O'Reilly Automotive Delivers Solid Quarter Despite Headwinds
O'Reilly Automotive Inc., a leading auto parts retailer, reported a solid fourth quarter and full year 2024 results despite facing headwinds in the industry. The company's shares grew 4.4% in the fourth quarter, with sales growth driven by both professional and DIY segments.
The company's comparable store sales for the fourth quarter increased 2.9%, marking its 32nd consecutive year of growth in this metric since becoming a public company. This growth was driven by solid results in both professional and DIY segments, with the relative performance between the two sides of the business being more balanced than experienced in the first 9 months of 2024.
O'Reilly's professional business delivered mid-single-digit comp growth, while the DIY segment grew just over 3%, its best quarterly result in 2024. The company benefited from strong demand in maintenance categories in the fourth quarter and saw continued softness in discretionary categories such as tools, accessories, and performance parts.
"We are pleased with our team's ability to navigate the challenging environment and still deliver increases in comparable store sales and earnings per share," said Brad Beckham, CEO of O'Reilly Automotive. "This is a testament to our team's commitment to delivering solid results despite the headwinds we faced."
However, the company did face a $0.46 headwind to EPS resulting from a fourth quarter charge of $35 million to adjust its auto claims self-insurance liabilities. This charge represented a headwind of over 1% to the full year EPS growth reported for 2024 and was even more impactful to the fourth quarter, representing a headwind of approximately 5% to the 2.6% EPS growth reported.
The company's CEO emphasized that despite these challenges, O'Reilly's team has established a long track record of robust growth and profitability, which enabled them to deliver record earnings for the year.
"We are never fully satisfied when we fall short of that high bar," Beckham said. "However, we are pleased with our team's ability to navigate the challenging environment and still deliver increases in comparable store sales and earnings per share."
O'Reilly's shares have been affected by the challenges faced by the industry, but the company remains optimistic about its future prospects.
