O’Reilly Automotive (ORLY) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached $4.27 billion, up 5% year-over-year, with comparable store sales up 2.3% following a 9% increase last year.

• Net income for Q2 was $623 million, down 1% year-over-year, while diluted EPS rose 3% to $10.55, aided by share repurchases.

• Professional business delivered mid-single-digit comps, while DIY sales declined just under 1%, with higher average ticket values offsetting lower transaction counts.

• The company completed the acquisition of Vast Auto, marking entry into the Canadian market and contributing to gross margin dilution.

• Opened 64 new stores in the first half of 2024, on track for 190–200 net new store openings for the year, including expansion in Mexico and Canada.

Financial highlights

• Q2 2024 sales were $4.27B (+5% YoY), with $70 million from new stores not yet in the comp base.

• Q2 gross profit was $2.17B (50.7% of sales), down from 51.3% last year, mainly due to the Canadian acquisition.

• Q2 operating income was $863M (20.2% of sales), up 1% YoY; net income was $623M (14.6% of sales), down 1% YoY.

• Free cash flow for the first half of 2024 was $1.2B, flat year-over-year.

• Capital expenditures for the first six months totaled $475M, focused on store and distribution expansion.

Outlook and guidance

• Full-year comparable store sales guidance lowered to 2%-4%; revenue expected between $16.6B and $16.9B.

• Gross margin guidance maintained at 51%-51.5% for 2024, with 30 bps dilution from Vast Auto.

• Operating margin guidance updated to 19.6%-20.1% for the full year.

• Diluted EPS guidance: $40.75–$41.25, representing a 7% year-over-year increase at the midpoint.

• Free cash flow guidance unchanged at $1.8–$2.1B for 2024.