O'Reilly Automotive today announced record revenues and earnings for its second quarter ended June 30, 2015.
2nd Quarter Financial Results
Sales for the second quarter ended June 30, 2015, increased $188 million, or 10%, to $2.04 billion from $1.85 billion for the same period one year ago. Gross profit for the second quarter increased to $1.06 billion (or 52.0% of sales) from $951 million (or 51.5% of sales) for the same period one year ago, representing an increase of 11%. Selling, general and administrative expenses ("SG&A") for the second quarter increased to $673 million (or 33.1% of sales) from $614 million (or 33.3% of sales) for the same period one year ago, representing an increase of 10%. Operating income for the second quarter increased to $386 million (or 19.0% of sales) from $336 million (or 18.2% of sales) for the same period one year ago, representing an increase of 15%.
Net income for the second quarter ended June 30, 2015, increased $28 million, or 14%, to $234 million (or 11.5% of sales) from $206 million (or 11.1% of sales) for the same period one year ago. Diluted earnings per common share for the second quarter increased 20% to $2.29 on 102 million shares versus $1.91 on 108 million shares for the same period one year ago.
Greg Henslee, O'Reilly's President and CEO commented, "We are very pleased to report another record breaking quarter. Our strong results are highlighted by an industry-leading 7.2% increase in comparable store sales, which mirrors the strong 7.2% increase we generated in the first quarter of the year. Our Team's focus on providing consistently high levels of service to our customers continues to drive our strong top-line performance, and I would like to thank each of them for their contributions to our ongoing success."
Henslee continued, "Team O'Reilly's unwavering commitment to profitable, sustainable growth translated our very strong sales results into a record second quarter operating margin of 19.0% and drove a 20% increase in second quarter diluted earnings per share to $2.29, representing our 26th consecutive quarter of dilutive earnings per share growth greater than 15%. We achieved these record breaking results despite recording a $19 million charge during the quarter as the result of an adverse verdict and associated costs of litigation arising from a dispute with a former service provider. This unusual charge, which is unrelated to our second quarter operations, decreased our second quarter operating margin by 93 basis points."
Year-to-Date Financial Results
Sales for the first six months of 2015 increased $362 million, or 10%, to $3.94 billion from $3.58 billion for the same period one year ago. Gross profit for the first six months of 2015 increased to $2.05 billion (or 52.0% of sales) from $1.83 billion (or 51.1% of sales) for the same period one year ago, representing an increase of 12%. SG&A for the first six months of 2015 increased to $1.31 billion (or 33.3% of sales) from $1.20 billion (or 33.7% of sales) for the same period one year ago, representing an increase of 9%. Operating income for the first six months of 2015 increased to $736 million (or 18.7% of sales) from $624 million (or 17.4% of sales) for the same period one year ago, representing an increase of 18%.
Net income for the first six months of 2015 increased $67 million, or 18%, to $446 million (or 11.3% of sales) from $380 million (or 10.6% of sales) for the same period one year ago. Diluted earnings per common share for the first six months of 2015 increased 24% to $4.35 on 103 million shares versus $3.52 on 108 million shares for the same period one year ago.
Henslee added, "During the first half of the year, we opened 99 net, new stores across the country and we are on track to meet our goal of 205 net, new store openings for the year. We continue to be pleased with the success of our new store openings as we expand the O'Reilly brand in existing markets and establish ourselves in new markets. As we look ahead into the second half of the year, we believe the long-term drivers for demand in our industry are intact, but more importantly, we are very confident in our ability to consistently execute our proven dual market strategy, supported by our dedicated and hardworking team. The third quarter is off to a good start; however, we anniversary our very strong 6.2% comparable store sales results from the third quarter of 2014, and based on these compares, we are establishing third quarter comparable store sales guidance at a range of 3% to 5%. Driven by our strong first half performance, we are increasing our full year comparable store sales guidance to a range of 4% to 6%. I would once again like to thank our over 71,000 Team Members for their hard work and commitment to providing exceptional service to every customer who depends on O'Reilly for their automotive care needs."
Share Repurchase Program
During the second quarter ended June 30, 2015, the Company repurchased 2.0 million shares of its common stock, at an average price per share of $221.50, for a total investment of $440 million. During the first six months of 2015, the Company repurchased 2.6 million shares of its common stock, at an average price per share of $218.05, for a total investment of $575 million. Subsequent to the end of the second quarter and through the date of this release, the Company repurchased an additional 0.2 million shares of its common stock, at an average price per share of $231.08, for a total investment of $55 million. The Company has repurchased a total of 49.2 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 $98.54, for a total aggregate investment of $4.85 billion. As of the date of this release, the Company had approximately $649 million remaining under its current share repurchase authorizations.
2nd Quarter 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 7.2% for the second quarter ended June 30, 2015, versus 5.1% for the same period one year ago. Comparable store sales increased 7.2% for the first six months of 2015, versus 5.7% for the same period one year ago.
Subscribe to Aftermarket Business World and receive articles like this every month….absolutely free. Click here.
