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O'Reilly (ORLY) Q3 Earnings Beat Estimates on Comps Growth

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O’Reilly Automotive Inc. (ORLY - Free Report) reported third-quarter 2021 earnings per share of $8.07, surpassing the Zacks Consensus Estimate of $6.99 on the back of comparable store sales growth. Comps grew 6.7% year over year for the quarter versus the Zacks Consensus Estimate of a decline of 15.02%. The bottom line also increased from $7.07 a share recorded in the prior-year quarter.
This U.S.-based specialty retailer of automotive parts registered quarterly revenues of $3,479.6 million, which topped the consensus mark of $3,217 million. The top line was also higher than the prior-year level of $3,207.6 million. During the quarter, the company opened 30 new stores in the United States and 22 in Mexico, bringing the total store count to 5,762 as of Sep 30, 2021.

O'Reilly Automotive, Inc. Price, Consensus and EPS Surprise

O'Reilly Automotive, Inc. Price, Consensus and EPS Surprise

O'Reilly Automotive, Inc. price-consensus-eps-surprise-chart | O'Reilly Automotive, Inc. Quote

Financials, Share Repurchase & Costs

For the September-end quarter, selling, general and administrative expenses flared up 11.3% year on year to $1,063 million. Nonetheless, operating income edged up 4% to $754.6 million from $725 million reported in the prior-year period on higher sales. Net income amounted to $558.6 million, up from $527.2 million generated in the year-ago quarter.

During the reported quarter, O’Reilly repurchased 1.6 million shares for $943 million at an average price of $595.96 per share. As of Oct 28, the company had $786 million remaining under the current share-repurchase authorization.

It had cash and cash equivalents of $449.3 million as of Sep 30, 2021. Its long-term debt stands at $3,826.1 million, lower than the year-ago level of $4,122.4 million.

During the reported quarter, O’Reilly generated $852.5 million in cash from operating activities compared with the year-ago period’s $790 million. Capital expenditure totaled $118 million, almost on par with the year-ago quarter. Free cash flow rose 8.9% on a year-over-year basis to $722 million.

2021 Guidance Raised

For 2021, O’Reilly — which shares space with CarMax (KMX - Free Report) , AutoZone (AZO - Free Report) and Advance Auto Parts (AAP - Free Report) in the same industry — now projects total revenues within $12.9-$13.2 billion, up from the prior guided range of $12.3-$12.6 billion. Earnings per share are envisioned within $29.25-$29.45 versus the previous view of $26.80-$27.00. It now expects comparable store sales to rise 10-12% versus growth of 5-7% projected earlier. Also, the Zacks Rank #2 (Buy) firm now envisions free cash flow in the band of $2-$2.3 billion, higher than the previous forecast of $1.5-$1.8 billion. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.