O’Reilly Automotive has announced record revenues and earnings for its first quarter ended March 31, 2016.
Sales for the first quarter increased $194 million, or 10 percent, to $2.10 billion, from $1.90 billion for the same period one year ago. Gross profit for the first quarter increased to $1.10 billion (or 52.4 percent of sales) from $987 million (or 51.9 percent of sales) for the same period one year ago, representing an increase of 11 percent. Selling, general and administrative expenses for the first quarter increased to $679 million (or 32.4 percent of sales) from $637 million (or 33.5 percent of sales) for the same period one year ago, representing an increase of 7 percent. Operating income for the first quarter increased to $419 million (or 20 percent of sales) from $350 million (or 18.4 percent of sales) for the same period one year ago, representing an increase of 19 percent.
Net income for the first quarter increased $43 million, or 20 percent, to $255 million (or 12.2 percent of sales) from $213 million (or 11.2 percent of sales) for the same period one year ago. Diluted earnings per common share for the first quarter increased 26 percent to $2.59 on 99 million shares versus $2.06 on 103 million shares for the same period one year ago.
Commenting on the company’s first quarter results, O’Reilly’s President and CEO Greg Henslee stated, “We are very proud to report a strong start to 2016, highlighted by a 6.1 percent increase in comparable store sales, which represents our 10th consecutive quarter of comparable store sales growth greater than 5 percent, and a 26 percent increase in first quarter diluted earnings per share to $2.59, which is our 29th consecutive quarter of diluted earnings per share growth greater than 15 percent. As we previously discussed, our first quarter 2016 results included one additional day due to Leap Day, which is excluded from our comparable store sales results, but benefited our first quarter EPS by approximately $0.05 per share. Our consistently strong performance is the direct result of the unwavering commitment of our over 73,000 team members dedicated to providing excellent customer service, and I would like to thank each of our hard-working team members for our strong first quarter performance and their relentless focus on our long-term success.”
Henslee added, “As we have commented on in the past, our gross margin results can face headwinds relating to merchandise acquisition cost improvements, which is a positive driver to our long-term gross margin expansion, but can create short-term pressure on our gross margin results due to reducing our inventory value to the lower acquisition cost in accordance with our LIFO accounting. Our second quarter earnings per share guidance includes an expected non-cash impact from a specific new supplier contract resulting in LIFO headwinds of approximately $23 million. While this item impacts our second quarter gross margin expectations, we still anticipate full-year gross margin to be within our previously guided range of 52.3 percent to 52.7 percent of sales as our gross margin benefits from these cost reductions for the remainder of 2016.”