O’Reilly Automotive has announced record revenue for its first quarter ended March 31, 2022, and announced the transition plan for Tom McFall, executive vice president and CFO.
1st Quarter Financial Results
Greg Johnson, O’Reilly’s president and CEO, commented, “We are pleased to report another profitable quarter, highlighted by a 4.8% increase in comparable store sales, which is on top of the record 24.8% comparable store sales growth we delivered in the first quarter last year, resulting in an incredible comparable store sales two-year stacked increase of 29.6%. Historically, our first quarter can be volatile, as we see weather impacts from winter conditions early in the quarter and the timing of the onset of spring at the end. This year was no exception, and we saw choppiness in our business that coincided with inclement weather at the beginning of our quarter and the slow start to spring, along with other macroeconomic pressures. However, we continue to be pleased with the core, underlying strength of our business and our solid first quarter comparable store sales results, which, on top of last year’s performance, are clear indicators of our Team’s ability to grow our business and take market share. During the quarter, we launched our professional pricing initiative, which created the expected pressure on gross profit, and our Teams continue to effectively manage the ongoing inflationary cost pressures. I would like to thank each of our over 84,000 Team Members in the U.S. and Mexico for their relentless focus on providing unsurpassed levels of customer service, and their ongoing efforts continue to drive profitable growth.”
Sales for the first quarter ended March 31, 2022, increased $205 million, or 7%, to $3.30 billion from $3.09 billion for the same period one year ago.
Gross profit for the first quarter increased 4% to $1.71 billion (or 51.8% of sales) from $1.64 billion (or 53.1% of sales) for the same period one year ago.
Net income for the first quarter ended March 31, 2022, decreased $20 million, or 4%, to $482 million (or 14.6% of sales) from $502 million (or 16.2% of sales) for the same period one year ago. Diluted earnings per common share for the first quarter increased 2% to $7.17 on 67 million shares versus $7.06 on 71 million shares for the same period one year ago.
Share Repurchase Program
During the first quarter ended March 31, 2022, the company repurchased 1.2 million shares of its common stock, at an average price per share of $664.15, for a total investment of $775 million. Subsequent to the end of the first quarter and through the date of this release, the company repurchased an additional 0.2 million shares of its common stock, at an average price per share of $694.70, for a total investment of $106 million. The company has repurchased a total of 86.9 million shares of its common stock under its share repurchase program since the inception of the program in January of 2011 and through the date of this release, at an average price of $202.88, for a total aggregate investment of $17.63 billion. As of the date of this release, the Company had approximately $1.12 billion remaining under its current share repurchase authorization.
Executive Leadership Transition
Effective May 9, Tom McFall, O’Reilly’s executive vice president and chief financial officer (CFO), will step down as CFO and continue his employment with the company in the role of executive vice president, and at that time, Jeremy Fletcher, O’Reilly’s senior vice president of finance and controller, will be promoted to the position of executive vice president and CFO.
“After 16 years of dedicated service, Tom has communicated his desire to transition into a different role with the company,” Johnson stated. “Tom has provided exceptional leadership to our company since joining Team O’Reilly in 2006, and we are pleased he will continue to provide valuable guidance and mentorship as he shifts to this new role. Tom will retain his existing responsibilities in the areas of Information Technology, Real Estate, Legal and Risk Management, and will continue to provide key strategic and executive leadership. Succession planning has always been an important component of our Culture, and Tom has done an extraordinary job preparing Jeremy for his new role.”
McFall commented, “It has been a privilege to have been a part of our success over the past 16 years, and I am very excited to continue my career with O’Reilly in a different role. Our consistent and profitable growth is the result of our team working together and continually striving for the next level of success. During my entire tenure as CFO, Jeremy and I have worked very closely together and he has been a trusted partner and advisor. I am highly confident in his ability to successfully transition into his new role and, along with our long-tenured executive management team, build on the company’s impressive record of 29 consecutive years of comparable stores sales growth and record operating income.”
About Jeremy Fletcher
Fletcher has been an O’Reilly team member for 16 years. Upon joining the company in 2005, Fletcher served as financial reporting and budgeting manager and progressed through the roles of director of finance, vice president of finance and controller and has served in his current role as senior vice president of finance and controller for over five years. Prior to joining O’Reilly, Fletcher worked as a Certified Public Accountant in public practice and in a financial reporting and planning role for a Fortune 1000 corporation. In his new role as executive vice president and CFO, Fletcher will assume full responsibility for all Finance, Accounting and Treasury functions for the company.