ORLY

As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q2. Today, we are looking at auto parts retailer stocks, starting with O'Reilly (NASDAQ:ORLY). Cars are complex machines that need maintenance and occasional repairs, and auto parts retailers cater to the professional mechanic as well as the do-it-yourself (DIY) fixer. Work on cars may entail replacing fluids, parts, or accessories, and these stores have the parts and accessories or these jobs. While e-commerce competition presents a risk, these stores have a leg up due to the combination of broad and deep selection as well as expertise provided by sales associates. Another change on the horizon could be the increasing penetration of electric vehicles. The 5 auto parts retailer stocks we track reported a mixed Q2. As a group, revenues were in line with analysts’ consensus estimates. Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 11.4% since the latest earnings results. Serving both the DIY customer and professional mechanic, O’Reilly Automotive (NASDAQ:ORLY) is an auto parts and accessories retailer that sells everything from fuel pumps to car air fresheners to mufflers. O'Reilly reported revenues of $4.89 billion, up 8.1% year on year. This print exceeded analysts’ expectations by 0.6%. Despite the top-line beat, it was still a mixed quarter for the company with EPS and gross margin in line with analysts’ estimates. Brad Beckham, O’Reilly’s CEO, commented, “I would like to thank all of Team O’Reilly for their tremendous hard work and unwavering commitment to taking care of our customers each and every day. We are very pleased to report another quarter of strong performance, highlighted by a comparable store sales increase of 6.0% and a 10% increase in diluted earnings per share. Our Team continues to consistently execute our proven dual market strategy at a high level and delivered solid growth in both professional and DIY during the quarter. We remain committed to taking market share by providing unsurpassed levels of service to our customers, supported by best-in-class parts availability.” O'Reilly scored the highest full-year guidance raise in the group. Still, the market seems discontent with the results. The stock is down 2.5% since reporting and currently trades at $88.35. Is now the time to buy O'Reilly? Access our full analysis of the earnings results here, it’s free. Largely targeting the professional customer, Genuine Parts (NYSE:GPC) sells auto and industrial parts such as batteries, belts, bearings, and machine fluids. Genuine Parts reported revenues of $6.54 billion, up 6% year on year, outperforming analysts’ expectations by 1.6%. The business had a strong quarter with full-year EPS guidance slightly topping analysts’ expectations and a beat of analysts’ EPS estimates. Genuine Parts achieved the biggest analyst estimate beat of the whole group. The market seems happy with the results as the stock is up 10.2% since reporting. It currently trades at $134.86. Is now the time to buy Genuine Parts? Access our full analysis of the earnings results here, it’s free. Started as a single location in Rochester, New York, Monro (NASDAQ:MNRO) provides common auto services such as brake repairs, tire replacements, and oil changes. Monro reported revenues of $287.1 million, down 4.6% year on year, in line with analysts’ expectations. It was a softer quarter as it posted a significant miss of analysts’ EPS estimates. Monro delivered the slowest revenue growth among its peers. As expected, the stock is down 27.9% since the results and currently trades at $12.40. Read our full analysis of Monro’s results here. Founded in Virginia in 1932, Advance Auto Parts (NYSE:AAP) is an auto parts and accessories retailer that sells everything from carburetors to motor oil to car floor mats. Advance Auto Parts reported revenues of $2 billion, flat year on year. This result came in 1.9% below analysts’ expectations. Aside from that, it was a satisfactory quarter as it also produced a beat of analysts’ EPS estimates but full-year revenue guidance slightly missing analysts’ expectations. Advance Auto Parts had the weakest performance against analyst estimates and weakest full-year guidance update of the whole group. The stock is down 23.8% since reporting and currently trades at $42.81. Read our full, actionable report on Advance Auto Parts here, it’s free. Aiming to be a one-stop shop for the DIY customer, AutoZone (NYSE:AZO) is an auto parts and accessories retailer that sells everything from car batteries to windshield wiper fluid to brake pads. AutoZone reported revenues of $4.84 billion, up 8.4% year on year. This number lagged analysts’ expectations by 0.6%. All in all, it was a mixed quarter for the company. AutoZone scored the fastest revenue growth in the group. The stock is down 13% since reporting and currently trades at $2,962. Read our full, actionable report on AutoZone here, it’s free. Over the past year, investors have been forced to repeatedly answer the same question: what is the market’s biggest risk? The answer has changed several times, and each shift has reshaped market leadership. Late in 2025 and early 2026, artificial intelligence became the market’s primary uncertainty. Investors questioned whether AI would erode software pricing power and weaken competitive moats as AI made it easier to replicate once-differentiated products. By the spring, technology took a back seat to geopolitics. The U.S. conflict with Iran briefly became the market’s dominant narrative, raising concerns about oil prices, inflation, and global growth. But as energy markets remained orderly and fears of a prolonged supply disruption faded, investors quickly turned their focus back to fundamentals. Want to invest in winners with rock-solid fundamentals? Check out our Top 6 Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

A month has gone by since the last earnings report for O'Reilly Automotive (ORLY). Shares have added about 0.5% in that time frame, underperforming the S&P 500. Will the recent positive trend continue leading up to its next earnings release, or is O'Reilly Automotive due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers. O’Reilly reported second-quarter 2026 earnings of 86 cents per share, up 10.3% year over year. The figure beat the Zacks Consensus Estimate of 85 cents by 1.2%. Revenues increased 8.1% to $4.89 billion and surpassed the consensus mark of $4.86 billion by 0.8%.Comparable store sales rose 6%, supported by solid growth across the professional service provider and do-it-yourself channels. The company also benefited from an expanding store network and a lower share count. 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. 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. 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%. 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. 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. 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. 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. It turns out, estimates review have trended upward during the past month. At this time, O'Reilly Automotive has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for value investors. Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, O'Reilly Automotive has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. O'Reilly Automotive is part of the Zacks Automotive - Retail and Wholesale - Parts industry. Over the past month, Genuine Parts (GPC), a stock from the same industry, has gained 9.5%. The company reported its results for the quarter ended June 2026 more than a month ago. Genuine Parts reported revenues of $6.54 billion in the last reported quarter, representing a year-over-year change of +6%. EPS of $2.15 for the same period compares with $2.10 a year ago. Genuine Parts is expected to post earnings of $2.10 per share for the current quarter, representing a year-over-year change of +6.1%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.9%. The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Genuine Parts. Also, the stock has a VGM Score of B. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report O'Reilly Automotive, Inc. (ORLY) : Free Stock Analysis Report Genuine Parts Company (GPC) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Find winning stocks in any market cycle. Join 7 million investors using Simply Wall St's investing ideas for FREE. O'Reilly Automotive stock has delivered strong long term returns over the past five years, yet current valuation checks suggest the shares now trade at a premium to an internally estimated intrinsic value based on a Discounted Cash Flow (DCF) approach and earnings multiples. O'Reilly Automotive has returned 122.6% over the past five years, which sets a high bar for any further upside from today's valuation. Future revenue and cash flow expectations can support the current share price. However, any disappointment in margins or cash generation may put pressure on that premium. The company passes only 1 of 6 valuation checks, which points to a stock that currently leans expensive rather than a clear bargain. The issue now is whether O'Reilly Automotive's quality and growth expectations justify paying above the intrinsic value estimate implied by the Discounted Cash Flow (DCF) work and the richer market multiples. Find out why O'Reilly Automotive's -13.4% return over the last year is lagging behind its peers. The Discounted Cash Flow (DCF) approach here values O'Reilly Automotive using projected free cash that is discounted back to today. The model starts from latest twelve month free cash flow of about $2.1b and assumes that cash generation continues to grow from this level rather than shrink. On those inputs, the 2 Stage Free Cash Flow to Equity model produces an estimated intrinsic value of about $63.84 per share. That intrinsic value sits well below the current share price, which implies roughly a 39.5% premium to the DCF estimate. For you as an investor, the key point is that the market is already pricing in strong ongoing cash generation for O'Reilly Automotive and leaving limited room for weaker outcomes than those built into the model. Any reassessment of growth or margins could have a larger impact on a stock that already trades well above this intrinsic value estimate. On this Discounted Cash Flow view, O'Reilly Automotive stock currently appears to be trading above this intrinsic value estimate. Our Discounted Cash Flow (DCF) analysis suggests O'Reilly Automotive may be overvalued by 39.5%. Discover 50 high quality undervalued stocks or create your own screener to find better value opportunities. Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for O'Reilly Automotive. The P/E ratio is a useful cross check for O'Reilly Automotive because earnings remain a key anchor for how the market values the stock. Right now the shares trade on about 27.2x earnings, which is higher than both the Specialty Retail industry average of 19.0x and the peer group average of 21.3x. The tailored fair P/E ratio for O'Reilly Automotive is estimated at 21.0x. That is meaningfully below the current 27.2x multiple, which indicates that investors are paying a premium relative to what this framework suggests given the sector, growth profile, margins and risk. Even allowing for the quality of the business, the stock price already reflects a richer earnings valuation than the industry and peer benchmarks indicate. On this P/E comparison, O'Reilly Automotive stock appears expensive relative to both its fair multiple and sector peers. See what the numbers say about this price — find out in our valuation breakdown. Simply Wall St Narratives for O'Reilly Automotive pick up from this valuation puzzle and explain what would need to happen to revenue growth, margins and earnings for the stock to be worth meaningfully more or less than the current price. Each narrative links its figures to a clear view of how O'Reilly Automotive's growth, profitability and risks could change, which you can revisit as fresh results and new data points appear on the Community page. One of the top community narratives on O'Reilly Automotive: 19% undervalued Read one of the top narratives on O'Reilly Automotive Do you think there's more to the story for O'Reilly Automotive? Head over to our Community to see what others are saying! For O'Reilly Automotive, both the Discounted Cash Flow (DCF) intrinsic value estimate and the P/E based comparison point to an overvalued stock on current assumptions. The broader valuation checks also lean weak, which reinforces that message rather than softening it. From here, the key question is whether O'Reilly Automotive can deliver enough cash flow and earnings to keep justifying a premium to its intrinsic value estimate and fair multiple. If growth or margins come in below what the market is currently assuming, the valuation case becomes harder to support. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include ORLY. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

AAP's earnings beat included a one-time $26M tariff refund worth $0.31 per share, while revenue of $2B missed estimates and comp sales fell 0.5%. AutoZone fell 3% and O'Reilly slipped 2% as softening DIY demand spooked the broader auto parts sector despite no issues with their own results. AAP entered the print up 45% year to date, amplifying the 21% drop as tighter household budgets hit DIY shoppers harder than management anticipated. Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and O'Reilly Automotive didn't make the cut. Grab the names FREE today. Shares of Advance Auto Parts (NYSE:AAP) stock are down 21% to $44.33 Thursday morning after the company posted Q2 2026 results that paired a headline earnings beat with a revenue miss and negative comparable sales. The move is the sharpest single-day slide in the aftermarket group and comes despite a raised full-year adjusted EPS outlook. The read-through is hitting peers as well. AutoZone (NYSE:AZO) stock is down 4% to $2,961, O'Reilly Automotive (NASDAQ:ORLY) stock is down 2% to $89.57, and Genuine Parts (NYSE:GPC) stock is down 3% to $131.05. The peer moves reflect a group-level reaction to softening do-it-yourself demand rather than a proportional hit tied to their own results. Advance Auto Parts reported adjusted diluted EPS of $1.03, topping the $0.81 consensus by 27.9%, while revenue of $2 billion missed the $2.04 billion estimate and slipped 0.5% year over year. Comparable store sales at the retailer declined 0.5%, with the DIY channel weakening sharply in the final four weeks of the quarter and the Pro channel delivering low-single-digit growth. Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and O'Reilly Automotive didn't make the cut. Grab the names FREE today. The composition of the beat matters. Advance Auto Parts' management booked $26 million in tariff refunds that contributed $0.31 to adjusted EPS, meaning a significant share of the outperformance is non-recurring. On an underlying basis, adjusted operating margin still expanded more than 250 basis points year over year to 5.6%, and year-to-date free cash flow swung to a positive $120 million from an outflow a year earlier. Guidance also disappointed on the sales side. The company reaffirmed fiscal 2026 net sales of $8.485 billion to $8.575 billion, a midpoint of $8.53 billion that sits below the $8.58 billion consensus, and trimmed store openings to 30 to 35 from 40 to 45. Furthermore, Advance Auto Parts' full-year adjusted EPS guidance was raised to $2.60 to $3.30 from $2.40 to $3.10, but that lift leans on the same one-time refund. Advance Auto Parts CEO Shane O'Kelly accentuated the positive points: Our second quarter comparable sales results reflected low-single-digit growth in the Pro channel, which performed in line with expectations. However, total enterprise sales performance was impacted by the DIY channel as tighter household budgets constrained spending more than we anticipated, especially during the last four weeks of the quarter. Positioning explains why the pain is concentrated on Advance Auto Parts. Through Wednesday's close, Advance Auto Parts stock was up 45% year to date while AutoZone stock was down 9%, so the two entered the print with very different setups and a mixed quarter lands harder on the name that had already run. O'Reilly Automotive stock and Genuine Parts stock entered the day roughly flat and up double digits respectively, cushioning the sympathy moves. Operational proof points at Advance Auto Parts remain constructive under the hood. Adjusted gross margin expanded roughly 240 basis points to 46.2%. Distribution-center consolidation finished with 15 DCs down from nearly 40. Net-debt leverage improved to 2.1 times from 2.4 times last quarter. The market is discounting those wins today in favor of the softer demand signal. The macro backdrop reinforces management's caution about lower- and mid-tier consumers. University of Michigan consumer sentiment sat at 49.5 in June, well below the 60 level flagged as recessionary in the source guide, and U.S. regular gasoline averaged $4.05 per gallon on August 17, up 5% from a month earlier. Both squeeze the exact customer group Advance Auto Parts calls out as most stressed. The Advance Auto Parts conference call at 8:00 a.m. ET has already opened, so commentary on Q3 DIY trends and the durability of Pro-channel growth will shape intraday price discovery. Management said Q3 trends during the first four weeks were tracking slightly ahead of the final weeks of Q2, a claim the sell side will test in follow-up notes. Traders may want to keep an eye on whether AAP stock stabilizes near the $44 area or takes another leg lower. On position sizing, the composition of the beat should shape any fresh exposure to Advance Auto Parts stock. About $0.31 of the $1.03 adjusted EPS came from a tariff refund that won't repeat, so underlying earnings power is meaningfully below the headline. A cautious, smaller position is the more defensible stance while the DIY demand picture clarifies over the second half. Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and O'Reilly Automotive didn't make the cut. Grab the names FREE today. Contact [email protected] for any questions or corrections.

Image source: The Motley Fool. Thursday, July 30, 2026 at 11:00 a.m. ET Chief Executive Officer - Brad W. Beckham President - Brent G. Kirby Chief Financial Officer - Jeremy Adam Fletcher Executive Chairman - Gregory L. Henslee Executive Vice Chairman - David O'Reilly Operator: Welcome to the O'Reilly Automotive, Inc. second quarter 2026 earnings call. My name is Matthew, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. And during the question-and-answer session, if you have a question, please press 1 on your touchtone phone. I will now turn the call over to Jeremy Adam Fletcher. Mr. Fletcher, you may begin. Jeremy Adam Fletcher: Thank you, Matthew. Good morning, everyone, and thank you for joining us. During today's conference call, we will discuss our second quarter results and our updated outlook for the remainder of 2026. After our prepared comments, we will host a question and answer period. Before we begin this morning, I would like to remind everyone that our comments today contain forward-looking statements. And we intend to be covered by and we claim the protection under the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You can identify these statements by forward-looking words such as estimate, may, could, will, believe, expect, would, consider, should, anticipate, project, plan, intend, or similar words. The company's actual results could differ materially from any forward-looking statements due to several important factors described in the company's latest annual report on Form 10-K for the year ended December 31, 2025, and other recent SEC filings. The company assumes no obligation to update any forward-looking statements made during this call. At this time, I would like to introduce Brad W. Beckham. Brad W. Beckham: Thanks, Jeremy. Good morning, everyone, and welcome to the O'Reilly Auto Parts second quarter conference call. Participating on the call with me this morning are Brent G. Kirby, our president and Jeremy Adam Fletcher, our chief financial officer. Gregory L. Henslee, our executive chairman, and David O'Reilly, our executive vice chairman, are also present on the call. it is once again my pleasure to begin our quarterly call by congratulating Team O'Reilly on another strong quarter and a very successful first half of 2026. Our team's steadfast commitment to providing consistently high levels of service to our customers drove a comparable store sales growth of 6% for our second quarter. Year to date, our comparable store sales have increased 7% and driven total sales growth of over 9%. As a result of our team's relentless focus on delivering profitable sales growth, we generated a 10% increase in diluted earnings per share in the second quarter. On top of the 11% growth, we delivered in the second quarter of 2025. For the first six months of 2026, our diluted EPS grew 13%. And I want to thank all of Team O'Reilly for the momentum they have created in our business so far in 2026. Now I would like to take a few minutes to walk through the details of our second quarter comparable store sales performance. Our comp growth of 6% surpassed our expectations driven by solid results in both our professional and DIY businesses. Our professional business continues to be the larger contributor to total comps. But we again saw the outperformance versus our expectations split evenly between both sides of our business similar to first quarter results. In aggregate, our comparable store sales gains continue to be driven by increases in average ticket values and robust professional ticket count growth. The growth in average ticket was primarily the result of same SKU inflation, which totaled 5.5% for our consolidated business and was in line with our expectations. Average ticket strength was the primary contributor to our low-single-digit DIY comparable store sales increase in the second quarter. This benefit was partially offset by pressure to transaction counts, which were down low single digits and slightly below our expectations in part due to headwinds in hot-weather-related categories. Despite this pressure, we believe we are outperforming the market and gaining DIY share, and we continue to see tremendous growth opportunity on this side of our business. We also continue to be pleased with the robust sales growth we are generating with our professional customers. Comparable store sales on this side of our business grew right at 10% in the second quarter, reflecting our fourth consecutive quarter of double-digit comps. The sales growth was fairly evenly split between an increase in average ticket value that was in line with our expectations and robust ticket count growth, which again outpaced our forecast. We do not quantify the individual ticket and traffic components of our sales results on a quarterly basis. However, I will share that our professional ticket count growth was in the mid-single digits in the second quarter and has essentially been within that range every quarter since our business normalized coming out of the pandemic. We are very excited about the continued momentum in professional business and our team's ability to compound the market share gains they are winning quarter after quarter year after year with our professional customers. Next, I wanna provide some detail on the cadence of our sales results as we move through the quarter. As I previously mentioned, our second quarter results surpassed our expectations and we outpaced these projections each month of the quarter with April's results outperforming a little more than May and June. As we discussed on last quarter's call, favorable spring weather supported by strong volumes in both our DIY and professional businesses as we exited the first quarter, and we saw much of that momentum continue in April. As we moved into our summer selling season, our sales trends moderated to a very consistent week-to-week pace through the remainder of the quarter. Finishing out the quarter, our June sales were solid on a one-year basis against the softer comparison in June 2025. But we did not realize the normal ramp up in demand for certain hot-weather-related categories that we typically like to see from the onset of summer heat at the end of the second quarter. We have definitely seen summer take hold across our markets in July though and we are very pleased with the strong step-up in sales results to start the third quarter. Turning to our revised full year guidance. I wanna provide some color on the update to our expected comparable store sales range. As noted in yesterday's press release, we have increased from the previous range of 3% to 5% to a range of 4% to 6%. This update flows through the outperformance we delivered in the first half of 2026. But leaves our expectations for comparable store sales growth for the back half of the year unchanged. Looking forward, we are pleased with the strong start to the third quarter but we are cognizant of the potential that the benefits we have realized so far this quarter are the result of normal month-to-month weather volatility and we do not want to overreact to trends that could moderate over time. Included in our outlook for the remainder of the year is our expectation for the same SKU benefit to moderate in the third and fourth quarters as we calendar the tailwind from tariff-driven price increases that we realized in 2025. As a reminder, those benefits started to flow into our comp results as we move through the third quarter last year with the lion's share of the impact reflected in price levels by the time we exited the third quarter. As a result of this dynamic, we are projecting the inflation benefit to moderate to 1% to 2% for the back half of 2026 with the third quarter expected at the top end and continued moderation to the bottom end of that range by the fourth quarter. These assumptions reflect our standard approach for setting guidance. We assume only modest levels of prospective future price changes. While we have passed along some incremental price increases in 2026, resulting primarily from the cost pressures due to increased crude oil prices, we are cautious as to how long these benefits will persist through the balance of the year. We are also cautious concerning the potential adverse impact to consumers and their resulting response in the face of continued economic pressure. We have some very relevant recent experience that points to the potential for choppiness in consumer demand in the face of volatility and price levels. However, we have been pleased with the resiliency of the consumer and believe our customers have adjusted well to the current economic conditions and will continue to prioritize the maintenance and repair of their existing vehicles. Ultimately, we remain optimistic about the health of our industry and our teams are committed as ever to build on our strong sales momentum, but we believe it is prudent to incorporate into our update and guide--updated guidance expectations some potential volatility as we finish out 2026. Before I move on from our guidance, I would also like to note that we are increasing our full year diluted earnings per share guidance to a range of $3.20 to $3.30. Our increase in EPS guidance is driven by our sales and operating performance in the first half of 2026, and the impact of shares repurchased through the date of our earnings release yesterday. Before I wrap up my prepared comments and turn the call over to Brent, I would like to spend a few minutes discussing our strategic priorities for use of capital and how these priorities align with the growth opportunities we see for our business. We are off to a strong start in 2026 and we remain extremely excited about our opportunities to build on this momentum to drive continued growth, and to capture a larger share of the fragmented addressable market in our industry. We have refined our strategy to capitalize on this tremendous opportunity over many years, building and strengthening a world-class customer service organization and executing a sustainable growth plan. Our capital allocation priorities directly align with that consistent long-term strategy. Our top priorities for use of capital continue to be reinvestments in our existing store and distribution network and organic growth through new store openings. We are currently 6,700 stores strong across North America, and Team O'Reilly includes over 95,000 of the most technically competent and customer focused professional parts people in our industry. Our greatest opportunity to grow our business is to match the hard work and dedication of these team members with attractive stores, robust inventory availability, and enhanced technology. Our teams operate with a continuous improvement mindset and we have been pleased with the returns on targeted investments in our existing business which have helped fuel industry leading comparable store sales growth. We have also been pleased with the continued success of our organic store growth and remain excited about opportunity to further consolidate the industry through the opening of stores in both new geographies and existing market areas. The success of our organic growth strategy is the result of our commitment to never compromise on our proven model. For each new store we open, we aggressively identify and develop a knowledgeable and enthusiastic team of professional parts people to provide unsurpassed customer service from day one, supported by the very best inventory availability, and selling tools in the industry. Over the course of our history, we have supplemented our capital investments in our existing network and an organic store growth with targeted opportunistic acquisitions. While we continue to view the acquisition of existing parts stores as an effective use of capital, we will also remain highly selective and strategic as we evaluate future opportunities consistent with our proven framework. Our success with acquisitions has been directly tied to the discipline we apply in selecting and executing on those opportunities and then the process we undertake to integrate the acquired companies. Our blueprint is focused on opportunities with a clear strategic rationale where we have a high degree of confidence. We can implement the O'Reilly culture, as well as our business and operating models. This disciplined strategy has allowed us to accelerate growth in markets that complement our existing footprint by quickly establishing both the proven O'Reilly model and a strong core of local parts professionals who have strong, long-standing customer relationships. We have successfully executed this strategy through acquisitions ranging from a single store to over 1,000 stores. With our commitment to fully integrating every acquisition we view each transaction as significant. However, with our current footprint, we expect the universe of opportunities that meet our strategic criteria to be primarily smaller tuck-in acquisitions and expansion markets. This also means we have no expectation or intention of executing a large transformative acquisition in the foreseeable future. Our final priority for use of capital after we have exhausted all opportunities to invest in our business is to return value to shareholders through our share repurchase program. Jeremy will provide a recap of the execution of our buyback program in his prepared remarks, but I would emphasize that we continue to feel good about the effectiveness of this program. As I wrap up my prepared comments, I would like to once again thank Team O'Reilly for their continued dedication to our company and strong performance in the second quarter. Now I will turn the call over to Brent. Brent G. Kirby: Thanks, Brad. I would also like to join Brad in congratulating Team O'Reilly on a strong performance in the second quarter. Driven by their steadfast dedication to our customers. I would like to begin my comments this morning by discussing our second quarter gross margin results, and our outlook for the remainder of 2026. For the second quarter, our gross margin of 51.4% was unchanged from the second quarter of 2025. In establishing our gross margin outlook, we assumed a slightly lower gross margin rate in the second quarter as compared to the full year. Which is typical for the seasonal composition of our product mix. So while our gross margin rate for the second quarter came in slightly below our full year guidance range, our results were in line with our expectations for the quarter. We continue to see very stable solid gross margin performance with only a few minor puts and takes driving the outcome for the quarter. We continue to benefit from incremental acquisition cost reductions and improved leverage of distribution cost, on our strong top line sales performance. On a year-over-year basis, these benefits were offset by mix pressures from the faster rate of professional sales growth and our product mix in the quarter. We also faced our most challenging quarterly comparison in 2026 related to the timing benefit that we realized in the second quarter of 2025 from the impact of tariff related cost and pricing adjustments. Given our in line first half performance, and the current stable market environment, we are maintaining our full year gross margin guidance range of 51.5% to 52%. At the midpoint, this reflects an expansion of 16 basis points compared to 2025. Through the first half of 2026, we are on track with our full year target with our year-to-date gross margin rate of 51.5% representing an 11-basis-point expansion over the prior year. We are pleased to be able to continue to deliver incremental margin expansion while at the same time generating the robust gross profit dollar increases that come with our market leading professional sales growth. Our experienced merchandise and supply chain teams continue to successfully partner with our supplier network to drive value for our customers and deliver these great results while also proactively managing through any issues to global supply chains. Moving to SG&A. Our second quarter SG&A per store grew at 4.8%, which included incremental spend to support elevated sales volumes similar to what we saw in the first quarter. We also experienced some modest incremental pressure from higher fuel prices. We continue to be pleased with our team's effectiveness in driving productivity through the management of our operating structure and our spend in the second quarter and first half of 2026 was within the range of our expectations. As we outlined coming into 2026, we anticipated growth in SG&A per store to be higher in the first half of the year. Driven in part by expected year-over-year SG&A pressures from self-insurance, and legal line items that ramped in the second half of 2025. Our experience for the first six months of 2026 for those line items has been in line with our expectations. So while we saw modest pressure to our SG&A as a percent of sales, deleveraging 9 basis points in the second quarter, we outperformed versus our expectations as a result of the strong sales growth generated by our team. We continue to expect our full year SG&A per store growth to be at or below 4%. But we are making a slight revision to tighten our full year range to 3.5% to 4%. Which incorporates the flow through of our results for the first half of 2026. This reflects an expected moderation of per store operating expense in the back half of the year as comparisons ease. Which is unchanged from our prior guidance. We are also reiterating our full year operating profit guidance range of 19.3% to 19.8%. Which reflects the sales, gross margin and operating expense forecast that we have outlined today. For the first half of 2026, our operating margin expanded 21 basis points, split evenly between gross margin expansion and SG&A leverage. And driving an increase in operating profit dollars of 10%. We strongly believe that our greatest long-term strategic opportunity is our ability to leverage our industry leading business model and execution to provide the best customer service in our industry. Our company operates in a fragmented industry and still holds a small percentage of the total addressable market. We have demonstrated that we are willing to aggressively lean into the investments and initiatives that equip us to address this opportunity. And we are very pleased to deliver productive returns on those efforts so far in 2026. Before I turn the call over to Jeremy, I want to provide an update on our store growth and capital investments for the first half of 2026. And our outlook for the remainder of the year. Year to date, we have opened 110 net new stores, with that growth spread across 31 U.S. states, Puerto Rico, Mexico and Canada. And we remain on track to open 225 to 235 net new stores in 2026. Capital expenditures in the first six months of 2026 were $552 million and we still expect a total capital expenditure investment for 2026 of $1.3 billion to $1.4 billion. Our planned expenditures in 2026 mirror the capital allocation priorities that Brad outlined earlier. Including acceleration in new store growth, corresponding enhancement of our distribution capabilities to support our industry leading inventory availability, and targeted initiatives to maintain and refresh the image and appearance of our store fleet and enhance our technology tools. We continue to pair these capital investments in our existing business with targeted investments in inventory. Inventory per store finished the second quarter at $892,000 which was up 7% from this time last year and up 2% from the end of 2025. This growth is slightly below what we originally projected for the first half of the year as a result of normal seasonal timing differences in the deployment of inventory. However, we are still targeting growth of 5% per store by the end of 26. We are excited to be able to highlight the tangible impact of these investments when we host our upcoming Analyst Day at our new Atlanta Distribution Center on September 17. We relocated our previous DC in Atlanta to this new 690,000-square-foot facility at the end of 2024. The incremental distribution capacity provided by this DC is enabling us to unlock additional expansion in the Southeastern United States and support import processing capabilities. This new facility is a great illustration of our proven business model and the continuous improvements we make to refine the processes and technology in our buildings to relentlessly enhance inventory availability, and the value proposition that we offer our customers. As I close my comments, I want to once again thank Team O'Reilly for their commitment to providing excellent consistent customer service to all our customers each and every day. Now I will turn the call over to Jeremy. Jeremy Adam Fletcher: Thanks, Brent. I would also like to thank all of Team O'Reilly for another strong quarter. Now, we will fill in some additional details on our second quarter results and outlook for the remainder of 2026. For the second quarter, sales increased $367 million, driven by a 6% increase in comparable store sales, and a $100 million non-comp contribution from stores opened in 2025 and 2026 that have not yet entered the comp base. For 2026, we now expect our total revenues to be between $18.9 billion and $19.2 billion. Our second quarter effective tax rate was in line with our expectations at 22.6% of pretax income, comprised of a base rate of 23.3%, reduced by a 0.7% benefit from share-based compensation. This compares to the second quarter of 2025 rate of 22.4% of pretax income, which was comprised of a base tax rate of 23.2%, reduced by a 0.8% benefit for share-based compensation. For the full year of 2026, we now expect an effective tax rate of 22.5%. We expect the quarterly rate to fluctuate due to variations in the tax benefit from share-based compensation and the tolling of certain tax periods in the fourth quarter. Now we will move on to free cash flow and the components that drove our results. Free cash flow for the first six months of 2026 was $1.5 billion versus $904 million in the first half of 2025. The increase in free cash flow was primarily driven by robust growth in operating income and the timing of payment for renewable energy credits. With a higher cash outflow for these payments occurring in the second quarter of 2025. For the full year of 2026, our expected free cash flow guidance remains unchanged at a range of $1.8 billion to $2.1 billion. I also want to touch briefly on our AP-to-inventory ratio. We finished the second quarter at 124%, which was in line with the same level at the end of 2025. For 2026, we expect to see continued moderation resulting from our planned incremental inventory investment and expect to finish the year at a ratio of approximately 122%. Moving on to debt. We finished the second quarter with an adjusted debt-to-EBITDAR ratio of 2.17x, which is an increase from our ratio at the end of 2025 of 2.03. This incremental step up in leverage reflects additional borrowings through our commercial paper program and is consistent with our intention to prudently approach our optimal leverage target of 2.5x. We continue to be pleased with the execution of our share repurchase program And during the second quarter, we repurchased 17 million shares at an average share price of $90.40, for a total investment of $1.5 billion. Our 2026 year-to-date share repurchases through the date of yesterday's press release totaled 34 million shares For a total investment of $3.1 billion. We have consistently viewed our buyback program as an effective means of returning excess capital to our shareholders. And the step up in share repurchase volume in 2026 reflects our strong cash flow generation and incremental borrowings as we move towards our leverage target. As Brad discussed earlier, we are very excited about the opportunities we have to execute our strategic roadmap and we will continue to prioritize capital investments in our existing business to grow market share. When it is appropriate to return excess capital to shareholders, we are very confident that the average repurchase price is supported by the expected discounted future cash flows of our business. Before I open up the call to your questions, I would like to thank our team for their commitment to the excellent customer service that drives our success. This concludes our prepared comments. At this time, I would like to ask Matthew, the operator, to return to the line, and we will be happy to answer your questions. Operator: Thank you. We will now begin the question-and-answer session. If you have a question, please press 1 on your phone. If you wish to be removed from the queue, please press 2. We do ask that while posing your question, please pick up your handset if you are listening on speakerphone to provide optimum sound quality. Please limit your questions to one question and one follow-up question. Once again, if you have a question, please press 1 on your phone. The first question comes from Michael Lasser from UBS. Your line is live. Michael Lasser: Good morning. Thank you so much for taking my question. Brad, right or wrong? The investment community is going to parse all of your very helpful words around O'Reilly's approach to capital allocation and M&A very carefully and this is all coming up given the speculation around O'Reilly's interest in the business of 1 of its main competitors. And the interpretation is if that was the case, is this a signal that O'Reilly either sees the competitive landscape or the customer consolidation changing such that it needs to at least look at a competitor for an acquisition to maintain its competitive position in the market. Can you address that and potentially put this to rest 1 last time? Thank you very much. Brad W. Beckham: Hey. Good morning, Michael. great question there. So, yeah, I wanna start out by stating, as you know, it is been our long time practice and our current practice. Not to comment or, spend unproductive time on speculation or rumors. I think we were very clear in our prepared comments what our priorities are today and are going to be over the foreseeable future. And I think to the kind of latter part of your question, the answer to that is no. We work in this amazing industry where we have 10% of the market. it is crazy for me to think over my 30-year history this year, starting in 2000 that we have well over 6,500 stores, and we still only have 10% of the market, both in the U.S. and when you look across North America. And so, what I would say to that, Mike, is we are more convicted than ever, about the fundamentals of our industry. We are more convicted than ever about the strength of O'Reilly and the fact that we feel like there is gonna continue to be consolidation organically through us running our playbook. Doing what we do well, focusing on our culture, promoting from within, being a store and customer centric business that is focused on, taking DIY share, from our DIY competitors and continuing to do what we do on the DIFM side, investing in inventory, getting it closer to the customer, delivery service, relationships, all the things we are doing to continue to consolidate the industry on the DIFM side. So my answer to you is no. there is nothing structural or fundamentally different about how we think about our ability to take market share in running our playbook that you know so very well. Thank you very much for that, Brad. Michael Lasser: My follow-up question is there is a lot of debate on what the demand and sales trends in the industry are gonna look like in the back half of the year as this like for like inflation starts to fade. So is it your expectation that, particularly on the DIY side, there will be an acceleration in units as the moderation in pricing happens. Especially at a time where gas prices probably remain elevated, and there is a lot of distraction out there. And have you seen an acceleration in units in July does that give you any incremental confidence that the outlook would remain consistent even as pricing dynamic unfold. Thank you very much. Brad W. Beckham: Yeah. Thanks again, Michael. Another great question. So just want to start this 1 out with the fact that I could we in the room here could not be more pleased with our team's results on the DIY side of the business. As any year goes, in DIY there is puts and takes month-to-month, quarter to quarter. Just so excited about not only the second quarter, but even more so what we have been able to do on the DIY side of the business in the first half of the year. You know, we feel strongly that we are taking market share, and we are always working to continue to drive foot traffic and do everything we can to drive our retail business. Second thing I would say is just to kind of reiterate what we said earlier is, as we work through the second quarter, it was evident we got toward the end of the quarter. It was just kind of wet and not as hot as it can normally be, in the latter part of the second quarter. And we absolutely saw pressure to some of those hot-weather-related categories. That we would normally start to really see solid performance, especially in June. And we have been really pleased to see that come back here these first 3.5 to four weeks of July. it is evident so far that those hot-weather-related categories, it is absolutely gotten hot in the far majority of our markets, and we feel really good about where our DIY business is headed, at least for the beginning of the third quarter here. That said, there is a lot of quarter left and we just want to be really careful, and we wanna balance the fact that we feel like we have good momentum We feel like our consumer and our customer specifically continues to be relatively healthy, but we also want to remain cautious in the way we are looking at the back half, not knowing what the future holds here in the short term with oil prices, fuel prices, just still a cautious consumer. And so we want to just, as we always do, make sure that we balance that out, you know, with some cautiousness as it relates to how we feel like the rest of the year is gonna play out. I may let Jeremy just talk a little bit your question on units and versus the inflation lap. Jeremy Adam Fletcher: Yeah. So maybe the only thing that I would add, Michael, it is a good question. You know, to some degree, how we think about the back half we are always gonna be a little bit reluctant. to polish our crystal ball anymore than the rest of you guys do about what we see happening. But in large part, the way that we thought about it coming into this year and in sure now that we are halfway into the year about how to think about the back half of the year is it a little bit more consistent with what our broader view around guidance and expectations would be in any period. And that you know, we continue to expect that average ticket is going to be a solid driver of our of our sales growth opportunity. Historically, for us, it is typically meant a benefit from same SKU inflation, but been a little bit more muted within our industry in a lot of the periods at the time of the year. Formed this type of outlook. So we think we get a little bit from same SKU, but then some of the average ticket benefits that we get around the complexity of the of the mix of products that we sell that continues to be more valuable and costly even as that engineering and technology gets better for our customers. And then having that average ticket supplemented by, by ticket count growth for our business that we feel like is still an opportunity for us. You know, for sure, on the professional side of the business, that is been that is been more robust. I think that is true broadly for the industry and for what where we are at. DIY ticket counts just, I think, from a secular perspective or are challenged by some of the same dynamics around the increased complexity of the parts, but we still think that we have got tremendous opportunity for growth in that area as well. So as we have thought about the back half of the year, that is kind of the--that is the outlook that we carry into to most periods as to how we can we can drive comps and what our opportunity is to outperform the market. Ultimately, you know, there are opportunities that for volatility that we could see, we have outlined those, I think, pretty clearly. For sure, there was some of that last year. There were some partial offsets to the same SKU benefit that we saw in some of those components that we think kinda revert back to their norms. And that is sort of how we would you kinda lay out what our expectation is, and that is what is implicit in what we have guided to finish out the year here. Michael Lasser: Thank you very much, and good luck. Brad W. Beckham: Thanks, Michael. Thank you. Michael. Operator: Your next question is coming from Christopher Horvers from JPMorgan. Your line is live. Christopher Horvers: Thanks. Good morning, guys. I wanted to dig more in on the DIY customers, you know, the stacks. Looks like they slowed from the first quarter to the second quarter. You also had a moment in where gas prices were $4.50 in the middle of May. So I guess how would you diagnose what looks like a 2-point slowdown sequentially on gas versus DIY starting to exaggerate deferral as gas prices peak there. And then how are you thinking about the risk in the back half of the year? As we got into the third quarter last year, there was a moment where you started to lap easy comparisons on the easier comparisons on the DIY side of the business, but then sort of it-- the macro uncertainty and some of the facing that low-end consumer sort of kept the trend where it was versus being alleviated by the easier comparison. So, you know, a broad question of how do you think about what happened in DIY from Q1 to Q2? What was the intra quarter behavior around gas prices? And how are you thinking about the deferral potential in the back half of the year? Jeremy Adam Fletcher: Yeah. All great questions, Christopher, and we will try to kinda take them, you know, in order of how you have talked about them. You know, for sure, some level of month-to-month change as we move through first quarter and here to second quarter, The gas price question is always a little bit of a challenge to parse out because often the reaction is not extended at any point in time and you do not know that we would really point to anything in particular about consumer reaction to that, that we think is real noteworthy or meaningful as we move through the quarter For sure, maybe for a short period of time in May, we could have seen some of that flow through sometimes when you start to parse too short a timeframe, it gets a little bit challenging. You know, when we just think about overall kind of first quarter versus second quarter, obviously pleased with where first quarter was at. We talked quite a bit about it last quarter of the call. You know, we had a extremely strong March and a good start to the spring selling season. Absolutely felt like that was buoyed by some solid tax refund money that was working its way through the system. And saw that as a as a really solid start to the quarter in the second quarter in April, not quite as strong as April as we were in March, but all things I think we spoke through. The more we move through second quarter, we kinda feel like that we settled at a level that was that was, you know, indicative of strong results for us. We are pleased with how the cadence of the quarter progressed as we move through it. But certainly, we I think we understood that there was some part of what we saw in the first quarter that was unique to the weather and the consumer benefits around tax refunds that we saw within the quarter. As we move through that and into the back half of the year, second quarter to Brad's point you know, finished on some of the hot weather categories, not quite as robust as you like to see. We figured we would probably pick that back up here in July. And then we will move through the balance of the year. To your point, some of the comparisons were choppy as the broader economy consumers kinda move through some of the responses to price levels being increased kind of really more broadly across the economy. And we talk through those as they occurred last year. I think you articulated very well. We do not necessarily think that we will see that level of volatility in the back half of the year. We think that there is probably a lot more stability there, although we are cognizant that it could we could see some of that again just depending upon what happens from a broader consumer perspective, but we will have we will have the opportunity in some of those periods to lap periods of time where maybe consumers were reacting a little bit to the things that were happening in 2025. You know, broadly speaking, ultimately, we will see where it all lands as we move through the rest of the year. We feel pretty good about momentum that we have been able to create from an execution perspective relative to where the market is. So, you know, our focus and intention is to outperform and to be able to deliver solid results in any market, and, ultimately, sometimes the highs and lows are determined by the short term things that we see in the in the consumer. Christopher Horvers: Yeah. Absolutely. Seems like this year, your share gains have really widened. Christopher Horvers: I wanted to follow-up on the outlook for inflation, understanding the back half of the year, you are sort of baking in the normalcy and what you assumed really at the start of 2026. But I wanted to pull apart, are you seeing sort of product cost increase requests give related to you know, the fuel cost of shipping products over from Asia that, you know, that your vendors wanna pass on to you. And if you get them, you know, would you pass them through? And then on the other hand, more of the periodic cost of, shipping from DC to customer and to store, how do you anticipate handling that? Do you have a do you has your outlook changed at all in that regard? And as you look back on the industry historically, does the industry pass on that sort of periodic cost of domestic transportation from DC to store and to customer versus you know, you know, for sure passing on the, product input cost side? Jeremy Adam Fletcher: Yeah. Great questions, Christopher. I will start there. And Brad or Brent might wanna to add to anything I miss. You know, from the from the kinda over the ocean freight, the inbound cost as we think about it is a component of our acquisition cost. You know, that obviously fluctuates from period to period, and we have seen some minor impacts there, but nothing of huge concern to us at this point. And to your point, we would kind of characterize that within the context of just broadly where we see acquisition and cost pressures and so forth. And that is we would tell you that is all been pretty rational and stable this year, and the industry continues to operate the past those through to customers as appropriate for what we see and what others would see. So nothing really kinda, I think, in that dynamic that we would view as unusual, and that is kinda incorporated into how we thought about sort of that normal rate of inflation that we are expecting for the back half of the year. From an operating cost standpoint, we are we are seeing, you know, I think everybody would be to run our trucks to maintain a high level of service to our customers. We are seeing some pressure from fuel prices that have been increased. You know, we would just to dimensionalize that a little bit. for you. It kind of falls within the range of some of the normal puts and takes we see within our SG&A spend. Brent outlined it within his comments. That was pretty much in line with our expectations. So in any given quarter, we are gonna have a range of where we think they will fit, and we were probably closer to the top end of that range with the sales volume being what it is. And some of that incremental. But by and large, in most instances, that is sort of managed along with the overall cost structure of the business. And it is not an item that you would see a discrete price change move through. Having said that, that is just part of part of the broader inflation that is always gonna be, you know, a part of our operating costs below the gross profit line. And those are all things that as we see inflation in acquisition costs in our industry is very rational in how we pass those through. it is always been our approach to make sure we are maintaining gross margin rate in those instances, and that benefit helps us to cover the normal operating cost inflation dynamics that we see in our business, and they typically tack up pretty well. If we were ever in a situation where we saw even more enhanced pressure on fuel or any other items that was sort of dislocated from the cost we paid for our products. Then we feel really comfortable that we could identify that and pass it through, then the market would be rational about that. But those things typically in our history and our business have worked pretty much in sync and in tandem. Christopher Horvers: Super helpful. Thanks so much. Brad W. Beckham: Thanks, Christopher. Thanks, Christopher. Operator: Your next question is coming from Zachary Fadem from Wells Fargo. Your line is live. Zachary Fadem: Hey. Good morning. You are pointing us to an SG&A per-store level that is moving back closer to that 3% range. And the first question is whether you think this is the right run rate now as we move past an elevated period. And as we normalize, is it fair to think about a 3% comp leverage point? And should we anticipate a return to operating margin expansion at this level? Jeremy Adam Fletcher: Yes. Good morning, Zachary. This is Jeremy. I will take the first stab at that question as well. And completely understand and appreciate the question on the longer term run rate. I would be remiss if I did not remind you that we will provide guidance for you guys for 2027 as we as we move closer to the year. And so we are we are always reluctant to put a stake in the sand around what you know, kind of the expected kind of core year to year guidance thought process should be on that because every environment just becomes a little bit unique and different. For sure for us in the back half of the year, we are we are we are calendaring up against some pretty substantial pressures in our business, and we spent a lot time, I think last year talking about some of the things that we saw in third quarter and fourth quarter. That elevated our SG&A levels that had been higher than what we had seen before. And so, the I think the 1 positive of that is as we as we calendar against some of those things, we will we will see the impact of some of those pressures being built into the base and not necessarily seeing a reacceleration on top of that. In the back half of the year. that is part of why we got comfort in why implicitly the per store SG&A growth rate within our guidance is less in the back half of the year than it is in the front half of the year. You know, I would not I would caution against saying, that is now the new run rate because we will roll into 2027, we will obviously have to have a read on where we think the broader inflation environment is and the broader economy is particularly as it pertains to wage rates and those types of things. And then we will also continue to be proactive and aggressive in our posture where we see that we have opportunities to lean into our business and do the types of things that we know will enhance the value that we create for our customers that helps us to drive the share gains that we have. So you know, it is not you know, I am not trying to be evasive around the question, but I would tell you, we do not we do not view it internally in those ways. We are gonna make sure that we match the business opportunities that we have in the that we have to be sure that we are driving the right result for our customers on a long-term perspective that we know is gonna help us to address this great opportunity that we talked about on the call. Brad W. Beckham: Yeah, Zachary. I may just add that, you know, feel really good about the back half and where we where we have said we are going to land. Still a lot of year to go, but have a lot of conviction about our ability to execute. But I just I would be remiss if I did not say that, you know, when I think about our 7% year-to-date comparable store sales increase, over top line growth of 9%. Our focus priority 1 is this 10% of the market we have. We feel like we can change that, very aggressively over the next few years, especially over the next decade. So our focus is on taking profitable share. First and foremost, our next priority is solidly driving operating profit dollar growth. And, so we just wanna we wanna stay focused on those things. But we also wanna balance that with the fact that we are very proud of the operating profit percentages we have been able to generate over the last couple decades as well as our leverage points you know, to make sure we are dragging it to the bottom line. And so we are focused on both, but we wanna keep an eye on that top line, and, we are not gonna make short term decisions that are gonna affect our ability to take share for the mid and long-term. Zachary Fadem: And putting your share gains aside for a minute, I think there is some concern that the broader industry is beginning to slow, call it inflation, consumer pressures, oil prices, etcetera. And I am curious to hear whether or not you agree with that sentiment and how you would view industry trends right now for both DIY and pro and how these dynamics influence your expectations for the broader category this year? Jeremy Adam Fletcher: Yeah. No. great question. Happy to address it, Zachary. I mean, I think for us, clearly, there is going to be some impact from just the calendaring of the of the price increases that the industry passed through last year. And so and so I think, you know, like, the clearest point of deceleration and really the 1 that I think we have been very clear about and articulated in the back half of year is that is just the dynamic around comparisons that we should expect to see. I think you know, 1 of the benefits, obviously, that we have been able to see this day to day and week-to-week is we kinda understand the cadence of our business and the volumes that we do and what we see in terms of customers and their transaction accounts, that kinda moves from period to period. And so as we as we look at our consumer and what they have looked like in 2026, we still feel good about the resiliency of that consumer to be able to adjust to some of the pressures that are occurring within the broader mark marketplace. We think that even as we have moved over the last calendar year through some of the stuff that, that caused some volatility in the last year and some of the puts and takes from fuel prices this year that we have we still operate an industry with a very resilient consumer and that they will they will respond well, that they are gonna take care of their vehicles and wanna keep them on the road at higher mileages and older ages because that is a it is a great decision for a car owner to do that. And we think all of those things lend probably more stability to how we view the outlook. Then there would be volatility. We are we are always gonna be cautious the back half of the year. You know, we know we will we will get into further into the year and start to get into the holiday selling season, everything else that could impact our customer. But outside of a very real calendaring of same-SKU inflation that will moderate back to kind of normal levels, The rest of how we would view the broader industry is positive and consistent with kinda our broader view on our industry in most periods. Brad W. Beckham: Yeah, Zachary. I would I would just wrap that up by saying that while it is always a little hard for us to set share gains aside because that is our that is our focus every day is taking existing share and out in the market and turning it into O'Reilly share. But if I do that, you know, I just gotta pull it back up to the fact that I do not know that I agree that the industry is gonna slow. There could be some volatility. We will see what happens with pressure to the consumer. But you know, I am sitting here looking at, you know, over 293 million light car and light truck vehicles in the U.S. now. that is an increasing number. Average age, as you know, continues to increase to 13 years old. We are over 3.3 trillion miles driven in 2025 in the U.S. alone. And those dynamics are very similar in Mexico and Canada. And so while there could be some short term volatility, I think really the breadth, the way that Jeremy articulated and when I think about the core fundamentals of our industry used car prices, new car prices, do not know that I totally agree that we are gonna see an industry slowdown. Appreciate the thoughts. Thanks for the time. Operator: Thank you. Your next question is coming from Greg Melich from Evercore ISI. Your line is live. Greg Melich: Hi. Thanks. I wanted to follow-up on what really drove a lot of the in like-for-like inflation, which is the tariffs. Have you guys received any rebates so far and or any forthcoming, in your guidance plans in the back half? And then my follow-up is on Phase 2 there. Brent G. Kirby: Yeah, Greg, This is Brent. I can start on the tariffs, and these guys can add in. But yeah. You know, I mean, you think about, obviously, the tariff environment has been pretty choppy. You know, for some time now. And you know, our team has done a fantastic job navigating through that. Our merchandise team has done a tremendous job working with suppliers on that. But you know, 1 thing I will remind you is, you know, we are not paying a lot of direct tariffs. A lot of our sourcing model historically has been driven by, you know, other suppliers that were the importer of record. You know, so in terms of just having a big tariff rebate check, per se, that is really not the way our supply chain model has historically worked. Now with that said, we have we have worked very diligently, the team's done a fantastic job working with our suppliers. To make sure that as that those tariff refunds come in, that we are benefiting from sharing the benefit from those refunds with our supplier partners. In addition to that, you know, as we always do, our team continues to do a fantastic job diversifying our supply chain with country of origin. We continue to make progress in that in the first half of the year. Very pleased with what we see there, and we are continuing to build capabilities that allow us to, in the cases that it benefits us, become that importer of record. In the cases it does not be that importer of record, but when you think about this direct tariff rebates or refunds as some retailers have spoken about it, that is that is something we are doing in cost and cost of goods and how we negotiate the cost of goods. And, we have been very pleased with the job that the team's done throughout the tariff regime of the last year and a half. And certainly, been very proud of the work of the team in the first half of this year and feel comfortable with the ability to do even more of that as we move into the back half of the year and move forward in terms of benefit of best first cost of goods and best utilization of transportation dollars in bringing those goods to market at the best possible cost to be able to maximize our margin opportunity. So, that is really the way we think about it and that is the way we have been operating just feel like the team's done a great job. But, yeah, there is maybe a little bit of a misinterpretation about direct refunds when you think about our supply chain model versus some others in retail that maybe you guys cover? Greg Melich: Got it. And maybe then a follow-on to that is given the you are working with your vendors, When you are working with them, is this something that, basically, ends up being an offset from what might be other rising energy cost pressures and if there is a way to think about having more perhaps rate go up in gross margin to what you are seeing in SG&A. From fuel costs? Brent G. Kirby: Yeah, everything's on the table in those negotiations. And, yeah, any input costs whatever that may be, whether it is commodities, labor, raw materials, transportation, whatever those components are of cost of goods in total, everything's a part of those negotiations. So, you know, what I would tell you is we feel very confident in our ability and partnership with those suppliers to be able to continue to improve our gross margin performance just kind of like I pointed to at the midpoint of the year in terms of our guide and maintaining that. We feel confident there as we look to the back half and feel confident even with some of the newer capabilities that we are building to even further address that as we move forward. Greg Melich: Got it. Thanks and good luck. Brad W. Beckham: Thanks, Gregory. Thanks, Gregory. Operator: Thank you. Your next question is coming from Simeon Gutman from Morgan Stanley. Your line is live. Simeon Gutman: Hey. Good morning, everyone. I know you guys do not manage the stock price, but 1 of the premises is that the profit growth would need to accelerate to create earnings upside drive the multiple and then obviously more earnings. The sales are good. We know SG&A is coming down. I wanted to focus on gross margin If there is any levers there that can be cranked up to think about how incremental margins can accelerate going forward. Jeremy Adam Fletcher: Yeah, I could start there, Simeon, and Brad can jump in. You know, we you know, Brent said it in his prepared comments. We feel good about our gross margin performance in the second quarter and front half of the year. You there is, I think, for us, a pretty a pretty consistent playbook around how we feel like we can make incremental improvements from a margin perspective. We have proven over the long course of time that we are a great partner for our suppliers. Know, we view the opportunities that we have in the businesses as a combined set of opportunities for us and our supplier partners. And as we grow, they benefit from it, and that, I think, helps us to be able to articulate a great value proposition that we can leverage to acquire parts better as we move forward. I think that also has been inclusive of how we can manage our portfolio of proprietary brands and being very thoughtful and strategic about how we position ourselves around those. And then obviously, distribution is huge part of our business, and we are working hard to lever those costs, but with a real eye towards the incredible productivity that our efforts there drives and the ability to drive sales gains and growth. And really that is the underpinning of everything that we do is how do we think about what is gonna be able to allow us to support creating the best value proposition for our customers and how do you how do you drive that gross profit dollar growth? By being able to consolidate the industry and grow faster. But at the same time, there are opportunities to incrementally improve that margin rate. You know, we you know, our capabilities and our flexibility to improve is going to really leverage our supply chain from kind of the point of manufacturers continue to improve over the course of time. that is evolved as we work through a few care cycles, and we have we have been able to diversify country of origin, and we will continue to pursue and explore opportunities there to get incrementally better. But it is really all kinda consistently focused on what do we think the right long-term strategy is there. In any given quarter, you know, we are gonna we are gonna perform within a little bit tighter band, and there will be puts and takes, but we feel good about the longer term trajectory of what we could do with gross margin rates. Simeon Gutman: Okay. And then a follow-up, flipping it back to, sales and SG&A leverage. Would you invest more for another incremental point of comp, meaning you think the business at its current run rate is taking an appropriate amount of share Or would you if you could drive the gross profit dollars faster vis-à-vis more sales, you would let the business run back down to SG&A per, call it, 3%. You would keep it a little higher? Brad W. Beckham: Yeah. Hey, Simeon, it is Brad. Great question. You know, that is what our team's focused on balancing every day is where our next best dollar spend is, the return on that dollar, And I would just say that, we feel really great with your question right where we are at. We feel like we are making the right investments we have the right ROI on. We feel like our store staffing, which it comes to store payroll, Jason Tarrant and his team are doing an unbelievable job walking that piano wire that they walk every day. Making sure that we are giving excellent customer service, taking market share, and also managing our largest controllable expenses for payroll. So we evaluate that ongoing, but we feel like we found the sweet spot in terms of what we are currently investing to get that top line return. Thanks, Simeon. Operator: Thank you. We have reached our allotted time for questions. I will now turn the call back over to Mr. Brad W. Beckham for closing remarks. Brad W. Beckham: Thank you, Matthew. We would like to conclude our call today by thanking the entire O'Reilly team for your continued dedication to our customers. I would like to thank everyone for joining our call today. I would also like to remind everyone that we will be webcasting our Analyst Day on Thursday, September 17, beginning at 8:00 AM Eastern Time. Details will be available on our website, and we hope you will be able to join us either virtually or in person. Thank you. Operator: Thank you. This does conclude today's conference call. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation. Before you buy stock in O'Reilly Automotive, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and O'Reilly Automotive wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $397,405!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,344,091!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 7, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. O'Reilly Automotive (ORLY) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Get insights on thousands of stocks from the global community of over 7 million individual investors at Simply Wall St. O'Reilly Automotive (ORLY) is back in focus after its latest quarterly report and guidance update, alongside a substantial share repurchase that completed a long running buyback program first announced in 2011. See our latest analysis for O'Reilly Automotive. Despite the solid quarterly update and completion of a long running buyback, O'Reilly Automotive's share price has eased, with the 30 day share price return down 5.14% and the 1 year total shareholder return down 11.15%. However, the 3 and 5 year total shareholder returns of 40.79% and 116.54% respectively point to stronger longer term momentum. If you are reassessing auto related exposure after O'Reilly Automotive's latest update, this can be a good moment to look at 35 power grid technology and infrastructure stocks as a fresh set of ideas beyond traditional retail stocks. O'Reilly Automotive just paired a completed multidecade buyback with revenue and earnings that met or topped expectations, yet the share price has pulled back. Is this mainly about the business, or has sentiment simply swung too far and set up the valuation debate next? O'Reilly Automotive's most followed narrative pegs fair value at $109.70, compared with a last close of $87.36. That gap is rooted in detailed growth, margin and valuation assumptions that go well beyond the latest quarter. Read the complete narrative. Want to understand why this narrative supports a higher fair value for O'Reilly Automotive than the current price implies? The story leans on steady revenue expansion, slightly higher margins and a richer future earnings multiple that sits above the broader specialty retail group. Curious which specific growth path and profit profile would be needed to bridge that gap? The full narrative lays out the specific earnings and revenue path behind that $109.70 figure. Result: Fair Value of $109.70 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, O'Reilly Automotive still faces meaningful risks, including tariff or sourcing changes that pressure product costs, and inflation driven increases in store level wages and occupancy expenses. Find out about the key risks to this O'Reilly Automotive narrative. The popular narrative points to O'Reilly Automotive trading below a modeled fair value of $109.70, yet its current P/E of 26.9x is higher than the US Specialty Retail industry at 20.6x, the peer average at 21.1x and the fair ratio of 19.4x that the market could move toward. That richer multiple reduces the margin of safety and raises the question of how much good news is already in the price. See what the numbers say about this price — find out in our valuation breakdown. Given the mix of concern and optimism around O'Reilly Automotive right now, use this period to review the data and pressure test your own stance with 3 key rewards and 2 important warning signs If O'Reilly Automotive has you rethinking your watchlist, do not stop here. Use the Simply Wall Street Screener to find other stocks that fit your goals. Target cash rich companies that appear mispriced by checking the 57 high quality undervalued stocks. Prioritise resilience and capital strength by reviewing the solid balance sheet and fundamentals stocks screener (46 results). Spot early stage stories with room to grow by scanning the screener containing 20 high quality undiscovered gems. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include ORLY. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Interested in O'Reilly Automotive, Inc.? Here are five stocks we like better. O’Reilly reported strong second-quarter results, with comparable-store sales up 6% and diluted EPS up 10% year over year. Professional sales led growth with roughly 10% comparable gains, while DIY sales rose at a low-single-digit rate. The company raised its full-year comparable-sales outlook to 4%–6% and EPS guidance to $3.20–$3.30, while forecasting 2026 revenue of $18.9 billion–$19.2 billion. Gross-margin and operating-margin guidance were maintained. O’Reilly remains focused on organic expansion, targeting 225–235 new stores in 2026 and $1.3 billion–$1.4 billion in capital spending. It repurchased $1.5 billion of stock in the quarter and said it does not expect to pursue a large transformative acquisition. Hitting the Brakes: Is O'Reilly's Stock a Breakdown or a Buy? O'Reilly Automotive (NASDAQ:ORLY) reported a stronger-than-expected second quarter, with comparable store sales rising 6% and diluted earnings per share increasing 10% from the prior-year period, as growth in its professional business remained particularly robust. Chief Executive Officer Brad Beckham said comparable-store sales rose 7% during the first six months of 2026, helping drive total sales growth of more than 9%. The company raised its full-year comparable-sales outlook to a range of 4% to 6%, from a prior range of 3% to 5%, while maintaining its expectations for growth in the second half of the year. → Why SK hynix Could Be the Best AI Chip Stock to Buy Now The Hidden Value in Genuine Parts Company’s Spin-Off Plan O'Reilly said its professional business generated comparable sales growth of about 10% in the second quarter, marking its fourth consecutive quarter of double-digit comparable growth. Professional ticket counts increased in the mid-single digits, while growth was also supported by higher average ticket values. The do-it-yourself business posted low-single-digit comparable-sales growth. Higher average ticket values, largely driven by same-SKU inflation, were the primary contributor, while transaction counts declined by a low-single-digit percentage. Beckham said hot weather-related product categories faced pressure late in the quarter because typical early-summer demand did not materialize as strongly as expected. → 3 Value ETFs to Consider as Growth Stocks Lag Behind From Rust to Riches: 2 Auto Parts Names Built for 2026 “Despite this pressure, we believe we're outperforming the market and gaining DIY share,” Beckham said, adding that the company saw a strong pickup in sales as hotter weather arrived in July. Same-SKU inflation totaled 5.5% for the consolidated business during the quarter. For the second half, O'Reilly expects that benefit to moderate to a range of 1% to 2% as the company laps tariff-driven price increases implemented in 2025. → 5 AI Stocks Are Pulling Back—Which Growth Catalysts Still Look Strongest? Management said it remains cautious about the potential effects of fuel prices, crude oil costs and broader economic pressures on consumers. Still, Beckham said customers have remained resilient and continue to prioritize maintaining and repairing their vehicles. O'Reilly increased its full-year diluted earnings-per-share guidance to a range of $3.20 to $3.30, citing first-half sales and operating performance as well as the impact of share repurchases completed through the earnings release date. The company now expects 2026 revenue of $18.9 billion to $19.2 billion. President Brent Kirby said second-quarter gross margin was 51.4%, unchanged from the year-earlier quarter and in line with management's expectations. The company benefited from acquisition cost reductions and improved distribution-cost leverage on higher sales volumes, though those gains were offset by product-mix effects and the faster growth of professional sales. O'Reilly maintained its full-year gross-margin guidance of 51.5% to 52%. At the midpoint, that would represent 16 basis points of expansion compared with 2025. Year-to-date gross margin was 51.5%, up 11 basis points from the prior year. Second-quarter selling, general and administrative expense per store increased 4.8%, reflecting spending to support higher sales volumes and modest pressure from higher fuel prices. O'Reilly narrowed its full-year SG&A-per-store growth guidance to 3.5% to 4%, while reiterating an operating-profit-margin outlook of 19.3% to 19.8%. For the first half, operating margin expanded 21 basis points and operating profit dollars increased 10%, Kirby said. O'Reilly opened 110 net new stores in the first half across 31 U.S. states, Puerto Rico, Mexico and Canada. The company remains on track to open 225 to 235 net new stores in 2026. It ended the quarter with 6,695 stores across North America and more than 95,000 team members. Capital expenditures totaled $552 million in the first six months, and the company continues to forecast full-year capital spending of $1.3 billion to $1.4 billion. Investments are targeted toward new stores, distribution capabilities, store refreshes, technology and inventory availability. Inventory per store ended the second quarter at $892,000, up 7% year over year. The company continues to target inventory-per-store growth of 5% by the end of 2026. Chief Financial Officer Jeremy Fletcher said first-half free cash flow rose to $1.5 billion from $904 million a year earlier, driven primarily by operating-income growth and the timing of renewable-energy-credit payments. Full-year free-cash-flow guidance remained $1.8 billion to $2.1 billion. The company repurchased 17 million shares during the second quarter at an average price of $90.40, spending $1.5 billion. Through the earnings release date, 2026 repurchases totaled 34 million shares for $3.1 billion. O'Reilly ended the quarter with adjusted debt to EBITDAR of 2.17 times and said it intends to prudently move toward its 2.5-times leverage target. Addressing speculation about a possible acquisition involving a competitor, Beckham reiterated that O'Reilly does not comment on rumors. He said the company expects future acquisition opportunities that meet its criteria to be mainly smaller tuck-in deals and expansion-market transactions, rather than a large transformative acquisition. “We have no expectation or intention of executing a large transformative acquisition in the foreseeable future,” Beckham said during prepared remarks. Management emphasized its focus on organic growth, customer service, store expansion and inventory investments, arguing that the company still has a relatively small share of a fragmented auto-parts market. O'Reilly plans to host an Analyst Day at its Atlanta distribution center on Sept. 17. O'Reilly Automotive, Inc is a leading retailer and distributor in the automotive aftermarket, supplying parts, tools, supplies and accessories for both professional service providers and do‑it‑yourself (DIY) customers. The company's product assortment covers replacement parts, maintenance items, performance parts, collision components and shop equipment, complemented by diagnostic tools, batteries, chemicals and consumables. O'Reilly serves customers through company-operated retail stores, commercial sales programs for repair shops and maintenance fleets, and digital channels that support parts lookup, ordering and fulfillment. The company operates a broad supply chain that includes regional distribution centers to support rapid replenishment of store inventory and commercial deliveries. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "O'Reilly Automotive Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

O’Reilly Automotive, Inc. ORLY reported second-quarter 2026 earnings of 86 cents per share, up 10.3% year over year. The figure beat the Zacks Consensus Estimate of 85 cents by 1.2%. Revenues increased 8.1% to $4.89 billion and surpassed the consensus mark of $4.86 billion by 0.8%.Comparable store sales rose 6%, supported by solid growth across the professional service provider and do-it-yourself channels. The company also benefited from an expanding store network and a lower share count. O'Reilly Automotive, Inc. price-consensus-eps-surprise-chart | O'Reilly Automotive, Inc. Quote 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. 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. 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%. 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. 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. 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. 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. 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. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report O'Reilly Automotive, Inc. (ORLY) : Free Stock Analysis Report Genuine Parts Company (GPC) : Free Stock Analysis Report General Motors Company (GM) : Free Stock Analysis Report Tesla, Inc. (TSLA) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Performance was anchored by the professional (DIFM) business, which achieved its fourth consecutive quarter of double-digit comparable store sales growth at 10%. Management attributes professional segment outperformance to robust ticket count growth in the mid-single digits, a trend that has remained consistent since the post-pandemic normalization. DIY comparable sales grew in the low single digits, benefiting from average ticket strength but facing headwinds from lower transaction counts due to unfavorable hot-weather-related category demand in June. Consolidated comparable store sales growth of 6% was driven by a 5.5% same-SKU inflation benefit, which aligned with management's internal expectations. Strategic positioning remains focused on organic consolidation of a fragmented market, with management emphasizing that they still only hold approximately 10% of the total addressable market. The company is prioritizing capital allocation toward existing store reinvestment and organic expansion, explicitly stating they have no intention of pursuing large transformative acquisitions. Full-year comparable store sales guidance was raised to 4% to 6%, purely reflecting first-half outperformance while keeping second-half expectations unchanged due to potential macro volatility. Management projects same-SKU inflation to moderate to 1% to 2% in the back half of 2026 as the company laps significant tariff-driven price increases from the prior year. The guidance framework assumes a cautious consumer outlook, accounting for potential choppiness in demand resulting from sustained economic pressure and volatile fuel prices. SG&A per store growth is expected to moderate in the second half of the year to finish between 3.5% and 4% as the company laps elevated legal and insurance costs from late 2025. Inventory investment is targeted to grow 5% per store by year-end 2026, supported by enhanced distribution capacity from the new Atlanta facility. Gross margin of 51.4% remained flat year-over-year, as benefits from acquisition cost reductions were offset by a higher mix of lower-margin professional sales. The company increased its adjusted debt-to-EBITDAR ratio to 2.17x, moving closer to its long-term optimal leverage target of 2.5x through increased commercial paper borrowings. Management highlighted the impact of crude oil price increases on product costs, which they have partially passed through to customers to maintain margin stability. A significant $3.1 billion has been deployed for share repurchases year-to-date, reflecting a strategic shift to return excess capital as cash flow generation remains robust. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management explicitly denied any structural change in their M&A strategy, reiterating a focus on organic growth and small 'tuck-in' acquisitions. They expressed high conviction in their ability to gain market share by running their existing 'playbook' rather than through transformative deals. Management is reluctant to predict a direct acceleration in units as pricing fades but expects average ticket to remain a driver due to increasing vehicle complexity. July trends showed a 'strong step-up' in sales as summer heat finally drove demand for deferred weather-related categories. O'Reilly does not expect large direct tariff rebate checks because they are rarely the importer of record; instead, they negotiate these benefits through lower acquisition costs with suppliers. The company is actively diversifying its country-of-origin sourcing to mitigate future geopolitical or tariff-related cost pressures. Management declined to set a 3% comp leverage point for 2027, stating they will continue to 'lean into' investments that drive market share even if it pressures short-term SG&A. Priority remains on growing operating profit dollars and taking share over hitting specific margin percentage targets.