O’Reilly Automotive’s business
O’Reilly Automotive (ORLY) generates its revenues by selling auto parts, tools, and accessories in the US market. The company provides these auto parts to do-it-yourself customers as well as for professional installation purposes.
In the last couple of years, US automakers (FXD) such as Ford (F) and General Motors (GM) benefited from higher US sales of trucks and utility vehicles. This positive sales growth also boosted future growth potential for US auto parts retailers including O’Reilly Automotive, Advance Auto Parts (AAP), and AutoZone (AZO). Now, let’s take a closer look at ORLY’ 3Q17 revenues.
O’Reilly’s 3Q17 revenues
In 3Q17, O’Reilly reported revenues of $2.3 billion with an increase of 5.4% from its revenues of $2.2 billion in the same quarter of the previous year. The company’s same-store sales rose 1.8% in 3Q17 as compared to 4.2% in 3Q16. Earlier this year, ORLY’s management had guided its 3Q17 same-store sales growth to be in the range of 1% to 3% YoY.
In the 3Q17 earnings report, ORLY’s CEO, Greg Henslee, mentioned that the sales growth was hit by continued low demand and adverse weather conditions in many parts of the US.
The management also warned investors that ORLY’s same-store sales growth could remain weak in the fourth quarter of 2017 between a range of 0% to 2%. This weak guidance for 4Q17 could continue to attract pessimism on Wall Street.
Continue to the next part where we’ll explore how O’Reilly Automotive’s profit margins were in 3Q17.