O’Reilly Automotive’s business
O’Reilly Automotive (ORLY) generates its revenues by selling auto parts, accessories, and tools in the US. The company provides these components and tools to do-it-yourself customers as well as professionals.
In the last couple of years, US auto companies (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 the growth potential for the US auto parts retailers such as O’Reilly Automotive, AutoZone (AZO), and Advance Auto Parts (AAP). Now, let’s take a closer look at ORLY’s 4Q17 sales.
O’Reilly’s 4Q17 sales
In 4Q17, O’Reilly reported revenues of $2.2 billion for an increase of 4.4% from its revenues of $2.1 billion in 4Q16. The company’s same-store sales grew 1.3% in 4Q17 compared to 4.8% growth seen in 4Q16. Earlier this year, ORLY’s management had guided its 4Q17 same-store sales growth to be weak, ranging from flat to 2.0%.
In the company’s 4Q17 earnings report, ORLY’s CEO, Greg Henslee, noted that its 4Q17 sales growth faced a negative impact of low demand and a mild winter season in the US.
However, the company’s management suggested that ORLY’s same-store sales growth rate is expected to improve in 1Q18 and rise to 2.0%–4.0%. This slightly positive guidance for 1Q18 could keep optimism alive for ORLY stock in the coming weeks.
Read on to learn more about O’Reilly Automotive’s profit margins in 4Q17.