O'Reilly Automotive Inc (ORLY, Financial) released its 8-K filing on February 7, 2024, announcing record revenue and earnings for the fourth quarter and full year of 2023. This marks the 31st consecutive year of comparable store sales growth for the company since its public debut in April 1993. O'Reilly Automotive, a leading retailer in the automotive aftermarket industry, operates 6,157 stores across 48 U.S. states, Puerto Rico, and Mexico, serving both professional service providers and do-it-yourself customers.
Fourth Quarter and Full-Year Financial Highlights
For the fourth quarter, O'Reilly reported a 5% increase in sales to $3.83 billion, with gross profit rising 6% to $1.97 billion, or 51.3% of sales. Operating income saw a 5% increase to $719 million, or 18.8% of sales. Net income for the quarter was $553 million, a 5% increase, resulting in an 11% rise in diluted earnings per share to $9.26.
The full-year results were equally impressive, with sales growing by 10% to $15.81 billion. Gross profit for the year increased by 10% to $8.10 billion, or 51.3% of sales. Operating income rose by 8% to $3.19 billion, or 20.2% of sales. Net income for the year was up by 8% to $2.35 billion, contributing to a 15% increase in diluted earnings per share to $38.47.
Strategic Growth and Share Repurchase Program
CEO Brad Beckham highlighted the company's expansion efforts, including the opening of 186 new stores and the establishment of a new distribution center in Guadalajara, Mexico. The company's share repurchase program remained active, with 3.6 million shares bought back in 2023 at an average price of $883.13 per share, totaling $3.15 billion.
"Our success in 2023 is a testament to our Team’s hard work, and as we look forward to 2024, we remain absolutely confident in our Team’s ability to consistently execute our dual market strategy and provide the best customer service in the industry," said Beckham.
O'Reilly's guidance for 2024 includes net new store openings of 190 to 200, with a projected total revenue of $16.8 billion to $17.1 billion. The company expects a gross profit margin of 51.0% to 51.5% and an operating income margin of 19.7% to 20.2%. The effective income tax rate is anticipated to be 22.6%, with diluted earnings per share estimated to be between $41.05 and $41.55.
Financial Statements and Leadership Changes
The balance sheet shows a healthy increase in total assets to $13.87 billion, up from $12.63 billion the previous year. The company also completed its Leadership Succession Plan with the retirement of CEO Greg Johnson and the promotions of Brad Beckham to CEO and Brent Kirby to President. Greg Johnson is nominated to serve on O'Reilly's Board, pending shareholder approval.
O'Reilly Automotive Inc (ORLY, Financial) continues to demonstrate robust financial health and strategic growth, positioning itself for continued success in the competitive automotive aftermarket industry. With a strong foundation and clear vision for the future, O'Reilly is set to maintain its trajectory of profitable growth and market share gains.
Explore the complete 8-K earnings release (here) from O'Reilly Automotive Inc for further details.
