O'Reilly Automotive Reports Strong Third-Quarter Earnings

O'Reilly Automotive, Inc. reported its third-quarter financial results, revealing a 14% increase in diluted earnings per share to 97 cents, surpassing the Zacks Consensus Estimate of 92 cents. Total revenues climbed 9% year over year to $5.12 billion, also beating expectations. The robust performance was supported by strong sales growth and $39 million in tariff refunds received through supplier partners.

Comparable store sales increased 7.2% during the quarter, reflecting double-digit growth in the professional business and mid-single-digit growth in the do-it-yourself retail segment. Sales to professional service provider customers rose 12.7% to $2.60 billion, making professional growth the largest contributor to overall comparable sales gains. Meanwhile, sales to do-it-yourself customers increased 6.2% to $2.45 billion, driven by higher demand for hot-weather-related products and increased average ticket values.

Gross profit for the quarter increased 10% to $2.68 billion, with gross margin expanding 50 basis points to 52.4%. The $39 million in tariff refunds contributed 76 basis points to the gross margin rate, helping offset pressures from petroleum-based product categories. Operating income climbed 13% to $1.10 billion, and net income increased 8% to $786 million.

During the third quarter, O'Reilly opened 63 new stores across North America, bringing its total store count to 6,758 as of September 30, 2026. Year-to-date net new store openings reached 173. Management remains confident in achieving its full-year target of 225 to 235 openings and announced plans to accelerate expansion to 265 to 275 net new stores in 2027.

The company also updated its full-year 2026 guidance, raising its comparable store sales growth outlook to a range of 5.5% to 6.5% and projecting total revenues between $19 billion and $19.3 billion. Diluted earnings per share are now anticipated to be between $3.25 and $3.35, while operating profit margins are expected to reach 19.5% to 20%.

O'Reilly generated $2.60 billion in operating cash flow during the first nine months of the year, up from $2.13 billion a year earlier. Capital expenditures totaled $860 million, and free cash flow increased to $1.73 billion. The company also repurchased 11.8 million shares for $1.03 billion during the quarter, with approximately $727 million remaining available under its share repurchase authorization.