [4] Group 3: Financial Performance - In the first quarter of 2025, O'Reilly's sales increased by 4%, while earnings rose only about 2%, indicating a disparity between sales growth and earnings growth [5][6] - Despite a 4% increase in sales, the company's net income fell from $547 million in Q1 2024 to $538 million in Q1 2025 due to rising selling, general, and administrative costs [8] - Earnings per share increased from $9.20 in Q1 2024 to $9.35 in Q1 2025, attributed to a 3% reduction in share count, despite lower net income [9][10] Group 4: Operational Challenges - The increase in operating costs has been a significant factor affecting profitability, with the earnings advance year over year being around 1.6%, suggesting that stock buybacks only partially mitigated the impact of rising costs [11]

Group 1: O'Reilly Automotive and AutoZone - O'Reilly Automotive reported first-quarter earnings of $9.35 per share, missing market estimates of $9.94 per share, with quarterly sales of $4.14 billion compared to expectations of $4.17 billion [1] - Jim Cramer recommended AutoZone over O'Reilly Automotive, highlighting that AutoZone has outperformed the market by 10.81% annually over the past 15 years, with an average annual return of 22.06% and a current market capitalization of $62.8 billion [2] Group 2: ASML Holding and Lam Research - ASML Holding reported a first-quarter sales miss, with a sequential revenue decline of 16.75% from €9.3 billion in the fourth quarter [3] - Jim Cramer recommended Lam Research Corporation over ASML, indicating a preference for Lam Research due to ASML's recent performance [3] Group 3: Onto Innovation - Onto Innovation issued second-quarter guidance below market estimates, projecting adjusted EPS of $1.21-$1.35 versus estimates of $1.50, and expected sales of $240 million to $260 million compared to projections of $269.10 million [4] Group 4: Fluor - UBS analyst maintained a buy rating for Fluor but lowered the price target from $49 to $48 [5] - Fluor shares fell 0.5% to close at $38.53 [6]

[PART I - FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Financial Statements (Unaudited)](index=4&type=section&id=ITEM%201%20-%20FINANCIAL%20STATEMENTS%20(UNAUDITED)) The unaudited condensed consolidated financial statements for Q1 2025 show a slight decrease in net income to $538.5 million, while total assets grew to $15.3 billion and diluted EPS increased to $9.35 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets reached **$15.29 billion** as of March 31, 2025, with a shareholders' deficit of **$1.36 billion** Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $6,029,467 | $5,839,895 | | **Total Assets** | **$15,293,875** | **$14,893,741** | | **Total Current Liabilities** | $8,510,506 | $8,283,505 | | **Long-Term Debt** | $5,651,821 | $5,520,932 | | **Total Shareholders' Deficit** | $(1,357,456) | $(1,370,961) | | **Total Liabilities and Shareholders' Deficit** | **$15,293,875** | **$14,893,741** | [Condensed Consolidated Statements of Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Q1 2025 sales grew 4.0% to **$4.14 billion**, with net income at **$538.5 million** and diluted EPS at **$9.35** Condensed Consolidated Statements of Income (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Sales** | $4,136,924 | $3,976,240 | | **Gross Profit** | $2,121,485 | $2,034,172 | | **Operating Income** | $741,466 | $752,481 | | **Net Income** | $538,485 | $547,238 | | **Diluted EPS** | $9.35 | $9.20 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow increased to **$755.1 million** in Q1 2025, with **$559.4 million** used for share repurchases Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $755,120 | $704,215 | | **Net cash used in investing activities** | $(285,003) | $(400,753) | | **Net cash used in financing activities** | $(409,452) | $(493,578) | | **Net increase (decrease) in cash** | $61,003 | $(189,868) | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, segment reporting, **$5.65 billion** in long-term debt, and **$559.4 million** in share repurchases - The company operates as a single reportable segment, the automotive aftermarket parts segment, conducting operations in the U.S., Canada, and Mexico[22](index=22&type=chunk) - Total long-term debt stood at **$5.65 billion** as of March 31, 2025, primarily composed of various senior notes and **$329.5 million** from its commercial paper program[40](index=40&type=chunk) Share Repurchases (Q1 2025 vs Q1 2024) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Shares Repurchased (thousands)** | 431 | 262 | | **Average Price per Share** | $1,297.15 | $1,029.24 | | **Total Investment (thousands)** | $559,428 | $270,017 | Sales by Customer Type (in thousands) | Customer Type | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Do-it-yourself customers** | $2,051,859 | $2,003,805 | | **Professional service provider customers** | $1,998,593 | $1,875,186 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=ITEM%202%20-%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses Q1 2025 financial results, noting a **4% sales increase** to **$4.14 billion** and a decrease in operating income margin to **17.9%** - As of March 31, 2025, the company operated **6,298 stores** in the U.S. and Puerto Rico, **93 stores** in Mexico, and **25 stores** in Canada[76](index=76&type=chunk) - Comparable store sales increased by **3.6%** in Q1 2025, driven by increases in average ticket values for both professional service provider and DIY customers[90](index=90&type=chunk)[91](index=91&type=chunk) - SG&A expenses increased to **33.4% of sales** from **32.2% YoY**, principally due to enhancements to store level pay plans, inflationary pressures in medical plan costs, and IT investments[94](index=94&type=chunk) [Results of Operations](index=29&type=section&id=RESULTS%20OF%20OPERATIONS) Q1 2025 sales increased **4%** to **$4.14 billion**, with operating income margin decreasing to **17.9%** due to higher SG&A expenses Q1 2025 vs Q1 2024 Performance Summary | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Sales Growth** | 4.0% | - | | **Comparable Store Sales Growth** | 3.6% | 3.4% | | **Gross Profit Margin** | 51.3% | 51.2% | | **SG&A as % of Sales** | 33.4% | 32.2% | | **Operating Income Margin** | 17.9% | 18.9% | | **Net Income Margin** | 13.0% | 13.8% | | **Diluted EPS Growth** | 1.6% | - | [Liquidity and Capital Resources](index=31&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) Q1 2025 operating cash flow was **$755.1 million**, funding **$287.0 million** in capital expenditures and **$559.4 million** in share repurchases Cash Flow and Liquidity (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Cash from Operating Activities** | $755,120 | $704,215 | | **Capital Expenditures** | $286,951 | $249,240 | | **Free Cash Flow** | $455,244 | $438,855 | Debt Covenant Ratios | Ratio | As of March 31, 2025 | As of March 31, 2024 | Covenant Requirement | | :--- | :--- | :--- | :--- | | **Consolidated Fixed Charge Coverage** | 6.03x | 6.31x | Minimum 2.50:1.00 | | **Consolidated Leverage Ratio** | 1.92x | 1.84x | Maximum 3.50:1.00 | [Quantitative and Qualitative Disclosures about Market Risk](index=36&type=section&id=ITEM%203%20-%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company faces interest rate risk on **$329.5 million** variable-rate debt and foreign currency risk from Mexican and Canadian operations - The company is subject to interest rate risk on its **$329.5 million** of outstanding commercial paper, which has a weighted-average variable interest rate of **4.640%**[116](index=116&type=chunk) - A hypothetical **10% adverse change** in exchange rates would result in a potential loss of approximately **$33.9 million** on net assets in Mexico and **$15.1 million** in Canada[119](index=119&type=chunk)[120](index=120&type=chunk) [Controls and Procedures](index=38&type=section&id=ITEM%204%20-%20CONTROLS%20AND%20PROCEDURES) Management concluded disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal controls - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[123](index=123&type=chunk) - There were no changes in the company's internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[124](index=124&type=chunk) [PART II - OTHER INFORMATION](index=39&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Legal Proceedings](index=39&type=section&id=ITEM%201%20-%20LEGAL%20PROCEEDINGS) The company is involved in routine litigation, which management does not expect to have a material adverse effect - The company is involved in litigation incidental to the ordinary conduct of its business and accrues for losses when an adverse outcome is probable and reasonably estimable[126](index=126&type=chunk) - Management does not currently believe that these legal matters will have a material adverse effect on the company's consolidated financial position, results of operations, or cash flows[126](index=126&type=chunk) [Risk Factors](index=39&type=section&id=ITEM%201A%20-%20RISK%20FACTORS) No material changes to risk factors were reported since the Annual Report on Form 10-K for December 31, 2024 - As of March 31, 2025, there have been no material changes to the risk factors previously set forth in the company's annual report on Form 10-K for the year ended December 31, 2024[127](index=127&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=39&type=section&id=ITEM%202%20-%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) No unregistered equity sales occurred in Q1 2025; **431,000 shares** were repurchased for approximately **$559.4 million** Share Repurchases in Q1 2025 (in thousands, except per share data) | Period | Total Shares Purchased | Average Price Paid per Share | Maximum Dollar Value Remaining | | :--- | :--- | :--- | :--- | | **Jan 2025** | 133 | $1,224.41 | $2,332,846 | | **Feb 2025** | 146 | $1,317.36 | $2,140,232 | | **Mar 2025** | 152 | $1,341.33 | $1,936,263 | | **Total Q1** | **431** | **$1,297.15** | **-** | [Other Information](index=39&type=section&id=ITEM%205%20-%20OTHER%20INFORMATION) No directors or officers adopted, modified, or terminated a Rule 10b5-1 trading plan in Q1 2025 - None of the Company's Directors or Officers adopted, modified, or terminated a Rule 10b5-1 trading agreement during the fiscal quarter ended March 31, 2025[129](index=129&type=chunk) [Exhibits](index=40&type=section&id=ITEM%206%20-%20EXHIBITS) This section lists exhibits filed with Form 10-Q, including the Credit Agreement and CEO/CFO certifications - Key exhibits filed include the First Amended and Restated Credit Agreement, CEO and CFO certifications under Sections 302 and 906 of the Sarbanes-Oxley Act, and iXBRL data files[130](index=130&type=chunk)

I focus on long-term investments while incorporating short-term shorts to uncover alpha opportunities. My investment approach revolves around bottom-up analysis, delving into the fundamental strengths and weaknesses of individual companies. My investment duration is the medium to long-term. Ultimately, I aim to identify companies with solid fundamentals, sustainable competitive advantages, and growth potential.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the comp ...

Group 1: Stock Split Overview - The first major stock split of 2025 has been announced by O'Reilly Automotive, marking its first forward split in 20 years and fourth since going public in 1993 [17][18] - O'Reilly Automotive's board approved a 15-for-1 forward split, which is expected to take effect after trading closes on June 9, 2025 [18] - The stock split is aimed at making it easier for employees to purchase whole shares rather than fractions, enhancing participation in the employee stock purchase plan [19] Group 2: Company Performance - O'Reilly Automotive's stock has increased over 4,500% since its last stock split two decades ago, indicating strong company performance and effective management decisions [20] - The average age of vehicles on U.S. roads has risen to 12.6 years in 2024, which benefits auto parts suppliers like O'Reilly as consumers tend to keep older vehicles longer [21] - O'Reilly's hub-and-spoke distribution model, with 31 regional distribution centers and nearly 400 hub stores, ensures efficient supply and availability of over 153,000 stock keeping units (SKUs) [22] Group 3: Share Repurchase Program - O'Reilly Automotive has executed a significant share repurchase program, buying back 96.5 million shares for a total investment of $25.94 billion, resulting in a 59.4% reduction in outstanding shares [23] - The reduction in share count due to buybacks is expected to positively impact earnings per share (EPS), making the stock more attractive to investors [23] Group 4: Market Resilience - The demand for auto parts is considered relatively recession-resistant, suggesting that O'Reilly Automotive's stock may continue to rise in the long term [24]

O'Reilly Automotive, Inc. (NASDAQ:ORLY) Q1 2025 Earnings Conference Call April 24, 2025 11:00 AM ET Company Participants Jeremy Fletcher - Executive Vice President and Chief Financial Officer Brad Beckham - Chief Executive Officer Brent Kirby - President Conference Call Participants Michael Lasser - UBS Simeon Gutman - Morgan Stanley Greg Melich - Evercore Chris Bottiglieri - BNP Robbie Ohmes - Bank of America Kate McShane - Goldman Sachs Christopher Horvers - JPMorgan Operator Welcome to the O'Reilly Autom ...

O’Reilly Automotive, Inc. (ORLY) reported first-quarter 2025 adjusted earnings per share (EPS) of $9.35, which lagged the Zacks Consensus Estimate of $9.83. The bottom line, however, increased from $9.20 reported in the prior-year quarter.The automotive parts retailer registered quarterly revenues of $4.14 billion, missing the Zacks Consensus Estimate of $4.17 billion. The top line, however, increased 4% year over year.During the quarter, comparable store sales grew 3.6%. The company opened 38 stores in the ...

Group 1: Earnings Performance - O'Reilly Automotive reported quarterly earnings of $9.35 per share, missing the Zacks Consensus Estimate of $9.83 per share, but showing an increase from $9.20 per share a year ago, resulting in an earnings surprise of -4.88% [1] - The company posted revenues of $4.14 billion for the quarter, missing the Zacks Consensus Estimate by 0.80%, and compared to $3.98 billion in the same quarter last year [2] - Over the last four quarters, O'Reilly Automotive has surpassed consensus EPS estimates only once [2] Group 2: Stock Performance and Outlook - O'Reilly Automotive shares have increased approximately 17.5% since the beginning of the year, contrasting with the S&P 500's decline of -10.1% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the upcoming quarter is $11.54 on revenues of $4.53 billion, and for the current fiscal year, it is $43.93 on revenues of $17.63 billion [7] Group 3: Industry Context - The Automotive - Retail and Wholesale - Parts industry is currently ranked in the bottom 15% of over 250 Zacks industries, indicating potential challenges for stocks within this sector [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact O'Reilly Automotive's stock performance [5] - The estimate revisions trend for O'Reilly Automotive is currently unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expectations of underperformance in the near future [6]

Financial Performance - First quarter 2025 revenue increased by $161 million, or 4%, to $4.14 billion from $3.98 billion year-over-year[2] - Comparable store sales grew by 3.6% in the first quarter, following a 3.4% increase in the same period last year[5] - Gross profit for the first quarter rose 4% to $2.12 billion, representing 51.3% of sales, compared to 51.2% of sales last year[2] - Net income decreased by $9 million, or 2%, to $538 million, which is 13.0% of sales, down from 13.8% last year[3] - Sales for the three months ended March 31, 2025, reached $4.14 billion, up from $3.98 billion in the same period of 2024, representing a year-over-year increase of 4.02%[18] - Net income for the three months ended March 31, 2025, was $538.49 million, compared to $547.24 million in 2024, a decline of 1.36%[18] - Earnings per share (basic) increased to $9.40 for Q1 2025, compared to $9.27 in Q1 2024, reflecting a growth of 1.40%[18] Guidance and Future Plans - The company maintained its full-year comparable store sales guidance of 2.0% to 4.0%[2] - Total revenue guidance for 2025 is set between $17.4 billion and $17.7 billion[7] - Operating income as a percentage of sales is expected to be between 19.2% and 19.7% for the full year[7] - The company plans to open 200 to 210 new stores in 2025, with 38 net new store openings in the first quarter[7] - The company plans to continue its growth strategy with a focus on new store openings and potential acquisitions in key markets[22] Cash Flow and Assets - Net cash provided by operating activities for the first quarter was $755 million[4] - Net cash provided by operating activities was $755.12 million for the three months ended March 31, 2025, compared to $704.22 million in 2024, an increase of 7.24%[19] - Free cash flow for the first quarter of 2025 was $455.24 million, up from $438.86 million in the same period of 2024, representing a growth of 3.70%[21] - Total assets increased to $15.29 billion as of March 31, 2025, compared to $14.21 billion a year earlier, reflecting a growth of 7.57%[16] Inventory and Liabilities - Total current liabilities increased to $8.51 billion as of March 31, 2025, from $7.89 billion a year earlier, marking a rise of 7.83%[16] - Inventory turnover ratio was 1.6 for the twelve months ended March 31, 2025, slightly down from 1.7 in 2024, suggesting a minor decrease in inventory efficiency[21] - The company maintained a stable inventory management strategy, with inventory calculated as accounts payable divided by inventory[23] Store Expansion and Employment - The total number of domestic stores increased to 6,298, with 33 new stores opened during the quarter, compared to 36 new stores opened in the same quarter of 2024[22] - The company expanded its presence in Mexico, opening 6 new stores, bringing the total to 93, up from 63 in the previous year[22] - Total employment rose to 93,419, an increase from 90,601 in the prior year, indicating growth in workforce to support expansion[22] - The total ending store count across all regions reached 6,416, an increase from 6,217 in the previous year, reflecting ongoing market expansion efforts[22] Sales Performance - Sales to do-it-yourself customers amounted to $2,051,859, up from $2,003,805, while sales to professional service provider customers increased to $1,998,593 from $1,875,186, reflecting strong demand in both segments[22] - The weighted-average sales per square foot for the three months ended March 31, 2025, was $82.22, slightly down from $82.59 in the same period of 2024[22] - Sales per weighted-average store for the twelve months ended March 31, 2025, was $2,650, compared to $2,601 in the previous year, showing improved productivity[22] Debt Management - Adjusted debt to EBITDAR ratio improved to 2.03 in 2025 from 1.95 in 2024, indicating better leverage management[21]