O'really, auto parts chain in high gear

O'Reilly Automotive reported another record-breaking quarter of financial results as the retailer revs up plans to expand its distribution network and store footprint.

The auto parts retailer reported that sales for the second quarter ended June 30 increased $188 million, or 10%, to $2.04 billion from $1.85 billion for the same period one year ago. Same store sales increased 7.2%.

This year, O’Reilly plans to add a net 205 stores, compared with 200 stores in 2014. In the latest period, it opened 34 stores.

Greg Henslee, O'Reilly's president and CEO, commented, "We are very pleased to report another record breaking quarter. Our strong results are highlighted by an industry-leading 7.2% increase in comparable store sales, which mirrors the strong 7.2% increase we generated in the first quarter of the year. Our Team's focus on providing consistently high levels of service to our customers continues to drive our strong top-line performance, and I would like to thank each of them for their contributions to our ongoing success."

Gross profit for the second quarter increased to $1.06 billion (or 52% of sales) from $951 million (or 51.5% of sales) for the same period one year ago, representing an increase of 11%.Net income for the second quarter ended June 30, increased $28 million, or 14%, to $234 million (or 11.5% of sales) from $206 million (or 11.1% of sales) for the same period one year ago. Diluted earnings per common share for the second quarter increased 20% to $2.29 on 102 million shares versus $1.91 on 108 million shares for the same period one year ago.

Henslee added: "Team O'Reilly's unwavering commitment to profitable, sustainable growth translated our very strong sales results into a record second quarter operating margin of 19.0% and drove a 20% increase in second quarter diluted earnings per share to $2.29, representing our 26th consecutive quarter of dilutive earnings per share growth greater than 15%. We achieved these record breaking results despite recording a $19 million charge during the quarter as the result of an adverse verdict and associated costs of litigation arising from a dispute with a former service provider. This unusual charge, which is unrelated to our second quarter operations, decreased our second quarter operating margin by 93 basis points."

The company also said it now expects total revenue for the year ending in December to be in the range of $7.75 billion to $7.85 billion, up from its previous projection of $7.6 billion to $7.8 billion. O’Reilly adjusted its full-year guidance to $8.59 to $8.69 a share, up from its previous projection of $8.42 to $8.52 per share.

As of June 30, the company operated 4,465 stores in 43 states.