Auto parts and accessories retailer O’Reilly Automotive (NASDAQ: ORLY) met Wall Street’s revenue expectations in Q3 CY2025, with sales up 7.8% year on year to $4.71 billion. The company’s outlook for the full year was close to analysts’ estimates with revenue guided to $17.7 billion at the midpoint. Its GAAP profit of $0.85 per share was 2.4% above analysts’ consensus estimates.
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O'Reilly (ORLY) Q3 CY2025 Highlights:
- Revenue: $4.71 billion vs analyst estimates of $4.69 billion (7.8% year-on-year growth, in line)
- EPS (GAAP): $0.85 vs analyst estimates of $0.83 (2.4% beat)
- The company slightly lifted its revenue guidance for the full year to $17.7 billion at the midpoint from $17.65 billion
- EPS (GAAP) guidance for the full year is $2.95 at the midpoint, roughly in line with what analysts were expecting
- Operating Margin: 20.7%, in line with the same quarter last year
- Free Cash Flow Margin: 6.3%, down from 11.5% in the same quarter last year
- Locations: 6,538 at quarter end, up from 6,291 in the same quarter last year
- Same-Store Sales rose 5.6% year on year (1.5% in the same quarter last year)
- Market Capitalization: $85.96 billion
Brad Beckham, O’Reilly’s CEO, commented, “We are pleased to report another quarter of solid performance and profitable growth, highlighted by a 5.6% increase in comparable store sales and a 12% increase in diluted earnings per share for the third quarter. Our Team continues to execute our proven business model at a very high level, generating robust sales growth by delivering share gains on both sides of our business. Team O’Reilly’s commitment to providing unparalleled service to our customers drove our strong results, and I would like to thank each of our over 93,000 Team Members for their unrelenting hard work and dedication.”
Company Overview
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.
Revenue Growth
A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years.
With $17.46 billion in revenue over the past 12 months, O'Reilly is one of the larger companies in the consumer retail industry and benefits from a well-known brand that influences purchasing decisions. However, its scale is a double-edged sword because it’s harder to find incremental growth when you’ve penetrated most of the market. To accelerate sales, O'Reilly likely needs to optimize its pricing or lean into international expansion.
As you can see below, O'Reilly’s sales grew at a mediocre 9.8% compounded annual growth rate over the last six years (we compare to 2019 to normalize for COVID-19 impacts), but to its credit, it opened new stores and increased sales at existing, established locations.
This quarter, O'Reilly grew its revenue by 7.8% year on year, and its $4.71 billion of revenue was in line with Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to grow 6.3% over the next 12 months, a deceleration versus the last six years. We still think its growth trajectory is attractive given its scale and implies the market is forecasting success for its products.
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Store Performance
Number of Stores
A retailer’s store count influences how much it can sell and how quickly revenue can grow.
O'Reilly sported 6,538 locations in the latest quarter. Over the last two years, it has opened new stores quickly, averaging 3.3% annual growth. This was faster than the broader consumer retail sector.
When a retailer opens new stores, it usually means it’s investing for growth because demand is greater than supply, especially in areas where consumers may not have a store within reasonable driving distance.
Same-Store Sales
The change in a company's store base only tells one side of the story. The other is the performance of its existing locations and e-commerce sales, which informs management teams whether they should expand or downsize their physical footprints. Same-store sales provides a deeper understanding of this issue because it measures organic growth at brick-and-mortar shops for at least a year.
O'Reilly’s demand has been spectacular for a retailer over the last two years. On average, the company has increased its same-store sales by an impressive 3.5% per year. This performance suggests its rollout of new stores is beneficial for shareholders. We like this backdrop because it gives O'Reilly multiple ways to win: revenue growth can come from new stores, e-commerce, or increased foot traffic and higher sales per customer at existing locations.
In the latest quarter, O'Reilly’s same-store sales rose 5.6% year on year. This growth was an acceleration from its historical levels, which is always an encouraging sign.
Key Takeaways from O'Reilly’s Q3 Results
Revenue was in line, but EPS beat. Looking ahead, full-year revenue and EPS were both raised. Zooming out, we think this was a fine quarter. The stock remained flat at $100.18 immediately following the results.
So do we think O'Reilly is an attractive buy at the current price? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.
