Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

O'REILLY AUTOMOTIVE, INC

(ORLY)
  Report
SummaryQuotesChartsNewsRatingsCalendarCompanyFinancialsConsensusRevisions 
SummaryMost relevantAll NewsAnalyst Reco.Other languagesPress ReleasesOfficial PublicationsSector newsMarketScreener Strategies

O'Reilly Automotive : O REILLY AUTOMOTIVE INC Management's Discussion and Analysis of Financial Condition and Results of Operations (form 10-Q)

05/07/2021 | 04:34pm EDT

Unless otherwise indicated, "we," "us," "our" and similar terms, as well as references to the "Company" or "O'Reilly," refer to O'Reilly Automotive, Inc. and its subsidiaries.

In Management's Discussion and Analysis, we provide a historical and prospective narrative of our general financial condition, results of operations, liquidity and certain other factors that may affect our future results, including

? recent developments within our Company;

? an overview of the key drivers of the automotive aftermarket industry;

? our results of operations for the three months ended March 31, 2021 and 2020;

? our liquidity and capital resources;

? any contractual obligations, to which we are committed;

? our critical accounting estimates;

? the inflation and seasonality of our business; and

? recent accounting pronouncements that may affect our Company.

The review of Management's Discussion and Analysis should be made in conjunction with our condensed consolidated financial statements, related notes and other financial information, forward-looking statements and other risk factors included elsewhere in this quarterly report.



FORWARD-LOOKING STATEMENTS


We claim the protection of the safe-harbor for forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can identify these statements by forward-looking words such as "estimate," "may," "could," "will," "believe," "expect," "would," "consider," "should," "anticipate," "project," "plan," "intend" or similar words. In addition, statements contained within this quarterly report that are not historical facts are forward-looking statements, such as statements discussing, among other things, expected growth, store development, integration and expansion strategy, business strategies, future revenues and future performance. These forward-looking statements are based on estimates, projections, beliefs and assumptions and are not guarantees of future events and results. Such statements are subject to risks, uncertainties and assumptions, including, but not limited to, the COVID-19 pandemic or other public health crises; the economy in general; inflation; consumer debt levels; product demand; the market for auto parts; competition; weather; tariffs; availability of key products; business interruptions, including terrorist activities, war and the threat of war; failure to protect our brand and reputation; challenges in international markets; volatility of the market price of our common stock; our increased debt levels; credit ratings on public debt; historical growth rate sustainability; our ability to hire and retain qualified employees; risks associated with the performance of acquired businesses; information security and cyber-attacks; and governmental regulations. Actual results may materially differ from anticipated results described or implied in these forward-looking statements. Please refer to the "Risk Factors" section of our Annual Report on Form 10-K for the year ended December 31, 2020, and subsequent Securities and Exchange Commission filings, for additional factors that could materially affect our financial performance. Forward-looking statements speak only as of the date they were made, and we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.



RECENT DEVELOPMENTS


We continue to prioritize the safety and wellness of our Team Members and our customers as we navigate the ongoing challenges resulting from the COVID-19 pandemic in the current environment. Vaccine availability, effectiveness and distribution, gradual reopening processes across many of our markets, government stimulus payments and enhanced unemployment benefits have positively impacted demand for the products we sell. We continue to keep our stores open and operating to meet our customers' critical needs, while also ensuring the safety of our Team Members and customers through strict adherence to our safety protocols; however, we cannot predict how long the current crisis will last or the extent of its impact on our customers, our Team Members and overall industry demand.

For additional risks related to the COVID-19 pandemic, please refer to the "Risk Factors" section of our Annual Report on Form 10-K for the year ended December 31, 2020.




OVERVIEW



We are a specialty retailer of automotive aftermarket parts, tools, supplies, equipment and accessories in the United States and Mexico. We are one of the largest U.S. automotive aftermarket specialty retailers, selling our products to both DIY customers and professional


                                       16

service providers - our "dual market strategy." Our stores carry an extensive product line consisting of new and remanufactured automotive hard parts, maintenance items, accessories, a complete line of auto body paint and related materials, automotive tools and professional service provider service equipment.

Our extensive product line includes an assortment of products that are differentiated by quality and price for most of the product lines we offer. For many of our product offerings, this quality differentiation reflects "good," "better," and "best" alternatives. Our sales and total gross profit dollars are, generally, highest for the "best" quality category of products. Consumers' willingness to select products at a higher point on the value spectrum is a driver of sales and profitability in our industry. We have ongoing initiatives focused on marketing and training to educate customers on the advantages of ongoing vehicle maintenance, as well as "purchasing up" on the value spectrum.

Our stores also offer enhanced services and programs to our customers, including used oil, oil filter and battery recycling; battery, wiper and bulb replacement; battery diagnostic testing; electrical and module testing; check engine light code extraction; loaner tool program; drum and rotor resurfacing; custom hydraulic hoses; professional paint shop mixing and related materials; and machine shops. As of March 31, 2021, we operated 5,660 stores in 47 U.S. states and 22 stores in Mexico.

We are influenced by a number of general macroeconomic factors that impact both our industry and our consumers, including, but not limited to, fuel costs, unemployment trends, interest rates and other economic factors. Due to the nature of these macroeconomic factors, we are unable to determine how long current conditions will persist and the degree of impact future changes may have on our business. Macroeconomic factors, such as increases in the U.S. unemployment rate, and demand drivers specific to the automotive aftermarket, such as U.S. miles driven, have been pressured as a result of responses to the COVID-19 pandemic, such as stay at home orders, work from home arrangements, and reduced travel. However, government stimulus and unemployment benefits and the reopening processes have positively impacted our performance. We are unable to predict the ongoing and future impact of the pandemic on broader economic conditions or our industry.

We believe the key drivers of current and future long-term demand for the products sold within the automotive aftermarket include the number of U.S. miles driven, number of U.S. registered vehicles, new light vehicle registrations and average vehicle age.




Number of Miles Driven

The number of total miles driven in the U.S. influences the demand for repair and maintenance products sold within the automotive aftermarket. In total, vehicles in the U.S. are driven approximately three trillion miles per year, resulting in ongoing wear and tear and a corresponding continued demand for the repair and maintenance products necessary to keep these vehicles in operation.

According to the Department of Transportation, the number of total miles driven in the U.S. decreased 13.2%, increased 0.9% and increased 0.4% in 2020, 2019 and 2018, respectively, and through February of 2021, year-to-date miles driven decreased 11.7%. Miles driven dramatically declined in 2020, as a result of responses to the COVID-19 Pandemic, and have remained below pre-pandemic levels.

Further government measures or consumer and business behavior could continue to have a negative impact on miles driven, but we are unable to predict the duration and severity of the impact to our business.

Size and Age of the Vehicle Fleet

The total number of vehicles on the road and the average age of the vehicle population heavily influence the demand for products sold within the automotive aftermarket industry. As reported by The Auto Care Association, the total number of registered vehicles increased 10.4% from 2009 to 2019, bringing the number of light vehicles on the road to 278 million by the end of 2019. For the year ended December 31, 2020, the seasonally adjusted annual rate of light vehicle sales in the U.S. ("SAAR") was approximately 16.3 million, and for 2021, the SAAR is estimated to be approximately 17.8 million, contributing to the continued growth in the total number of registered vehicles on the road. In the past decade, vehicle scrappage rates have remained relatively stable, ranging from 4.1% to 5.7% annually. As a result, over the past decade, the average age of the U.S. vehicle population has increased, growing 18.0%, from 10.0 years in 2009 to 11.8 years in 2019. The outlook for SAAR is highly uncertain, as the severity and duration of the COVID-19 crisis is indeterminable; however, the rate of new vehicle sales in any given year represents a small percentage of the total light vehicle population and has a muted impact on the total number of vehicles on the road and average age of vehicles over the short term.

We believe the increase in average age can be attributed to better engineered and manufactured vehicles, which can be reliably driven at higher mileages due to better quality power trains, interiors and exteriors, and the consumer's willingness to invest in maintaining these higher-mileage, better built vehicles. As the average age of vehicles on the road increases, a larger percentage of miles are being driven by vehicles that are outside of a manufacturer warranty. These out-of-warranty, older vehicles generate strong demand for automotive aftermarket products as they go through more routine maintenance cycles, have more frequent mechanical failures and generally require more maintenance than newer vehicles. We believe consumers will continue to invest in these reliable, higher-quality, higher-mileage vehicles and these investments, along with an increasing total light vehicle fleet, will support continued demand for automotive aftermarket products.




                                       17

We remain confident in our ability to gain market share in our existing markets and grow our business in new markets by focusing on our dual market strategy and the core O'Reilly values of hard work and excellent customer service.



RESULTS OF OPERATIONS



Sales:

Sales for the three months ended March 31, 2021, increased $614 million or 25% to $3.09 billion from $2.48 billion for the same period one year ago.

Comparable store sales for stores open at least one year increased 24.8% and decreased 1.9% for the three months ended March 31, 2021 and 2020, respectively.

Comparable store sales are calculated based on the change in sales for stores open at least one year and exclude sales of specialty machinery, sales to independent parts stores and sales to Team Members, as well as sales from Leap Day in the three months ended March 31, 2020. Online sales, resulting from ship-to-home orders and pickup in-store orders, for stores open at least one year, are included in the comparable store sales calculation.

The following table presents the components of the increase in sales for the three months ended March 31, 2021 (in millions):


                                                   Increase in Sales for the Three Months Ended
                                                                  March 31, 2021
                                                       Compared to the Same Period in 2020
Store sales:
Comparable store sales                            $                                          589
Non-comparable store sales:
Sales for stores opened throughout 2020,
excluding stores open at least one year that
are included in comparable store sales, and
Mayasa store sales                                                                            40
Sales for stores opened throughout 2021                                                       12
Sales from Leap Day in 2020                                                                 (34)
Decline in sales for stores that have closed                                                 (3)
Non-store sales:
Includes sales of machinery and sales to
independent parts stores and Team Members                                                     10
Total increase in sales                           $                                          614



We believe the increased sales are the result of store growth, the high levels of customer service provided by our well-trained and technically proficient Team Members, superior inventory availability, including same day and over-night access to inventory in our regional distribution centers, enhanced services and programs offered in our stores, a broader selection of product offerings in most stores with a dynamic catalog system to identify and source parts, a targeted promotional and advertising effort through a variety of media and localized promotional events, continued improvement in the merchandising and store layouts of our stores, compensation programs for all store Team Members that provide incentives for performance and our continued focus on serving both DIY and professional service provider customers. The government stimulus payments, enhanced unemployment benefits, lifting of stay at home orders and associated market reopening and recovery plans when combined with favorable industry dynamics, such as consumers investing in existing vehicles, led to strong demand for our products in the first quarter.

Our comparable store sales increase for the three months ended March 31, 2021, was driven by increases in average ticket values and transaction counts for both DIY and professional service provider customers. Average ticket values benefited from consumers spending additional time and money repairing and maintaining their vehicles in response to the COVID-19 and economic environment.

In addition, the improvement in average ticket values was the result of the increasing complexity and cost of replacement parts necessary to maintain the current population of better-engineered and more technically advanced vehicles.

These better-engineered, more technically advanced vehicles require less frequent repairs, as the component parts are more durable and last for longer periods of time. This decrease in repair frequency creates pressure on customer transaction counts; however, when repairs are needed, the cost of replacement parts is, on average, greater, which is a benefit to average ticket values.

Improvement in transaction counts during the three months ended March 31, 2021, compared to the same period in the prior year, were primarily due to COVID-19 stay at home orders and business restrictions enacted during March of 2020 and resulted in immediate pressure to transaction counts for both DIY and professional service provider customers. The continued market reopening and recovery plans, ongoing government stimulus and favorable winter and spring weather conditions all benefited transaction counts in the current period.

We opened 66 net, new U.S. stores during the three months ended March 31, 2021, compared to opening 73 net, new U.S. stores during the three months ended March 31, 2020. As of March 31, 2021, we operated 5,660 stores in 47 U.S. states and 22 stores in Mexico compared to 5,512 stores in 47 U.S. states and 21 stores in Mexico at March 31, 2020.

                                       18



Gross profit:

Gross profit for the three months ended March 31, 2021, increased 27% to $1.64 billion (or 53.1% of sales) from $1.30 billion (or 52.3% of sales) for the same period one year ago. The increase in gross profit dollars for the three months ended March 31, 2021, was primarily the result of new stores and the increase in comparable store sales at existing stores. The increase in gross profit as a percentage of sales for the three months ended March 31, 2021, was due to a mix benefit driven by greater percentage of total sales generated from DIY customers, which carry a higher gross margin than professional service provider sales and leverage of fixed distribution costs, as a result of strong comparable store sales growth.

Selling, general and administrative expenses:

Selling, general and administrative expenses ("SG&A") for the three months ended March 31, 2021, increased 9% to $950 million (or 30.7% of sales) from $872 million (or 35.2% of sales) for the same period one year ago. The increase in total SG&A dollars for the three months ended March 31, 2021, was the result of additional facilities and vehicles to support our increased sales and store count, partially offset by prior year incremental SG&A expenses incurred from one additional day due to Leap Day. The decrease in SG&A as a percentage of sales for the three months ended March 31, 2021, was due to leverage of store operating costs on strong comparable store sales growth.

Operating income:

As a result of the impacts discussed above, operating income for the three months ended March 31, 2021, increased 63% to $691 million (or 22.4% of sales) from $424 million (or 17.1% of sales) for the same period one year ago.

Other income and expense:

Total other expense for the three months ended March 31, 2021, decreased 20% to $35 million (or 1.1% of sales) from $44 million (or 1.8% of sales) for the same period one year ago. The decrease in total other expense for the three months ended March 31, 2021, was the result of an increase in the value of our trading securities, as compared to a decrease in the value of our trading securities in the same period one year ago, and decreased interest expense on lower average outstanding borrowings and lower average cost of borrowings.

Income taxes:

Our provision for income taxes for the three months ended March 31, 2021, increased 95% to $154 million (23.5% effective tax rate) from $79 million (20.9% effective tax rate) for the same period one year ago. The increase in our provision for income taxes for the three months ended March 31, 2021, was the result of higher taxable income and lower benefits from renewable energy investment tax credits, partially offset by higher excess tax benefits from share-based compensation. The increase in our effective tax rate for the three months ended March 31, 2021, was the result of the benefit from investments in renewable energy tax credit funds in the prior period, partially offset by higher excess tax benefits from share-based compensation in the current period, as compared to the same period in the prior year.

Net income:

As a result of the impacts discussed above, net income for the three months ended March 31, 2021, increased 67% to $502 million (or 16.2% of sales) from $300 million (or 12.1% of sales) for the same period one year ago.

Earnings per share:

Our diluted earnings per common share for the three months ended March 31, 2021, increased 78% to $7.06 on 71 million shares from $3.97 on 76 million shares for the same period one year ago.

LIQUIDITY AND CAPITAL RESOURCES

Our long-term business strategy requires capital to open new stores, fund strategic acquisitions, expand distribution infrastructure, operate and maintain existing stores and may include the opportunistic repurchase of shares of our common stock through our Board-approved share repurchase program. The primary sources of our liquidity are funds generated from operations and borrowed under our unsecured revolving credit facility. Decreased demand for our products or changes in customer buying patterns could negatively impact our ability to generate funds from operations. Additionally, decreased demand or changes in buying patterns could impact our ability to meet the debt covenants of our credit agreement and, therefore, negatively impact the funds available under our unsecured revolving credit facility. We believe that cash expected to be provided by operating activities and availability under our unsecured revolving credit facility will be sufficient to fund both our short-term and long-term capital and liquidity needs for the foreseeable future. However, there can be no assurance that we will continue to generate cash flows at or above recent levels, and we are unable to predict the impact of the uncertainty and disruption caused by the COVID-19 pandemic on our ability to generate funds or maintain liquidity.




                                       19

The following table identifies cash provided by/(used in) our operating,
investing and financing activities for the three months ended March 31, 2021 and
2020 (in thousands):


                                               For the Three Months Ended
                                                       March 31,
Liquidity:                                        2021             2020
Total cash provided by/(used in):
Operating activities                         $      890,672     $   459,093
Investing activities                               (93,757)       (226,642)
Financing activities                              (651,304)          15,300
Effect of exchange rate changes on cash               (371)         (1,090)

Net increase in cash and cash equivalents $ 145,240 $ 246,661


Capital expenditures                         $       94,879     $   133,284
Free cash flow (1)                                  789,780         227,170


(1) Calculated as net cash provided by operating activities, less capital

    expenditures and excess tax benefit from share-based compensation payments,
    and investment in tax credit equity investments for the period.




Operating activities:

The increase in net cash provided by operating activities during the three months ended March 31, 2021, compared to the same period in 2020, was primarily due to an increase in net income, a larger decrease in net inventory investment and a larger increase in a net taxes payable position. The larger decrease in net inventory investment in the current period, as compared to the same period in the prior year, was primarily attributable to the strong comparable store sales growth and the resulting benefit to inventory turns. The larger increase in the net taxes payable position was primarily due to higher taxable income in the current period, as compared to the same period in the prior year, partially offset by the realization of renewable energy investment tax credits in the prior period.




Investing activities:

The decrease in net cash used in investing activities during the three months ended March 31, 2021, compared to the same period in 2020, was the result of a decrease in investments in renewable energy tax credit investment funds and a decrease in capital expenditures. The decrease in investments in renewable energy tax credit funds was the result of entering into tax credit equity investments in the comparable period in the prior year, and no investments in the current period, which are primarily for the purpose of receiving renewable energy investment tax credits. The decrease in capital expenditures was primarily due to the lower level of distribution expansion projects and new store project development in the current period, as compared to the same period in the prior year.




Financing activities:

The net cash used in financing activities during the three months ended March 31, 2021, versus net cash provided by financing activities during the three months ended March 31, 2020, was attributable to the net proceeds from the issuance of long-term debt and the net borrowings on our revolving credit facility in the comparable period in the prior year and an increase in repurchases of our common stock during the current period, as compared to same period in the prior year.

Unsecured revolving credit facility:

On April 5, 2017, the Company entered into a credit agreement (the "Credit Agreement"). The Credit Agreement provides for a five-year $1.2 billion unsecured revolving credit facility (the "Revolving Credit Facility") arranged by JPMorgan Chase Bank, N.A., which is scheduled to mature in April 2022. The Credit Agreement includes a $200 million sub-limit for the issuance of letters of credit and a $75 million sub-limit for swing line borrowings. As described in the Credit Agreement governing the Revolving Credit Facility, the Company may, from time to time, subject to certain conditions, increase the aggregate commitments under the Revolving Credit Facility by up to $600 million, provided that the aggregate amount of the commitments does not exceed $1.8 billion at any time.

As of March 31, 2021, we had outstanding letters of credit, primarily to support obligations related to workers' compensation, general liability and other insurance policies, in the amount of $84.0 million, reducing the aggregate availability under the Credit Agreement by that amount. As of March 31, 2021, we did not have any outstanding borrowings under our Revolving Credit Facility.

Senior Notes:

As of March 31, 2021, we have issued and outstanding a cumulative $4.2 billion aggregate principal amount of unsecured senior notes, which are due between 2021 and 2031, with UMB Bank, N.A. and U.S. Bank as trustees. Interest on the senior notes, ranging from 1.750% to 4.625%, is payable semi-annually and is computed on the basis of a 360-day year. None of our subsidiaries is a guarantor under our senior notes.



                                       20

Debt covenants:

The indentures governing our senior notes contain covenants that limit our ability and the ability of certain of our subsidiaries to, among other things, create certain liens on assets to secure certain debt and enter into certain sale and leaseback transactions, and limit our ability to merge or consolidate with another company or transfer all or substantially all of our property, in each case as set forth in the indentures. These covenants are, however, subject to a number of important limitations and exceptions. As of March 31, 2021, we were in compliance with the covenants applicable to our senior notes.

The Credit Agreement contains certain covenants, including limitations on indebtedness, a minimum consolidated fixed charge coverage ratio of 2.50:1.00 and a maximum consolidated leverage ratio of 3.50:1.00. The consolidated fixed charge coverage ratio includes a calculation of earnings before interest, taxes, depreciation, amortization, rent and non-cash share-based compensation expense to fixed charges. Fixed charges include interest expense, capitalized interest and rent expense. The consolidated leverage ratio includes a calculation of adjusted debt to earnings before interest, taxes, depreciation, amortization, rent and non-cash share-based compensation expense. Adjusted debt includes outstanding debt, outstanding stand-by letters of credit and similar instruments, five-times rent expense and excludes any premium or discount recorded in conjunction with the issuance of long-term debt. In the event that we should default on any covenant contained within the Credit Agreement, certain actions may be taken, including, but not limited to, possible termination of commitments, immediate payment of outstanding principal amounts plus accrued interest and other amounts payable under the Credit Agreement and litigation from our lenders.

We had a consolidated fixed charge coverage ratio of 6.46 times and 5.08 times as of March 31, 2021 and 2020, respectively, and a consolidated leverage ratio of 1.77 times and 2.45 times as of March 31, 2021 and 2020, respectively, remaining in compliance with all covenants related to the borrowing arrangements.




                                       21

The table below outlines the calculations of the consolidated fixed charge coverage ratio and consolidated leverage ratio covenants, as defined in the Credit Agreement governing the Revolving Credit Facility, for the twelve months ended March 31, 2021 and 2020 (dollars in thousands):


                                                For the Twelve Months Ended
                                                        March 31,
                                                   2021              2020
GAAP net income                               $     1,953,473     $ 1,370,328
Add:  Interest expense                                159,246         145,070
      Rent expense (1)                                358,653         342,908
      Provision for income taxes                      589,099         385,509
      Depreciation expense                            311,037         279,103
      Amortization expense                              9,392           1,771
      Non-cash share-based compensation                23,164          22,372
Non-GAAP EBITDAR                              $     3,404,064     $ 2,547,061

      Interest expense                        $       159,246     $   145,070
      Capitalized interest                              9,324          13,197
      Rent expense (1)                                358,653         342,908
Total fixed charges                           $       527,223     $   501,175

Consolidated fixed charge coverage ratio                 6.46            5.08

GAAP debt                                     $     4,124,168     $ 4,471,248
Add:  Stand-by letters of credit                       84,045          39,083
      Discount on senior notes                          4,892           3,510
      Debt issuance costs                              20,940          19,242
      Five-times rent expense                       1,793,265       1,714,540
Non-GAAP adjusted debt                        $     6,027,310     $ 6,247,623

Consolidated leverage ratio                              1.77            2.45


(1) The table below outlines the calculation of Rent expense and reconciles Rent

    expense to Total lease cost, per Accounting Standard Codification 842 ("ASC
    842") the most directly comparable GAAP financial measure, for the
    twelve months ended March 31, 2021 and 2020 (in thousands):


Total lease cost, per ASC 842, for the twelve months ended March 31, 2021 $ 426,126 Less:

           Variable non-contract operating lease components, related
                to property taxes and insurance, for the twelve months
                ended March 31, 2021                                                   67,473
Rent expense for the twelve months ended March 31, 2021                        $      358,653

Total lease cost, per ASC 842, for the twelve months ended March 31, 2020 $ 404,138 Less:

           Variable non-contract operating lease components, related
                to property taxes and insurance, for the twelve months
                ended March 31, 2020                                                   61,230
Rent expense for the twelve months ended March 31, 2020                        $      342,908




The table below outlines the calculation of Free cash flow and reconciles Free
cash flow to Net cash provided by operating activities, the most directly
comparable GAAP financial measure, for the three months ended March 31, 2021 and
2020 (in thousands):


                                                             For the Three Months Ended
                                                                     March 31,
                                                               2021               2020
Cash provided by operating activities                     $      890,672     $      459,093
Less: Capital expenditures                                        94,879            133,284

Excess tax benefit from share-based compensation

      payments                                                     6,007              3,380
      Investment in tax credit equity investments                      6             95,259
Free cash flow                                            $      789,780     $      227,170



Free cash flow, the consolidated fixed charge coverage ratio and the consolidated leverage ratio discussed and presented in the tables above are not derived in accordance with United States generally accepted accounting principles ("GAAP"). We do not, nor do we suggest investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, GAAP financial information. We believe that the presentation of our free cash flow, consolidated fixed charge coverage ratio and consolidated leverage ratio provides meaningful supplemental information to both management and investors and reflects the required covenants under the


                                       22

Credit Agreement. We include these items in judging our performance and believe this non-GAAP information is useful to investors as well. Material limitations of these non-GAAP measures are that such measures do not reflect actual GAAP amounts. We compensate for such limitations by presenting, in the tables above, a reconciliation to the most directly comparable GAAP measures.

Share repurchase program:

In January of 2011, our Board of Directors approved a share repurchase program.

Under the program, we may, from time to time, repurchase shares of our common stock, solely through open market purchases effected through a broker dealer at prevailing market prices, based on a variety of factors such as price, corporate trading policy requirements and overall market conditions. Our Board of Directors may increase or otherwise modify, renew, suspend or terminate the share repurchase program at any time, without prior notice. As announced on February 10, 2021, our Board of Directors approved a resolution to increase the authorization amount under our share repurchase program by an additional $1.0 billion, resulting in a cumulative authorization amount of $15.8 billion. The additional authorization is effective for a three-year period, beginning on its respective announcement date.




The following table identifies shares of our common stock that have been
repurchased as part of our publicly announced share repurchase program for the
three months ended March 31, 2021 and 2020 (in thousands, except per share
data):


                              For the Three Months Ended
                                      March 31,
                                2021               2020
Shares repurchased                  1,475              1,484
Average price per share    $       450.65     $       386.71
Total investment           $      664,533     $      574,037



As of March 31, 2021, we had $817.0 million remaining under our share repurchase program. Subsequent to the end of the first quarter and through May 7, 2021, we repurchased less than 0.1 million additional shares of our common stock under our share repurchase program, at an average price of $556.69, for a total investment of $8.0 million. We have repurchased a total of 82.5 million shares of our common stock under our share repurchase program since the inception of the program in January of 2011 and through May 7, 2021, at an average price of $181.09, for a total aggregate investment of $14.9 billion.



CONTRACTUAL OBLIGATIONS


There have been no material changes to the contractual obligations, to which we are committed, since those discussed in our Annual Report on Form 10-K for the year ended December 31, 2020.



CRITICAL ACCOUNTING ESTIMATES


The preparation of our financial statements in accordance with GAAP requires the application of certain estimates and judgments by management. Management bases its assumptions, estimates, and adjustments on historical experience, current trends and other factors believed to be relevant at the time the condensed consolidated financial statements are prepared. There have been no material changes in the critical accounting estimates since those discussed in our Annual Report on Form 10-K for the year ended December 31, 2020.



INFLATION AND SEASONALITY


We have been successful, in many cases, in reducing the effects of merchandise cost increases principally by taking advantage of supplier incentive programs, economies of scale resulting from increased volume of purchases and selective forward buying. To the extent our acquisition costs increased due to base commodity price increases industry-wide, we have typically been able to pass along these increased costs through higher retail prices for the affected products. As a result, we do not believe inflation has had a material adverse effect on our operations.

To some extent, our business is seasonal primarily as a result of the impact of weather conditions on customer buying patterns. While we have historically realized operating profits in each quarter of the year, our store sales and profits have historically been higher in the second and third quarters (April through September) than in the first and fourth quarters (October through March) of the year.

RECENT ACCOUNTING PRONOUNCEMENTS

See Note 13 "Recent Accounting Pronouncements" to the Condensed Consolidated Financial Statements for information about recent accounting pronouncements.




                                       23

INTERNET ADDRESS AND ACCESS TO SEC FILINGS

Our Internet address is www.OReillyAuto.com. Interested readers can access, free of charge, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, through the Securities and Exchange Commission's ("SEC") website at www.sec.gov and searching with our ticker symbol "ORLY." Such reports are generally available the day they are filed. Upon request, we will furnish interested readers a paper copy of such reports free of charge. The information on our website is not part of this report and is not incorporated by reference into this report or any of the Company's other filings with the SEC.

© Edgar Online, source Glimpses

All news about O'REILLY AUTOMOTIVE, INC
05/28O'REILLY AUTOMOTIVEá : Increases Share Buyback Plan by $1.5 Billion
MT
05/27O REILLY AUTOMOTIVE INCá : Other Events (form 8-K)
AQ
05/26AutoZone Expected to Report Higher Earnings, But Faces Comparison Challenges,..
MT
05/19O REILLY AUTOMOTIVE INCá : Change in Directors or Principal Officers, Submission..
AQ
05/07O'REILLY AUTOMOTIVEá : Insiders Make Significant Stock Sales in O'Reilly Automot..
MT
05/07O'REILLY AUTOMOTIVEá : O REILLY AUTOMOTIVE INC Management's Discussion and Analy..
AQ
05/06INSIDER TRENDS : O'Reilly Automotive Insider Extends 90-Day Selling Trend
MT
05/06INSIDER TRENDS : 90-Day Insider Selling Trend Prolonged at O'Reilly Automotive
MT
05/05O REILLY AUTOMOTIVE INCá : Other Events (form 8-K)
AQ
05/04Goldman Sachs Upgrades Advance Auto Parts, Genuine Parts, Lifts Price Targets..
MT
More news
Financials (USD)
Sales 2021 12 087 M - -
Net income 2021 1 803 M - -
Net Debt 2021 4 309 M - -
P/E ratio 2021 21,0x
Yield 2021 -
Capitalization 37 303 M 37 303 M -
EV / Sales 2021 3,44x
EV / Sales 2022 3,31x
Nbr of Employees 76 257
Free-Float 98,7%
Chart O'REILLY AUTOMOTIVE, INC
Duration : Period :
O'Reilly Automotive, Inc Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends O'REILLY AUTOMOTIVE, INC
Short TermMid-TermLong Term
TrendsBearishBullishBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 26
Average target price 585,89 $
Last Close Price 534,73 $
Spread / Highest target 21,6%
Spread / Average Target 9,57%
Spread / Lowest Target -17,0%
EPS Revisions
Managers and Directors
NameTitle
Gregory D. Johnson Co-President & Chief Executive Officer
Jeff M. Shaw Co-President & Chief Operating Officer
Thomas G. McFall Executive VP, Chief Financial & Accounting Officer
David E. O'Reilly Executive Chairman
Jeffrey Alan Lauro Senior Vice President-Information Technology
Sector and Competitors
1st jan.Capitalization (M$)
O'REILLY AUTOMOTIVE, INC18.23%37 143
AUTOZONE, INC.16.92%29 861
ADVANCE AUTO PARTS, INC.26.08%12 888
AUTOBACS SEVEN CO.,LTD.3.57%1 072
MEKONOMEN AB (PUBL)58.29%976
CARPARTS.COM, INC.49.80%893