OReilly Posts 6 Q2 Revenue Growth

Key Points

• Revenue (GAAP) reached $4.53 billion, Revenue rose 6% year over year to $4.53 billion, but fell just below consensus estimates (GAAP).

• EPS grew 11% while gross profit margin improved year over year from 50.7% to 51.4%.

• Management raised full-year comparable store sales guidance to 3%–4.5% for FY2025 and continued rapid store expansion.

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O'Reilly Automotive (NASDAQ:ORLY), a leading retailer and distributor of automotive parts, released its earnings on July 23, 2025. The report showed revenue (GAAP) of $4.53 billion, up 6% compared to the same period last year (GAAP). Diluted earnings per share (GAAP) came in at $0.78, an increase of 11% year over year, but technically missed by small margins. Overall, the company turned in notable growth in sales and profitability, with comparable store sales growth reaching 4.1%, a standout metric for the quarter.

Source: O'Reilly Automotive. Note: Analysts' consensus estimates for the quarter provided by FactSet.

Understanding O'Reilly Automotive's Business and Priorities

O'Reilly Automotive targets both professional auto service providers and do-it-yourself (DIY) customers in the aftermarket auto parts sector. Its stores carry parts, accessories, tools, maintenance items, and related supplies for cars, trucks, and SUVs. The dual focus allows it to serve a broad market and build steady sales across economic cycles.

The company’s recent priorities include expanding its store footprint, deepening relationships with both customer bases, and maintaining superior parts availability. Key to its performance are a robust distribution network and investment in technically proficient staff. The growing professional service segment—typically auto repair shops—remains a particular area of emphasis given its faster growth rate compared to DIY retail customers.

Quarter Highlights, Financial and Operational Performance

Comparable store sales, a measure of growth at locations open at least one year, increased to 4.1%. This surpassed the company’s previous expectations and was up from 2.3% in the prior-year quarter. Growth was driven by both customer types, with the professional business being the larger driver of total comparable sales results.

Gross profit margin, which measures the percent of revenue left after deducting the direct cost of goods sold, improved from 50.7% to 51.4%. At the same time, total selling, general, and administrative expenses (SG&A) rose 8% year over year (GAAP). The SG&A expense rate increased 0.7 percentage points to 31.2% of sales, up from Q2 2024, with wage and benefit costs cited as ongoing pressures. Despite these challenges, operating income grew 6% and net income (GAAP) was up 7% from the prior-year period.

Inventory per store was $833,000, with company-wide inventory turnover dipping to 1.6 times from 1.7 a year ago. Management attributed the increase to its ongoing strategy to support industry-leading parts availability and to back rapid store expansion. In total, the company opened 105 net new stores in the first half of 2025, including the milestone 100th location in Mexico. The total store count at period end reached 6,483, an increase of 239 from June 30, 2024, to June 30, 2025.

Free cash flow (non-GAAP) for the first half of 2025 was $904 million, primarily due to increased working capital investment and higher taxes. The company continued its capital return focus, repurchasing 6.8 million shares for $617 million, alongside a 15-for-1 stock split completed in June 2025, with adjusted debt to EBITDAR, a metric indicating financial leverage, at 2.06 times for the twelve months ended June 30, 2025.

Looking Ahead: Guidance and What to Monitor

Management raised its full-year comparable store sales guidance to 3.0%–4.5% for FY2025, reflecting strong sales seen so far this year. Full-year revenue (GAAP) is projected at $17.5 billion to $17.8 billion for FY2025, with gross margin (GAAP) expected in the 51.2%–51.7% range for FY2025, and diluted EPS (GAAP) forecast between $2.85 and $2.95 for FY2025. Free cash flow (non-GAAP) is guided toward $1.6 billion to $1.9 billion for FY2025.

Operationally, management highlighted continued investment in its store network and commitment to opening 200 to 210 net new stores during 2025. The company said ongoing efforts to diversify sourcing outside of China and a strategic mix of privately-branded and national brand products underpin its flexibility in a shifting tariff and supply chain environment. Looking forward, investors should track cost trends in SG&A, progress on store expansion, potential impacts from tariffs, and how inventory levels evolve in light of ongoing investments.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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