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Why Is O'Reilly Automotive (ORLY) Up 1.7% Since Last Earnings Report?
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A month has gone by since the last earnings report for O'Reilly Automotive (ORLY - Free Report) . Shares have added about 1.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is O'Reilly Automotive due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
O'Reilly Q2 Earnings & Sales Beat Estimates
O’Reilly reported second-quarter 2023 adjusted earnings per share of $10.22, beating the Zacks Consensus Estimate of $10.05. The bottom line increased from $8.78 in the prior-year quarter.
The automotive parts retailer registered quarterly revenues of $4,069 million, crossing the Zacks Consensus Estimate of $3,990 million. The top line increased 11% year over year.
During the quarter, comps grew 9% due to robust DIY comparable store sales growth. The company opened 42 new stores in the United States and Mexico. The total store count was 6,071 as of Jun 30, 2023.
Financials, Share Repurchase & Costs
In the reported quarter, selling, general and administrative expenses flared up 14% year over year to $1,232.8 million. Operating income rose 7% to $854 million from $799 million. Net income amounted to $627 million, up 9% from $577 million in the year-ago quarter.
During the reported quarter, O’Reilly repurchased 0.8 million shares for $680 million at an average price of $904.37 per share. After the end of the quarter until the release date, ORLY repurchased an additional 0.1 million shares of common stock for a total investment of $119 million at an average price of $952.24 per share. As of Jul 26, the company had nearly $1.81 billion remaining under the current share repurchase authorization.
It had cash and cash equivalents of $57.9 million at the end of the reported quarter, down from $108.6 million recorded as of 2022-end. Its long-term debt was $4,873.7 million, higher than $4,371.6 million as of Dec 31, 2022.
During the reported quarter, O’Reilly generated $937.6 million in cash from operating activities, up from the year-ago period’s $702.1 million. Capital expenditures totaled $237.7 million, rising from $124.9 million in the year-ago period. Free cash flow expanded by 18.7% to $681.2 million.
Revised Outlook for 2023
For 2023, total revenues are now expected to be in the range of $15.4-$15.7 billion, up from the prior guidance of $15.2-$15.5 billion. Earnings per share are now expected between $37.05 and $37.55, up from the previous estimate of $36.5-$37. The forecast for comparable store sales growth has been revised up to 5-7%, from the previously guided range of 4-6%. Now, the free cash flow is projected in the band of $1.9-$2.2 billion, up from the previously guided range of $1.8-$2.1 billion. Capital expenditures are expected within the range of $750-$800 million, the same as the previously guided range. The company intends to open 180-190 stores this year.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
VGM Scores
Currently, O'Reilly Automotive has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, O'Reilly Automotive has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is O'Reilly Automotive (ORLY) Up 1.7% Since Last Earnings Report?
A month has gone by since the last earnings report for O'Reilly Automotive (ORLY - Free Report) . Shares have added about 1.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is O'Reilly Automotive due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
O'Reilly Q2 Earnings & Sales Beat Estimates
O’Reilly reported second-quarter 2023 adjusted earnings per share of $10.22, beating the Zacks Consensus Estimate of $10.05. The bottom line increased from $8.78 in the prior-year quarter.
The automotive parts retailer registered quarterly revenues of $4,069 million, crossing the Zacks Consensus Estimate of $3,990 million. The top line increased 11% year over year.
During the quarter, comps grew 9% due to robust DIY comparable store sales growth. The company opened 42 new stores in the United States and Mexico. The total store count was 6,071 as of Jun 30, 2023.
Financials, Share Repurchase & Costs
In the reported quarter, selling, general and administrative expenses flared up 14% year over year to $1,232.8 million. Operating income rose 7% to $854 million from $799 million. Net income amounted to $627 million, up 9% from $577 million in the year-ago quarter.
During the reported quarter, O’Reilly repurchased 0.8 million shares for $680 million at an average price of $904.37 per share. After the end of the quarter until the release date, ORLY repurchased an additional 0.1 million shares of common stock for a total investment of $119 million at an average price of $952.24 per share. As of Jul 26, the company had nearly $1.81 billion remaining under the current share repurchase authorization.
It had cash and cash equivalents of $57.9 million at the end of the reported quarter, down from $108.6 million recorded as of 2022-end. Its long-term debt was $4,873.7 million, higher than $4,371.6 million as of Dec 31, 2022.
During the reported quarter, O’Reilly generated $937.6 million in cash from operating activities, up from the year-ago period’s $702.1 million. Capital expenditures totaled $237.7 million, rising from $124.9 million in the year-ago period. Free cash flow expanded by 18.7% to $681.2 million.
Revised Outlook for 2023
For 2023, total revenues are now expected to be in the range of $15.4-$15.7 billion, up from the prior guidance of $15.2-$15.5 billion. Earnings per share are now expected between $37.05 and $37.55, up from the previous estimate of $36.5-$37. The forecast for comparable store sales growth has been revised up to 5-7%, from the previously guided range of 4-6%. Now, the free cash flow is projected in the band of $1.9-$2.2 billion, up from the previously guided range of $1.8-$2.1 billion. Capital expenditures are expected within the range of $750-$800 million, the same as the previously guided range. The company intends to open 180-190 stores this year.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
VGM Scores
Currently, O'Reilly Automotive has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, O'Reilly Automotive has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.