O’Reilly Automotive(ORLY) ZACKS·2025-04-16 13:55Core Viewpoint - O'Reilly Automotive (ORLY) is expected to report first-quarter 2025 results on April 23, with consensus estimates for EPS at 4.17 billion, indicating growth from the previous year [1][2]. Financial Performance - The consensus estimate for ORLY's earnings has decreased by a penny in the past week, suggesting a 6.85% growth compared to the same quarter last year [2]. - The revenue estimate implies a year-over-year increase of 4.88%, with ORLY having beaten earnings estimates in two of the last four quarters, resulting in an average negative surprise of 0.48% [3]. Market Trends - U.S. new vehicle sales are projected to rise by 0.6% year-over-year to 3.79 million units in Q1 2025, which is expected to benefit O'Reilly due to increased demand for new vehicles [4]. - Comparable sales growth for O'Reilly is anticipated to be 1.8% in the first quarter of 2025 [4]. Revenue Outlook - O'Reilly has achieved record revenues for 32 consecutive years, driven by growth in the auto parts market, vehicle longevity, store expansion, and a strong distribution network. The company projects 2025 revenues between 17.7 billion, up from $16.71 billion in 2024 [5]. Inventory and Expenses - The company plans to increase inventory levels throughout the year to ensure product availability, aiming for a 5% growth in inventory per store for 2025 [6]. - Per-store SG&A expenses rose by 4.6% year-over-year in 2024, with expectations of a 2-2.5% increase in 2025 due to wage pressures and investments in hub stores and technology [6]. Margin Pressure - While a positive sales outlook for 2025 is likely to support ORLY's top-line growth, rising SG&A expenses may exert pressure on profit margins [7]. Earnings Prediction - The current model does not predict an earnings beat for ORLY, as it has an Earnings ESP of -0.78%, indicating that the Most Accurate Estimate is lower than the Zacks Consensus Estimate [8][9].