O’Reilly Automotive has announced record revenue and earnings for its fourth quarter ended Dec. 31, 2020. The results represent 28 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.
4th Quarter Financial Results
Greg Johnson, O’Reilly’s CEO and co-president, commented, “We are extremely pleased to report another record-breaking quarter to finish out 2020, with the incredible performance by Team O’Reilly in the fourth quarter capping the best full-year financial results in our Company’s history. I would like to thank Team O’Reilly for the tremendous dedication and hard work they demonstrated time and again over the past year in one of the most difficult environments we have ever faced as a Company. Our top priority continues to be the protection of the health and safety of our Team Members and customers, and we are extremely proud of our Team’s continued outstanding service that has been so critical to our customers during the pandemic. This commitment drove our fourth quarter comparable store sales increase of 11.2% and full-year comparable store sales growth of 10.9%, which represents our highest full-year same store sales increase in the last 25 years.”
Sales for the fourth quarter increased $346 million, or 14%, to $2.83 billion from $2.48 billion for the same period one year ago. Gross profit for the fourth quarter increased 11% to $1.47 billion (or 52% of sales) from $1.32 billion (or 53.3% of sales) for the same period one year ago. Selling, general and administrative expenses (“SG&A”) for the fourth quarter increased 6% to $938 million (or 33.2% of sales) from $883 million (or 35.6% of sales) for the same period one year ago. Operating income for the fourth quarter increased 21% to $534 million (or 18.9% of sales) from $442 million (or 17.8% of sales) for the same period one year ago.
Net income for the fourth quarter ended December 31, 2020, increased $68 million, or 21%, to $393 million (or 13.9% of sales) from $325 million (or 13.1% of sales) for the same period one year ago. Diluted earnings per common share for the fourth quarter increased 27% to $5.40 on 73 million shares versus $4.25 on 76 million shares for the same period one year ago.
Full-Year Financial Results
Johnson further commented, “The robust sales volumes, combined with diligent expense control, drove another extremely profitable quarter, highlighted by a 21% increase in operating profit and a 27% increase in diluted earnings per share for the fourth quarter. For the full year, diluted earnings per share increased 32%, as Team O’Reilly generated an outstanding operating margin of 20.8%, which exceeded our previous record operating margin by over 100 basis points. The tireless efforts of our Team allowed us to produce these strong results even in the face of unprecedented challenges in 2020.”
Sales for the year ended December 31, 2020, increased $1.45 billion, or 14%, to $11.60 billion from $10.15 billion for the same period one year ago. Gross profit for the year ended December 31, 2020, increased 13% to $6.09 billion (or 52.4% of sales) from $5.39 billion (or 53.1% of sales) for the same period one year ago. SG&A for the year ended December 31, 2020, increased 6% to $3.67 billion (or 31.6% of sales) from $3.47 billion (or 34.2% of sales) for the same period one year ago. Operating income for the year ended December 31, 2020, increased 26% to $2.42 billion (or 20.8% of sales) from $1.92 billion (or 18.9% of sales) for the same period one year ago.
Net income for the year increased $361 million, or 26%, to $1.75 billion (or 15.1% of sales) from $1.39 billion (or 13.7% of sales) for the same period one year ago. Diluted earnings per common share for the year increased 32% to $23.53 on 74 million shares versus $17.88 on 78 million shares for the same period one year ago.
“As we look forward to 2021,” Johnson continued, “we remain optimistic about our prospects to generate continued strong financial results. We have seen a strong start to the year, with the continuation of robust sales volumes through the month of January, but we remain cautious as we plan for the coming year in light of the continued significant uncertainty related to the ongoing impact of the pandemic and the difficult comparisons we will face beginning in April, as we lap the surge of volume we experienced in 2020. As a result, our expectation is that comparable store sales will be in the range of down 2% to flat, versus 2020, but well above our historical trends on a two-year stack basis.”
Share Repurchase Program
During the fourth quarter ended Dec. 31, 2020, the company repurchased 2.2 million shares of its common stock, at an average price per share of $451.90, for a total investment of $993 million. During the year, the company repurchased 4.8 million shares of its common stock, at an average price per share of $431.93, for a total investment of $2.09 billion. Subsequent to the end of the fourth quarter and through the date of this release, O’Reilly repurchased an additional 0.7 million shares of its common stock, at an average price per share of $447.40, for a total investment of $298 million. The company has repurchased a total of 81.7 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 $178.33, for a total aggregate investment of $14.57 billion.
O’Reilly also announced that its board of directors approved a resolution to increase the authorization amount under its share repurchase program by an additional $1 billion, raising the aggregate authorization under the program to $15.75 billion. The additional $1 billion authorization is effective for a three-year period, beginning on Feb. 10, 2021.
