O’Reilly Automotive Inc. (ORLY) posted a 19.3% increase in earnings to $1.36 per share in the first quarter of 2013 compared with $1.14 in the year-ago quarter, exceeding the Zacks Consensus Estimate by a penny. Net income improved 5% to $154 million (9.7% of sales) from $147 million (9.6%) in the first quarter of 2012.
Revenues during the quarter scaled up 4% to $1.59 billion from $1.53 billion in the same period a year ago. Comparable store sales increased 1.9% compared with 6.1% in the first quarter of 2012 (both adjusted for the impact of Leap Day in 2012-quarter).
Gross profit ascended 5% to $799 million (50.4% of sales) from $762 million (49.8%) a year ago. Selling, general and administrative expenses rose 6% to $548 million (34.5%) from $514 million (33.6%) in the 2012-quarter. Operating income for the quarter increased marginally by 1% to $251 million (15.8%) from $248 million (16.2%) for the same period one year ago.
During the quarter, O’Reilly opened 66 stores and closed 1 store, bringing its total store count to 4,041 in 42 states as of Mar 31, 2013. Sales per weighted average-store decreased to $391 from $400 a year ago.
During the quarter, O’Reilly repurchased 2.5 million shares of its common stock for $228 million, reflecting an average price of $92.35. Subsequent to the end of the first quarter and through the date of the earnings release, the company has repurchased an additional 0.6 million shares for $65.0 million, implying an average price of $101.21.
Since the inception of the share repurchase program in January 2011, O’Reilly repurchased a total of 35.2 million shares for $2.7 billion, reflecting an average price of $77.14. As of Apr 24, 2013, the company had approximately $285 million worth of shares remaining under its share repurchase program.
O’Reilly had cash and cash equivalents of $205.4 million as of Mar 31, 2013, which more than halved from $575.2 million as of Mar 31, 2011. Long-term debt increased to $1.10 billion as of Mar 31, 2013 from $797.5 million as of Mar 31, 2012. This translated into a higher long-term debt-to-capitalization ratio of 34.6% as of Mar 31, 2013 compared with 21.7% as of Mar 31, 2012.
In the quarter, net cash flow from operations declined 45.4% to $226.3 million from $414.5 million in the previous year quarter. The decrease in cash flow was primarily attributable to higher accounts receivable. Meanwhile, capital expenditures (net) decreased marginally to $73.1 million from $75.0 million in the same quarter of 2012.
O’Reilly has projected earnings per share in the range of $1.46–$1.50 and consolidated comparable store sales to increase in a band of 4% to 6% for the second quarter of 2013.
For full year 2013, the company raised its earnings per share guidance to the range of $5.64 to $5.74 from the earlier range of $5.57 to $5.67. However, it reiterated its guidance of consolidated comparable store sales increase of 3% to 5% for the year. The company also reiterated revenue guidance of $6.6 billion to $6.7 billion, upgraded gross margin guidance to 50.0% to 50.4% from 49.9% to 50.3%, and reiterated operating margin guidance between 15.8% and 16.2% for the year.
O’Reilly reinstated capital expenditures guidance of $385 million to $415 million and free cash flow guidance between $450 million and $500 million for the year.
O'Reilly Automotive is the third largest specialty retailer of automotive aftermarket parts, tools, supplies, equipment, and accessories in the U.S., selling products to both Do-it-Yourself (:DIY) customers and Do-it-for-Me (:DIFM) or professional installers. Currently, it retains a Zacks Rank #3 (Hold).
Recently, retailer and distributor of automotive replacement parts, AutoZone Inc. (AZO) reported a 15.2% rise in earnings per share to $4.78 in fiscal 2013-second quarter (ended Feb 9, 2013) from $4.15 in the year-ago quarter. The results surpassed the Zacks Consensus Estimate by 4 cents.
Another auto parts retailer, Pep Boys — Manny, Moe & Jack (PBY) posted a broader loss of $14.5 million or 27 cents per share in the fourth quarter of fiscal 2012 ended Feb 2, 2013 compared with $4.4 million or 8 cents in the corresponding quarter of prior year as well as the Zacks Consensus Estimate of 5 cents.
CarMax Inc. (KMX) with a Zacks Rank #2 (Buy) is worth to look in the automotive replacements parts industry.
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