O’Reilly Automotive Inc. has announced record revenues and earnings for its fourth quarter and full year ended Dec. 31, 2016. The results represent 24 consecutive years of comparable store sales growth and record revenue and operating income for O’Reilly since becoming a public company in April of 1993.
Fourth Quarter Financial Results
Sales for the fourth quarter increased $150 million, or 8 percent, to $2.10 billion from $1.95 billion for the same period one year ago. Gross profit for the fourth quarter increased to $1.11 billion (or 53.1 percent of sales) from $1.03 billion (or 52.7 percent of sales) for the same period one year ago, representing an increase of 8 percent.
Net income for the fourth quarter increased $27 million, or 13 percent, to $246 million (or 11.7 percent of sales) from $219 million (or 11.2% of sales) for the same period one year ago. Diluted earnings per common share for the fourth quarter increased 18 percent to $2.59 on 95 million shares versus $2.19 on 100 million shares for the same period one year ago.
“We are very pleased to once again report another profitable quarter and a solid finish to 2016,” said Greg Henslee, O’Reilly’s CEO. “Our team’s dedication to providing consistent, unsurpassed levels of customer service drove our comparable store sales growth of 4.8 percent for the quarter, which is on top of a very strong increase of 7.7 percent in 2015. Our relentless focus on profitable growth translated this strong top-line performance into a fourth quarter record operating margin of 19.4%, and generated an 18% increase in fourth quarter diluted earnings per share to $2.59, which exceeded the top end of our guidance range for the quarter. I would like to thank our over 74,000 team members for their continued hard work and unrelenting focus on providing consistently excellent service to our customers.”
Full-Year Financial Results
Sales for the year ended Dec. 31, 2016, increased $626 million, or 8 percent, to $8.59 billion from $7.97 billion for the same period one year ago. Gross profit for the year ended increased to $4.51 billion (or 52.5% of sales) from $4.16 billion (or 52.3% of sales) for the same period one year ago, representing an increase of 8 percent.
Net income for the year increased $106 million, or 11 percent, to $1.04 billion (or 12.1 percent of sales) from $931 million (or 11.7 percent of sales) for the same period one year ago. Diluted earnings per common share increased 17 percent to $10.73 on 97 million shares versus $9.17 on 102 million shares for the same period one year ago.
Henslee commented on O’Reilly’s full-year 2016 results stating, “For the full year, we delivered a solid comparable store sales increase of 4.8 percent, which is on top of a 7.5 percent increase in 2015 and a 6 percent increase in 2014, and we translated this industry leading top-line performance into a record 19.8 percent operating margin, and a 17 percent increase in diluted earnings per share to $10.73, representing our eighth consecutive year of diluted earnings per share growth greater than 15%. During 2016, we successfully opened 210 net, new stores, and as previously announced, we plan to expand our store count by 190 net, new stores in 2017, which puts us on track to surpass the 5,000 store mark during 2017, only four years after achieving 4,000 stores in 2013.”
The company also announced that Greg Johnson and Jeff Shaw have been promoted to co-presidents of O’Reilly.
“O’Reilly’s promote from within philosophy is a pillar of our culture and a key driver to our long-term success,” stated Henslee, “and I’m very pleased to have such excellent leaders as Greg and Jeff to take on these new roles as co-presidents of the company.”
Henslee added, “I am extremely proud of the outstanding contributions Greg and Jeff have made to our company, and I am very excited about their ability to lead O’Reilly to continued success for many years to come.”
Johnson will be responsible for merchandise, logistics, purchasing, inventory management, rricing, advertising, information technology, legal, risk management, loss prevention, human resources and finance. Shaw’s areas of responsibility will include store operations, sales, distribution operations, real estate, jobber sales and acquisitions. Johnson and Shaw will continue to report to Henslee, who will remain CEO but will pass on the title of President.