O’Reilly Automotive, Inc. ORLY reported first-quarter 2026 adjusted earnings per share (EPS) of 72 cents, which beat the Zacks Consensus Estimate of 69 cents by 4.18%. The bottom line increased from 62 cents in the prior-year quarter.
The automotive parts retailer registered quarterly revenues of $4.56 billion, which surpassed the Zacks Consensus Estimate of $4.47 billion by 2.1%. The top line also rose 10.2% year over year.
The quarter was driven by strong demand, with comparable store sales rising 8.1%. Growth in both the professional and DIY segments, along with careful cost control, supported the overall performance. The company opened 59 stores in the United States, Mexico and Canada in the first quarter. The total store count was 6,644 as of March 31, 2026.
O'Reilly Automotive, Inc. Price, Consensus and EPS Surprise
O'Reilly Automotive, Inc. price-consensus-eps-surprise-chart | O'Reilly Automotive, Inc. Quote
ORLY’s Sales Mix Highlights Professional Momentum
A key feature of the quarter was the continued weight of the professional service provider channel. Sales to professional customers were $2.29 billion, up from $2 billion a year ago, reflecting meaningful growth in the company’s higher-frequency commercial business.
Do-it-yourself demand also contributed, with DIY sales of $2.19 billion versus $2.05 billion in the prior-year quarter. Other sales and adjustments were $79.6 million compared with $86.5 million last year, leaving the mix largely driven by the two core customer groups.
O’Reilly Expands Profit Dollars as Sales Scale
O’Reilly translated the higher sales base into improved profit dollars. Gross profit increased to $2.35 billion, and gross margin held firm at 51.5% of sales versus 51.3% a year ago, indicating pricing and sourcing discipline despite a rising cost environment.
Expense growth remained controlled relative to sales. Selling, general and administrative costs rose to $1.51 billion, but declined to 33% of sales from 33.4% last year. Operating income climbed to $841.6 million, with operating margin improving to 18.5% from 17.9%, underscoring a focus on productivity and prudent expense management.
ORLY Converts Earnings Into Cash and Share Reduction
Cash generation was a standout. Net cash provided by operating activities was $1.03 billion in the quarter, up from $755.1 million in the year-ago period, supported by higher earnings and favorable working-capital movements.
This strong cash generation supported an aggressive capital return program. Capital expenditures were $244.4 million, and free cash flow totaled $785.1 million. ORLY repurchased 10 million shares for $923 million at an average price of $92.45 in the first quarter. From the end of the first quarter until April 29, 2026, it bought an additional 3.6 million shares for $338 million at an average price of $92.83.
O’Reilly’s Balance Sheet Reflects Inventory Investment
As of March 31, 2026, O’Reilly’s cash and cash equivalents totaled $252.6 million, up from $191.2 million a year earlier. Inventory rose to $5.81 billion from $5.17 billion, reflecting a larger store base and the need to support high service levels across both customer segments.
On the funding side, as of March 31, 2026, long-term debt rose to $6.2 billion from $5.65 billion a year ago. Accounts payable increased to $7.24 billion from $6.54 billion, mainly reflecting higher inventory levels. Overall, total assets grew to $16.94 billion from $15.29 billion in the same period last year.
ORLY Lifts 2026 Outlook Across Key Operating Targets
The company maintained its full-year outlook, with total revenues expected between $18.7 billion and $19 billion. Gross margin is projected in the range of 51.5-52%. The effective tax rate is expected to be 22.6%.
It continues to expect 225-235 new store openings and comparable store sales growth of 3-5%. Cash flow guidance remains unchanged, with operating cash flow of $3.1-$3.5 billion, capital spending of $1.3-$1.4 billion, and free cash flow of $1.8-$2.1 billion.
The company now expects operating margin to be in the range of 19.3-19.8%, up slightly from the previous outlook of 19.2-19.7%. Diluted earnings per share are projected between $3.15 and $3.25 compared with the earlier guidance of $3.10-$3.20.
ORLY currently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Key Releases From Auto Space
Autoliv, Inc. ALV reported first-quarter 2026 results on April 17. It posted adjusted earnings of $2.05 per share, which declined 4.7% year over year but surpassed the Zacks Consensus Estimate of $1.77 by 15.8%. Net sales were $2.75 billion, up 6.8% from the year-ago quarter and above the Zacks Consensus Estimate of $2.63 billion by 4.52%.
Autoliv ended the quarter with cash and cash equivalents of $342 million compared with $322 million a year earlier. Long-term debt was $1.7 billion compared with $1.56 billion in the year- ago period. Shareholder returns continued through dividends. Autoliv paid a cash dividend of 87 cents per share in the quarter, with total dividend payments of $65 million.
Genuine Parts Company GPC reported its first-quarter 2026 results on April 21. It posted adjusted earnings of $1.77 per share, which missed the Zacks Consensus Estimate of $1.81 by 1.94%. The bottom line improved 1.1% from the year-ago quarter’s adjusted earnings of $1.75 per share. The company posted revenues of $6.27 billion, which beat the Zacks Consensus Estimate of $6.17 billion by 1.5% and increased 6.8% year over year. The performance was driven by solid sales growth across business segments and a 20-basis-point improvement in gross margin to 37.3%.
GPC’s total liquidity was $1.3 billion as of March 31, 2026, including $500 million in cash and $838 million of revolver capacity. During the quarter, GPC invested $98 million in capex and $14 million in acquisitions while returning $142 million to shareholders via dividends. For 2026, the company targets $450-$500 million in capex and $300-$350 million in M&A, with approximately 7.5 million shares remaining under its repurchase authorization.
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