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O'Reilly Automotive (ORLY) Misses Q1 EPS by 29c; Issues Mixed Outlook

April 26, 2017 4:34 PM EDT

O'Reilly Automotive (NASDAQ: ORLY) reported Q1 EPS of $2.60, ex-gain, $0.29 worse than the analyst estimate of $2.89. Revenue for the quarter came in at $2.16 billion versus the consensus estimate of $2.22 billion.

GUIDANCE:

O'Reilly Automotive sees Q2 2017 EPS of $3.10-$3.20, versus the consensus of $3.16.

O'Reilly Automotive sees FY2017 EPS of $12.05-$12.15, versus the consensus of $12.37. O'Reilly Automotive sees FY2017 revenue of $9.1-9.3 billion, versus the consensus of $9.21 billion.

"On our February 7, 2017 conference call, we discussed the volatility weather brings to our first quarter results. Based on mild January temperatures and the headwind that created in our business, we reduced our quarterly comparable store sales guidance for the first quarter to 2% to 4%. The unseasonal weather continued in February, and the absence of typical spring weather in many of our markets in March, combined with the dislocation of tax refunds, continued to create headwinds for the remainder of the quarter. We believe these headwinds were the primary drivers of our below expectation comparable store sales of 0.8%.” commented Greg Henslee, O’Reilly’s CEO. “With these transient headwinds behind us and the onset of our spring selling season, we are establishing our second quarter comparable store sales guidance of 3% to 5% and maintaining our full-year comparable store sales guidance of 3% to 5%. We continue to strongly believe our Team’s strength and ability to consistently execute our business model, along with the positive industry factors of an aging vehicle fleet, increasing number of vehicles on the road, relatively low gas prices and low unemployment rates, will continue to underpin our solid, long-term profitable growth.”

“Excluding the benefit of the change in accounting for stock option gains, our earnings per share fell well short of our guidance range of $2.78 to $2.88, as the shortfall in sales created leverage pressure on all areas of our business. The unseasonal weather created mix headwinds to our gross margin and the soft sales resulted in deleverage of fixed costs in our gross margin and our SG&A, although our Team did a good job of controlling expenses during this slower than anticipated demand environment. Despite the specific challenges of the first quarter, our Team was able to generate a very respectable 18.7% operating profit.” Mr. Henslee continued, “Looking forward to the remainder of the year, we continue to expect our business to be solid and are reiterating our full-year operating profit guidance range of 20.1% to 20.5% of sales.”

For earnings history and earnings-related data on O'Reilly Automotive (ORLY) click here.



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