Article Featured on News-Leader.com | October 26, 2017
O’Reilly Automotive stock rallied midday Thursday as the market responded to the company’s reported third-quarter earnings.
O’Reilly’s third-quarter comparable store sales increased by 1.8 percent for the three months ending Sept. 30, the company said in a statement Wednesday afternoon.
In the statement, CEO Greg Henslee characterized that sales figure as “solidly in our guidance range of 1 to 3 percent for the quarter, as we continued to face a challenging demand environment and experienced severe weather in various parts of the country.”
Sales for third quarter increased $119 million, or 5 percent, to $2.34 billion, from $2.22 billion for the same period last year. Gross profit was also up 5 percent over third quarter 2016.
Net income for third quarter increased $5 million, or 2 percent, to $284 million, up from $278 million for the same period one year ago.
But it has been a rough year for the Springfield-based auto-parts company, as online retailer Amazon has shoved its way into the car-parts game, prompting stock declines in Big Four auto-parts merchants like O’Reilly and AutoZone, the USA TODAY Network reported.
ORLY’s share price has trended downward over the past 12 months from $277.16 on Oct. 26, 2016 to $209.57 as of 11 a.m. Thursday.
The 1- to 3-percent “guidance range” for third-quarter sales represented a lowering of expectations. For the second quarter, O’Reilly had forecast a same-store sales increase of 3 to 5 percent but achieved an increase of 1.7 percent, the News-Leader previously reported.
In the Wednesday statement, Henslee cited additional “headwinds” for O’Reilly through the final three months of the year: an extra Sunday in the calendar, which is O’Reilly’s slowest day of the week, and the fact that Christmas Day falls on a Monday.
Thus the company forecasts same-store sales growth between 0 and 2 percent for its fourth quarter.
Still, Henslee said, “the long-term demand drivers for our industry remain intact and positive, including increasing annual miles driven and a growing and aging vehicle fleet.”
The company reported that on Oct. 20 it opened its 5,000th store, located in Norwich, Connecticut. So far in 2017, O’Reilly has opened a net increase of 171 new stores in 34 states.
Texas, Florida and the Northeast are the company’s strongest growth markets, and O’Reilly wants a net increase of 200 new stores in 2018.
O’Reilly employs about 73,000 people, 1,200 of whom are based in Springfield, making the company one of the area’s largest employers, according to the Springfield Area Chamber of Commerce.