O'Reilly Automotive today announced record revenues and earnings for its fourth quarter and full year ended December 31, 2015. The results represent 23 consecutive years of comparable store sales growth and record revenue and operating income for O'Reilly since becoming a public company in April 1993.
4th Quarter Financial Results
Sales for the fourth quarter ended December 31, 2015, increased $185 million, or 10%, to $1.95 billion from $1.76 billion for the same period one year ago. Gross profit for the fourth quarter increased to $1.03 billion (or 52.7% of sales) from $912 million (or 51.7% of sales) for the same period one year ago, representing an increase of 13%. Selling, general and administrative expenses ("SG&A") for the fourth quarter increased to $665 million (or 34.1% of sales) from $609 million (or 34.5% of sales) for the same period one year ago, representing an increase of 9%. Operating income for the fourth quarter increased to $363 million (or 18.6% of sales) from $303 million (or 17.2% of sales) for the same period one year ago, representing an increase of 20%.
Net income for the fourth quarter ended December 31, 2015, increased $37 million, or 20%, to $219 million (or 11.2% of sales) from $182 million (or 10.3% of sales) for the same period one year ago. Diluted earnings per common share for the fourth quarter increased 24% to $2.19 on 100 million shares versus $1.76 on 103 million shares for the same period one year ago.
Greg Henslee, O'Reilly's President and CEO, commented, "We are very pleased to once again report another very profitable quarter and a very strong finish to a record breaking year. Our Team's dedication to providing consistent, excellent customer service every day drove our very robust fourth quarter comparable store sales increase of 7.7%, which was on top of a strong comparable store sales increase of 6.3% in the fourth quarter of 2014. This industry leading comparable store sales performance represents our 9th consecutive quarter of comparable store sales growth greater than 5%, with increases of over 7% in each quarter of 2015. Our relentless focus on profitable growth translated our strong top line performance into a 24% increase in fourth quarter diluted earnings per share of $2.19, which represents our 28th consecutive quarter of diluted earnings per share growth greater than 15%, and I would like to thank each of our Team Members for their continued hard work and commitment to our ongoing success."
Full-Year Financial Results
Sales for the year ended December 31, 2015, increased $751 million, or 10%, to $7.97 billion from $7.22 billion for the same period one year ago. Gross profit for the year ended December 31, 2015, increased to $4.16 billion (or 52.3% of sales) from $3.71 billion (or 51.4% of sales) for the same period one year ago, representing an increase of 12%. SG&A for the year ended December 31, 2015, increased to $2.65 billion (or 33.2% of sales) from $2.44 billion (or 33.8% of sales) for the same period one year ago, representing an increase of 9%. Operating income for the year ended December 31, 2015, increased to $1.51 billion (or 19.0% of sales) from $1.27 billion (or 17.6% of sales) for the same period one year ago, representing an increase of 19%.
Net income for the year ended December 31, 2015, increased $153 million, or 20%, to $931 million (or 11.7% of sales) from $778 million (or 10.8% of sales) for the same period one year ago. Diluted earnings per common share for the year ended December 31, 2015, increased 25% to $9.17 on 102 million shares versus $7.34 on 106 million shares for the same period one year ago.
Henslee said, "Team O'Reilly's dedication to unsurpassed service levels resulted in a full-year comparable stores sales increase of 7.5%, a record 19.0% operating margin and a 25% increase in full-year diluted earnings per share to $9.17, which represents our seventh consecutive year of 20% or greater annual diluted earnings per share growth. We are very proud of our record breaking 2015 financial results, as well as the addition of 205 net, new stores and the expansion into Connecticut, our 44th state, and we are intensely focused on extending our proven record of profitable growth in 2016. In the coming year, we expect to see continued strong demand in our industry, and more importantly, we remain very confident in our Team's commitment to providing consistently high levels of service to our customers. We will, however, face very difficult same store sales comparisons in each quarter of 2016, and based on these factors, we are establishing our first quarter and full-year 2016 comparable store sales guidance ranges at 3% to 5%. We will see a top-line benefit in 2016 from one additional calendar day, due to Leap Day in February; however, our comparable store sales guidance ranges for both the first quarter and full-year exclude this additional day."
Share Repurchase Program
During the fourth quarter ended December 31, 2015, the Company repurchased 1.1 million shares of its common stock at an average price per share of $256.93, for a total investment of $287 million. During the year ended December 31, 2015, the Company repurchased 4.9 million shares of its common stock at an average price per share of $231.81, for a total investment of $1.14 billion. Subsequent to the end of the fourth quarter and through the date of this release, the Company repurchased an additional 0.6 million shares of its common stock, at an average price per share of $243.96, for a total investment of $141 million. The Company has repurchased a total of 51.8 million shares of its common stock under its share repurchase program since the inception of the program in January of 2011 and through the date of this release, at an average price of $106.08, for a total aggregate investment of $5.50 billion.
Today, the Company also announced that its Board of Directors approved a resolution to increase the authorization amount under its share repurchase program by an additional $750 million, raising the aggregate authorization under the program to $6.25 billion. The additional $750 million authorization is effective for a three-year period, beginning on February 10, 2016. Stock repurchases under the program may be made from time to time, as the Company deems appropriate, solely through open market repurchases effected through a broker dealer at prevailing market prices, based on a variety of factors such as price, corporate requirements and overall market conditions. There can be no assurance as to the number of shares the Company will purchase, if any. The share repurchase program may be increased or otherwise modified, renewed, suspended or terminated by the Company at any time, without prior notice. As of the date of this release, the Company had approximately $750 million remaining under its current share repurchase authorizations.
Subscribe to Aftermarket Business World and receive articles like this every month….absolutely free. Click here.
