O’Reilly Automotive today announced record revenues and earnings for its fourth quarter and full year ended December 31, 2014. The results represent 22 consecutive years of comparable store sales growth and record revenue and operating income for O’Reilly since becoming a public company in April of 1993.
4th quarter financial results
Sales for the fourth quarter ended December 31, 2014, increased $143 million, or 9%, to $1.76 billion from $1.62 billion for the same period one year ago. Gross profit for the fourth quarter increased to $912 million (or 51.7% of sales) from $819 million (or 50.5% of sales) for the same period one year ago, representing an increase of 11%. Selling, general and administrative expenses (“SG&A”) for the fourth quarter increased to $609 million (or 34.5% of sales) from $564 million (or 34.8% of sales) for the same period one year ago, representing an increase of 8%. Operating income for the fourth quarter increased to $303 million (or 17.2% of sales) from $256 million (or 15.8% of sales) for the same period one year ago, representing an increase of 18%.
Net income for the fourth quarter ended December 31, 2014, increased $29 million, or 19%, to $182 million (or 10.3% of sales) from $152 million (or 9.4% of sales) for the same period one year ago. Diluted earnings per common share for the fourth quarter increased 26% to $1.76 on 103 million shares versus $1.40 for the same period one year ago on 109 million shares.
O’Reilly’s President and CEO, Greg Henslee commented, “We are very pleased to report another profitable quarter and a strong finish to a very successful year. Team O’Reilly’s unwavering commitment to providing unsurpassed levels of customer service each day drove our industry-leading 6.3% comparable store sales increase for the fourth quarter, which exceeded our guidance and resulted in a 6% comparable store sales increase for the full year, well above the guidance we set at the beginning of the year. Our unrelenting focus on profitable growth translated these strong top-line results into a record fourth quarter operating margin of 17.2% and a 26% increase in fourth quarter earnings per share, representing our 24th consecutive quarter of EPS growth greater than 15%. I would like to congratulate Team O’Reilly for exceeding our sales and profitability goals in yet another quarter and thank each of them for their continued hard work and dedication to our ongoing success.”
Full-year financial results
Sales for the year ended December 31, 2014, increased $567 million, or 9%, to $7.22 billion from $6.65 billion for the same period one year ago. Gross profit for the year ended December 31, 2014, increased to $3.71 billion (or 51.4% of sales) from $3.37 billion (or 50.7% of sales) for the same period one year ago, representing an increase of 10%. SG&A for the year ended December 31, 2014, increased to $2.44 billion (or 33.8% of sales) from $2.27 billion (or 34.1% of sales) for the same period one year ago, representing an increase of 8%. Operating income for the year ended December 31, 2014, increased to $1.27 billion (or 17.6% of sales) from $1.10 billion (or 16.6% of sales) for the same period one year ago, representing an increase of 15%.
Net income for the year ended December 31, 2014, increased $108 million, or 16%, to $778 million (or 10.8% of sales) from $670 million (or 10.1% of sales) for the same period one year ago. Diluted earnings per common share for the year ended December 31, 2014, increased 22% to $7.34 on 106 million shares versus $6.03 for the same period one year ago on 111 million shares.
Henslee continued, “We finished 2014 with a record operating margin of 17.6% and a 22% increase in earnings per share, which is our sixth consecutive year of 21% or greater EPS growth. Based on our belief in the continued strength of the long- term drivers for demand in our industry and, more importantly, in our Team’s commitment to providing consistently high levels of customer service, we are establishing our first quarter and full-year 2015 comparable store sales guidance at a range of 3% to 5%. We remain steadfast in our commitment to profitable growth, and for 2015, we are projecting an increase in operating margin to between 18.1% and 18.5% of sales. I would like to again thank and congratulate Team O’Reilly for our record breaking 2014 results as we look forward to building on this strong performance in 2015.”
Share repurchase program
During the fourth quarter ended December 31, 2014, the Company repurchased 1.2 million shares of its common stock at an average price per share of $152.05, for a total investment of $179 million. During the year ended December 31, 2014, the Company repurchased 5.7 million shares of its common stock at an average price per share of $150.86, for a total investment of $866 million. Subsequent to the end of the fourth quarter and through the date of this release, the Company repurchased an additional 0.1 million shares of its common stock, at an average price per share of $183.20, for a total investment of $9 million. The Company has repurchased a total of 46.4 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 $91.16, for a total aggregate investment of $4.23 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 $500 million, raising the aggregate authorization under the program to $5.0 billion. The additional $500 million authorization is effective for a three-year period, beginning on February 4, 2015. 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 $770 million remaining under its current share repurchase authorizations.
4th quarter and full-year comparable store sales results
Comparable store sales are calculated based on the change in sales for stores open at least one year and exclude sales of specialty machinery, sales to independent parts stores and sales to Team Members. Comparable store sales increased 6.3% for the fourth quarter ended December 31, 2014, versus 5.4% for the same period one year ago. Comparable store sales increased 6.0% for the year ended December 31, 2014, versus 4.3% for the same period one year ago.
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