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It has been about a month since the last earnings report for O'Reilly Automotive (ORLY). Shares have added about 0% in that time frame, outperforming the S&P 500.
Will the recent trend continue leading up to its next earnings release, or is O'Reilly Automotive due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
O'Reilly Q3 Earnings Miss Expectations
O’Reilly reported third-quarter 2024 adjusted earnings per share (EPS) of $11.41, which missed the Zacks Consensus Estimate of $11.53. However, the bottom line increased from $10.72 reported in the prior-year quarter. The automotive parts retailer registered quarterly revenues of $4.36 billion, missing the Zacks Consensus Estimate of $4.43 billion. The top line, however, increased 3.8% year over year.
During the quarter, comparable store sales grew 1.5%. The company opened 47 new stores in the United States, Mexico and Canada during the quarter. The total store count was 6,291 as of Sept. 30, 2024.
Financials, Share Repurchase & Costs
In the reported quarter, selling, general and administrative expenses rose 7% year over year to $1.35 billion. Operating income remained flat year over year at $897 million. Net income was $665 million, up from $650 million in the year-ago quarter.
During the reported quarter, O’Reilly repurchased 0.5 million shares for $541 million at an average price of $1,084.28 per share. After the end of the quarter until the release date, ORLY repurchased an additional 0.1 million shares of common stock for a total investment of $70 million at an average price of $1,170.55 per share. As of Oct. 23, the company had nearly $898 million remaining under the current share repurchase authorization.
It had cash and cash equivalents of $115.6 million at the end of the reported quarter, down from $279.1 million recorded as of 2023-end. Its long-term debt was $5.36 billion, lower than $5.57 billion as of Dec. 31, 2023.
During the reported quarter, O’Reilly generated $772 million in cash from operating activities compared with the year-ago period’s $2.43 billion. Capital expenditures totaled $258.3 million compared with $732.9 million in the year-ago period. Free cash flow was $500 million, down 69.8% year over year.
ORLY’s Updated 2024 Outlook
For 2024, O’Reilly estimates total revenues in the range of $16.6-$16.8 billion, down from the prior guidance of $16.6-$16.9 billion. It now expects earnings per share in the range of $40.60-$41.10, down from the previous estimate of $40.75-$41.25. The outlook for comparable store sales growth was revised downward to 2-3% from 2-4%. The outlook for free cash flow remained unchanged at $1.8-$2.1 billion. Capital expenditure guidance remained unchanged in the range of $900 million to $1 billion. The company intends to open 190-200 stores this year.