O'Reilly Automotive, Inc. (ORLY) Earnings

metirFinance

Dec 2026upcoming

Next quarter

Expected to report Feb 3, 2027 — estimated from last year’s reporting date.

Consensus is $0.77 EPS for Dec 2026 across 11 estimates, ranging $0.75 to $0.79.

ORLY Sep 2026

Reported Oct 28, 2026 · after the close

: 5.43%
: -2.62%

: $0.92
: $0.97
: —
: —

Highlights

Sales and comps: Third-quarter sales rose 9% year over year to $5.12 billion; comparable-store sales grew 7.2%, on top of 5.6% growth a year earlier, for a 12.8% two-year stack.
EPS beat: Diluted EPS was $0.97, up 14% from $0.85 a year ago and 5.43% above the $0.92 consensus; net income increased 8% to $786 million.
Channel momentum: Professional comparable sales grew slightly more than 10%, while DIY comps rose mid-single digits; management said professional growth included mid-single-digit customer transaction growth.
Margins and refunds: Gross margin expanded 54 basis points to 52.4%, including a $39 million tariff-refund benefit worth 76 basis points; excluding that benefit, margin was approximately 26 basis points below the year-ago rate.
Raised outlook: 2026 comparable-sales guidance increased to 5.5%–6.5% from 4%–6%; gross-margin guidance rose to 51.6%–52.1% and operating-margin guidance to 19.5%–20.0%.
Capital returns: O’Reilly repurchased 11.8 million shares for $1.03 billion in the quarter and 38.5 million shares for $3.47 billion in the first nine months; 2.3 million more shares were bought back after quarter-end through the release date.
Cash generation and expansion: Nine-month operating cash flow was $2.60 billion and free cash flow was $1.73 billion; the company opened 173 net new stores year to date and set a 2027 target of 265–275.

Analysis

O’Reilly delivered a strong third quarter, with diluted EPS of $0.97 beating the $0.92 consensus by 5.43%. Revenue rose 9% year over year to $5.12 billion, from $4.71 billion, while operating income increased 13% to $1.10 billion and net income rose 8% to $786 million. Sequentially, sales increased from $4.89 billion in Q2 and EPS from $0.86. EPS growth also benefited from a lower diluted share count: 812 million shares versus 853 million a year ago.

The defining feature was broad-based sales strength: comps grew 7.2% despite a strong prior-year comparison, with professional growth slightly above 10% and mid-single-digit DIY growth. But the margin result needs context: reported gross margin rose to 52.4%, while a $39 million tariff-refund benefit contributed 76 basis points; excluding it, the rate was below last year’s 51.9%. O’Reilly raised its full-year comp and margin outlook after the sales outperformance, while acknowledging moderating inflation benefits and consumer uncertainty. It is also accelerating investment in its store base: 173 net openings year to date and a higher 2027 target. Buybacks remained substantial, funded alongside higher borrowing as leverage moved toward the company’s 2.5x target.

Comparable sales momentum

Broad-based growth: Comparable-store sales increased 7.2%, accelerating to a 12.8% two-year stack from 5.6% growth in Q3 2025. Management said sales were strong fairly evenly through the quarter, with July’s improvement sustained.
Professional and DIY: Professional comps grew slightly more than 10%, with gains split between ticket and transaction counts; mid-single-digit growth in professional customer counts indicated share gains. DIY comps grew mid-single digits, as higher average tickets offset a low-single-digit decline in DIY transactions.
Inflation and weather: Same-SKU inflation was slightly above 4%, led by petroleum-based products such as oil and lubricants. Management estimated those categories added about 1 percentage point to comp growth, while hot-weather categories also benefited from favorable conditions and share gains.

Margins and tariff refunds

Reported margin: Gross profit rose 10% to $2.68 billion, and gross margin increased 54 basis points year over year to 52.4%. The $39 million of supplier-passed tariff refunds contributed 76 basis points, making the reported rate an elevated comparison for future quarters.
Underlying pressures: Excluding the refund benefit, gross margin was approximately 51.6%, about 26 basis points below the year-ago 51.9%. Management said petroleum-category mix and pricing timing created roughly 40 basis points of pressure; higher acquisition costs had not yet been fully reflected in market prices, although gross-profit dollars in those categories grew.
Operating leverage: SG&A rose 8% to $1.58 billion, but declined to 30.9% of sales from 31.1% a year earlier, a 16-basis-point improvement. Operating income grew 13% to $1.10 billion and operating margin expanded to 21.4% from 20.7%.

Raised 2026 outlook

Sales and earnings: Full-year comparable-sales guidance increased to 5.5%–6.5% from 4%–6%, and revenue guidance is $19.0 billion–$19.3 billion. EPS guidance is $3.25–$3.35; management said the midpoint is 2% above the prior midpoint and 11% above 2025.
Margins: Gross-margin guidance rose 10 basis points to 51.6%–52.1%, and operating-margin guidance rose 20 basis points to 19.5%–20.0%. The outlook incorporates the third-quarter tariff-refund benefit and an expected moderation in gross margin in Q4.
Costs and inflation: Full-year SG&A per-store growth is now expected at 4.5%–5.0%, with spending dependent in part on sustaining elevated sales volumes and service levels. Management expects Q4 same-SKU inflation of roughly 2.5%–3%, up from its previous expectation, but anticipates moderation from Q3 and cautioned that commodity pricing and consumer pressures remain uncertain.

Stores and investment

Store openings: O’Reilly opened 63 stores in Q3 and 173 net new stores year to date, remaining on track for 225–235 in 2026. It raised its 2027 target to 265–275, with growth planned across existing and newer markets in the U.S., Canada, and Mexico.
Capacity and inventory: The company described new stores as its strongest-return investment and expects continued spending on distribution capacity and technology to support expansion. Inventory per store was $912,000, up 6.3% year over year; turns remained 1.6x.
Capital spending: Nine-month capital expenditures were $860 million, against full-year guidance of $1.3 billion–$1.4 billion.

Cash flow and buybacks

Cash generation: Nine-month operating cash flow increased to $2.60 billion from $2.13 billion, while free cash flow rose to $1.73 billion from $1.20 billion. Management attributed the increase to operating-income growth and the timing of renewable-energy tax-credit payments, which weighed more heavily on 2025 cash flow. Full-year free-cash-flow guidance increased to $1.9 billion–$2.2 billion.
Share repurchases: The company bought back 11.8 million shares in Q3 at an average $87.34 for $1.03 billion. Nine-month repurchases were 38.5 million shares for $3.47 billion, with approximately $727 million remaining under the authorization at the release date.
Leverage: Adjusted debt to EBITDAR was 2.26x, up from 2.04x at year-end 2025. O’Reilly issued $1.6 billion in senior notes during the quarter, primarily to term out commercial-paper borrowings ahead of maturing debt, and said the increased borrowing is consistent with moving toward its 2.5x leverage target.

O'Reilly Automotive, Inc.

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