O'Reilly Q2 Earnings Beat on Strong Comparable and Pro Sales

ORLY’s Comps Gain Extends Sales Momentum

Second-quarter comparable store sales growth accelerated from 4.1% in the year-ago period. The metric includes sales from U.S. stores open for at least one year, along with eligible ship-to-home and pickup-in-store online orders.

For the first six months of 2026, comparable store sales increased 7% compared with 3.9% a year earlier. Total first-half revenues advanced 9.1% to $9.45 billion, reflecting sustained demand across O’Reilly’s core customer groups.

O’Reilly’s Pro Channel Leads the Mix

Sales to professional service provider customers increased 12.5% year over year to $2.47 billion. The channel accounted for slightly more than half of quarterly revenues and outpaced growth in the do-it-yourself business.

DIY sales rose 4.9% to $2.34 billion. Other sales and sales adjustments totaled $85.6 million, down from $100.7 million in the prior-year quarter. The results highlight the continued momentum of O’Reilly’s dual-market strategy.

ORLY Holds Margins as Costs Rise

Gross profit increased 8.2% to $2.52 billion. Gross margin remained unchanged at 51.4%, indicating that the company preserved product profitability while supporting higher sales volumes.

Selling, general and administrative expenses rose 8.4% to $1.53 billion. These costs represented 31.3% of sales compared with 31.2% a year ago. Operating income advanced 7.8% to $985.7 million, while operating margin held steady at 20.2%.

O’Reilly Converts Growth Into Cash Flow

Net income increased 7% to $715.1 million, although net margin declined to 14.6% from 14.8%. Interest expense rose to $69.9 million from $57.3 million, partially offsetting the benefit of higher operating profit.

Second-quarter operating cash flow increased 33% to $1.01 billion. Capital expenditures totaled $307.6 million, while free cash flow climbed 54.4% to $692.7 million. For the first six months, operating cash flow reached $2.04 billion and free cash flow totaled $1.48 billion.

ORLY Expands Stores and Returns Capital

O’Reilly opened 51 stores during the quarter, including 46 domestic locations and five stores in Mexico. The company ended June with 6,695 stores across the United States, Puerto Rico, Mexico and Canada. Year-to-date net new openings totaled 110.

ORLY repurchased 16.7 million shares during the quarter for $1.51 billion at an average price of $90.40. First-half repurchases totaled $2.43 billion. The lower diluted share count of 829 million, down from 858 million, helped earnings per share grow faster than net income.

O’Reilly’s Balance Sheet Reflects Investment

As of June 30, 2026, ORLY’s cash and cash equivalents totaled $262.2 million, up from $198.6 million as of June 30, 2025. Inventory increased 10.6% to $5.97 billion as the company supported a larger store base and maintained parts availability.

Long-term debt rose to $7.01 billion from $5.82 billion. Accounts payable increased to $7.38 billion from $6.86 billion, while the accounts-payable-to-inventory ratio declined to 123.7% from 127%. Adjusted debt to EBITDAR increased to 2.17 from 2.06.

ORLY Raises Key 2026 Targets

O’Reilly raised its 2026 comparable store sales guidance to 4-6% from the previous estimate of 3-5%. Total revenues are now projected between $18.9 billion and $19.2 billion, up from the prior outlook of $18.7-$19 billion. Diluted earnings are expected in the range of $3.20-$3.30 per share, up from the previous outlook of $3.15 to $3.25.

The company continues to target 225-235 net new store openings. Gross margin is projected at 51.5-52%, with operating margin expected between 19.3% and 19.8%. Operating cash flow is forecast at $3.1-$3.5 billion, and free cash flow is anticipated between $1.8 billion and $2.1 billion.

ORLY currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Key Releases From Auto Space

General Motors Company GM reported second-quarter 2026 adjusted earnings of $3.57 per share, up 41.3% year over year. The figure beat the Zacks Consensus Estimate of $3.13 by 14.06%. Revenues increased 1.9% to $48.03 billion and surpassed the consensus estimate of $46.56 billion by 3.15%. Strong pricing, lower costs and disciplined incentives supported results. General Motors raised its full-year adjusted EBIT guidance to $14-$16 billion from $13.5-$15.5 billion. Adjusted earnings are now projected at $12-$14 per share, up from the prior range of $11.50-$13.50.

Tesla, Inc. TSLA reported second-quarter 2026 adjusted earnings of 33 cents per share, which declined 17.5% year over year. The figure missed the Zacks Consensus Estimate of 50 cents by 34%. Revenues advanced 25.5% to $28.24 billion and surpassed the consensus estimate of $25.81 billion by 9.41%. Tesla expects 2026 capital expenditures to exceed $25 billion and rise further over the next two to three years. 

Genuine Parts GPC reported second-quarter 2026 adjusted earnings of $2.15 per share, beating the Zacks Consensus Estimate of $2.10 by 2.38%. The bottom line increased 2.4% from $2.10 in the year-ago quarter. Revenues rose 6% year over year to $6.54 billion and surpassed the consensus estimate of $6.39 billion by 2.36%. Genuine Parts reaffirmed its 2026 adjusted earnings guidance of $7.50-$8 per share and total sales growth outlook of 3-5.5%. Genuine Parts ended June with $2.3 billion of liquidity, including $559 million in cash.

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