O'Reilly Automotive Inc (ORLY)

Business Description

O'Reilly Automotive, Inc. is a specialty retailer and supplier of automotive aftermarket parts, tools, supplies, equipment, and accessories, operating in the United States, Puerto Rico, Mexico, and Canada . The company serves both do-it-yourself (DIY) customers and professional service providers through a dual market strategy, with a significant portion of its revenue coming from the DIY channel . O'Reilly's product offerings include new and remanufactured automotive hard parts, maintenance items, accessories, auto body paint, automotive tools, and professional service provider equipment, categorized by quality and price into "good," "better," and "best" . The company also provides enhanced services such as battery diagnostics, recycling programs, and custom hydraulic hoses .

Automotive Hard Parts - Offers new and remanufactured parts essential for vehicle repair and maintenance, catering to both DIY customers and professional service providers.
Maintenance Items - Supplies products necessary for routine vehicle upkeep, including filters, fluids, and wipers, ensuring vehicle longevity and performance.
Accessories - Provides a range of automotive accessories, enhancing vehicle aesthetics and functionality, tailored to customer preferences.
Auto Body Paint - Supplies paint products for vehicle bodywork, supporting both cosmetic and repair needs with a variety of color options.
Automotive Tools - Offers a comprehensive selection of tools required for vehicle repair and maintenance, serving both amateur and professional mechanics.
Professional Service Provider Equipment - Supplies specialized equipment for professional automotive service providers, enhancing service efficiency and capability.
Enhanced Services - Includes battery diagnostics, recycling programs, and custom hydraulic hoses, offering additional value and convenience to customers.

Key Metrics

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Executive Team

Questions to Ask Management

Given that your higher-margin DIY business, which accounts for slightly over 50% of your sales , is experiencing softness and facing increased competition from mass retailers and warehouse clubs becoming more competitive , how do you plan to regain momentum and protect your market share in the DIY segment?
With the prospect of tariffs ranging from 30% to 60% on goods from China and other countries , what specific strategies are you implementing to mitigate the potential impact on your cost of goods sold and overall margins?
Your SG&A expenses grew 4.2% in the third quarter, reaching the high end of your expectations due to factors like self-insurance costs from events such as Hurricane Helene and deferred compensation ; how do you intend to control these expenses without compromising your commitment to excellent customer service?
You've reduced your operating margin guidance to a range of 19.4% to 19.9%, driven by third-quarter sales performance and updated full-year comparable store sales expectations ; what concrete steps are you taking to improve sales and margins in the face of current macroeconomic pressures?
The delays in new store openings due to construction and permitting issues have put you slightly behind your growth plan ; how are you addressing these obstacles to ensure timely expansion and maximize the returns on your capital investments?

Program Details	Program 1	Program 2
Approval Date	May 23, 2023	November 16, 2023
End Date/Duration	3 years from approval	3 years from approval
Total additional amount	$2.0 billion	$2.0 billion
Remaining authorization amount	$0	$967.7 million
Details	Program to return excess capital to shareholders	Program to return excess capital to shareholders

Debt Maturity Schedule

Year	Amount Due (in billions)	Debt Type	Interest Rate (%)	% of Total Debt
2026	1.25	Senior Notes	3.550	23.2% = (1.25 / 5.39) * 100
2026	1.25	Senior Notes	5.750	23.2% = (1.25 / 5.39) * 100
2027	0.75	Senior Notes	3.600	13.9% = (0.75 / 5.39) * 100
2028	0.50	Senior Notes	4.350	9.3% = (0.50 / 5.39) * 100
2029	0.50	Senior Notes	3.900	9.3% = (0.50 / 5.39) * 100
2030	0.50	Senior Notes	4.200	9.3% = (0.50 / 5.39) * 100
2031	0.50	Senior Notes	1.750	9.3% = (0.50 / 5.39) * 100
2032	0.85	Senior Notes	4.700	15.8% = (0.85 / 5.39) * 100
2034	0.50	Senior Notes	5.000	9.3% = (0.50 / 5.39) * 100

Auditor

Name	Start Date	End Date	Reason for Change
Ernst & Young LLP	1992	Present	Current auditor

Name	Position	Start Date	Short Bio
Brad Beckham	Chief Executive Officer	January 2024	Brad Beckham has been with O'Reilly for 28 years, starting as a Parts Specialist. He has held various roles, including Store Manager and Executive Vice President. He became CEO in January 2024 .
Brent G. Kirby	President	January 2024	Brent G. Kirby joined O'Reilly in 2018 as Senior Vice President of Omnichannel. He has served as Executive Vice President of Supply Chain and became President in January 2024 .
Jeremy Fletcher	Executive Vice President and Chief Financial Officer	May 9, 2022	Jeremy Fletcher has been with O'Reilly for 18 years, starting as Financial Reporting and Budgeting Manager. He became CFO on May 9, 2022 .
Scott R. Ross	Executive Vice President and Chief Information Officer	October 2023	Scott R. Ross joined O'Reilly in October 2023. He has over 30 years of IT experience, previously serving as President of Saks Cloud Services at Hudson's Bay Company .
Doug Bragg	Executive Vice President of Operations and Sales	2022	Doug Bragg has been with O'Reilly for 33 years, starting as a Distribution Center Team Member. He became Executive Vice President of Store Operations in 2022 .
Tamara F. Conn	Senior Vice President of Legal and General Counsel	July 2023	Tamara F. Conn has been with O'Reilly for 15 years, starting as Legal Counsel. She became Senior Vice President of Legal and General Counsel in July 2023 .
Robert Dumas	Senior Vice President of Eastern Store Operations and Sales	2016	Robert Dumas has been with O'Reilly for 32 years, starting as a Parts Specialist. He became Senior Vice President of Eastern Store Operations and Sales in 2016 .
Larry Gray	Senior Vice President of Inventory Management	June 2023	Larry Gray has been with O'Reilly for 32 years, starting as a Distribution Center Team Member. He became Senior Vice President of Inventory Management in June 2023 .
Philip M. Hopper	Senior Vice President of Real Estate and Expansion	2022	Philip M. Hopper has been with O'Reilly for 12 years, starting as Real Estate Counsel. He became Senior Vice President of Real Estate and Expansion in 2022 .
Jeffery T. Loafman	Senior Vice President of Distribution Operations	April 2023	Jeffery T. Loafman joined O'Reilly in April 2023. He previously worked at Walmart, Inc. for over 20 years in various roles, including Vice President of International Distribution Operations .
Chris Mancini	Senior Vice President of Central Store Operations and Sales	2022	Chris Mancini has been with O'Reilly for 20 years, starting as an Installer Service Specialist. He became Senior Vice President of Central Store Operations and Sales in 2022 .
Mark J. Merz	Senior Vice President of Finance	2022	Mark J. Merz has been with O'Reilly for 16 years, starting as a Senior Accountant. He became Senior Vice President of Finance in 2022 .
Shari Reaves	Senior Vice President of Human Resources and Training	February 2024	Shari Reaves has been with O'Reilly for 30 years, starting as an Employment Coordinator. She became Senior Vice President of Human Resources and Training in February 2024 .
Chuck Rogers	Senior Vice President of Professional Sales and Store Operations Support	2022	Chuck Rogers has been with O'Reilly for 33 years, starting as a Delivery Specialist. He became Senior Vice President of Professional Sales and Store Operations Support in 2022 .
Jason Tarrant	Senior Vice President of Western Store Operations and Sales	2018	Jason Tarrant has been with O'Reilly for 23 years, starting as a Parts Specialist in 2001. He became Senior Vice President of Western Store Operations and Sales in 2018 .
David Wilbanks	Senior Vice President of Merchandise	2016	David Wilbanks has been with O'Reilly for 11 years, starting as Vice President of Merchandise. He became Senior Vice President of Merchandise in 2016 .