O’Reilly Automotive’s business
O’Reilly Automotive (ORLY) generates revenue by selling auto parts, accessories, and tools in the United States. The company provides these components and tools to do-it-yourself customers and companies offering professional installation services.
In the last few years, US auto companies (FXD) such as Ford (F) and General Motors (GM) have benefited from higher US sales of trucks and utility vehicles. In 2017, the average age of on-road vehicles rose to more than 11.6 years. This increase in age boosted growth potential for US auto part retailers such as O’Reilly Automotive, AutoZone (AZO), and Advance Auto Parts (AAP). Let’s take a closer look at ORLY’s 1Q18 sales.
O’Reilly’s 1Q18 sales
In 1Q18, O’Reilly’s revenue rose 5.9% year-over-year to $2.3 billion from $2.2 billion, and its same-store sales growth rose to 3.4% from just 0.8% in 1Q17 and 1.3% in 4Q17. ORLY met its 1Q18 same-store sales growth rate estimate of 2%–4% ORLY CEO Greg Henslee stated that the solid sales growth in 1Q18 was a result of “dedication to excellent customer service.”
In its 2Q18 and 2018 outlook, ORLY indicated that it expects its same-store sales growth rate to remain at 2%–4%. This positive guidance could keep optimism alive on Wall Street in future weeks. Continue to the next part, where we’ll discuss O’Reilly Automotive’s profit margin in 1Q18.