O’Reilly Automotive has announced record revenue and earnings for its second quarter ended June 30, 2021, and announced the future retirement and leadership succession plan for Jeff Shaw, COO and co-president.
2nd Quarter Financial Results
Greg Johnson, O’Reilly’s CEO and co-president, commented, “We are pleased to report another outstanding quarter, especially as our Team faced very difficult comparisons to our extremely strong results in the second quarter last year. Team O’Reilly continues to deliver consistently outstanding service to our customers and produce record-breaking financial results, highlighted by our 9.9% increase in comparable store sales for the quarter, on top of a 16.2% increase in the prior year. We are also proud of our team’s ability to deliver profitable growth, leveraging our strong top-line results to drive second quarter diluted earnings per share of $8.33, which was a 17% increase over the prior year and on top of the 57% increase in earnings per share we delivered in the second quarter of 2020. I would like to take this opportunity to thank our over 79,000 Team Members for their incredible hard work and unwavering dedication to safety, while providing excellent customer service, which has been so crucial to our customers during the pandemic.”
Sales for the second quarter ended June 30, 2021, increased $374 million, or 12%, to $3.47 billion from $3.09 billion for the same period one year ago. Gross profit for the second quarter increased 12% to $1.83 billion (or 52.7% of sales) from
$1.64 billion (or 53.0% of sales) for the same period one year ago. Selling, general and administrative expenses (SG&A) for the second quarter increased 14% to $1.03 billion (or 29.7% of sales) from $901 million (or 29.1% of sales) for the same period one year ago. Operating income for the second quarter increased 8% to $796 million (or 23.0% of sales) from $736 million (or 23.8% of sales) for the same period one year ago.
Net income for the second quarter ended June 30, 2021, increased $54 million, or 10%, to $585 million (or 16.9% of sales) from $532 million (or 17.2% of sales) for the same period one year ago. Diluted earnings per common share for the second quarter increased 17% to $8.33 on 70 million shares versus $7.10 on 75 million shares for the same period one year ago.
Year-to-Date Financial Results
Johnson added, “Our team’s unwavering commitment to our customers in the first half of 2021 drove a 16.5% increase in comparable store sales, a 28% increase in operating profit dollars and a 39% increase in diluted earnings per share. Our continued strong sales results in 2021 are the product of strong execution of our dual market strategy, combined with a beneficial industry backdrop, augmented by favorable weather trends, and the significant positive impact from the last round of government stimulus starting at the end of our first quarter. Even as the tailwind from the stimulus benefits moderated in May and June, we have remained very pleased with our Team’s ability to sustain year-over-year increases in sales volumes despite the very difficult comparisons to the prior year. Our better-than-expected sales volumes in May and June have continued thus far in July. As a result of our second quarter performance and strong start to our third quarter, coupled
with our confidence in Team O’Reilly’s ability to provide industry-leading customer service, we are raising our full-year 2021 guidance for comparable store sales from a range of 1% to 3% to a range of 5% to 7%. We are also increasing our full-year diluted earnings per share guidance to a range of $26.80 to $27, which represents an increase of $2.05 at the midpoint from our previously provided guidance.”
Sales for the first six months of 2021 increased $988 million, or 18%, to $6.56 billion from $5.57 billion for the same period one year ago. Gross profit for the first six months of 2021 increased 18% to $3.47 billion (or 52.9% of sales) from $2.93 billion (or 52.7% of sales) for the same period one year ago. SG&A for the first six months of 2021 increased 12% to $1.98 billion (or 30.2% of sales) from $1.77 billion (or 31.8% of sales) for the same period one year ago. Operating income for the first six months of 2021 increased 28% to $1.49 billion (or 22.7% of sales) from $1.16 billion (or 20.8% of sales) for the same period one year ago.
Net income for the first six months of 2021 increased $255 million, or 31%, to $1.09 billion (or 16.6% of sales) from $832 million (or 14.9% of sales) for the same period one year ago. Diluted earnings per common share for the first six months of 2021 increased 39% to $15.39 on 71 million shares versus $11.06 on 75 million shares for the same period one year ago.
Jeff Shaw, COO and Co-President, Retirement and Leadership Succession
“After more than 33 years of dedicated service to O’Reilly, Jeff Shaw has decided to retire, effective in early 2022,” said Johnson. “Jeff is an outstanding leader and mentor, and he has been a critical part of our company’s incredible success and profitable growth during his tenure. He is extremely passionate about providing consistent, top-notch customer service and has relentlessly perpetuated this focus in every member of his team. Jeff has been a champion of executing the company’s ‘promote from within’ philosophy, and he has personally trained and mentored many of O’Reilly’s current senior leadership team, including identifying and preparing for his own retirement and succession. I would like to express my sincere appreciation to Jeff for his incredible contributions to O’Reilly’s success, and we all wish Jeff and his family a very happy and well-deserved retirement.”
Shaw has been an O’Reilly team member for more than 33 years, beginning his career as a parts specialist and progressing through the roles of store manager, district manager, regional manager, divisional vice president, vice president of the southern division, vice president of sales and operations, senior vice president of sales and operations, executive vice president of store operations and sales, and co-president, and was promoted to his current role of COO and co-president on May 8, 2018. In his current role, Shaw’s primary areas of responsibility are store operations, sales, distribution operations and international operations.
Johnson continued, “Thanks to Jeff’s focus on succession planning, we are very pleased to announce that Brad Beckham, O’Reilly’s executive vice president of store operations and sales, will be promoted to the position of executive vice president and chief operating officer at the time of Jeff’s retirement. Brad has been an O’Reilly team member for more than 24 years, beginning his career as a parts specialist and, through his dedication and hard work, has been promoted up through the organization. Brad is a very experienced operator and exceptional leader and shares Jeff’s passion for providing excellent customer service, and I am confident he is well prepared to help lead our Company to success long into the future.”
At the time of Shaw’s retirement, his leadership and operational responsibilities will be transitioned to Beckham and to Brent Kirby, O’Reilly’s executive vice president of supply chain.
Jeff Shaw commented, “It has been an honor to have worked with so many great people at O’Reilly for these past 30 plus years, and I am extremely grateful for all of the opportunities provided to me by our company during my career. While I will miss working with the Team every day, I could not be more pleased to have been a part of the company’s past success, and I am extremely confident that Brad is ready to step into his new role. Brad is an extremely talented and well-respected leader and will ensure O’Reilly’s focus on providing top-notch service to our customers will continue long into the future.”