O'Reilly Automotive, Inc. Q1 FY2026 earnings call

• Thanked over 93,000 team members for delivering strong results in first quarter. - Discussed comparable store sales performance, noting 8.1% growth surpassing expectations, with professional and DIY sides contributing. - Talked about the volatile nature of first quarter due to winter weather, tax refunds, etc. - Highlighted broad-based strength across categories. - Discussed gross margin, SG&A, inventory, store growth, and capital investments. - Mentioned private label penetration climbing to over 50% of total revenue. - Spoke about the team's execution and focus on profitable growth.

Comparable store sales grew 8.1%, with professional business being the larger contributor to total comp results, having posted double-digit comps for the third straight quarter. DIY side generated mid single-digit comp. Total sales grew 10.2% in first quarter. First quarter gross margin was 51.5%, a 19 basis point increase from first quarter 2025. SG&A had 34 basis points of leverage. Inventory per store finished first quarter at $874,000, up 8.5% from last year and 0.5% from end of year. Turned 1.6 times. Opened 59 net new stores across U.S., Mexico, and Canada in first quarter.

• Maintained full-year comparable store sales guidance range of 3 to 5%. - Increased full-year diluted earnings per share guidance to $3.15 to $3.25. - Maintained full-year gross margin guidance range of 51.5 to 52%. - Raised full-year operating profit guidance range by 10 basis points to 19.3 to 19.8%. - Expected free cash flow guidance remains unchanged at $1.8 to $2.1 billion for 2026. - Expect AP to inventory ratio to moderate to approximately 122% by end of 2026.

• Rapid increases in fuel costs have potential to impact consumer spending. - Conflict in Iran and resulting constraints on global oil supply could be disruptive to certain categories and impact supply chain costs. - Potential impact of tariff environment changes, though net tariff exposure has remained relatively stable. - Uncertain stance by consumers could affect future performance.

• Question from Simeon Gutman on market share, response about team execution and broad-based share gains. - Question from Greg Mellick on like-for-like inflation and input costs, response about unchanged inflation outlook and approach. - Question from Christopher Horvers on oil price shock and passing on costs, response about product cost and operating cost considerations. - Question from Mike Baker on costs and impact of tax refunds, response about SG&A growth and pent-up demand. - Question from Brett Jordan on private label and motor oil, response about private label strategy and motor oil supply chain. - Question from Scott Ciccarelli on SG&A and labor, response about wage rates and productivity. - Question from Max Ricklenko on gas prices and competitive environment, response about gas price impact and competitive landscape