O’Reilly Automotive (ORLY) Q4 2023 earnings summary

Executive summary

• Record FY2023 revenue and operating income; comparable-store sales grew for the 31st consecutive year, up 7.9% for the year.

• Q4 comparable-store sales rose 3.4%, following 9.0% growth in Q4 2022; diluted EPS increased 11% to $9.26.

Financial highlights

• Q4 sales rose 5% YoY to $3.83B; gross profit increased 6% to $1.97B, or 51.3% of sales.

• Q4 operating income increased 5% to $719M, or 18.8% of sales; net income rose 5% to $553M, or 14.4% of sales.

• FY2023 sales increased 10% to $15.81B; gross profit rose 10% to $8.10B, or 51.3% of sales.

• FY2023 operating income grew 8% to $3.19B; net income increased 8% to $2.35B, while diluted EPS rose 15% to $38.47.

Outlook and guidance

• FY2024 guidance: 190–200 net new stores; comparable-store sales growth of 3.0%–5.0%; revenue of $16.8B–$17.1B.

• Guidance calls for gross margin of 51.0%–51.5%, operating margin of 19.7%–20.2%, and an effective tax rate of 22.6%.

• FY2024 diluted EPS guidance is $41.05–$41.55; operating cash flow $2.7B–$3.1B; capital expenditures $900M–$1.0B; free cash flow $1.8B–$2.1B.

• Canadian acquisition estimates are included in guidance, with expected 25 bps gross-margin dilution and 15 bps operating-margin dilution for FY2024.