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Simeon Ari Gutman

Research Analyst at Morgan Stanley

Simeon Ari Gutman's questions to O REILLY AUTOMOTIVE (ORLY) leadership

Simeon Ari Gutman's questions to O REILLY AUTOMOTIVE (ORLY) leadership • Q3 2025

Question

Simeon Ari Gutman followed up on DIY deferral, asking if it's purely price elasticity or also related to the timing of price movements, and questioned the company's investment posture regarding elevated SG&A per store, accelerated store growth, and its approach to operating margin.

Answer

CEO Brad Beckham explained that DIY deferral is modest, not across the board, and not always directly tied to tariff-driven costs, with strength still seen in maintenance categories. He noted no material trade-down in good, better, best product tiers. President Brent Kirby stated no fundamental shift in operating margin approach, attributing elevated SG&A to inflation and investments in operating posture and team support. Brad Beckham added that O'Reilly balances SG&A management with service levels and will continue disciplined investments in technology, teams, and supply chain.

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Simeon Ari Gutman's questions to O REILLY AUTOMOTIVE (ORLY) leadership • Q3 2025

Question

Simeon Ari Gutman asked if DIY deferral is primarily price elasticity or timing of price movements, and about O'Reilly's investment posture regarding elevated SG&A per store and operating margin.

Answer

Brad Beckham (CEO, O'Reilly Automotive) explained it's early to definitively attribute DIY deferral solely to price elasticity, noting it's not across all categories or directly tied to tariff-driven costs, and no trade-down is observed. Brent Kirby (President, O'Reilly Automotive) stated no fundamental shift in operating margin approach, with recent SG&A increases partly due to inflation and investments to strengthen operating posture. Brad Beckham (CEO, O'Reilly Automotive) added that they are pleased with internal SG&A management and will continue disciplined investment in technology, teams, and supply chain.

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Simeon Ari Gutman's questions to RH (RH) leadership

Simeon Ari Gutman's questions to RH (RH) leadership • Q2 2026

Question

Simeon Ari Gutman asked about the sequential improvement in free cash flow, questioning if real estate monetization remains a necessary pursuit given the positive trend, and followed up on the timing of the business entering a new growth period post-investment cycle.

Answer

Chairman and CEO Gary Friedman explained that real estate monetization is opportunistic, not a necessity, as RH is primarily a developer with a sale-leaseback model. He detailed the Aspen portfolio and current market conditions, noting that selling now might not be ideal. CFO Jack Preston clarified that communicating real estate value is about understanding assets relative to debt. Friedman added that the business is ready for growth post-peak investment cycle, but cautioned about inflation risks from tariffs, which he believes could severely disrupt the furniture industry. He emphasized the need for rational, data-driven discussions with the administration regarding tariffs.

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Simeon Ari Gutman's questions to RH (RH) leadership • Q2 2026

Question

Simeon Ari Gutman inquired about RH's free cash flow improvement and whether real estate monetization remains a necessary strategy given the projected cash flow for fiscal 2025 and beyond. He also asked about the company's readiness for a new growth period, considering the easing investment cycle and new initiatives.

Answer

Chairman & CEO Gary Friedman and CFO Jack Preston clarified that real estate monetization is opportunistic, not a necessity, highlighting their role as developers rather than long-term owners. They discussed the Aspen portfolio, the impact of rising interest rates on development, and the strategic value of properties like RH England and RH Detroit. Friedman emphasized the business's readiness for growth post-investment cycle but expressed concern about inflation from tariffs, urging policymakers to consider the industry's perspective on potential new tariffs.

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