O'Reilly Automotive Inc.
) posted an 18.4% increase in earnings to $1.61 per share in the
first quarter of 2014 from $1.36 in the year-ago quarter.
Earnings also exceeded the Zacks Consensus Estimate by 3 cents.
Net income improved 13% to $173.9 million (10.1% of sales) from
$154.3 million (9.7%) in the first quarter of 2013.
Quarterly revenues scaled up 9% to $1.73 billion from $1.59
billion in the same period a year ago. Revenues marginally
surpassed the Zacks Consensus Estimate of $1.72 billion.
Comparable store sales increased 6.3% in the reported quarter
compared with 0.6% in the first quarter of 2013.
Gross profit ascended 10% to $877.7 million (50.8% of sales) from
$798.7 million (50.4% of sales) a year ago. Selling, general and
administrative expenses rose 7.9% to $590.6 million (34.2% of
sales) from $547.6 million (34.5%) in the year-ago quarter.
Operating income increased 14.4% to $287.1 million (16.6% of
sales) from $251.1 million (15.8% of sales) for the same period
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During the quarter, O'Reilly opened 50 net new stores in 23
states. Many of the new stores are in Florida. The total store
count stood at 4,216 as of Mar 31, 2014. Sales per weighted
average-store increased to $408,000 from $391,000 a year ago.
New Distribution Centers
The distribution center located in Lakeland has started
operating. It is providing daily inventory replenishments to the
stores located in the area. Another distribution center
located in Naperville, IL, is under construction and will be
operational soon. The Devens, MA, distribution center will be
inaugurated by the end of the year. O'Reilly believes that these
three distribution centers will enhance the network and
performance of the company.
During the quarter under review, O'Reilly repurchased 0.1 million
shares of its common stock for $22 million, reflecting an average
price of $148.18. Subsequent to the end of the first quarter and
through Apr 23, 2014, the company has repurchased an additional
0.2 million shares for $34 million, implying an average price of
Since the inception of the share repurchase program in Jan 2011,
O'Reilly has repurchased a total of 41 million shares for $3.41
billion, indicating an average price of $83.20. As of Apr 23,
2014, the company had approximately $590 million worth of shares
remaining under its share repurchase program.
O'Reilly had cash and cash equivalents of $511.8 million as of
Mar 31, 2014, compared with $205.4 million as of Mar 31, 2013.
Long-term debt increased to $1.4 billion as of Mar 31, 2014 from
$1.1 billion as of Mar 31, 2013.
In the first three months of 2014, net cash flow from operations
increased to $345.5 million from $226.3 million in the
previous-year period. Meanwhile, capital expenditures (net)
increased to $82.8 million from $73.1 million in the same period
For second-quarter 2014, O'Reilly projects earnings per share in
the range of $1.79-$1.83. The company expects consolidated
comparable store sales to increase by 2% to 4%.
For full-year 2014, the company expects earnings per share in the
range of $6.82 to $6.92. O'Reilly expects consolidated comparable
store sales to increase between 3% and 5% during the year. The
company also reiterated revenue guidance of $7 billion to $7.2
billion for 2014, gross margin guidance of 50.9%-51.4%, and
operating margin projection of 17% to 17.4%.
O'Reilly expects capital expenditures within the range of $390
million to $420 million and free cash flow between $580 million
and $620 million for the year.
O'Reilly Automotive is a prominent player in the automotive
replacement parts and accessories industry along with
Advance Auto Parts Inc.
). It sells its products to both Do-it-Yourself (DIY) customers
and Do-it-for-Me (DIFM) or professional installers. Currently,
O'Reilly retains a Zacks Rank #2 (Buy).