O’Reilly Automotive(US:ORLY)2023-02-09 20:13Financial Data and Key Metrics Changes - The company reported a comparable store sales increase of 9% in Q4 2022, with a full-year growth of 6.4%, exceeding previous guidance [6][23] - Diluted EPS increased by 8% to $33.44, representing a 3-year compounded annual growth rate of 23% [6] - The company expects 2023 EPS guidance to be between $35.75 and $36.25, indicating an 8% increase compared to 2022 [23] Business Line Data and Key Metrics Changes - The professional business led growth with double-digit comparable store sales growth, while the DIY business showed improved performance with strong average ticket growth [27][11] - Average ticket size grew in the high single digits, supported by mid single-digit growth in same SKU inflation [56] Market Data and Key Metrics Changes - The automotive aftermarket remains strong, driven by consumers keeping their vehicles longer due to vehicle scarcity [12] - The company anticipates a slight decline in DIY traffic in 2023 but expects to gain market share to offset this [14] Company Strategy and Development Direction - The company plans to invest in operational strength, focusing on team member experience, store upgrades, and technology projects [16] - The strategy includes enhancing customer service and inventory management to capitalize on market opportunities [16][58] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the automotive aftermarket's resilience despite potential economic challenges, emphasizing the non-discretionary nature of their business [13] - The company remains optimistic about growth opportunities in both DIY and professional segments for 2023 [58] Other Important Information - The company’s capital expenditures in 2022 were $563 million, with a guidance of $750 million to $800 million for 2023 [41] - Inventory per store at the end of 2022 was $730,000, up 15% from the previous year [39] Q&A Session All Questions and Answers Question: How does the company view its comp guidance for 2023? - Management clarified that the 4% to 6% comp guidance is based on a bullish outlook for the industry and not merely a necessity to cover increased costs [77] Question: What is the expected impact of lower input costs on profitability? - Management indicated that while there are some cost reductions, they remain cautious about the overall impact on margins and profitability [79] Question: What was the inflation in average hourly wage last year and expectations for this year? - The company reported mid to high-single digit wage inflation in 2022 and expects it to moderate but remain in the mid-single digit range for 2023 [95] Question: Is there any trade-down occurring among customers? - Management noted that there has not been significant trade-down behavior, with some customers trading up to higher quality products [97]