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ORLY's Q3 earnings rose 14% to 97 cents per share, while revenues climbed 9% to $5.12B, beating estimates.
Professional sales surged 12.7%, while $39M in tariff refunds helped O'Reilly lift gross margin to 52.4%.
ORLY raised its 2026 EPS outlook to $3.25-$3.35 and plans to accelerate store openings to 265-275 in 2027.
O'Reilly Automotive, Inc. (ORLY - Free Report) reported third-quarter 2026 earnings of 97 cents per share, beating the Zacks Consensus Estimate of 92 cents by 5.44%. Earnings increased 14% from 85 cents in the year-ago quarter, supported by robust sales growth and tariff refunds.
Revenues rose 9% year over year to $5.12 billion, surpassing the Zacks Consensus Estimate of $5 billion by 2.49%. Comparable store sales increased 7.2%, reflecting double-digit growth in the professional business and mid-single-digit growth in the do-it-yourself (DIY) business.
Sales to professional service provider customers increased 12.7% year over year to $2.60 billion from $2.31 billion. Professional comparable store sales grew slightly more than 10%, making the business the largest contributor to overall comparable sales growth.
Growth in professional comparable sales was evenly split between higher average ticket values and increased transaction counts. Professional customer transactions rose at a mid-single-digit rate, reflecting market share gains. New stores opened in 2025 and 2026 contributed $94 million in incremental sales during the quarter.
O'Reilly's DIY Sales Gain Despite Consumer Pressure
Sales to DIY customers increased 6.2% year over year to $2.45 billion from $2.30 billion. Comparable sales in the retail business grew at a mid-single-digit rate, benefiting from stronger demand for hot weather-related products and higher average ticket values.
DIY transaction counts faced a low-single-digit headwind, indicating pressure on consumers. However, higher ticket values more than offset the decline. Same-SKU inflation exceeded 4% across the combined businesses, primarily driven by petroleum-based products such as motor oil and lubricants.
Management noted that consumers continued prioritizing vehicle maintenance and repair, although lower-income DIY customers remained under greater pressure than higher-income and professional service customers.
ORLY's Margins Expand on Tariff Refund Benefits
Gross profit increased 10% year over year to $2.68 billion from $2.44 billion. Gross margin expanded 50 basis points to 52.4%, primarily benefiting from $39 million in tariff refunds received through supplier partners. These refunds contributed 76 basis points to the gross margin rate.
However, petroleum-based categories created approximately 40 basis points of gross margin pressure due to unfavorable product mix and pricing dynamics. Selling, general and administrative expenses increased 8% to $1.58 billion but declined to 30.9% of sales from 31.1%.
Operating income climbed 13% to $1.10 billion, with operating margin improving to 21.4% from 20.7%. Net income increased 8% to $786 million from $726 million.
O'Reilly Expands Its Store Network
The company opened 63 new stores across North America during the third quarter, including 54 domestic locations, eight in Mexico and one in Canada. Its total store count reached 6,758 as of Sept. 30, 2026.
Year-to-date net new store openings totaled 173. Management remains confident of achieving its 2026 target of 225-235 openings and announced plans to accelerate expansion to 265-275 net new stores in 2027.
The company continues investing in distribution capacity and automation to support expansion, improve product availability and enhance service efficiency.
ORLY's Cash Flow Strengthens, Buybacks Continue
O'Reilly generated $2.60 billion in operating cash flow during the first nine months of 2026, up from $2.13 billion a year earlier. Capital expenditures totaled $860 million, while free cash flow increased to $1.73 billion from $1.20 billion.
Cash and cash equivalents totaled $194.4 million as of Sept. 30, 2026. Long-term debt was $7.71 billion, compared with $6.02 billion at 2025-end.
During the quarter, the company repurchased 11.8 million shares for $1.03 billion. Approximately $727 million remained available under its repurchase authorization as of Oct. 28, 2026.
O'Reilly Raises 2026 Earnings and Margin Outlook
For 2026, management raised its comparable store sales growth guidance to 5.5-6.5% from 4-6%. Total revenues are projected between $19 billion and $19.3 billion.
Gross margin guidance increased to 51.6-52.1%, while operating margin expectations rose to 19.5-20%. The company now anticipates earnings of $3.25-$3.35 per share.
Operating cash flow is projected at $3.2-$3.6 billion, with capital expenditures of $1.3-$1.4 billion. Free cash flow guidance increased to $1.9-$2.2 billion.
Management expects fourth-quarter gross margin to moderate from the third quarter's tariff-refund-supported level. Same-SKU inflation is also expected to ease, while higher fuel costs and operating expenses could remain near-term pressures.
Other Key Releases From the Auto Space
Genuine Parts Company (GPC - Free Report) reported third-quarter 2026 adjusted earnings of $2.07 per share, which missed the Zacks Consensus Estimate of $2.09. The bottom line increased 4.5% from $1.98 in the year-ago quarter. Revenues rose 4.2% year over year to $6.52 billion and surpassed the consensus estimate of $6.5 billion. Comparable sales increased 2.9%, led by strong Industrial demand. Genuine Parts ended September with $2.4 billion of liquidity, including $763 million in cash.
General Motors (GM - Free Report) delivered strong third-quarter 2026 results yesterday. Its earnings per share grew 32.2% year over year to $3.70 and topped the Zacks Consensus Estimate of $3.55. Revenues of $50.02 billion increased 3% year over year and outpaced the consensus mark of $48.21 billion. On a further encouraging note, General Motors raised its adjusted automotive free cash flow forecast to $11.5-$12.5 billion from $9.5-$11.5 billion and authorized a $20-billion multi-year share repurchase program.
Tesla (TSLA - Free Report) reported third-quarter 2026 adjusted earnings of 48 cents per share, which beat the Zacks Consensus Estimate of 45 cents by 6.67%. However, earnings declined 4% from 50 cents in the year-ago quarter, reflecting higher operating expenses. Tesla’s revenues totaled $28.05 billion, down marginally from $28.1 billion a year ago. The metric surpassed the Zacks Consensus Estimate of $27.78 billion by 0.96%. Tesla has trimmed its 2026 capital expenditure outlook to approximately $20 billion from $25 billion guided earlier.
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ORLY Q3 Earnings Beat Estimates on Strong Sales & Tariff Refunds
Key Takeaways
O'Reilly Automotive, Inc. (ORLY - Free Report) reported third-quarter 2026 earnings of 97 cents per share, beating the Zacks Consensus Estimate of 92 cents by 5.44%. Earnings increased 14% from 85 cents in the year-ago quarter, supported by robust sales growth and tariff refunds.
Revenues rose 9% year over year to $5.12 billion, surpassing the Zacks Consensus Estimate of $5 billion by 2.49%. Comparable store sales increased 7.2%, reflecting double-digit growth in the professional business and mid-single-digit growth in the do-it-yourself (DIY) business.
O’Reilly currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
O'Reilly Automotive, Inc. Price, Consensus and EPS Surprise
O'Reilly Automotive, Inc. price-consensus-eps-surprise-chart | O'Reilly Automotive, Inc. Quote
ORLY's Professional Business Drives Sales Growth
Sales to professional service provider customers increased 12.7% year over year to $2.60 billion from $2.31 billion. Professional comparable store sales grew slightly more than 10%, making the business the largest contributor to overall comparable sales growth.
Growth in professional comparable sales was evenly split between higher average ticket values and increased transaction counts. Professional customer transactions rose at a mid-single-digit rate, reflecting market share gains. New stores opened in 2025 and 2026 contributed $94 million in incremental sales during the quarter.
O'Reilly's DIY Sales Gain Despite Consumer Pressure
Sales to DIY customers increased 6.2% year over year to $2.45 billion from $2.30 billion. Comparable sales in the retail business grew at a mid-single-digit rate, benefiting from stronger demand for hot weather-related products and higher average ticket values.
DIY transaction counts faced a low-single-digit headwind, indicating pressure on consumers. However, higher ticket values more than offset the decline. Same-SKU inflation exceeded 4% across the combined businesses, primarily driven by petroleum-based products such as motor oil and lubricants.
Management noted that consumers continued prioritizing vehicle maintenance and repair, although lower-income DIY customers remained under greater pressure than higher-income and professional service customers.
ORLY's Margins Expand on Tariff Refund Benefits
Gross profit increased 10% year over year to $2.68 billion from $2.44 billion. Gross margin expanded 50 basis points to 52.4%, primarily benefiting from $39 million in tariff refunds received through supplier partners. These refunds contributed 76 basis points to the gross margin rate.
However, petroleum-based categories created approximately 40 basis points of gross margin pressure due to unfavorable product mix and pricing dynamics. Selling, general and administrative expenses increased 8% to $1.58 billion but declined to 30.9% of sales from 31.1%.
Operating income climbed 13% to $1.10 billion, with operating margin improving to 21.4% from 20.7%. Net income increased 8% to $786 million from $726 million.
O'Reilly Expands Its Store Network
The company opened 63 new stores across North America during the third quarter, including 54 domestic locations, eight in Mexico and one in Canada. Its total store count reached 6,758 as of Sept. 30, 2026.
Year-to-date net new store openings totaled 173. Management remains confident of achieving its 2026 target of 225-235 openings and announced plans to accelerate expansion to 265-275 net new stores in 2027.
The company continues investing in distribution capacity and automation to support expansion, improve product availability and enhance service efficiency.
ORLY's Cash Flow Strengthens, Buybacks Continue
O'Reilly generated $2.60 billion in operating cash flow during the first nine months of 2026, up from $2.13 billion a year earlier. Capital expenditures totaled $860 million, while free cash flow increased to $1.73 billion from $1.20 billion.
Cash and cash equivalents totaled $194.4 million as of Sept. 30, 2026. Long-term debt was $7.71 billion, compared with $6.02 billion at 2025-end.
During the quarter, the company repurchased 11.8 million shares for $1.03 billion. Approximately $727 million remained available under its repurchase authorization as of Oct. 28, 2026.
O'Reilly Raises 2026 Earnings and Margin Outlook
For 2026, management raised its comparable store sales growth guidance to 5.5-6.5% from 4-6%. Total revenues are projected between $19 billion and $19.3 billion.
Gross margin guidance increased to 51.6-52.1%, while operating margin expectations rose to 19.5-20%. The company now anticipates earnings of $3.25-$3.35 per share.
Operating cash flow is projected at $3.2-$3.6 billion, with capital expenditures of $1.3-$1.4 billion. Free cash flow guidance increased to $1.9-$2.2 billion.
Management expects fourth-quarter gross margin to moderate from the third quarter's tariff-refund-supported level. Same-SKU inflation is also expected to ease, while higher fuel costs and operating expenses could remain near-term pressures.
Other Key Releases From the Auto Space
Genuine Parts Company (GPC - Free Report) reported third-quarter 2026 adjusted earnings of $2.07 per share, which missed the Zacks Consensus Estimate of $2.09. The bottom line increased 4.5% from $1.98 in the year-ago quarter. Revenues rose 4.2% year over year to $6.52 billion and surpassed the consensus estimate of $6.5 billion. Comparable sales increased 2.9%, led by strong Industrial demand. Genuine Parts ended September with $2.4 billion of liquidity, including $763 million in cash.
General Motors (GM - Free Report) delivered strong third-quarter 2026 results yesterday. Its earnings per share grew 32.2% year over year to $3.70 and topped the Zacks Consensus Estimate of $3.55. Revenues of $50.02 billion increased 3% year over year and outpaced the consensus mark of $48.21 billion. On a further encouraging note, General Motors raised its adjusted automotive free cash flow forecast to $11.5-$12.5 billion from $9.5-$11.5 billion and authorized a $20-billion multi-year share repurchase program.
Tesla (TSLA - Free Report) reported third-quarter 2026 adjusted earnings of 48 cents per share, which beat the Zacks Consensus Estimate of 45 cents by 6.67%. However, earnings declined 4% from 50 cents in the year-ago quarter, reflecting higher operating expenses. Tesla’s revenues totaled $28.05 billion, down marginally from $28.1 billion a year ago. The metric surpassed the Zacks Consensus Estimate of $27.78 billion by 0.96%. Tesla has trimmed its 2026 capital expenditure outlook to approximately $20 billion from $25 billion guided earlier.