ORLY - O'Reilly Automotive Inc. (ORLY) Q1 2024 Earnings Call Transcript

2024-04-25 13:45:30 ET

O'Reilly Automotive, Inc. (ORLY)

Q1 2024 Earnings Conference Call

April 25, 2024 11:00 AM ET

Company Participants

Jeremy Fletcher – Executive Vice President and Chief Financial Officer

Brad Beckham – Chief Executive Officer

Brent Kirby – President

Conference Call Participants

Chris Horvers – JPMorgan

Seth Basham – Wedbush Securities

Michael Lasser – UBS

Greg Melich – Evercore ISI

Simeon Gutman – Morgan Stanley

Mike Baker – D.A. Davidson

Presentation

Operator

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. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session. [Operator Instructions]

I will now turn the call over to Jeremy Fletcher. Mr. Fletcher, you may begin.

Jeremy Fletcher

Thank you, Matthew. Good morning, everyone, and thank you for joining us. During today's conference call, we will discuss our first quarter 2024 results and our outlook for the remainder of the year. After our prepared comments, we will host a question-and-answer period. Before we begin this morning, I would like to remind everyone that our comments today contain forward-looking statements, and we intend to be covered by and we claim the protection under the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You can identify these statements by forward-looking words such as estimate, may, could, will, believe, expect, would, consider, should, anticipate, project, plan, intend or similar words. The company's actual results could differ materially from any forward-looking statements due to several important factors described in the company's latest annual report on Form 10-K for the year ended December 31, 2023, and other recent SEC filings. The company assumes no obligation to update any forward-looking statements made during this call.

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

Brad Beckham

Thanks Jeremy. Good morning, everyone, and welcome to the O'Reilly Auto Parts first quarter conference call. Participating on the call with me this morning are Brent Kirby, our President; and Jeremy Fletcher, our Chief Financial Officer; Greg Henslee, our Executive Chairman; and David O'Reilly, our Executive Vice Chairman, are also present on the call.

I'll begin our call today by thanking our over 90,000 team members for their relentless dedication to providing the knowledge and expertise our customers have come to expect and rely on from the professional parts people at O'Reilly Auto Parts. We are truly in a people business where relationships and customer service are paramount, and Team O'Reilly continues to demonstrate their ability to outhustle, out service and, in turn, outperform our competition. We finished the first quarter with a 3.4% comparable store sales growth on top of a 10.8% in the prior year. Our continued strong top line sales results are dependent on and driven by consistent daily execution across all of our 6,200-plus stores in the U.S., Mexico, Puerto Rico and now Canada.

Driving continued growth in our store volumes does not get easier as our company gets bigger, especially as we build on the significant market share gains we have captured over the last few years. Our single greatest challenge as a company and the driving factor to our success is our ability to build and develop teams and leaders who will be the standard bearers of our culture far into the future. Our leaders across our stores, distribution centers and corporate offices are relentlessly dedicated to perpetuating our culture and investing in our people. Thank you, Team O'Reilly for your commitment to our customers, our company and your fellow team members.

Now I'd like to start our discussion of the first quarter by walking through the details of our sales performance. Starting with comparable store sales, our growth of 3.4% in the quarter was within our full year guidance range, but slightly below our expectations as we saw some volatility I will discuss in more detail in a moment. We drove solid performance and positive comps in both our DIY and professional businesses in the quarter with the mid-single-digit comps in professional being the larger driver of our results, consistent with our expectation and ongoing trends. Increases in average ticket values and ticket counts were both contributors to comp growth on both sides of our business with inflation at about 1%, in line with our full year expectations....

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