O’Reilly Automotive reported record third-quarter revenue and earnings, with comparable-store sales up 7.2% and sales growth across both its professional and do-it-yourself businesses. The auto-parts retailer also raised its full-year sales and margin outlook, while continuing a large share-buyback program.
A $39 million benefit from tariff refunds contributed to the quarter’s results. O’Reilly said it is on track to open 225 to 235 net new stores in 2026.
Key details
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Revenue and earnings grew: Third-quarter sales rose 9% to $5.12 billion. Net income increased 8% to $786 million, while diluted earnings per share rose 14% to $0.97. The average diluted share count fell to 812 million from 853 million a year earlier, helping lift per-share earnings faster than net income.
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Comparable sales remained strong: Comparable-store sales increased 7.2%, following 5.6% growth in the year-earlier quarter—a two-year increase of 12.8%. O’Reilly attributed growth to gains in both parts of its business: double-digit growth in sales to professional customers and mid-single-digit growth in DIY.
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Operating performance improved: Gross profit grew 10% to $2.68 billion, and gross margin rose to 52.4% of sales from 51.9%. Operating income increased 13% to $1.10 billion; operating margin expanded to 21.4% from 20.7%. Selling, general and administrative expenses rose 8%, slower than sales growth, and declined slightly as a share of revenue.
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The first nine months also showed growth: Sales rose 9% to $14.57 billion, and comparable-store sales increased 7.1%, on top of 4.5% growth in the same period last year. Net income reached $2.10 billion, up 9%, while diluted earnings per share increased 13% to $2.54. Operating margin was 20.1%, compared with 19.7% a year earlier.
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Full-year guidance was raised: O’Reilly now expects 2026 comparable-store sales growth of 5.5% to 6.5%, gross margin of 51.6% to 52.1%, and operating profit of 19.5% to 20.0%. The company said the updated outlook reflects the strong third quarter, including tariff refunds, and its margin expectations for the fourth quarter.
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Store expansion continues: O’Reilly had opened 173 net new stores in North America through the first nine months of the year. It remains on track to open 225 to 235 net new stores in 2026.
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Buybacks continued at scale: The company repurchased 11.8 million shares for $1.03 billion in the third quarter. For the first nine months, it bought back 38.5 million shares for $3.47 billion. It repurchased another 2.3 million shares for $204 million after quarter-end through the date of the announcement. About $727 million remained under its current authorization.
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Operating cash flow was substantial: O’Reilly reported $2.6 billion of cash provided by operating activities year to date.
Plain-English implications
O’Reilly’s improved outlook combines strong comparable-store sales with higher expected margins, though the company noted that tariff refunds helped the third-quarter result. Its buybacks have materially reduced the diluted share count, supporting per-share earnings growth. Store openings remain a significant part of its expansion plan.