O'Reilly Automotive (ORLY) 8 Feb 242023 Q4 Earnings call transcript

Welcome to the O'Reilly Automotive, Inc. Fourth Quarter and Full Year 2023 Earnings Call. My name is Matthew, and I will be your operator for today's call. [Operator Instructions] I will now turn the call over to Jeremy Fletcher. Mr. begin. may you Fletcher,

Good and Matthew. joining you us. morning, you, thank everyone, for Thank

call, our XXXX. will full today's a we During conference period. answer discuss comments, will results our question and prepared year and fourth outlook our for After we host XXXX and quarter

forward-looking we morning, the covered be for like Reform Private harbor by, we claim I Before under the to our the that provisions to everyone begin we contained contain today intend this protection Securities safe of comments Act forward-looking would in remind statements statements, and and Litigation XXXX.

several You forward-looking consider, materially may, ended December should, estimate, these actual XXXX, SEC statements described report similar any factors can would, plan, could, annual latest project, company's recent due identify differ or intend statements in XX, year words Form company's from XX-K the filings. such could anticipate, on expect, words. to important by and other for will, the believe, The as results forward-looking

The to company At would any I forward-looking this time, no this like update made during statements Brad call. Beckham. obligation introduce assumes to

the our on Jeremy. Vice morning call Chief everyone, Good to Participating welcome O'Reilly with Executive also Parts Greg Henslee, Jeremy call. Officer. on Thanks, Financial and fourth our call. O'Reilly, conference Chairman, me Chairman; and Auto this President; Kirby, David are quarter our Brent the and morning, the Fletcher, present Executive our are

begin performance to our morning congratulating strong in like I'd quarter. another this O'Reilly fourth by Team call the on

performance the year represented year, fourth comparable faced generated sales toughest our in in X% which prior team we last where XXXX. our Our strongest quarterly comparisons quarter store

sales strong X.X% stores. result customer of our was deliver day a our service excellent increase quarter X,XXX each the every their This very able fourth direct this comparable high bar, commitment over unwavering providing a XXXX. of team to in of was Against in to of store

comparable quarter's on our store was XXXX, end robust revised provided team the sales high the of generated X.X% of last which at call. a we year full the For increase, range guidance

on was the also performance sales growth the the the line These in X% continued to X sales for results top of XX% almost of above representing $XX.XX, of points performance We're creation pleased results drove record-setting increased deliver with year guidance another our this end was top share incredible per in our percentage XXXX industry-leading This team XXXX, especially of X sales strong strong earnings comp range extremely diluted of ability to original full value X%. high shareholders. preceding since EPS to our as years. again

our it's than As years, EPS our growth. amazing we we the did of too back as forced our some in our may opposite, in XXX% XXXX, to above strong has business Instead, generated far again X think such in just the been as accept continued longer-term in they it be to context. share have of would $XX.XX our XXXX. doubled performance the was to the outstanding last To team these earnings After in for per give helpful idea I results perspective, performance, some this view an XXXX. easy more with give that a company just accelerated run XXXX

service be by in competition Team's couldn't the industry. outperforming our providing I proud the more to dedication relentless of the customer best

annual at has built in of this on that the and our a in Dallas As just leadership team, weeks year for display generated excitement our business excitement full we X held conference momentum you'd ago. incredible expect, was lot our

most our one teams, share company, product our our sales year skills, practices and and to best managers focus enhance importantly, and distribution all knowledge, year, together in bring we performances leadership field to on Each set of place across including management store build celebrate our come. the award-winning leadership,

attitude our clear about was and performance this the defines conference winning is our focus seizing which are year all Leaders It's opportunities Our the driving customers of leaders Motion, forward infectious. the team. in front And taking with next energy of us. passionate industry-leading in our perfectly step of and the theme created by and

Now I'd our like quarter minutes some few fourth to and provide results. take a color on

third quarter's with quarter fourth started As results trends we we line we exited conference the discussed on saw in solid sales the last we quarter. with as call,

quarter, As our consistent perspective -- a we guidance performing from expectations. than results each our remain the on volume a better relatively progress with throughout volume month

results the last sales favorable comparable pressure we very As years capitalized when faced in basis store winter December we against expected, weather. X on a year-over-year comparisons our challenging on

winter, with have the this in winter typical So business January support harsh we variability weather that conditions in of December. more seen our arriving far versus

broad-based we with XXXX pleased However, very how core are performance finished nonweather-related with solid out categories. our we across

yet professional delivered Our team quarter double-digit by driven our growth where side comparable our of store fourth business comp in results the the sales strength of another on quarter. were

continue our and Our at with professional business performance to ticket proven growth robust was primarily our model driven a level customer high team's through pleased we gain be ability in share service. and by counts, exceptional to execute

the DIY moderating to we as count XXXX in Our ticket business, benefits strength SKU was offset comparisons a inflation. saw pressure professional same faced partially where from by weather we well our benefit as in challenging

the to both Overall, average in impact combined quarter. business growth sides ticket the of our was comp contributor of a on our growth

ramped entered levels on had discussed throughout we quarter's from the that we year-over-year as we lapped fourth As fully quarter, the call, price benefits over XXXX. inflation last that carried

X%, our over quarter, line fourth was expectations. just with benefit our the in same For SKU

to to with starting of sales a want for transition our XXXX, our outlook. I discussion guidance Next,

and outperform earnings industry the additional our release we're guidance how want a market. yesterday, to X%, the sales provide to disclosed and have annual we our viewing XXXX in opportunities both on X% to conditions some we our store of range As comparable establishing economic color at we're for broader in we the

fundamental for transportation needs into the automotive industry believe now remains the for stable aftermarket robust our XXXX generates be and vehicles. industry, compelling daily consumers The consumers value their demand very proposition and there demand continues through maintenance industry for backdrop repair we the a of our of the XXXX, is and in to existing in to strong. progress drivers invest for and we As and resilient

line continued the been the the and increase see metric the trends miles our over total We've an to improvement size growth this pleased and U.S. in park. car expect industry several in line long in to steady population driven with the in quarters -- growth in in term with last by driven see of

to keep average age industry our the higher benefited consumers at willingness increasing on vehicles road longer show their as mileages. investments will strong continue benefit believe prioritize from existing and and has higher the to them to also vehicles in of We a

for in a trends, the From health turn, believe We our customers strong and moderating is favorable improved fuel we consumer of and prices wages, broader as industry. the solid, macroeconomic conditions our view employment stable inflation. current standpoint, economic by supported

expertise is not in our to our conditions. However, ability economic predict broader

the impacts rates, of year shocks, election sustained and or We or price remain from potential cautious could jumps regarding any we volatility. interest in the our possibility for levels higher worsening see particularly short-term gas economic conditions in economic prices outlook

maintenance economy adjust As their as industry will economic in we environments broader of well and that our ends prioritize even nondiscretionary to of the discussed vehicles we the repair customers XXXX, the the if up our the in industry a existing and the Due and past, we maintain conviction challenging our pace perform consumers to challenges. have of quickly of have pressures. countermeasure resiliency in nature facing our in confidence our business, will

I our our performance effectiveness model, year a stable economic providing few in on outlook minutes discussing depend customer and want both to a our how share. that spend on To turn, incorporates assumptions our While reasonably gaining of executing XXXX our our sides for ultimately, will we business. exceptional service environment, our market opportunities in this view of business end,

both with comparable sales contributors our to businesses professional to again in expected outperform. DIY positive be and We XXXX, professional to our store growth expect

in away in been mid-teens. generated were our of our we truly with office availability. excellent as excited Team ticket incredible years to on by Team gains the industry-leading especially have distribution our commitment our and customer members professional sales, delivered XXXX store, momentum saw the X count customer blown inventory consecutive We comparable the growth We sales base, service driving with has store and

higher outlook XXXX. bar growth We we in moderate the in in remain we for comps naturally to professional as expect set bullish against compare but our XXXX, in

trend We also come business, DIY the our but long-term DIY to in DIY on the of that growth opportunities the to believe we share will of side industry gain in anticipate counts. of ticket pressure any context share the have

down extended our and service of of increased dynamic broadly ticket DIY quality resulting in counts will We parts repair believe industry from the drive and complexity intervals industry.

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of and total positive comps average parts and higher drives to XXXX. also quality DIY However, values, increased expect in complexity ticket be we

values. For in both average to expect we growth ticket sides of see our continued business,

provide However, inflation last the SKU same in than smaller years. our will have assume X a realized projections benefit XXXX we

point increases with were forward from are very in XXXX. levels practice, price consistent modest historical XXXX and only more levels our in stable we Overall this much in assuming price

minimal a of less increased with As X% digits, to a low overall by our driven result, assumes same single than inflation tailwind expected SKU up be guidance from ticket complexity.

variability holiday comparable second be absent the growth On from the move basis, and a the our of is last on unforeseen the fairly the weather even Before to store like any business sales XXXX quarterly a to in seasonal our throughout I weekly our timing for XXXX versus expect expectation XXXX, XXXX. would shift of in growth Easter steady minor sales relatively guidance, in and volume highlight quarter we sales quarterly of first to quarter our in year. cadence I

in We are off winter start XXXX pleased in to favorable by a weather January. be solid aided to

see weather previously, quarter. I of much did in we the winter As benefit fourth the mentioned not

would in material typical as we However, with weather and for from sales normal, winter impacts the full January, the of guidance weather. assumptions do include arrival the our of backdrop not our view any XXXX now underlying year conditions

on to well and like our plans capital results for our expansion move XXXX. I'd XXXX discuss in as Now as investment to

billion, for exceeded updated we $X over just the were last approximately is which XXXX our for initial the year. expenditures and million on above range guidance quarter's $XXX capital call Our guidance

in As to as we to incremental enhance we our our accelerate opportunities initiatives store image progressed invest distribution network our and certain on refresh realized and fleet vehicle spend appearance. store our XXXX, as and further through well

to capital guidance setting billion. our For XXXX, we're expenditure $X $XXX at million

will total the expected similar level spend a of will our change approach XXXX, composition CapEx While somewhat. as

restarting at that in previous projects directed A portion saw we where stores. were convenience and was initiatives our deployment opportunity of accelerating capital image certain to in XXXX an of years and delayed the improve our

a for Our more XXXX spend. a investment projects anticipate of to leveling type these back capital plans normalized of annual

We new also expect CapEx distribution spend a for see to projects in XXXX. reduced

provide our will be projects on to ongoing continue expansion, moments. a on We a Brent status and few update distribution track with in these

still in in have infrastructure. offset investment projects strategic XXXX, be we be in as reductions investment our to increased anticipated largely upon dollars based below forward these projects substantial will While in planned to an CapEx investments time technology stores new well will facilities. XXXX by invest lines continued move for as These our year development new spend in and this

shift is CapEx our toward stores store store being new driven and new in owned store future a openings store XXXX lease in growth by development. growth planned versus Our

As Mexico. in openings new markets store XXXX the XXX of we to spread for multiple and quarter, have XXX target a last we disclosed net U.S. established across

We our existing to the stores of excited pleased continue alike. growth very opportunities both be are markets new our about new in performance with and and

our properties invested growth. fuel stronger volumes store own returns flows increasingly in a successfully ability to and in new on our generate expansion have stores toward preference higher is capital our sales cash open We long-held that as enhanced we driving

been success has company our across the strengths factor supplementing our geographic of -- the to who parts ability of our our with which to culture expansion our growth is excellent the providing The to in footprint, in ability of important a our live balance their customer committed professional the in factor service store with trained markets. stores the key One while organic also across greenfield -- growth staff new story O'Reilly strategic and people highly our are and geographic acquisitions. most

paramount relationships with to to with Over customers have the partner our have to through we have leadership of thrilled seasoned enter several very in our Vasto Del ability company this our are success. With January course to to great extremely that with in partner history, market. acquisitions of been are and mind, Canadian are has Groupe join team excited who fortunate completed in professionals, strong and acquisition with new companies to forces our experienced markets we been to their our the

our values of core X Canada. thousands independent network customers headquartered is ago in service. company-owned family-owned focused and Vast-Auto company press noted in release years customer work with stores, XX As of and satellite They December, Montreal, across distribution a professional support a highly X operates and as of operate Distribution. warehouses excellent respected over XX hard culture that Canada a founded partners is currently company Quebec, in the on the Vast-Auto strategic centers business and Eastern

expansion -- of to come planning our now, are Canada, team footprint. to there and grow very for as But Team process future will we are excited the definitely XXX-plus planning the our very the We in O'Reilly. for be of innings welcome more to in Vast-Auto early we still members

In as call as well over a additional night. our our on to expectations in gross outlined I will guidance last details moments, our our share provide turn release But XXXX. want profit him, profit few press before highlight I operating per the and earnings to results for we Brent

will guidance We per to while have the EPS XXXX, have acquisition accretive on XXXX we established slightly $XX.XX material earnings our bottom a be to to line impact $XX.XX, in share. Vast-Auto it our expect for at not

business industry-leading plans and operating drive profitability commitment earnings grow in XXXX share outlook our and our continued to reflects and to investing market Our results.

We investments returns. capitalize long-term robust high pleased and to our and ability on competitive drive sales and generate will operating have to manage and with been to our continue strong our momentum judiciously positioning growth capital

I we customers, strong beginning in the call historical entire to and today. our of our our highly to team outlined very committed are EPS remains ability Our business confident our and results the on build at

As I hard O'Reilly for to would thank like XXXX. work, wrap in I Team up my performance comments, prepared again once dedication and their

to will over turn I Now call Brent. the

great our like I thrilled another morning team Team the O'Reilly Brad. would by on begin year this congratulating welcoming our comments company. XXXX Canadian to We're Thanks, to members also newest great with in my to and partner team company Canada, a plans. an and enter for culture, as market. Their the strategic of our Canadian this foundation to experienced Vast-Auto team leadership important view part acquisition in we provide our excellent and strong growth expansion

provide discuss Today, and quarter operational margin. and our I will fourth on further full year our additional color XXXX. gross some for outlook with results Starting

quarter fourth from fourth basis at the our expectations. and of was a point XX XX.X% of gross of the end XXXX margin quarter increase Our high

range. with Our and full at at line end also margin year also year in gross the XX.X%, came in high our of guidance last

our impacts quarters margin XX by initiative. in gross As remaining were pressure Subsequent period quarter, for a reminder, year of improved to the of from impacted first final our quarter XXXX. calendaring the points incremental XXXX first compared the faced full our year the professional X XXXX the to comparable approximately basis we in from the results pricing as

been especially with consistent the solid light results, professional margin We've our mix performance in we pleased in strong faced business. gross from our our headwind outsized of

improvements incremental supplier distribution margins Our drive outstanding supply to support have worked efficiencies. partners from in through diligently teams improved and costs our gross with chain acquisition

to calendar through XXXX, drive year. incremental see as in expect we expansion improvements we further the margin and as continue gross For gains XXXX our to we similar of progress

results. the to dilution XX range in anticipated guidance includes XX% XXXX from Vast-Auto which We the have business inclusion of established points basis our acquired XX.X%, a for of of an

of press cost. to and release, lower in mix profit distribution operate our mix net new a owned of XX outlined partner's expecting of parts because a only current with business margin, stores, we're we impact operating but to points lower operating gross basis stores independent consolidate our since this associated of margin to expect As headwind they

tremendous Excluding the our proposition focus our of is on chain, the have amount XX customers. be in reflects gross our operations a business, and basis profit creating premium expected midpoint. at the store projected sales impact teams up to our value This of confidence the supply adding points Vast-Auto for

remained Our XXXX. similar XXXX. quarterly as very we cadence margin we move a consistent quarterly gross and expect throughout through

outlined look perspective, cannot prices what customers, his in macro a Brad and to environment, completely as While relates we our input both predict product inflation assumptions from cost like our also as comments. build selling will stable our it inflation current in a to

offset result partners, we XXXX, puts efforts experienced acquisition supply environment our broadly effectively. During by inflationary cost Team's a saw pressures in costing chain to by takes and manage the as our of

view industry in similar rational normal state a and really environment expect XXXX. our as this for of We condition a

expectations customer Our also assume will our industry rational. remain in pricing

our we've with dollar incremental As XXXX an growth, rate, we're solid improvements is more of growth margin our been even pleased strong projected in again XXXX. to as gross increase profit with for excited and XX% in which saw gross

consistent performance continued our high business in to best availability our of Our and parts our execution level commitment model industry. the unrelenting is providing our with customers strong the direct a result of of absolute

continue investments direct This the competitive the of projects chain, XXXX. And inventory to about making have position. commitment supply long-term we advantage to distribution we're is in capabilities excited in sound and network our our enhance underway result our to

network, capacity on significant update we progress. I'd levels the our add and quick provide that and side service to our on development distribution X projects start like business, of in the have To to will a

larger, to disclosed, under relocate efficient have Springfield, we our more existing distribution DCs to Georgia construction and have centers previously we Atlanta, new As Missouri currently facilities.

support growth that have grown our more core mature volumes to significantly increased support per will areas store capacity as enable the us new years. in expanded of during store as well last several market to the continue some This

our to and We're on process in end Stafford, these in begin be half transferring operational for the of XXXX. of projects the XXXX, Atlanta great middle Springfield Virginia of the of to complete facility Both the and progress track. on are the we'll new making development distribution the greenfield projecting of to this to center We're year. back expect also continue new be relocation at this of the facility in stores

It areas will untapped market support our into these company. new our expansion for

outlined facilities both the in and share Our new earlier, distribution Brad markets. these our be strategy aligns that existing capture strategies ability of key store market to and with directly growth new drivers will

we're addition chain to prioritize we In our to store enhance to our network, opportunities the distribution investments level continue supply hub model. have making of tiered our in we centers, the which next is the

and Our we'll and the the our continued in an the quick to to of our and tier achieve a localized capital stores of of our We compete factor our commitment. and portion all stores is have our this line location effectively to in and respective stores number, is to their in in adjust markets, hub distribution ability operating to inventory down network best this plans year, street. our toward with model geared XXXX necessary goal. size evaluate access broad investment up ensure important this Every continually support access are as with for availability SKU ability to this

Moving on inventory. to

network. our our investments year, will store at our was sales the per X% opportunistic and planned and per driven in see continued store inventory inventory corresponds our end was year, In of from the the to of we support send coming last $XXX,XXX, growth the momentum. distribution which -- hub end Our growth with XXXX by up

of lower since is chain to our expect X% the the another more increase XXXX, per count. store within growth inventory, Vast-Auto addition distribution acquired model per-store a in resulting their weighted with approximately For store inventory heavily of we X% to existing with

the assortment targeted inventory adding to augmenting Our possible growth availability. in stores on and focused our best local objectives on expanded offering our the ensure inventory in hub in are availability inventories our relocated and DCs, we're capitalizing network additions

XX a and costs. legal to I SG&A Now profit for quarter Fourth of driven exposure operating above was fourth costs, basis our inflation expense sales percent as XX.X%, and up self-insured of SG&A outlook by our spend points time from performance liability and quarter XXXX claims and XXXX want and some auto covering our the to XXXX. due expectations in higher-than-expected

third year per above of from result our same quarter SG&A Average these full drivers. a slightly expense as XXXX revised for of were X.X%, store the up guidance the

initiatives have and As the our growth targeted compared strength the SG&A our enhancing team. throughout technology in operational through reinvestment stores, as year, our result was the discussed historical to year-over-year planned rates, outstanding we growth our outsized long-term at of

this forward X of Vast-Auto planning we're With to to As XXXX, by operations. store addition point approximately driven per grow of we X.X% the average look increase by to of X/X SG&A X%. the

XXXX the a key Our investment but step SG&A our than significant would forecast is factors. anticipated in driven normally made we in in few store we from growth XXXX, initial by is guidance higher a down

Part of increased by related year-over-year in a expense our directly our anticipated increase depreciation in XXXX in to XXXX SG&A and increase XXXX. CapEx both expense is driven spend

investments, this As move we capital XXXX, our through as XXXX new mix prior year especially of in we spending shifts investments. our store towards more passed headwind will as calendar moderate

with significant to incremental forward. We've the investments our the spend pleased driver move infrastructure. more our capabilities, our impact technology been initiatives investment are both continued in IT and opportunities our growth business tools having in see we our we is initiative-driven SG&A as and The support our planned of on

at on XX.X%. to expectations operating and our range setting guidance rate, our Based XX.X% projected these profit gross margin we're

As our inclusion we the guidance. includes points results this of yesterday, of release XX Vast-Auto's disclosed our basis in in dilution anticipated press an from consolidated

Based half. year. half year the to the in for back guidance operating growth results our our XXXX the our more SG&A of the we the year, cadence expect XXXX expected on operating impact, with the during of of slightly midpoint from brackets range than that our profit first down profit anticipated Excluding last pressure

the of As results. our Brad previously mentioned, growing driving are we market industry-leading share and to highly committed

it with to want annual the was Before our conference time company privilege my spend leaders Brad January. our in expressing to in join I leadership at comments, close I

given was on our satisfied they grow outstanding not celebrate Our XXXX had to focused and excellent continuing Rather, that certainly much to team success. market share is XXXX, performance beyond. on in in providing customer past and but intensely evident team our their are it with service resting

I Now over the turn will call to Jeremy.

O'Reilly year. like another would Brent. outstanding Thanks, congratulate to Team also on I

we some will fill fourth on XXXX. in guidance details results additional Now our and quarter for

the opened For entered driven million, X.X% noncomp store base. increased a in $XX in sales stores sales comp and XXXX contribution quarter, fourth by XXXX from $XXX increase a million comparable and that yet the have not

For XXXX, we billion be to $XX.X billion. expect between $XX.X revenues our total and

includes Our from historical day our total additional consistent guidance comparable our sales revenues included be day XXXX, in will for benefit the with practice. calculation store leap but this in not

Our XX.X%, base fourth XX.X%, rate from of benefit a X.X% a income, of compensation. of This was of compares was rate of rate quarter of a income X.X% reduced share-based comprised of for pretax benefit pretax to by tax which of quarter the XX.X% fourth compensation. by reduced effective comprised tax rate base a share-based XXXX XX.X%

The of federal XXXX state to credits. fourth result an as as a certain in compared and tax quarter increase was of lower XXXX base rate

effective For base rate pretax comprised share-based for by of the benefit of XX.X% X.X% was reduced XX.X% a tax full compensation. rate a income, of year, our

rate comprised of a for year X.X% of an XXXX, For reduced effective base we of of the rate XX.X%, XX.X%, benefit by a full share-based tax compensation. of expect

also benefit quarterly can in other to compensation quarters tax of tolling the X We due expect rate. tax periods, share-based from be the fluctuations lower the tax create quarter the in fourth variations to our than certain rate

free our will on we flow XXXX. results and cash Now and move that the our in drove components to expectations XXXX for

XXXX. working result reduction tax partially we from for of XXXX favorable cash versus credits. tax benefit in and offset Brad versus XXXX growth in timing energy of was billion income realized The the million were in inventory the an decrease in net payments earlier capital expenditures increased increase inventory as by $XXX for a net and renewable was discussed as disbursements These the XXXX. $X billion headwinds substantial well capital Free $X.X flow of in in

range be benefit our For realized We tax flow of in XXXX, cash in free to we expect billion. of from by growth energy operating as flow cash renewable we will to compare of anticipate to to billion and income again tax $X.X payments free XXXX benefit the credits. a we the headwind the in from favorable be timing purchases offset $X.X

Brent in at have impact their XXXX, result, and we similar discussed made to as prepared growth And comparable investments and comments, for in cash a inventory in we flow. to planned a expenditures capital As XXXX. free levels the expect Brad we

I inventory also net inventory was AP of saw We reduced our the much driven we XXX%, of touch our which briefly component from to the to on want the through by XXXX. ratio. at quarter finished fourth rate

sales volumes significant as in end substantial reflects support payments strong timing the and moderation made at of This inventory additions last XXXX to AP the of impact our year. we associated with the exited inventory purchases we

we of acquisition and For expect ratio at a XXXX, and year moderation approximately currently finish to from an see the continued to Canadian impact expect our XXX%.

end We of maturing the finished June of of compared our by adjusted with debt. XXXX X-year X.XXx the notes successful notes. our $XXX and increase of issuance partially our the on with as $XXX X.XXx program, Moving of offset ratio to senior debt-to-EBITDA retirement million by commercial fourth of of ratio paper in an November million driven borrowings to quarter under

plan target to We be continue and to time. below number of X.Xx that approach our over prudently leverage

million at an And XXXX, repurchase price we total be execution share share billion. for X.X with shares continue average repurchased $XXX.XX our program. of of We pleased investment the to a for of $X.X

of for means view in repurchased XX $XXX million our shares price program confident of we shareholders. price Since and a our XXXX, excess future the remain have buyback share average very our the average our program is at share We as supported of the we expected billion. cash returning of effective $XX.X that inception to continue repurchase of repurchase total to an an flows discounted by capital business, investment

does but shares outlined EPS our share reminder, repurchases. a include impact call, of Brad the this not earlier As includes repurchased guidance, any additional through

to their thank team I the company Before I dedication entire customers. O'Reilly and your up our questions, like to open to for our would call our

excellent drive our Your service to performance. and hard work outstanding continues commitment customer to

prepared be time, we this to and our I the to comments. the concludes This to operator, your happy answer At questions. return ask would will like line, to Matthew,

Your coming Truist question Scot Securities. first Instructions] from [Operator Ciccarelli from is

Young Joshua for on is Scot. This

are Then attribute about with would business? share we from side on about the the more growth the Or As accounts? more existing with new you business that as sustainability transaction of to think you've doing it coming the been rates XXXX, commercial, we how wallet commercial putting in you look customers? to thinking up is growth of the

Josh, it's there's if this anything everything year. know, last I professional in the last We're moving up performance mid-teens, side of Brad. comp the and guys top in off have lot generated we a going pieces else. against with kick this you as a huge I'll XXXX growth sales on But the think of year years. X see on

a on of We bit little there's continue as in bit as about be a sustainability lot of our XXXX. want to Again, want I So a be to little get a that careful of in pieces 'XX. everything percentage going talking bases to the cautious bigger. moving

of side. business. ability team's continue in confident especially the gains on can to talk I what absolute be ability on and professional to outcomp drive to take side our from professional the you confidence an our couldn't the share to We the is share, perspective about to market continue more But continue to

execution just had extremely side in fragmented. we to As the continue know share sure make everyday our we gains here that as drive we've place of have XXXX. is And in of a you lot still well that always initiatives to as business fundamental

would combination of of that anything going markets list, have else. of business. don't with there call in to a they the of terms the In it's you up we're When Josh, probably makeup think hardly on it, somebody because focused existing think I about how always even transaction our say the out new part working of of both. business kind we There's still customers relationship professional us of from be and that we're always buy simply

business every over and those relationships chipping day. is out that on but time, And away there it built we're

when that we're at performance and that the the feel so continue existing we professional balanced we're both for business I future. foreseeable and to like is side, fairly new. And seeing Brent going that growth, And on customers today. look Jeremy not and we doing have with And our

with this of Very some case helpful. are? spending. And think accelerated Got investment that you you 'XX. it. obviously us investment by be the And the on this sounds And Could year, this again it more may of in be growth biggest give elevated like opportunities then, that just remaining SG&A on your investment do end sort finished just color year? the cycle you you'll where had

if that, else. a fair have the take And anything I'll guys again, see Obviously, Josh. Yes, question. very

through business opportunities a through of profitability we long in our about As we're that you we about talk the quarters sure our of XXXX, position always continue game the strength. it minute we to as comes driving to share know, talked the from ago. to when see sustained play gains that thinking We're making

Really, how couple of each this see for question, you've going as look Really, store see our continue last feel. we a some we're we And as we And seen, had how in going continued and when is we're the that times at to ability how obviously rifle approach time and competitors. we happening it of that's capitalize and day. the that, with volatility and weaker when then us of to still the about that's the makeup to XXXX? comes manage to the wait year, payroll every our entire on we we some said feel answers that

in on tech. sure seeing sides makeup of rifle to to those want both biggest investments that We're really staffing business how We affect Really, is the really about share our gains. of the make to just be on to still making that approach we talked that. going staff our levels for that the driver that Brent also sure we're continue continued is

thinking is pretty about that simple. how And we're

at We of an business. the last looking the We're market years, the have looking U.S. had but of backwards. our only years run next we're We own many amazing in the many in not XX%

to investments service. in our to technology it have frontline going help the get we members these better when customer to after we how and an extreme so some comes are of And team of to specifically form give opportunity

friction and are experience, from the to customer our going both with customers. customers remove our How we DIY professional

to there's good here. only and feel of we we the and so like SG&A, but down be about own extremely the feel for in we investments XX% Josh, long knowing here And drive the knowing wouldn't to those could that do, do, things playing we're that right we market short the game thing term SG&A,

comments, return customer And to the expecting Yes. only a to a we thing we game, would of through And an everything on in a it. investments, and to outsized point, filter invest in, base. return return we're but marketplace relates it invest long as playing tech the the Josh, our I Brad's the especially with Brad's add

investments. look So we we make that's the when lens those through

question next Sachs. Kate Your from coming McShane Goldman from is

bit change And for if means wondered to through the over what buybacks term? more you longer share availability that I of could you walk little talk can retail? a the about more cash us owned for

returns back owned is how this It's like a bases is long-term of and a ability over store interesting an business. Great capital to as lot bias properties. been had of kind towards that shareholders. investment preference get Kate, We to of part We've for a invest our or company. in our compounding question. our Jeremy. able attractive history deploy our an out transition feel a of always increasing an we're

our to of, in use started about and share kind the over around think long XXXX gosh, the how dial spoken of our of consistent up time, move as structure we've we current been capital sort buyback, of to capital. our we've And prioritization course of especially we

always and valuable to been on And as shareholders. very our long how make course for the engine stores that within operations we that that, And then been first a going we existing of better. focus our things about that's our a know be existing part has the funding growth, think are we of time for

been best bit always are are and that within the available a opportunities by market. That's little our tempered what things

And so we've a had always balance.

those work both investments on on years, improve the we we've sides. economics really through few seen the As last

for and powerful and an there's our properties store have volumes the we those owned value invest think creation sure, and as more there per But we improved, stores, profitability think, per as own I even mechanism in store I that's helped.

properties I think marketplace a been identify to little also been those there's an within has that bit the easier. ability

been have time. of that for those at direction been it's some obviously So period factors, and least driving the moving

beginning that's mix the next those new they've been positive us, we of year, stores feel in year You closer year be being of in like to our instead to the for the year, that decisions don't the for expect of around make at for this XX% thing. for But play. and would owned a XX%

from to to our of we it with of perspective, around how terms In -- affects historical obviously, going share to buyback a it's also ability deploy in dollars at that's use But priorities that. allocate less the that would cash be increments, our line that's capital.

just question. and kind incredibly did -- thing Brad. Jeremy was with in. to ability jump job the from what is a And our I reiterate This just of one new framing to Jeremy highlight up open Yes. The are we said impressed would your I your how great may Kate, stores. answer really

site Our the with kind greenfield are country a from right in we way our field existing people, both build and backfill with through the footprint the our new of store through new in store Team's incredibly professional as the team just execution ability part acquisition the to well great build is the just all of as markets pleased manager way our all store our parts markets. the doing and team center performance

Baker is Your from D.A. Mike next from coming question Davidson.

alluded but the color of a Can situation. it, more you on little to -- competitive you sort

tough pretty at your through share been have sales at supply NAICS bit comps you those ability even this little a anything versus comps of the to bit just lines? entire you little anything look big if With a competitive are changing or don't data. in know if if wondering or because terms of versus along take I lower below there's or that comps situation market share industry gainers in guys automotive your competitors your stores. I'm quarter You view market's market comparisons, you look data, your

Mike, at I'll Brad. it's a take that. stab

performance answer correlate maybe data. way at to our directly O'Reilly, anything as some to been that question change not in our out So look Not competitive do. to But say the just to on have never We, in business, tie by dynamic in able there. NAICS least at there's that the directionally, the month. QX your something exactly seen haven't we at we

well, lot independent a in team I sales tool that outputs spent the incredibly mean, of I has listen, they're that you very at -- looking our competitors the CRM just And those Mike, out know field. our time well I from run.

tremendous amount are the they great when market a have market independents, total professional the an our toughest honestly WDs, at we addressable incredible competitor they on do are they those hold And that the X competitors. the the side respect We most our of for steppers. and share job. business, look They of

to be or to that change continue year tough but all That in see that has step we tough year, QX. they and anything said, a last that different, there's anything has they pointed been been nothing were

directly data, that tie to you're really seeing just wouldn't that we seeing that. I so And in aren't what

this I very to Mike, environment parts down parts I and said. service, amongst rational we forward. add is see pricing to continue availability competition as would there also proposition to going ability would feel with a professional to that to win Brent. our to when out the good add we and everything continue relates our comes it Brad people very it and

you another said. sense. follow-up something makes -- That One to Okay.

to You the margin first a half, profit is relatively be but greater in talked the gross comps pressure about little consistent. consistent operating bit relatively and

when adding or the Just bit you're half. Is half store So what the in some to just labor more the curious SG&A year of that a half? first investments would second higher is occur? little of versus cause first presumably, the timing that in

fleet some or noise capital really store It's investments flowed through hit the like the bit we've to investments and a more our especially year. impact we ability our of stores our of way lighting little year depreciation Mike. in upgrade, things as No, get the our throughout the rollout those of in, made and heavier the some of all that of investments, the LED little about that a thinking of of those timing in all those XXXX, part that impact first would the means with prior got us of compare the our how -- bit

technology looks of the There the spoke also is what is cadence of like. that some investments timing degree to, that some of of that Brent

cadence reason that's So for the that, look. around commentary to expect how would I guess, we

is next Your coming Lasser Michael from UBS. question from

share XXXX? and year, X% assumed growth about for you your your have you the rate what industry to rate you the did grow As for share the you within growth in ability take guidance to essentially Have same your comp the at assumed X% that you will that set industry?

We great Michael, question. appreciate it.

business, market in kind of all to professional. share, not take our balance -- to to ability continue want both to of obviously, we confidence the outcomp the So just in our to continue sides

maybe and a as year. I of earlier, Brent said as "normal" an more see I both I As think we generally XXXX market overall did,

definition the normal. what's of Now

doing opportunity, years much of history, happened, normal how the generally much many and previous this, COVID, to for of year a normal range. how things have we is volatility, probably back X% think decades X% kind all year to how industry that upon more all in look at You based that that many the a our last our

what range. of so in saying would the what holds you to the future, Michael, very say know, predicting exactly I think X% to for like X% kind But Again, ties we're good always industry kind point and generally that guide. that what of I not think say And into we we're future I at the with hard it's to XXXX. our you

as XXXX I as add they be guiding would the clearly X.X% I and this were thing we're share not to ask in only no. if think is to that range The our have that we we last year. gains you do XXXX? will strong is, the year, mean, obviously Michael, to in answer to question, comped market

We energized created enthusiastic that feel We our still move have to same we are forward. the like and Teams about we've competitive advantages. really like feel momentum the

traffic our But of we're continuing hard calendar side especially professional to comps, business. on increasingly the

how gains, bigger doing we out. the we're on that year we're a knowledge going think, play but So to our think will this make base. that to I just It's that, within continue about way implicit

that a Okay. focus My margin your there few within rate company years? made is, tenure spend of And CEO the the improve follow-up rate of peak has the being operating Brad, as begin do is the level? question at the given of this of much O'Reilly, you organization you is think last that percentage continuing a over to time, on been investment over lot how

so much, Thank Michael. you Yes.

know, always as to our the XX focus you supplier years, company we here not what's I've our our and market, focus, started dominant and always everything total only mission Mexico Canada. has U.S. addressable And we statement there the areas. we company as a going in parts but with the So that grew out the primary been up with we're not for market just in -- be our have the that on auto but for do now all business

we been And that. drive goal And profitably, done always so has that that has growth. And changed. with then every dollar always start and have we -- our to profit not operating

years to to where our to sure is dollar going we the I what driving anybody set think assuring a through you that forward points last the make where past. about been what we're that want head When over going back, we do is at. share terms our operating to profit in ended of at. operating know in thinking kind meaning year where about and we do ended percentage question, I I come. when the we in to fact we trajectory profit XXXX, do absolutely with I X want but at XX.X%, can a years, is similar for It's it's of future Michael, up XXXX sure think to XX.X% live of don't want to think to and always want that an gains of growth. That's kind rate your make what we're we with we But the the the it not be, of

high extremely Now we gotten get. where been possibly is CSK we've bought when have And XXXX. we've our Absolutely, way pride do always can profit answer always And of right operating We're our rate? question our as prideful going in we been, where has we since back all has gotten rate. what to the the percentage? in especially hey, as

gains, can. we going we're that we profit that focus. share to to and profitably We're to rate So and we'll operating on as growth, it make sure going have doing to driving continue drive dollar much possibly that that focus as continue

Stanley. Your next Gutman is Morgan from from coming question Simeon

why and Brad, know have SG&A get perfectly to but you about higher year, return. we there's, pay around How talking it's looks while tapering, it you? you on maintaining industry the a know much little were not going you more, you got debate in, off last lean linked, level it, I And even did like did not earlier. an spent behind last year. of call some in spend? continue I there's to but displacement a

that see off guys start have else. I'll and if anything and Simeon, the Thanks,

this of we last been I about yes, been talk feel -- lot kind we've of right. year. really catch-up There's So about good. spent a that's what asked think We with

the amount Brent's solid we point questions, on want and timing be we those whether make, to to more up" and on, CapEx to play of whether OpEx other reframe because with of we a between spend "catching internally that a together return discipline And earlier I here it to that how every that anything think be we one CapEx were have SG&A, it very on depreciation.

us the that to that feel And to question We we we're continue your -- what to of got money lean line so that's right where we and of today spend. to that, really really both good guidance. into spend the root your good back is is the us directions. going really where to about And we're of we lanes about the returns. And kind our at -- really what's feel just

every about feel we're We returns comes everything into and when it seen. SG&A. heard good piece that our things as about moving good comes CapEx talking that image as We all us really as lean about well when going to to of the investments, you've tech to our to it of and safer stores talk vehicles, the the you've appearance about. We're and continue feel

Simeon, I...

-- follow-up a And please.

question, in Simeon, as opportunity. leaned where but of kind future we of that add to obviously, to too, And feel and a opportunity. we is, come to in an acquisition, still that just see shape we speak investment one definitely good part other over to about as maybe well, more too, Brad's investing continue thing just to comment to your time, lean into

Yes. term. in never prepared And think what venture I in I the weather guess maybe it more to means a follow-up, remarks, quarter. heard a short don't quick you

ongoing with the years face you weather, or of business? of rate idea got maintenance deferred is and there that X favorable Given but any that resolved the run

You're talking Simeon? about fourth quarter,

that deferred Or realized just has maintenance? create does the then any repair? Yes, and weather more favorable impact? as become gotten that fourth for quarter And has maintenance

one. No, I question. good appreciate A Yes. the

holiday For that the impact. was you the quarter calendar, sure, us. impact, fourth unfavorable little a bit of to there is the would weather tell a I the timing both for

do into lot strong, saw what It guidance we XXXX, how been moved we with into in of was we was the 'XX fourth about which The to and anticipated performed in bulk also. how have quarter. would we a the had as thought very built

timing January showing in December degree winter the So which impacted those of to definitely there's versus up a results.

about of couple December of like this really weeks talking huge versus a not it's as mover major shifts mean, about couple you how January In year. terms simple literally in needle in of for weeks that think I to a a of deferral, last we're as year and

we about kind that's winter And prepared be we normal of think our on kind sort expect remainder comments, of to within industry. would in is of talked we the the year full for would how of as setup view we the the season, about the for why balance we're where as

Melich Greg from is Evercore. question next coming from Your

on sales to like up then SG&A. maybe on follow a and bit I'd

make And the you fourth I year, quarter, right, was clear, actually is above the the the I've to first Was in it It got think quarter vortex? Just negative the December. said given pressured. December, range polar for running

Yes.

to of good we December knew those than us. both discrete X-year questions, at give answer better a it weeks comp. can don't challenge the for periods Greg. negative because where be of how and our just We short would I run time So of just the -- It there's kind last it plan The but substantially of was was year can quantification we on was the year. weeks a vary candidly, always beginning with

But well. we're we far running pleased set the that we do couple weeks in of that attribute got we feel largely really, and comfortable up really so we weather how that We're harsh with January. shrink to of

guide? around bps want a within fair X% make inflation of then that will your And X% mix follow-up right? sure mix to Got XXX another be buildup? this, on inflation So to a and the And part we sales. same assume then maybe it. of get I X%. SKU and complexity I Is should

Yes. for on I like finer don't Greg, it, put point I'd XXXX. that that know too

inflation will XXXX. First, don't I in be what know

which than ticket less ticket get the a independent even bit company average X%. faster, the We'll little a benefit from up. growing is naturally professional pulls of guidance average Our that, total above

still that ticket the solid. growth professional to would as our we by expectations comp portion the is count year of of next be to side for a are expect expected driven business But continue

-- Well, on the get ask flex somebody in you stock ask Great. do that else when we let someone I'll website. the see capacitor

Greg. you, Thank

remarks. turn time have Beckham reached closing now for Brad our questions. for the will back Mr. call I We to allotted over

produced you, call like Team in by quarter for April. O'Reilly our today Thank unwavering in the thanking thank Thank I to forward for to the conclude XXXX. we today, call results to customers and our results We dedication look you. would Matthew. like our first your would everyone reporting you outstanding our joining and entire to

does This call. conclude today's you. Thank conference

participation. at Thank your a wonderful may day. lines phone You your disconnect for have you time, this