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Oct. 28, 2020, 4:32 p.m. EDT

O'Reilly Automotive, Inc. Reports Third Quarter 2020 Results and Announces Additional $1.0 Billion Share Repurchase Authorization

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SPRINGFIELD, Mo., Oct 28, 2020 (GLOBE NEWSWIRE via COMTEX) -- -- Third quarter comparable store sales increase of 16.9%, total sales growth of 20.3%

-- 39% increase in third quarter diluted earnings per share to $7.07

-- Net cash provided by operating activities increased $859 million or 57.7%

O'Reilly Automotive, Inc. (the "Company" or "O'Reilly") /zigman2/quotes/207206119/composite ORLY -2.19% , a leading retailer in the automotive aftermarket industry, today announced record revenue and earnings for its third quarter ended September 30, 2020.

3 Quarter Financial Results

Greg Johnson, O'Reilly's CEO and Co-President, commented, "The COVID-19 pandemic continues to present a significant challenge to consumers, and our number one priority continues to be protecting the health and wellness of our Team Members and customers. We are extremely proud of Team O'Reilly's ongoing hard work and dedication to serving each community where we do business, as well as their ability to deliver another outstanding quarter while providing excellent customer service during these difficult times. Our Team's tireless efforts resulted in our second consecutive quarter of over 16% comparable store sales growth. Our DIY business was again a larger contributor to our comparable store sales growth; however, our professional business performed very well, again generating comparable store sales above our expectations during the quarter. We were pleased with our strong sales performance throughout the third quarter, and our business has continued to perform very well through the first three weeks of October, generating robust comparable store sales in the low double digits."

Mr. Johnson further commented, "Our Team's hard work and commitment to expense control resulted in another extremely profitable quarter, exemplified by our 22.6% operating profit margin, which represents a 249 basis point improvement over the prior year, and a 39.2% increase in diluted earnings per share to $7.07. Through the first nine months of 2020, we also generated significant growth in cash provided by operations and free cash flow, increasing both metrics by over $850 million. We continue to maintain a cautious approach to managing our operating costs in these uncertain economic conditions and remain steadfastly focused on providing the excellent customer service that drives long-term profitable growth. Finally, we would like to thank all of Team O'Reilly for your tremendous determination and relentless dedication to taking care of our customers each day - your countless contributions are absolutely the driver to our ongoing success."

Sales for the third quarter ended September 30, 2020, increased $541 million, or 20%, to $3.21 billion from $2.67 billion for the same period one year ago. Gross profit for the third quarter increased 18% to $1.68 billion (or 52.4% of sales) from $1.42 billion (or 53.3% of sales) for the same period one year ago. Selling, general and administrative expenses ("SG&A") for the third quarter increased 8% to $955 million (or 29.8% of sales) from $886 million (or 33.2% of sales) for the same period one year ago. Operating income for the third quarter increased 35% to $725 million (or 22.6% of sales) from $536 million (or 20.1% of sales) for the same period one year ago.

Net income for the third quarter ended September 30, 2020, increased $136 million, or 35%, to $527 million (or 16.4% of sales) from $391 million (or 14.7% of sales) for the same period one year ago. Diluted earnings per common share for the third quarter increased 39% to $7.07 on 75 million shares versus $5.08 on 77 million shares for the same period one year ago.

Year-to-Date Financial Results

Sales for the first nine months of 2020 increased $1.11 billion, or 14%, to $8.78 billion from $7.67 billion for the same period one year ago. Gross profit for the first nine months of 2020 increased 13% to $4.61 billion (or 52.6% of sales) from $4.07 billion (or 53.1% of sales) for the same period one year ago. SG&A for the first nine months of 2020 increased 5% to $2.73 billion (or 31.1% of sales) from $2.59 billion (or 33.8% of sales) for the same period one year ago. Operating income for the first nine months of 2020 increased 27% to $1.89 billion (or 21.5% of sales) from $1.48 billion (or 19.3% of sales) for the same period one year ago.

Net income for the first nine months of 2020 increased $293 million, or 28%, to $1.36 billion (or 15.5% of sales) from $1.07 billion (or 13.9% of sales) for the same period one year ago. Diluted earnings per common share for the first nine months of 2020 increased 33% to $18.12 on 75 million shares versus $13.63 on 78 million shares for the same period one year ago.

3 Quarter Comparable Store Sales Results

Comparable store sales are calculated based on the change in sales for U.S. stores open at least one year and exclude sales of specialty machinery, sales to independent parts stores and sales to Team Members, as well as sales from Leap Day in the nine months ended September 30, 2020. Online sales, resulting from ship-to-home orders and pick-up-in-store orders, for U.S. stores open at least one year, are included in the comparable store sales calculation. Comparable store sales increased 16.9% for the third quarter ended September 30, 2020, on top of 5.0% for the same period one year ago. Comparable store sales increased 10.7% for the nine months ended September 30, 2020, on top of 3.9% for the same period one year ago.

Share Repurchase Program

During the third quarter ended September 30, 2020, the Company repurchased 1.0 million shares of its common stock, at an average price per share of $458.70, for a total investment of $443 million. During the first nine months ended of 2020, the Company repurchased 2.6 million shares of its common stock, at an average price per share of $415.28, for a total investment of $1.09 billion. Subsequent to the end of the third quarter and through the date of this release, the Company repurchased an additional 0.7 million shares of its common stock, at an average price per share of $458.97, for a total investment of $313 million. The Company has repurchased a total of 79.5 million shares of its common stock under its share repurchase program since the inception of the program in January of 2011 and through the date of this release, at an average price of $170.92, for a total aggregate investment of $13.59 billion.

Today, the Company also announced that its Board of Directors (the "Board") approved a resolution to increase the authorization amount under its share repurchase program by an additional $1.0 billion, raising the aggregate authorization under the program to $14.75 billion. The additional $1.0 billion authorization is effective for a three-year period, beginning on October 28, 2020. Stock repurchases under the program may be made from time to time, as the Company deems appropriate, solely through open market repurchases effected through a broker dealer at prevailing market prices, based on a variety of factors such as price, corporate requirements and overall market conditions. There can be no assurance as to the number of shares the Company will purchase, if any. The share repurchase program may be increased or otherwise modified, renewed, suspended or terminated by the Company at any time, without prior notice. As of the date of this release, the Company had approximately $1.16 billion remaining under its current share repurchase authorizations.

Continued Suspension of Guidance

As previously announced, the Company withdrew all previously issued 2020 guidance, and given the ongoing uncertainty related to COVID-19, the Company is not resuming guidance at this time.

Non-GAAP Information

This release contains certain financial information not derived in accordance with United States generally accepted accounting principles ("GAAP"). These items include adjusted debt to earnings before interest, taxes, depreciation, amortization, share-based compensation and rent ("EBITDAR") and free cash flow. The Company does not, nor does it suggest investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, GAAP financial information. The Company believes that the presentation of adjusted debt to EBITDAR and free cash flow provide meaningful supplemental information to both management and investors that is indicative of the Company's core operations. The Company has included a reconciliation of this additional information to the most comparable GAAP measure in the selected financial information below.

Earnings Conference Call Information

The Company will host a conference call on Thursday, October 29, 2020, at 10:00 a.m. Central Time to discuss its results as well as future expectations. Investors may listen to the conference call live on the Company's website at www.OReillyAuto.com by clicking on "Investor Relations" and then "News Room." Interested analysts are invited to join the call. The dial-in number for the call is (703) 375-5524; the conference call identification number is 3669318. A replay of the conference call will be available on the Company's website through Thursday, October 28, 2021.

About O'Reilly Automotive, Inc.

O'Reilly Automotive, Inc. was founded in 1957 by the O'Reilly family and is one of the largest specialty retailers of automotive aftermarket parts, tools, supplies, equipment and accessories in the United States, serving both the do-it-yourself and professional service provider markets. Visit the Company's website at www.OReillyAuto.com for additional information about O'Reilly, including access to online shopping and current promotions, store locations, hours and services, employment opportunities and other programs. As of September 30, 2020, the Company operated 5,592 stores in 47 U.S. states and 21 stores in Mexico.

/zigman2/quotes/207206119/composite
US : U.S.: Nasdaq
$ 445.89
-9.98 -2.19%
Volume: 869,429
Feb. 25, 2021 4:00p
P/E Ratio
18.94
Dividend Yield
N/A
Market Cap
$32.42 billion
Rev. per Employee
N/A
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