O'Reilly Automotive — Third Quarter 2026 Earnings Summary

Financial Performance:

• Third quarter revenue increased 9% year-over-year to $5.12 billion from $4.71 billion.
• Year-to-date revenue increased 9% to $14.57 billion from $13.37 billion.
• Third quarter gross profit increased 10% to $2.68 billion (52.4% of sales) from $2.44 billion (51.9% of sales).
• Year-to-date gross profit increased 10% to $7.55 billion (51.8% of sales) from $6.89 billion (51.5% of sales).
• Third quarter SG&A expenses increased 8% to $1.58 billion (30.9% of sales) from $1.46 billion (31.1% of sales).
• Year-to-date SG&A expenses increased 9% to $4.62 billion (31.7% of sales) from $4.26 billion (31.8% of sales).
• Third quarter operating income increased 13% to $1.10 billion (21.4% of sales) from $976 million (20.7% of sales).
• Year-to-date operating income increased 11% to $2.93 billion (20.1% of sales) from $2.63 billion (19.7% of sales).
• Third quarter net income increased 8% to $786 million (15.3% of sales) from $726 million (15.4% of sales).
• Year-to-date net income increased 9% to $2.10 billion (14.4% of sales) from $1.93 billion (14.5% of sales).
• Third quarter diluted earnings per share increased 14% to $0.97 from $0.85.
• Year-to-date diluted earnings per share increased 13% to $2.54 from $2.25.
• Net cash provided by operating activities year-to-date was $2.6 billion.
• Adjusted debt to EBITDAR ratio for the twelve months ended September 30, 2026, was 2.26, up from 2.04 in the prior year period.
• Inventory turnover remained flat at 1.6 for the twelve months ended September 30, 2026, compared to 1.6 in the prior year.
• Average inventory per store increased to $912 thousand from $858 thousand.
• Accounts payable to inventory ratio decreased to 121.8% from 125.9%.

Guidance and Future Outlook:

• Raised full-year 2026 comparable store sales guidance to a range of 5.5% to 6.5%.
• Raised full-year 2026 gross margin guidance to a range of 51.6% to 52.1%.
• Raised full-year 2026 operating profit guidance to a range of 19.5% to 20.0%.
• Updated full-year 2026 total revenue guidance to a range of $19.0 billion to $19.3 billion.
• Updated full-year 2026 diluted earnings per share guidance to a range of $3.25 to $3.35.
• Updated full-year 2026 net cash provided by operating activities guidance to a range of $3.2 billion to $3.6 billion.
• Updated full-year 2026 free cash flow guidance to a range of $1.9 billion to $2.2 billion.
• Updated full-year 2026 capital expenditures guidance to a range of $1.3 billion to $1.4 billion.
• Updated full-year 2026 effective income tax rate guidance to 22.7%.
• On track to reach 225 to 235 net new store openings in 2026, having opened 173 net new stores year-to-date.

Business Segments and Product Lines:

• Comparable store sales increased 7.2% in the third quarter, driven by double-digit growth in the professional business and mid-single digit growth in the DIY business.
• Two-year comparable store sales stack increased 12.8%.
• Third quarter comparable store sales increased 7.1% for the nine months ended September 30, 2026.
• Sales to professional service provider customers totaled $2.60 billion in the third quarter and $7.36 billion year-to-date.
• Sales to do-it-yourself customers totaled $2.45 billion in the third quarter and $6.98 billion year-to-date.
• Company operated 6,758 stores across 48 U.S. states, Puerto Rico, Mexico, and Canada as of September 30, 2026.
• Store count increased by 220 net stores year-to-date (148 domestic, 22 Mexico, 3 Canada).

Market and Competitive Landscape:

• Growth driven by share gains on both the professional and DIY sides of the business.
• Company operates as a leading retailer in the automotive aftermarket industry.

Risks and Challenges:

• Forward-looking statements are subject to risks including the general economy, inflation, consumer debt levels, product demand, competition, weather, trade disputes, tariffs, supply chain disruptions, business interruptions, brand reputation risks, international market challenges, stock price volatility, increased debt levels, credit ratings, IT system failures, cyber-attacks, employee hiring and retention, and governmental regulations.

Management Commentary and Tone:

• CEO Brad Beckham thanked team members for their commitment and noted the strong third quarter comparable store sales increase of 7.2%.
• Management attributed the 14% increase in diluted EPS to top-line growth and a $39 million benefit from tariff refunds received during the third quarter.
• Management expressed being "extremely pleased" with the ability to deliver industry-leading results.
• Management stated they are "very pleased with our new store performance and confident in the strength of the fundamental demand drivers in our business."

Other Key Points:

• Third quarter net cash provided by operating activities was $2.6 billion year-to-date.
• During the third quarter, the Company repurchased 11.8 million shares for $1.03 billion at an average price of $87.34.
• Year-to-date, the Company repurchased 38.5 million shares for $3.47 billion at an average price of $89.99.
• Excise tax on share repurchases for the nine months ended September 30, 2026, was $34.7 million.
• Subsequent to the quarter, the Company repurchased an additional 2.3 million shares for $204 million.
• Total shares repurchased since the program's inception in January 2011 is 1.50 billion shares for a total aggregate investment of $31.02 billion.
• Approximately $727 million remained under the current share repurchase authorization as of the release date.
• Third quarter operating income included a $39 million benefit from tariff refunds.
• Conference call scheduled for October 29, 2026, at 10:00 a.m. Central Time.