O'Reilly Automotive (ORLY) 25 Apr 242024 Q1 Earnings call transcript

Welcome to the O'Reilly Automotive, Inc.

First Quarter 2024 Earnings Call. My name is Matthew, and I'll 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 the will results today's host we During conference period. discuss prepared we outlook the a question-and-answer our and for first remainder After of year. comments, will our XXXX quarter

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

words described obligation You the expect, as can Form forward-looking identify this project, made words. these any statements should, XXXX, could and during consider, annual actual report factors may, by the ended The plan, important filings. believe, to any call. forward-looking differ no will, company's SEC latest due in company or December from on similar year such company's assumes The statements update other could, XX, to for XX-K statements anticipate, several forward-looking recent intend estimate, would, results materially

this At like I Beckham. introduce time, Brad would to

our the over people thanking have Thanks, on providing Vice morning rely Good Chief call Chairman, O'Reilly begin team professional from call. Parts present conference the by customers expertise first call me our for Parts. XX,XXX morning, and Executive Participating Greg at expect come Henslee, our also Jeremy their are on parts Officer. and Auto O'Reilly Financial and welcome call. I'll dedication knowledge the members our on everyone, O'Reilly, quarter today to relentless to our the Chairman; Jeremy. to this President; Kirby, David are Auto our Brent with and the and Fletcher, Executive our

competition. where top growth We their our to are and of in truly finished XX.X% in O'Reilly the with a store to Team a are sales the on continues prior comparable year. paramount, X.X% turn, quarter ability outhustle, demonstrate outperform business We and, first relationships and [indiscernible] service people customer a in

driven Our line stores daily continued Rico top execution across strong sales in and of and Mexico, now X,XXX-plus are all the U.S., Puerto dependent by consistent on Canada. results our

Driving we bigger, the volumes share captured store on get significant company as gains continued few especially our does over easier as build gets we years. market our last growth in the have not

company our Our and is ability single into as develop will driving of greatest far culture and who success bearers challenge leaders the to a to factor the build our the future. teams standard our be and

relentlessly to leaders team and fellow stores, your dedicated Our our across and company our culture Thank Team you, members. perpetuating investing our in our distribution our commitment your offices are people. and for corporate centers customers, to O'Reilly

sales, driver walking I'd quarter by performance. start and a the in range, contributors the slightly about our growth ticket detail average Increases store solid moment. of results, businesses of mid-single-digit positive more will and with professional below expectations. on drove but our our our within our line performance the in discussion was Now to our through with the like being comps in business comparable comps as quarter year We some the I counts values and both in in details in quarter volatility with discuss sales at were Starting we full ticket in saw trends. sides comp in X.X% of our of with of first guidance expectations year our DIY with Professional larger full ongoing and our both X%, both growth the expectation consistent our to inflation

the Next, I first quarter. provide our want of sales cadence in to the on some color results

the weather can results the month we and from both onset severity business quarter. be of our We the and the each of in see As variability spring. we winter pleased sales first of store timing to type discussed comparable generate positive our past, quarter in in of as volatile from were the have

choppiness the characteristic quarter, slow experience be did we a that to of we can However, start first spring. exited especially with as

on results reported winter call, in earnings quarter's benefited last of from markets. harsh produced which solid we January, many our we weather As in

Moving past in starting a and the through impacted Typically, our weather by distribution with that February tax business was ramping winter the in negatively coincides refunds. individual month we the income February the see much timing of of through January, refunds. benefit of tax early

delay up March. noticeable at catch year, of business. the first year we this a pressured of was refunds of prior end refunds there half and the begin amount of These saw of that our both processing the to moderated cumulative in the sides trends February However, pressures to the as improved in

also we of experienced March throughout unseasonably across However, weather wet our cool markets. many

in favorable As sustained have a typically as result, seen that slightly into the and our quarter exited saw first The quarter, continued full finished accompanies our as we spring the business uptick March expectations. below we we haven't still trends the weather. really April

historically. the we choppiness in we which DIY with The is first have more significantly what quarter seen line impacted in business, saw

on the Our can and perform repair, to ability driveways, up vehicles often have that willingness may and items maintenance working their on hold winter. their DIY their in impact customers are been tune during conditions so weather

this weather customers timing by volatility to pressures refunds, more insulated While tax tend muted more of the business impacted the business of from our DIFM during professional our on was side quarter. and the our was also delayed be

business as be to performance of pleased the our comparisons. challenging with face even continue very professional we We

in of share exceeded as we our in of our drove a As believe full that professional quarter significant comparisons, expected calendar that results the year. in comps continued quarter quarter's first XX% guidance gains Against on share we professional in earnings are we last year year the first these this outlined we call, reflect moderation performance an comp last challenging gains. seeing professional

of what by market of in remains share America. We our our our a the professional leverage all momentum North professional have highly to are to continue fragmented we and ability grow excited business team's across created

comments about to are of thinking to as balance we how some sales Now I'd provide for outlook the the the year. like

is in quarter. uncommon XXXX noted seen I business volatility As first our far not the previously, the so for have in we

of you heard to are many listening at point overreact choppiness the say As have this us cautious year. before, to not in we today

weather-driven will move expect forward, normalize business selling moderate and we into we variability any will As the summer season.

range. Given to this store results we full sales our year within and of X% maintaining to quarterly the comparable outlook, our are would expect X% comp also fall same guidance

particularly healthy. in will economic Inherent our end pressures, we guidance belief investing of situations of their is for We demand significant be industry to our or and prioritize results and that is continues the to environment. believe consumer our cost the expectations current payment monthly of of this our view a maintain given composition In vehicles, new support heightened in the sales reasonably to consumers the our continue burden replacement believe resilient vehicle. consumer

mix prioritize to across our category recurring categories continued as continue maintenance broad-based see jobs. filters are in We performance such encouraged and with oil consumers strength to as

consumers their carry in are evidence we categories, turn, products as products of best value provide we seeing to well investment are spectrum extended to our within seeing trade notable rather down continue warranties Additionally, higher-quality perform not and and transportation. that level prioritize long-term in better value

and the macro considering potential deterioration However, how that spend the consumers in begin more push money. could cautious environment they to of we broader where still their remain carefully

these time, And that consumer gives to headwinds present. given us term. needs will the demand transportation proposition prioritize experience confidence are over the that Our short value continue is their

of a as impediment of teams All for not an pie to our in in industry macroeconomic substantial business. sides the piece accept our our we gain we will set to team or have and to of allow this on markets mission pressures know the being is We leader our said, of is industry the bigger settle before there and average to our growth both be opportunity growth. all

would discussion, move few on are impacts to out I there discrete sales. as I sales to from our like call Before a our items

Easter holiday approximately as on into a store met of into the first year, plan the and points to our quarter. our was headwind basis First, sales our XX expectations which built quarter this shifted comparable

of an of a the quarter day additional day of leap selling comparable impact Next, as XXXX. day our the of we the leap result received first exclude We benefit in from benefit came total X.X% of on total representing as the calculation, in of expected, increase quarter. XXX points sales our was our and this in included guidance but sales sales basis store

Last, we and XX, Del January from Vasto acquisition forward are Groupe on closed numbers. operating point on our in their reported results that the of included

are The first sales sales from quarter our total comparable from basis Mexico. by excluded the XX also of approximately points store like inclusion which sales results, increase Vast-Auto benefited

Moving to earnings diluted per on share.

year full a our guidance $XX.XX. increasing to EPS are $XX.XX of range to We

impacts next a of that as of by guidance gross the lower-than-planned our margin rate Our repurchased and tax release the EPS will today. lift the in Brent through driven as earnings well cover date and SG&A shares results is

ability you with manage costs we in here to numerous share have our initiatives a our been will have the enhance still in position. pleased motion team's we moment, to Brent on making progress projects As competitive further steady and while with

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

Now I'll turn the call over to Brent.

by start to I Team incredible begin a O'Reilly also comments to Brad. solid this their morning for XXXX. would hard my thanking like work Thanks, to ensure

a absolute operate team Puerto We that market United are in, key across of of to now we Canada. Mexico, and the proud the to O'Reilly professional of our know Regardless parts Rico success dedicated O'Reilly service. Team to customer States, excellent say the is culture that extends the people we

capital gross with cover quick Starting our expansion and update margin in and provide investments on margin. I and results quarter thus far our will a XXXX. first gross Today, SG&A

quarter better the an was Our of first margin our for slightly expectations than first basis XXXX quarter. gross increase quarter point the of XX.X% from XX and

quarter incremental in year. noted, quarter with basis the XX guided to the And gross beginning the the Vast-Auto margin points we to the at the line previously business. to of dilution results was As this Brad acquisition first year the full operating of the was our from include first

of continued have quarter. see puts anticipated supply in takes environment, We cost first chain a the experienced the supplier mix acquisition and to and and stable

margins On modest cost we have in incremental those costs cost. passing in been freight market-driven successful To buying have a increases as reductions certain categories, pricing as benefited net that along improvements acquisition seen rational a basis, pressure we gross the in by continued improved in well environment. extent driven inflation

to continue to the performance performance expect we within gross margin quarter, our our to XX.X%. Given in margin year of XX% land solid gross our range quarterly full first

Turning to SG&A.

management as with expectations We SG&A in our results the line in quarter sales. are first a of percentage with pleased

point average as leap growth quarter day. a of basis from of additional increase result first an included Our the XXX anticipated SG&A X.X% per business store day

quarter the XX store was operating expectations Canada's we with Additionally, owned of growth SG&A on inclusion the the from portion increment basis per of our results, quarter includes a line the since point the which on in have business. that based

spend plan per the quarter on in to for us first full our pace store average by keeps SG&A Our growing X%. year of X.X%

our of that we result in on moderate last year move compare will cadence impact SG&A business. noted XXXX as average to beginning store we investments in growth per throughout the As of the a as against the call, we made the of

While as as fleet enhancements to growth move been we some we the areas. our begin to into ramping and store our have planned forward image capabilities layer expenses making incremental SG&A on in our we XXXX to these vehicle comparisons initiatives, the our well as investments and in technology appearance continue incurred of will of throughout as

to SG&A, in this these which spend of The headwinds throughout our SG&A the moderate quarter impact first balance anticipate of year. deleverage comparison the drove we also of planned

make the levels top quarter, control. total. spend our the driver the in with choppiness staffing effectively incremental we the The we of the during prudent SG&A believe our most our balanced within in we business concerning first expense teams deploying our we remain stores are Given experienced decisions line investments significant

current our business, team. judiciously relationships. our We are customer and long-term high conditions reflects professionalism our consistency success long-term appropriate that is also we that of our while service the service been customer team the feel as our Our has market and demonstrated ensuring critical focused customer to in expenses level all in maintains excellent by delivering develops that managing delivering for excellent on in conditions

high We are levels we have to make confident that made provide O'Reilly and the service productivity. at are of industry-leading to position Team investments continuing customer

unchanged, includes operating the we full within in points dilution basis the of gross to to year of in we SG&A our anticipated and margin come the and outlook the of the Vast-Auto's quarter, With to solid from continue inclusion results. is which performance XX.X% XX.X%, range expect first margin saw XX the

addition X.X% chain range had at strong this year Inventory existing the level Vast-Auto's refined and within from of increase of we as X% pleased of have the and XXXX. are count up per to to which provided also deployment XXXX. Inventory X% growth continue and each expanding and store end see quarter anticipated, last end finished enhanced of target we remained at DC stores a our incremental has while we the by The $XXX,XXX, X.Xx, our turnover X.X% continually in store inventory the productivity inventory was from time inventories. the we inventory hub and and of

and Our in-stock store hard our in Parts O'Reilly offers to remains position best markets. all inventory are Auto strong, teams the ensure working of our availability

our and U.S. investments. the during and Mexico stores across capital a first We to on total growth progress of store Turning quarter. the opened XX

the into bring Additionally, XX we Canadian to pleased fold. the stores were officially

and expenditures excludes quarter goal of for million, XXX Our Capital of annual are $X store on for annual billion. opening Canadian the the $XXX to addition the net new XX $XXX of stores. we track million were our XXX to guidance

Our DC this those Georgia, markets. Missouri projects those are to to making Springfield, levels further more new, year service and great and in are enhance relocation Atlanta, online we later facilities bring and efficient within excited larger progress,

middle excited about the that Virginia, far the Stafford, so Mid-Atlantic, on our of We are be operational slated is made in D.C. to XXXX. also progress in

customer to a As for O'Reilly would and have challenge my the look on a comments, their Team customer to forward opportunities delivering like service commitment I ahead excellent to finish thank one taking time. that at I we team. as I

over call Jeremy. the turn will I Now to

a to solid would the to Brent. on Thanks, like Team congratulate O'Reilly year. start also I

Now fill first some the outlook remainder we quarter of and for XXXX. details will additional our on results in

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

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

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

as amount below expectations a compensation. effective and first rate Our tax from of was we benefit quarter share-based our result of the realized timing

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

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

Now our that cash for flow the $XXX XXXX. XXXX was flow Free free we million the in to and on of drove million cash $XXX quarter move results. components will versus first

the earnings. XXXX, result decrease increase The in was million inventory $XX of in increase of net an larger offset a in by partially

to of For expected XXXX, billion. $X.X at billion our remains flow cash range a unchanged free guidance $X.X

of moderation percentage Canadian down in a the would including year we finishing at finished the was from end acquisition line This from XXX% in with at of as impact XXX%, inventory quarter levels. expectations, payable XXXX. and accounts the with our Our line these the first anticipate

our on a debt. quarter borrowings commercial under our compared of with of adjusted by debt-to-EBITDA finished reduction We Moving decrease first program. the of X.XXx with to the XXXX driven X.XXx end in as ratio an ratio to paper

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

future total an to And pleased price million. of repurchased of shares our the as remain average $X,XXX to buyback repurchase quarter, of during and excess for cash average business, very shareholders. flows share that our We with to continue XXX,XXX by of the our means the the $XXX view is effective supported of We be share a investment expected first continue execution program our an we repurchase discounted price we at confident capital program. returning

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

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

customer and to our continues commitment excellent service work to This comments. drive our outstanding Your performance. prepared concludes hard

At we to will ask return the I'd the Matthew, happy operator, like to and this be to answer your time, to questions. line,

from first from Instructions] Horvers comes [Operator question JPMorgan. Chris The

comps beginning what February, performance you've the is about, you of talk that that performance arrival you geographic you the seen look Can of markets seen? about like since how markets of can So the spring? arrive, haven't? that correlated has to spring the versus have talk where the And been

really there. of that the in demand, markets, way question we kind we the Chris, of of January. thanks true And there again what is pleased harsh markets like through lot drives that saw really, you're January, quarter your played were was Well, in felt quarter to really the for that a walking with pieces we And the directly where really really weather moving just exactly January. really a winter lot out in question.

weather, on happening kind some business to of work of was get people for unfavorable out to cool on DIY geographically certain kind made you kind in February, was and And it we a more on of markets what long bit And that tax we there of wet certain got a stay kind with the that, a from too really kind a saw kind don't early of of it, us, felt into the the we normalized it and stuff. standpoint little kind of what sense little especially we and regions, definitely to or of roll of what bit lack matched as some money get like in, want after of more necessarily month. then seeing to not saw As more with weather divisions, the see started things in Chris. then from in up volatility in

of So was by When based comparison sense this there upon really was what doing. our pieces versus from a time weather looked we the it fairly regional of at kind pretty at region everything made lot and moving much the our the there. looked was year, plan you consistent, performance and last

the So the outlook -- does have the to the markets the year? I with where spring in X% in that consistent break, for comps X% been guess, seen you've quarters

Yes.

challenges I think Jeremy. one this of is -- the

sustained really of on one challenges just business had think is spring we normalized haven't business. in I how a would consistency the our we've perform seen

with on described seen Brad we as as that's think, impact are to can this consistent factors improved move through We'll not we that shifted that But areas I it's that for choppiness on call, week to more the that. the where as few anything impact pockets quarter, during of the But time the been the ones week especially rate just the period us get characterized quarter. been stage, of of performance different see underlying we that. been sure, that's we've exactly that of tax of choppiness lot has a the There's And the and a the through. more harder the have refund see volatile consistent been been move sustained. just when a at saw there's money we around, businesses.

seeing I that, something that. else? mentioned even exposure you're repairs low mix the you that ticket or national the oil in like anything haven't also to are accounts. to deferral know evidence or And I any selling And type not a -- have question, parts a pads you of brake change or that But down. that of seen any Understood. as of And I and trade B channel even other understand you're like that seeing A follow-up or bigger know business, some you're seeing SKUs you trade that you up, within consumers mentioned

our question, of look be answer of look it When business general Yes, whether Chris. it book great be versus or account no. a is at follow-up we and strategic you garage national accounts, regional whether the a account. at The kind independent

look we're Brent a we Especially categories I, then down -- account last how when And categories, we're national smaller question, are when of you part is the of look business, competitors. our our performing. portion maintenance when our look As categories you when seeing of category of of pleased that the at it the your our nondiscretionary you categories, when the those know, really when we business at at to business look that. and have [indiscernible] but some break and mix customer the and -- categories, needs-based with at we're just not our we at look extremely you we

want we like just When be that that of said best, we been area The categories. has I things accessories, look truck that, we better have you earlier, spectrum more to say And good, seen or kind discretionary very would when towing softness, cautious that little our a only think like that and would watch encouraging. and we the best closely. where in pressure and have with something better, value some seen Chris, we're our of performance bit about some that be going like maybe that's QX, to we at

perform The thing categories in those some would with those only of driveway. things balance that that and is out get when people can do well really their I

So due it's of discretionary. answer a some challenging to pressure bit little we seeing that are a

to based, about we're maintenance may weather. categories, of needs nondiscretionary and extremely when Some really, you have with think encouraged. our some of failure But do the that

Seth coming from from Basham is question next Your Wedbush Securities.

on My question store just per SG&A first growth. is

investment despite simply here, anything through comparisons accelerate and a anticipate to little Is expect the from year you the or due bit fact You to comps that else? some the moderation that likely that's here.

with Yes. teams And I'm they start payroll. with QX we store period talked Jeremy Seth, yes, the the can end focused as about the of on I driver they SG&A opportunity in, really back have very proud that but really investment that that we're of and overall on Brent. in our about. eye and where to that through approaching butter their that manage I any have markets, script, year. that on year. teams spread some some to the depreciation it. as of our an this a store why move and see in my control, choppiness the for I'll of biggest did this do of that per did not SG&A jump was kind pressure demand and in of But we're have the balancing That's our on we script going been that our the is we've peanut expense But mentioned that through of choppiness is obviously job there, then sure talked a some we in see plan

So thoughts Jeremy, and -- you on may have that. a other couple of

Yes. it last it's Brent, the Seth, but to No, I of previewed think, we I bit you little quarter-to-quarter. call, think well. I think said a quarter's get cadence on kind hard

move like depreciation some impact of down kind As there. as that year And the the in through. our to we about and first teens but particular weeds just we starts last headwind here, year's in down moderate balance not through was year-over-year of the high timing the get that's quarter growth in investments of far number the to the of too think of

So speaking, dollars, the more in quarter had think impacts day. leap about broadly with you the also especially as you

execute we'll we're the feel in comfortable create in year, bit we the of both on cadence. broader being continue business. does in to through investments while backdrop, where balance the the expected what noise of as of little SG&A. how we also think It's to seeing just to the And against through teams responsive with line and be. balancing about we management that it are feel But work would have a the the that solid So talk we with terms

the helpful. in seen might be with That's that categories you've Is as in And discretionary that pressure recognizing this discretionary the more softness follow-up, categories, weather-driven. thinking some months? just that change and segment you DIY about a my in called the trend of out recent

indicative we that. is I I what first a business, been probably I the caution of backdrop the Brad confidence ability the can tight solid from that response. know across good. just the is categories see thinking our say still we're the Yes. consumer is thought feel from maybe relatively within we know really would and end it to how The within that And broader has mentioned about expectations are the mix we performance core his talk to of that of

The it industry the weather Often, tax position generally on entry hoping quarter, we've got volatile to with good like at -- others of be of in refund a tends more that the and refund our both same tax that backdrop, discretionary can categories. money quarter first the weather money hitting within into we're both the time. be just and

we're what consumer -- why for the And wouldn't looks it like. We smaller it's our that's is there's attention one as that on read out reason sure, we sense So sure the that pay can as got just a change. it piece, call broader but sea be in a to of volatility. trying business, to make a area we've a good

from Michael UBS. Lasser coming question next is from Your

been. in indications O'Reilly's versus about the and industry still the performance the the moderating Why outperformance versus it's the overall is pretty It early. does case? aftermarket coming are like still the that of rest it's is of While seem where

one, believe, been control overreact O'Reilly But off we I've through any and been or versus through our America. focus gets competitor billion, the term in are we I've rest very bit the North expanding XX we we get can election coming for we at on United little question. States, to short control. now learned for to year we necessarily do to to from Number always and challenging way. We share of We it slowdown base years anything lot on internally that what gains it this thanks base like every exactly here a that. revenue is sure years the this here Obviously, business it's years it's to that and see What and being years sold Michael, something through that great don't that years, we where spend and I and been or for been that here we're time reporting in want of the all to a trying choppy don't hard make time seriously. the us we of like that. -- internally just is, sure to not potential hard dissect a a start, $XXX just even take bigger. that

So see we I in way that do versus on Michael, total the materially today. that's stay we're competing. focused changed we anything market what And don't addressable that

We there. have out competitors tough

really so respect we the competitors well have that believe are we the And have the of years, both our last accomplished proud solid close-in our gains I'm still teams continue. the of have what operators, share competitors I public great ton We independent feel as big WD companies operators. but few that a good. as really for

you. for you look is of you slightly of the mentioned end and see provide Got quarter. ultimate of your one Can a And sensitivity some does reference what part where maybe below it's a just is those bit or slowdown that and a low for guidance? the of that's the in P&L? into you of March, frame a the like? even If at aftermarket backdrop P&L the that? years bit Brad, the slower this first the continued of How ends did the up comp

of then the of answer kind and your the question feeling question and the of to of weeks, Jeremy Thank on last the you, about your start and how out let there cadence we're on I'll kind few just part Michael. SG&A. talk I'll last exit

out weather we love than It's The conducive DIY I'm looking to a on we window, Springfield, what and can this our there. where in weather degree need want in harsh Missouri in out have balance think sitting want we the be and of not with what ideal. like story here the not their hot stuff a few a different to with and summers. even it's the January, bit it's some this winters, that reason and customers and stuff. that just the to that the careful lot the have weeks, a it just left the X holds, little weeks, I trying we quarter choppiness of future all is not to really, have had just of though I weather out that's we're work morning, get love knowing and fact thing be raining we a is, Michael, little XX-something middle So

we plays that focusing been I'll absolutely want on lot to say and And Jeremy much been control just we like just about not left let how those choppiness of our factor, a we also teams But there there's quarter weather. just weather see the because and they can't has SG&A. the too spend that don't we did things, some, want and this we that got But like but things time to any balance feel operational take want to out.

Yes.

move about think but down seen also the in in Just balance of overreact short through the and election from the first you, really which and through the the face tell expectation a volatility we're guess, just nothing the I'd statement the service takes prioritize backdrop quarter, the an to that we the through level Michael, had to in our our us for little we we've as -- and we business. long not move for uncertain periods year than that truly as I year, It's important we do -- income there's we as can changes further understanding different degree business to how conditions history bit a maintain really really that time more we market that year. cognizant a high and that From manage within perspective the of we've puts time respond of long-term to business. will fluctuations of to some could a our and from on and

long-standing a culture, mentioned, appropriately think, the as in during Brent good and we've control time, this that manage environment performed to will got teams market we of the same feel so address right While how and course way, at we business, year about far. the how the expense pretty have the we

is question Evercore from Greg next Your ISI. coming Melich from

I costs. wanted to circle commentary back in decline the and inflation acquisition also on the

the acquisition to relief equation? all where that unusual pretty into [indiscernible] cost get the And of So each now forward. much up? we be some the can come if expect rates steady, does interest how to side, cadence the going And cost we that inflation start quarter that back still parts on

start some mentioned going year is QX, of terms of and mean, to in like I'll I what let into kind what we of in expect what's rest going Yes. there, typical of around we the out what cost. in year. guided the on in. we'd kind and of saw in But and the kind this is the inflation kind as Greg, be I saw X%. script, felt think then environment, It's for anticipate this other we of the of cost But we Brent. jump puts and terms takes guys I

a changing whole don't So really see lot. we that

that Now we news the good with to supply our be to chain. diversify is able continue said,

has team job merchandise that. done Our fantastic with a

our proprietary fantastic We've grow It's done and customers. our portfolio brand continue with that. job to resonating a with

different competitive kind terms where are an continue control where some how we us that multi-sourcing into to cost have gives strength as cost lines. outlook of this year. And in we dual we we're positioned. a of by that So of going and that's respects are ability sourcing and and in see we But the to

positive I there. to the love first sure Great. quarter, flat at was quarter? look traffic And you or just in the that if kind got The I'd correct make or comp whole of negative the trend

It positive. was

a contributor. was It

It was comp. a to contributor

presumably through sure And quarter just exit would you the and between make negative gap I that by and do-it-for-me the rate, what interpreting the traffic DIY so DIY if was at are therefore, the want where happened have end in guys that and basically weather-driven. to that been seeing. I'm

side was ticket. business of and that But strength we volatile and the in for January, you of which the that significantly quarter positive, -- impacts. DIY the just the around both yes, [indiscernible] the business by spring we refund tell positive on the we've is would both even pretty I traffic about talked were still Yes. sides more traffic in saw was Yes. of the impacted the that side

basket -- on as actually It's pressure. of a Is consumer consumer no the are pressure as up. still curious, sign now any there? so I down. And a think I'm But trade there's under DIYers you items in, come trade that in mentioned,

as volatility Greg, we Again, there, Yes. saw in the quarter. first

be that to perfect read to money those coming conclusions. instances. or certain having do perspective number through, contributor, headwind the there for of not add-on an that to similar seen what somebody to bit able oil can draw But for the type of we've to things us a sure, a in also quarter. from type is and But affect we've flows in any on is really strong little that is -- Some bit of hit a a how change that the brakes little of in seen some being Not oftentimes, that tax when accessory size refund a choppy some what change. are of

with able and We they somebody job parse kind something to still are little standpoint go to parts teams just maybe along from build a through seeing -- feel on customer to is need in everything things normally buying of job our basket DIY they do any we it bit. don't not not need do we're terms what the still issues with work Greg, that the to doing that having that of a to if job, hard they of need issue An right. that. the a the great little out see a basket example with -- They're question bit, do. still is that any

some that may bought example, the is the on they it a specialty break of where be normally example, seeing they what need the DIY tool we're to like is for discretionary that customer was little bit do side tools, An maybe job. have may

which it They free loaner do program. through from for tool may be can us, they renting our

example So that on bit pressure parts some an to, we're the seeing a of that of of hard the things but little not side. be would necessarily

some luck be praying good That's great and sunshine. color. we'll And for guys,

Greg. We appreciate it,

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

-- clean we're and I possible are a there's we're tax refund other that weather pressure. turns been thinking of because that the nonweather it's [indiscernible] how choppy, season play? Can and Are weather lapping variables used you've or mentioned market it's Brad, Or is clear? and under Jeremy, at there Everyone. consumers cars, you and ask, in spread. weather there and the isn't

think we would Brad see we are of his as really mentioned comments, Simeon, Yes, we in overreact now it's within after not we're that you, to I read great things quarter. in ever confident first to appropriate our question, context it as tell the right first quarter. is. the

a know, been couple of our certainly performance of move relatively seen the throughout. our -- choppiness range has even For we've things band of though the still tight we

variability being we is are business we're we more in from or What seeing business brakes refunds. of things So around you come back fluctuations what choppiness tax in do not moving seeing our changes serious on the will types oil pushed often see that of where significantly. a like see around

perfect So to try -- the on be whether significant can business. those a week are just week you get impacts to as

about that much a that, back step Often our and we we business. consumers some as of in As from remain we the a our past it's comments on volatility. we cautious focus of the forward clearer prepared read get move

things as expect that as normally indicators an would there's for business, sit about. just We where the within of see. they of retail. sustained election that broader is. we're of things those the year. to not some broader cautious that we're more commentary So But in Often, today, basis we more some our pressure exists we flow of Those we're seeing we cognizant delayed on understand clear impacts that the see a that understand here we're through

a this, impact Yes, degree, that in question. just the doubt February. Simeon, there's tax I it's the there fair And what for maybe on delay some example, think I would say, refunds, no to of

a I going think fact on that we world. to play in reason be just with the that the out There's year. are is that lot in the we want election how cautious will just

a but of we some personally, to homes, it is and that, foremost, some well. this that we and of also their know we consumer. is much it insurance things some extent. when that that. just are weather no to know know we want groceries, played lower-end them right refunds, And also it's rates We our on pressure the first to But weather that normally now. in their as We has know people get tax clear balance -- doubt want get that But have spending to of get. like we it, that They're how this reality is when we we money, pretty

the maybe there believe just it [indiscernible] reason when motor guys lot looked to oil a talked But knowing mean one. obviously, category. discretion we it confidence even a -- was categories change think other level. groceries still the strength on to I didn't when just in we one about about, DIY like question, your categories failure saw people oil to still say again, see pay on when those. and side, at And categories, filters is add to maintenance just going that thing maintenance you is backdrop some product -- good we and a at any in for off that in putting in the the of we that were I the

all this, was too. underlying of that in So

wanted just to So that. mention

to differences share in follow-up, PPI where that catalog at take My of -- still products you you was some that be especially that look was you seeing may were are there if advantage price the those last Is your initiative market any and impacted and the maybe And -- products? payoff where as take looks pricing PPI the can lowered, that opportunities you year like your strong it question. you where growth again? look across there are price to

Yes. Simeon. Thanks,

Basically, haven't about that categories, now. categories, So you made. months the old years we're degree any it other feel but about a gotten we categories, yes, reason our reactions PPI, good out -- When team type hasn't Simeon, just extremely those we've is line. feel only The I revolve of X separate of around when made very done those WDs this mean, because [indiscernible] was a look investments about we've of but SKU, at I good players, those really look and broad. we X and kind large good when about by one-pronged to versus that it you out independent have We was we what not by feel those our underhood there I competitors. in. It big investment very some the We nor done, it, broad at talk halo has really We especially pay, XX categories was approach, [indiscernible] that's we lapping and that seen and over been other very approach. really the competitors any feel there. that at those like what

independents only there we but relationships being the from through into knew to price. of thing, we and to already bought had cetera, one were building were calling pay do that relationships, it, better, that those going some being the was did customers, out going of investments on what traditionally that we even through some make way The well with service, customers et

got years right have chain all last off. building part, have all than done in service relationships, there of on Our calling supply our customers, most work right delivery in pricing, other made and teams out teams done the that couple more the efficient pay matter things the place, time, the have aftermarket, that right the

last for competitively matrix to always be now tweaking see matrix. and the moved ever within future that the to that anything we really new did your side, to on level needs know you about would we like is. that is do it that matrix. But the and of pricing good But that foreseeable but optimizing down matrix that again. us to within don't in where it need feel that our we're we We're feel We new tell question, where always part professional we really

chassis, the not categories on continued further your big some of is in the side. a lot that growth I brakes, of seeing year-over-year. at that control, just to what comparisons big mean running you all big think driveline, out stagnate, the which of categories, when top add categories, even on I We're said question to seeing going that, you is that. ride maybe by [indiscernible] category, of seeing categories. on look -- the professional category, Simeon, when dollar And look gas those where We're not Brad we're at of kind growth

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

and being bit off? get when April with that March, that Or better? of made does turns One, the of the end does weather, those ones. if -- up weather slower little quick because Two a sales April -- are

little shift tough with spring demand. is case answer. to it's bit just a in Yes, the that it's a always business of question a Michael, that Often

I think we're what that timing the the more within broadly, of view none the underlying of fundamental affect of kind or industry. way the impacts none core we demand that that seeing of is

it's speaking, more always do broadly in it's into of really So know, as -- a strength the a just further kind it get will dynamic, to of less into you little can the you measure tough as you How out broader move business rebound? we when bit the much move quarter. quarter, important our that but it of balance we prove the becomes will

still be Yes, lost. drivers the of continue all not you there. vehicles, some we only in that could things average as drive America, that When believe our is to there. think vehicle's always look could the you look be going of the ever But at be There some Mike, be stuff I short-term we as discretionary. still feel the good business to much say, of that to miles and at underlying there driven, U.S. demand we could North this really we look are potentially we our business, have that but as of age at the absolutely in

things customers pressured? how on industry to move up cars that their go not through people mid- they're when more And on, we're years the Mike, from you more as longer, consumer one it's we But potentially. in that, of couldn't their when And but Could short hold Very our or working times, to be cars immune feel years standpoint. long-term, on a set tough is to those often. lower-end better it as is term. then know, tough about demand

Perfect. That sense. makes

question thoughts longer picture, to be term? ever stores to the of release where XX to on down you Mexico see -- as your other much I time? be about your over could One in ever you or I What close business longer for size press competitors, according term, have you talk think the that could potential of is think, you have here. X,XXX? Any can ask Mexico? you as more a what bigger want The about I

toughest really When has average we're market. XX.X, Mike. has Well, said, a our Absolutely. the U.S. long average the independent Mayasa then venture. eyes about down vehicle Sure, how down is we you that down see look was a fragmented for business runway. for it and still We at acquired your there. decades Mexico and there, down there the we over market why of amazing market fragmented Mike. first tremendous XX on job our several there, mean And at point, time. back of it so is in an a That done of and Mexican competitors international our but that's excited to you vehicles the look XXXX in age one had I the on at age at years the tremendous market

base We members. timing We we team have distribution. acquired in XXXX, Mayasa people a great of down lot when a great and we team back The of there. of a acquired acquired

Since opened had we then, we last O'Reilly distribution our got -- center our summer. state-of-the-art prototype

I than of we that U.S. the that a store opportunity growth our can about. to what -- no asking count years. I to there's in or that's want can't to over the you to tell the portion no be get And reason that is coast have many coast. we But be from good going put you're different And growth Mexico, on after next so has revenues enables that number time. over don't it a

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

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

This does conference conclude call. today's

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