O'Reilly Lifts 2026 Sales And Margin Targets As Professional Business Grows At A Double-Digit Pace
The auto parts chain posted third-quarter sales of $5.12 billion and credited a $39 million tariff refund for part of its 14% per-share earnings gain.
O'Reilly Automotive, the auto parts retailer, raised its full-year 2026 targets for same-store sales and profit margins after third-quarter sales rose 9% to $5.12 billion, the company said in an 8-K filed Wednesday. Diluted earnings per share climbed 14% to $0.97, helped by a $39 million benefit from tariff refunds and a smaller share count.
Professional customers lead the quarter
Sales at U.S. stores open at least a year rose 7.2% in the third quarter, on top of 5.6% a year earlier. CEO Brad Beckham said that produced a two-year stack of 12.8%, driven by share gains, with "double-digit growth in our professional business and mid-single digit growth in DIY."
Sales to professional service customers reached $2.60 billion, against $2.31 billion a year earlier, while do-it-yourself sales were $2.45 billion, up from $2.30 billion. Gross profit rose 10% to $2.68 billion, or 52.4% of sales, from 51.9%. Operating income rose 13% to $1.10 billion, or 21.4% of sales.
Net income rose 8% to $786 million, from $726 million. Per-share earnings grew faster because diluted shares fell to 812 million from 853 million.
Guidance goes up, with refunds baked in
Beckham said the higher full-year outlook includes the tariff refund benefit and the company's fourth-quarter margin expectations. O'Reilly now targets comparable sales growth of 5.5% to 6.5%, gross margin of 51.6% to 52.1% and operating margin of 19.5% to 20.0%.
The company also guided to revenue of $19.0 billion to $19.3 billion and diluted earnings of $3.25 to $3.35 per share. It expects 225 to 235 net new stores in 2026, after opening 173 net so far this year.
A $1.03 billion buyback quarter
O'Reilly, which sells auto parts, tools and accessories to do-it-yourself drivers and professional repair shops, repurchased 11.8 million shares in the third quarter at an average $87.34, for $1.03 billion. Since quarter-end it has bought another 2.3 million shares for $204 million, and about $727 million remains under its authorization.
Long-term debt stood at $7.71 billion on September 30, up from $5.92 billion a year earlier, and the company had a shareholders' deficit of $2.09 billion. For the first nine months, operating cash flow was $2.6 billion.
Management will discuss the results on a conference call Thursday at 10:00 a.m. Central Time.
Sources
- 8-K Filing — O REILLY AUTOMOTIVE INC (ORLY) — SEC EDGAR
- Exhibit orly-ex99d1.htm — O REILLY AUTOMOTIVE INC 8-K exhibit — SEC EDGAR
- AutoZone and O'Reilly better positioned to capitalize on do-it-for-me trends—BofA Securities (ORLY:NASDAQ) | Seeking Alpha — seekingalpha.com
- Does Earnings Preview Change The Bull Case For O'Reilly Stock (ORLY)? — Yahoo Finance
- If You Invested $1000 in O'Reilly Automotive a Decade Ago, This is How Much It'd Be Worth Now — Yahoo Finance
- O’Reilly Automotive, Inc. Reports Third Quarter 2026 — globenewswire.com
