686091109 Filings — O Reilly Automotive Inc - FilingSpy
686091109
O Reilly Automotive Inc
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One of North America's largest auto parts retailers, O'Reilly Auto Parts runs thousands of stores serving both do-it-yourself car owners and professional mechanics, offering everything from batteries and brakes to engine parts. It was founded in 1957 in Springfield, Missouri, when Charles F. O'Reilly and his son "Chub" resigned from their employer rather than accept a forced retirement and a move to Kansas City, betting on themselves instead. Today its "Professional Parts People" staff even read check-engine light codes and test batteries for free right in the store.
Comparable store sales growth decelerated to 6.0% in Q2 2026 from 8.1% in Q1, while revenue rose 8.1% to $4.89B.
growth slowed from the prior quarter's two-year high. rose 8.1% to $4.89 billion and increased 10.3% to $0.86, driven by higher average ticket values and professional transaction counts, while held flat at 51.4%. The company issued $850 million in , pushing past $7 billion as it continues to fund share repurchases.
Key takeaways
rose 6.0% in Q2 2026, decelerating from the 8.1% pace in Q1 2026 but still above the 4.1% recorded in Q2 2025, with higher average ticket values and professional transaction counts partially offset by lower DIY transactions.
rose 8.1% to $4.89 billion, and was flat at 51.4%, as better acquisition costs and distribution efficiencies were offset by a continued mix shift toward lower-margin professional sales.
Section summaries
Management's Discussion and Analysis
Q2 2026 sales rose 8% to $4.89B on 6.0% comparable store sales growth, with gross margin flat at 51.4%.
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increased 6.0% in Q2 and 7.0% in H1 2026, driven by higher average ticket values and professional transaction counts, partially offset by lower DIY transactions.
as a percentage of sales rose 10 to 31.3%, driven by inflationary cost pressures and higher medical and casualty insurance costs, partially offset by from the gain.
rose 10.3% to $0.86, aided by a 3.4% reduction in the diluted share count from share repurchases, while increased 7.0% to $715.1 million.
for the first half of 2026 reached $1.49 billion, up 53.2% from the prior year, driven by higher and lower .
rose 20.4% to $7.01 billion after the company issued $850 million in and redeemed $500 million, while remained negative at -$1.84 billion.
What changed
The 6.0% growth in Q2 2026 decelerated from the 8.1% pace in Q1 2026, which was flagged as the fastest quarterly pace in two years, but remained above the 4.1% recorded in Q2 2025.
held at 51.4% in Q2 2026, flat and down 10 from Q1 2026's 51.5%, as the professional sales mix shift continued to offset acquisition cost and distribution efficiency gains, a dynamic flagged in prior quarters.
as a percent of sales rose to 31.3% in Q2 2026 from 31.2% a year earlier, moving back toward the 32.1% full-year 2025 rate after Q1 2026's 33.0% level, as inflationary medical and insurance costs persisted.
rose to $7.01 billion from $6.20 billion at the end of Q1 2026, driven by an $850 million senior note issuance, accelerating the negative equity trajectory that had been flagged as a key watch item.
What to watch
Q3 2026 to see if the 6.0% Q2 pace stabilizes or continues to decelerate from the 8.1% Q1 peak as the company progresses toward 225–235 net new store openings.
Q3 2026 to see if the 51.4% level holds as professional mix pressure and lower-margin sales persist against acquisition cost benefits.
Full-year 2026 as a percent of sales to see if the 31.3% Q2 rate eases or stays above the 32.1% FY2025 level as inflationary cost pressures continue.
and negative equity trajectory as the $2.4 billion remaining authorization continues against $7.01 billion in debt following the $850 million senior note issuance.
margin remained at 51.4% in Q2 and improved 10 to 51.5% in H1, benefiting from better acquisition costs and distribution efficiencies despite a mix shift toward lower-margin professional sales.
SG&A as a percentage of sales rose 10 to 31.3% in Q2 due to inflationary cost pressures and higher medical/casualty insurance costs, partially offset by on strong .
grew 10% to $0.86 in Q2, aided by a 3.4% reduction in diluted share count from share repurchases.
surged 63% to $1.48B in H1 2026, driven by higher and lower , while the company issued $850M in and redeemed $500M.
The company plans 225 to 235 net new store openings in 2026 and remains in compliance with all debt covenants, with a of 2.07x.
Quantitative and Qualitative Disclosures About Market Risk
Market risks center on foreign-currency translation of Mexican and Canadian subsidiaries and variable-rate commercial paper borrowings.
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As of June 30, 2026, the company had no borrowings under its , limiting variable-rate exposure from that source.
Outstanding commercial paper borrowings totaled $1.3 billion at a weighted-average rate of 4.065%; a 10% rate increase would reduce annual pre-tax earnings and cash flows by $5.5 million.
Cash and cash equivalents of $262.2 million are invested in short-term instruments with maturities of 90 days or less, and the company believes interest rate exposure on these balances is minimal.
Net asset exposure in Mexican subsidiaries was $594.7 million; a 10% adverse currency move would cause an approximate $54.1 million loss recorded in other comprehensive income, not earnings.
Net asset exposure in Canadian subsidiaries was $189.1 million; a 10% adverse currency move would cause an approximate $17.2 million loss recorded in other comprehensive income.
A 10% change in average foreign exchange rates would not have materially impacted operating results, and overall market risks have not materially changed since the 2025 Form 10-K.
The Company is currently involved in litigation incidental to the ordinary conduct of the Company’s business. Based on existing facts and historical patterns, the Company accrues for litigation losses in instances where an adverse outcome is probable and the Company is able to…
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The Company is currently involved in litigation incidental to the ordinary conduct of the Company’s business. Based on existing facts and historical patterns, the Company accrues for litigation losses in instances where an adverse outcome is probable and the Company is able to reasonably estimate the probable loss in accordance with Accounting Standard Codification 450-20. The Company also accrues for an estimate of legal costs to be incurred for litigation matters. Although the Company cannot ascertain the amount of liability that it may incur from legal matters, it does not currently believe that, in the aggregate, these matters, taking into account applicable insurance and accruals, will have a material adverse effect on its consolidated financial position, results of operations or cash flows in a particular quarter or annual period.
As of June 30, 2026, there have been no material changes to the risk factors set forth in our annual report on Form 10-K for the year ended December 31, 2025.
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As of June 30, 2026, there have been no material changes to the risk factors set forth in our annual report on Form 10-K for the year ended December 31, 2025.