8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT PURSUANT TO

SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (date of earliest event reported): July 26, 2023

O’Reilly Automotive, Inc.

(Exact name of registrant as specified in its charter)

Missouri	000-21318	27-4358837
(State or other jurisdiction	Commission file	(I.R.S. Employer
of incorporation or organization)	number	Identification No.)

233 South Patterson Avenue

Springfield, Missouri 65802

(Address of principal executive offices, Zip code)

(417) 862-6708

(Registrant’s telephone number, including area code)

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on which Registered
Common Stock $0.01 par value	ORLY	The NASDAQ Stock Market LLC
		(NASDAQ Global Select Market)

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of Securities Act of 1933 (230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (240.12b-2).

☐ Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Section 2 – Financial Information

Item 2.02 – Results of Operations and Financial Condition

On July 26, 2023, O’Reilly Automotive, Inc. (the “Company” or “O’Reilly”) issued a press release announcing its 2023 second quarter earnings.  The text of the press release is attached hereto as Exhibit 99.2.

Section 5 – Corporate Governance and Management

Item 5.02 – Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

On July 26, 2023, the Company issued a press release announcing that Greg Johnson, the Company’s Chief Executive Officer (“CEO”), informed the Company’s Board of Directors (the “Board”) of his intention to retire from the Company effective January 31, 2024.  The Board has selected Brad Beckham, the Company’s Co-President, to succeed Mr. Johnson as CEO upon Mr. Johnson’s retirement.  The Board has also determined that Brent Kirby, the Company’s Co-President, will be promoted to President upon Mr. Johnson’s retirement.

Mr. Beckham, age 44, has been an O’Reilly Team Member since 1996. Mr. Beckham’s O’Reilly career began as a Parts Specialist and progressed through the roles of Store Manager, District Manager, Regional Manager, Divisional Vice President, Vice President of Eastern Store Operations and Sales, Senior Vice President of Eastern Store Operations and Sales, Senior Vice President of Central Store Operations and Sales, Executive Vice President of Store Operations and Sales, and Executive Vice President and Chief Operating Officer.  Mr. Beckham has held the position of Co-President since January of 2023.

Mr. Kirby, age 55, has been an O’Reilly Team Member since 2018.  Mr. Kirby began his 35 year retail career with Lowe’s Companies, Inc. (“Lowe’s”) as a hardware associate and progressed through various positions at the store, district, and regional levels before being promoted to Senior Vice President of Store Operations and later Chief Omnichannel Officer.  Prior to joining O’Reilly, Mr. Kirby held the position of Chief Supply Chain Officer for Lowe’s.  In 2018, Mr. Kirby’s O’Reilly career began as Senior Vice President of Omnichannel and progressed through the roles of Executive Vice President of Supply Chain and Executive Vice President and Chief Supply Chain Officer.  Mr. Kirby has held the position of Co-President since January of 2023.

The Human Capital and Compensation Committee of the Board (the “Compensation Committee”) recommended, and the Board approved, maintaining the current annual base salary and annual performance incentive compensation for Messrs. Johnson, Beckham, and Kirby at this time.  The Compensation Committee will evaluate Messrs. Beckham’s and Kirby’s full compensation plan, including, but not limited to, base salary, cash-based incentive compensation, equity-based incentive compensation and other perquisites, at the time of Mr. Johnson’s retirement and Messrs. Beckham’s and Kirby’s promotions and will provide a recommendation to the Board at that time.

There are no arrangements or understandings between Mr. Beckham or Mr. Kirby and any other person pursuant to which Mr. Beckham or Mr. Kirby was selected as an officer, there are no family relationships between Mr. Beckham or Mr. Kirby and any director or other officer of the Company, and there are no transactions in which the Company is a party and in which Mr. Beckham or Mr. Kirby has a material interest subject to disclosure under Item 404(a) of Regulation S-K.

The text of the press release is attached hereto as Exhibit 99.1.

Section 9 – Financial Statements and Exhibits

Item 9.01 – Financial Statements and Exhibits

Exhibit Number	Description
99.1	Press release dated July 26, 2023
99.2	Press release dated July 26, 2023
104	Cover Page Interactive Data File – the cover page XBRL tags are embedded within the Inline XBRL document

The information in Item 2 and Exhibit 99.2 of this Current Report on Form 8-K shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.  

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: July 26, 2023	O’REILLY AUTOMOTIVE, INC.
	By:	/s/ Jeremy A. Fletcher
		Jeremy A. Fletcher
		Executive Vice President and Chief Financial Officer
		(principal financial and accounting officer)

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

O’REILLY AUTOMOTIVE, INC. ANNOUNCES LEADERSHIP SUCCESSION PLAN

●Chief Executive Officer Greg Johnson to retire

●Brad Beckham to be promoted to Chief Executive Officer

●Brent Kirby to be promoted to President

Springfield, MO, July 26, 2023 – O’Reilly Automotive, Inc. (the “Company” or “O’Reilly”) (Nasdaq: ORLY), a leading retailer in the automotive aftermarket industry, today announced the Company’s leadership succession plan.  Greg Johnson, the Company’s Chief Executive Officer (“CEO”), has informed the Company’s Board of Directors (the “Board”) of his intention to retire from the Company effective January 31, 2024.  The Board has selected Brad Beckham, the Company’s Co-President, to succeed Mr. Johnson as CEO upon Mr. Johnson’s retirement.  The Board has also determined that Brent Kirby, the Company’s Co-President, will be promoted to President upon Mr. Johnson’s retirement.

Executive Chairman of the Board, Greg Henslee, commented, “On behalf of the Board, I would like to express my sincere gratitude to Greg for his 41 years of dedicated service to O’Reilly and, most importantly, for his outstanding leadership as CEO during a truly momentous phase of our Company’s history.  Greg has mentored and developed a strong executive leadership team who led the Company through a period of unprecedented growth, driving record profitability.  Greg is extremely passionate about and committed to perpetuating the O’Reilly Culture and is relentlessly focused on driving excellent customer service in all aspects of our business.  Above all, Greg has been a champion for O’Reilly’s promote from within philosophy and our dedication to long-term succession planning, and he has done an exemplary job preparing both Brad Beckham and Brent Kirby for their new roles.  Brad shares Greg’s passion for O’Reilly.  He is a highly respected member of our executive team whose considerable experience and significant industry knowledge make him exceptionally qualified to succeed Greg as CEO.  Brent is also a proven leader and his extensive retail supply chain and omnichannel experience is critical to successfully driving our Company’s strategic initiatives.  The Company is well prepared for this executive leadership transition and the Board remains highly confident in Team O’Reilly’s ability to continue to generate long-term value for our shareholders.”

“It has been such a privilege to play a part in O’Reilly’s incredible growth story,” stated Mr. Johnson.  “Without any doubt, our success and achievements have been driven by our dedicated Team Members who live our Culture values each day and consistently provide the highest level of service in our industry, and it has truly been an honor to work with this unbelievably talented team.  During my tenure as CEO, Brad and Brent have both been critical members of the O’Reilly leadership team and their significant knowledge, combined with that of our entire experienced executive management team, positions the Company well to continue our record of 30 consecutive years of comparable store sales and operating income growth.”

“It is such an incredible honor to be chosen as the next CEO of our great Company.  I am extremely humbled at the tremendous privilege it is to represent our over 88,000 dedicated and hardworking Team Members”, commented Mr. Beckham, who will become only the fourth CEO in O’Reilly’s rich history.  “When I joined Team O’Reilly as a parts professional in 1996, we focused on the fundamental concept of providing excellent customer service each and every day; 27 years later that principle is alive and well and remains the foundation for our continued success.  David O’Reilly, Greg Henslee, and Greg Johnson have been great examples as leaders and, along with Brent and our entire leadership team, I am absolutely committed to perpetuating our Culture, expanding our market share, and driving profitable growth long into the future.”

About Brad Beckham

Mr. Beckham, age 44, has been an O’Reilly Team Member since 1996.  Mr. Beckham’s O’Reilly career began as a Parts Specialist and progressed through the roles of Store Manager, District Manager, Regional Manager, Divisional Vice President, Vice President of Eastern Store Operations and Sales, Senior Vice President of Eastern Store Operations and Sales, Senior Vice President of Central Store Operations and Sales, Executive Vice President of Store Operations and Sales, and Executive Vice President and Chief Operating Officer.  Mr. Beckham has held the position of Co-President since January of 2023.

About Brent Kirby

Mr. Kirby, age 55, has been an O’Reilly Team Member since 2018.  Mr. Kirby began his 35 year retail career with Lowe’s Companies, Inc. (“Lowe’s”) as a hardware associate and progressed through various positions at the store, district, and regional levels before being promoted to Senior Vice President of Store Operations and later Chief Omnichannel Officer.  Prior to joining O’Reilly, Mr. Kirby held the position of Chief Supply Chain Officer for Lowe’s.  In 2018, Mr. Kirby’s O’Reilly career began as Senior Vice President of Omnichannel and progressed through the roles of Executive Vice President of Supply Chain and Executive Vice President and Chief Supply Chain Officer.  Mr. Kirby has held the position of Co-President since January of 2023.

About O’Reilly Automotive, Inc.

O’Reilly Automotive, Inc. was founded in 1957 by the O’Reilly family and is one of the largest specialty retailers of automotive aftermarket parts, tools, supplies, equipment, and accessories in the United States, serving both the do-it-yourself and professional service provider markets.  Visit the Company’s website at www.OReillyAuto.com for additional information about O’Reilly, including access to online shopping and current promotions, store locations, hours and services, employment opportunities, and other programs.  As of June 30, 2023, the Company operated 6,071 stores across 48 U.S. states, Puerto Rico, and Mexico.

Forward-Looking Statements

The Company claims the protection of the safe-harbor for forward-looking statements within the meaning of 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.  In addition, statements contained within this press release that are not historical facts are forward-looking statements, such as statements discussing, among other things, expected growth, store development, integration and expansion strategy, business strategies, future revenues, and future performance.  These forward-looking statements are based on estimates, projections, beliefs, and assumptions and are not guarantees of future events and results.  Such statements are subject to risks, uncertainties, and assumptions, including, but not limited to, the economy in general; inflation; consumer debt levels; product demand; a public health crisis; the market for auto parts; competition; weather; tariffs; availability of key products and supply chain disruptions; business interruptions, including terrorist activities, war and the threat of war; failure to protect our brand and reputation; challenges in international markets; volatility of the market price of our common stock; our increased debt levels; credit ratings on public debt; historical growth rate sustainability; our ability to hire and retain qualified employees; risks associated with the performance of acquired businesses; damage, failure or interruption of information technology systems, including information security and cyber-attacks; and governmental regulations.  Actual results may materially differ from anticipated results described or implied in these forward-looking statements.  Please refer to the “Risk Factors” section of the annual report on Form 10-K for the year ended December 31, 2022, and subsequent Securities and Exchange Commission filings, for additional factors that could materially affect the Company’s financial performance.  Forward-looking statements speak only as of the date they were made, and the Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

For further information contact:	Investor Relations Contacts
	Mark Merz (417) 829-5878
	Eric Bird (417) 868-4259
	Media Contact
	Sonya Cox (417) 829-5709

EX-99.2

Exhibit 99.2

FOR IMMEDIATE RELEASE

O’REILLY AUTOMOTIVE, INC. REPORTS SECOND QUARTER 2023 RESULTS

●Second quarter comparable store sales growth of 9.0%

●16% increase in second quarter diluted earnings per share to $10.22

●Announced Executive Leadership Succession Plan

Springfield, MO, July 26, 2023 – O’Reilly Automotive, Inc. (the “Company” or “O’Reilly”) (Nasdaq:  ORLY), a leading retailer in the automotive aftermarket industry, today announced record revenue and earnings for its second quarter ended June 30, 2023.

2^nd Quarter Financial Results

Greg Johnson, O’Reilly’s CEO, commented, “We are very pleased to report another quarter of continued strong growth, highlighted by a 9.0% increase in comparable store sales and a 16% increase in diluted earnings per share to $10.22.  Team O’Reilly’s commitment to providing consistently excellent customer service drove robust double-digit professional and solid DIY comparable store sales growth in the quarter.  I want to congratulate our over 88,000 dedicated Team Members on their incredible performance in the second quarter and express my sincere appreciation for their relentless focus on delivering industry-leading service to our customers each and every day.”

Sales for the second quarter ended June 30, 2023, increased $398 million, or 11%, to $4.07 billion from $3.67 billion for the same period one year ago.  Gross profit for the second quarter increased 11% to $2.09 billion (or 51.3% of sales) from $1.88 billion (or 51.3% of sales) for the same period one year ago.  Selling, general and administrative expenses (“SG&A”) for the second quarter increased 14% to $1.23 billion (or 30.3% of sales) from $1.09 billion (or 29.6% of sales) for the same period one year ago.  Operating income for the second quarter increased 7% to $854 million (or 21.0% of sales) from $799 million (or 21.8% of sales) for the same period one year ago.

Net income for the second quarter ended June 30, 2023, increased $51 million, or 9%, to $627 million (or 15.4% of sales) from $577 million (or 15.7% of sales) for the same period one year ago.  Diluted earnings per common share for the second quarter increased 16% to $10.22 on 61 million shares versus $8.78 on 66 million shares for the same period one year ago.

Year-to-Date Financial Results

Mr. Johnson continued, “We have opened 100 net, new stores across 34 U.S. states, Puerto Rico, and Mexico so far in 2023 and are on pace to meet our goal of 180 to 190 net, new store openings in 2023.  We continue to be very pleased with our new store performance, driven by our well-trained and technically-proficient Professional Parts People.  We are also excited to celebrate the expansion of our distribution network with the opening of our first O’Reilly distribution center in Mexico in July.  This new, 370,000 square foot facility strengthens our existing store network with enhanced inventory availability, empowering higher service levels and establishing the critical foundation for long-term store growth in Mexico.”

Sales for the first six months of 2023 increased $810 million, or 12%, to $7.78 billion from $6.97 billion for the same period one year ago.  Gross profit for the first six months of 2023 increased 11% to $3.98 billion (or 51.1% of sales) from $3.59 billion (or 51.6% of sales) for the same period one year ago.  SG&A for the first six months of 2023 increased 13% to $2.41 billion (or 30.9% of sales) from $2.12 billion (or 30.5% of sales) for the same period one year ago.  Operating income for

the first six months of 2023 increased 7% to $1.57 billion (or 20.2% of sales) from $1.47 billion (or 21.1% of sales) for the same period one year ago.

Net income for the first six months of 2023 increased $86 million, or 8%, to $1.14 billion (or 14.7% of sales) from $1.06 billion (or 15.2% of sales) for the same period one year ago.  Diluted earnings per common share for the first six months of 2023 increased 16% to $18.49 on 62 million shares versus $15.94 on 66 million shares for the same period one year ago.

Mr. Johnson concluded, “The strong top-line performance we delivered through the first half of the year exceeded our expectations, and we remain pleased with our performance thus far in July.  We believe the core underlying demand drivers of our industry remain solid, and more importantly, we remain confident in our Team’s ability to consistently execute our proven dual market strategy and expand our market share.  Based on our strong year-to-date results and continued robust sales trends, we are increasing our full-year comparable store sales guidance from a range of 4% to 6% to a range of 5% to 7%.  Finally, I would like to again thank Team O’Reilly for delivering strong results in the first half of 2023 – your commitment to our customers remains the key to O’Reilly’s ongoing success.”

2^nd Quarter Comparable Store Sales Results

Comparable store sales are calculated based on the change in sales for U.S. stores open at least one year and exclude sales of specialty machinery, sales to independent parts stores, and sales to Team Members.  Online sales for ship-to-home orders and pick-up-in-store orders for U.S. stores open at least one year are included in the comparable store sales calculation.  Comparable store sales increased 9.0% for the second quarter ended June 30, 2023, on top of 4.3% for the same period one year ago.  Comparable store sales increased 9.8% for the six months ended June 30, 2023, on top of 4.5% for the same period one year ago.

Share Repurchase Program

During the second quarter ended June 30, 2023, the Company repurchased 0.8 million shares of its common stock, at an average price per share of $904.37, for a total investment of $680 million.  During the first six months of 2023, the Company repurchased 2.1 million shares of its common stock, at an average price per share of $849.48, for a total investment of $1.79 billion.  Excise tax on shares repurchased, assessed at one percent of the fair market value of net shares repurchased, was $16.5 million for the first six months of 2023.  Subsequent to the end of the second quarter and through the date of this release, the Company repurchased an additional 0.1 million shares of its common stock, at an average price per share of $952.24, for a total investment of $119 million.  The Company has repurchased a total of 92.7 million shares of its common stock under its share repurchase program since the inception of the program in January of 2011 and through the date of this release, at an average price of $236.52, for a total aggregate investment of $21.94 billion.  As of the date of this release, the Company had approximately $1.81 billion remaining under its current share repurchase authorization.

Updated Full-Year 2023 Guidance

The table below outlines the Company’s updated guidance for selected full-year 2023 financial data:

	For the Year Ending
	December 31, 2023
Net, new store openings	180 to 190
Comparable store sales	5.0% to 7.0%
Total revenue	$15.4 billion to $15.7 billion
Gross profit as a percentage of sales	50.8% to 51.3%
Operating income as a percentage of sales	19.8% to 20.3%
Effective income tax rate	22.5%
Diluted earnings per share (1)	$37.05 to $37.55
Net cash provided by operating activities	$2.6 billion to $3.0 billion
Capital expenditures	$750 million to $800 million
Free cash flow (2)	$1.9 billion to $2.2 billion

(1) Weighted-average shares outstanding, assuming dilution, used in the denominator of this calculation, includes share repurchases made by the Company through the date of this release.

(2) Free cash flow is a non-GAAP financial measure.  The table below reconciles Free cash flow guidance to Net cash provided by operating activities guidance, the most directly comparable GAAP financial measure:

		For the Year Ending
(in millions)		December 31, 2023
Net cash provided by operating activities		$	2,670	to	$	3,030
Less:	Capital expenditures		750	to		800
	Excess tax benefit from share-based compensation payments		20	to		30
Free cash flow		$	1,900	to	$	2,200

Non-GAAP Information

This release contains certain financial information not derived in accordance with United States generally accepted accounting principles (“GAAP”).  These items include adjusted debt to earnings before interest, taxes, depreciation, amortization, share-based compensation, and rent (“EBITDAR”) and free cash flow.  The Company does not, nor does it suggest investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, GAAP financial information.  The Company believes that the presentation of adjusted debt to EBITDAR and free cash flow provide meaningful supplemental information to both management and investors that is indicative of the Company’s core operations.  The Company has included a reconciliation of this additional information to the most comparable GAAP measure in the table above and the selected financial information below.

Executive Leadership Succession Plan

Today, in a separate press release, O’Reilly also announced the Company’s leadership succession plan.  Effective January 31, 2024, Greg Johnson, who currently serves as the Company’s Chief Executive Officer (“CEO”) will retire and, at that time, Brad Beckham, who currently serves as the Company’s Co-President, will be promoted to CEO, and Brent Kirby, who currently serves as the Company’s Co-President, will be promoted to President.

Earnings Conference Call Information

The Company will host a conference call on Thursday, July 27, 2023, at 10:00 a.m. Central Time to discuss its results as well as future expectations.  Investors may listen to the conference call live on the Company’s website at www.OReillyAuto.com by clicking on “Investor Relations” and then “News Room.”  Interested analysts are invited to join the call.  The dial-in number for the call is (888) 506-0062 and the conference call identification number is 273805.  A replay of the conference call will be available on the Company’s website through Friday, July 26, 2024.

About O’Reilly Automotive, Inc.

O’Reilly Automotive, Inc. was founded in 1957 by the O’Reilly family and is one of the largest specialty retailers of automotive aftermarket parts, tools, supplies, equipment, and accessories in the United States, serving both the do-it-yourself and professional service provider markets.  Visit the Company’s website at www.OReillyAuto.com for additional information about O’Reilly, including access to online shopping and current promotions, store locations, hours and services,

employment opportunities, and other programs.  As of June 30, 2023, the Company operated 6,071 stores across 48 U.S. states, Puerto Rico, and Mexico.

Forward-Looking Statements

The Company claims the protection of the safe-harbor for forward-looking statements within the meaning of 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.  In addition, statements contained within this press release that are not historical facts are forward-looking statements, such as statements discussing, among other things, expected growth, store development, integration and expansion strategy, business strategies, future revenues, and future performance.  These forward-looking statements are based on estimates, projections, beliefs, and assumptions and are not guarantees of future events and results.  Such statements are subject to risks, uncertainties, and assumptions, including, but not limited to, the economy in general; inflation; consumer debt levels; product demand; a public health crisis; the market for auto parts; competition; weather; tariffs; availability of key products and supply chain disruptions; business interruptions, including terrorist activities, war and the threat of war; failure to protect our brand and reputation; challenges in international markets; volatility of the market price of our common stock; our increased debt levels; credit ratings on public debt; historical growth rate sustainability; our ability to hire and retain qualified employees; risks associated with the performance of acquired businesses; damage, failure or interruption of information technology systems, including information security and cyber-attacks; and governmental regulations.  Actual results may materially differ from anticipated results described or implied in these forward-looking statements.  Please refer to the “Risk Factors” section of the annual report on Form 10-K for the year ended December 31, 2022, and subsequent Securities and Exchange Commission filings, for additional factors that could materially affect the Company’s financial performance.  Forward-looking statements speak only as of the date they were made, and the Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

For further information contact:	Investor Relations Contacts
	Mark Merz (417) 829-5878
	Eric Bird (417) 868-4259
	Media Contact
	Sonya Cox (417) 829-5709

O’REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

	June 30, 2023		June 30, 2022		December 31, 2022
	(Unaudited)		(Unaudited)		(Note)
Assets
Current assets:
Cash and cash equivalents	$	57,880	$	253,904	$	108,583
Accounts receivable, net		374,714		330,672		343,155
Amounts receivable from suppliers		138,666		123,112		127,019
Inventory		4,626,410		4,005,384		4,359,126
Other current assets		113,597		86,800		110,376
Total current assets		5,311,267		4,799,872		5,048,259
Property and equipment, at cost		7,872,672		7,160,583		7,438,065
Less: accumulated depreciation and amortization		3,170,474		2,878,170		3,014,024
Net property and equipment		4,702,198		4,282,413		4,424,041
Operating lease, right-of-use assets		2,185,196		1,965,941		2,112,267
Goodwill		897,128		881,299		884,445
Other assets, net		180,834		138,164		158,967
Total assets	$	13,276,623	$	12,067,689	$	12,627,979
Liabilities and shareholders’ deficit
Current liabilities:
Accounts payable	$	6,219,838	$	5,258,712	$	5,881,157
Self-insurance reserves		131,781		137,281		138,926
Accrued payroll		127,333		106,814		126,888
Accrued benefits and withholdings		150,453		148,805		166,433
Income taxes payable		233,507		2,080		—
Current portion of operating lease liabilities		380,618		341,705		366,721
Other current liabilities		450,169		417,792		383,692
Total current liabilities		7,693,699		6,413,189		7,063,817
Long-term debt		4,873,702		4,669,833		4,371,653
Operating lease liabilities, less current portion		1,870,392		1,683,216		1,806,656
Deferred income taxes		260,642		203,744		245,347
Other liabilities		205,661		205,137		201,258
Shareholders’ equity (deficit):
Common stock, $0.01 par value:
Authorized shares – 245,000,000
Issued and outstanding shares –
60,402,359 as of June 30, 2023,
63,752,833 as of June 30, 2022, and
62,353,221 as of December 31, 2022		604		638		624
Additional paid-in capital		1,330,270		1,286,651		1,311,488
Retained deficit		(2,994,418)		(2,391,108)		(2,375,860)
Accumulated other comprehensive income (loss)		36,071		(3,611)		2,996
Total shareholders’ deficit		(1,627,473)		(1,107,430)		(1,060,752)
Total liabilities and shareholders’ deficit	$	13,276,623	$	12,067,689	$	12,627,979

Note:  The balance sheet at December 31, 2022, has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by United States generally accepted accounting principles for complete financial statements.

O’REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
Sales	$	4,068,991	$	3,670,737	$	7,776,855	$	6,966,748
Cost of goods sold, including warehouse and distribution expenses		1,982,409		1,786,019		3,799,944		3,373,958
Gross profit		2,086,582		1,884,718		3,976,911		3,592,790
Selling, general and administrative expenses		1,232,809		1,086,168		2,406,493		2,124,710
Operating income		853,773		798,550		1,570,418		1,468,080
Other income (expense):
Interest expense		(49,587)		(37,384)		(94,159)		(72,225)
Interest income		760		682		1,628		1,192
Other, net		4,186		(4,550)		8,665		(6,488)
Total other expense		(44,641)		(41,252)		(83,866)		(77,521)
Income before income taxes		809,132		757,298		1,486,552		1,390,559
Provision for income taxes		181,767		180,538		342,302		331,919
Net income	$	627,365	$	576,760	$	1,144,250	$	1,058,640
Earnings per share-basic:
Earnings per share	$	10.32	$	8.86	$	18.66	$	16.08
Weighted-average common shares outstanding – basic		60,817		65,116		61,324		65,840
Earnings per share-assuming dilution:
Earnings per share	$	10.22	$	8.78	$	18.49	$	15.94
Weighted-average common shares outstanding – assuming dilution		61,366		65,686		61,878		66,434

O’REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	For the Six Months Ended
	June 30,
	2023		2022
Operating activities:
Net income	$	1,144,250	$	1,058,640
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property, equipment and intangibles		191,673		168,045
Amortization of debt discount and issuance costs		2,431		2,242
Deferred income taxes		13,507		28,302
Share-based compensation programs		14,571		12,702
Other		75		283
Changes in operating assets and liabilities:
Accounts receivable		(31,443)		(60,593)
Inventory		(257,337)		(318,756)
Accounts payable		335,299		563,012
Income taxes payable		261,208		12,013
Other		(22,865)		(73,917)
Net cash provided by operating activities		1,651,369		1,391,973
Investing activities:
Purchases of property and equipment		(460,942)		(228,921)
Proceeds from sale of property and equipment		7,056		8,222
Investment in tax credit equity investments		(4,149)		(4,080)
Other		(1,971)		(86)
Net cash used in investing activities		(460,006)		(224,865)
Financing activities:
Proceeds from borrowings on revolving credit facility		2,776,000		785,800
Payments on revolving credit facility		(1,976,000)		(785,800)
Proceeds from the issuance of long-term debt		—		847,314
Principal payments on long-term debt		(300,000)		—
Payment of debt issuance costs		(24)		(6,323)
Repurchases of common stock		(1,791,451)		(2,151,242)
Net proceeds from issuance of common stock		48,680		35,112
Other		(354)		(350)
Net cash used in financing activities		(1,243,149)		(1,275,489)
Effect of exchange rate changes on cash		1,083		172
Net decrease in cash and cash equivalents		(50,703)		(108,209)
Cash and cash equivalents at beginning of the period		108,583		362,113
Cash and cash equivalents at end of the period	$	57,880	$	253,904
Supplemental disclosures of cash flow information:
Income taxes paid	$	65,361	$	291,695
Interest paid, net of capitalized interest		88,924		68,318

O’REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES

SELECTED FINANCIAL INFORMATION

(Unaudited)

		For the Twelve Months Ended
		June 30,
Adjusted Debt to EBITDAR:		2023		2022
(In thousands, except adjusted debt to EBITDAR ratio)
GAAP debt		$	4,873,702	$	4,669,833
Add:	Letters of credit		111,428		108,891
	Discount on senior notes		5,888		6,692
	Debt issuance costs		20,410		23,475
	Six-times rent expense		2,455,938		2,282,502
Adjusted debt		$	7,467,366	$	7,091,393
GAAP net income		$	2,258,260	$	2,136,265
Add:	Interest expense		179,654		141,830
	Provision for income taxes		636,388		619,047
	Depreciation and amortization		381,561		337,345
	Share-based compensation expense		28,327		24,783
	Rent expense (i)		409,323		380,417
EBITDAR		$	3,893,513	$	3,639,687
Adjusted debt to EBITDAR			1.92		1.95

(i) The table below outlines the calculation of Rent expense and reconciles Rent expense to Total lease cost, per ASC 842, the most directly comparable GAAP financial measure, for the twelve months ended June 30, 2023 and 2022 (in thousands):

		For the Twelve Months Ended
		June 30,
		2023		2022
Total lease cost, per ASC 842		$	485,805	$	453,697
Less:	Variable non-contract operating lease components, related to property taxes and insurance		76,482		73,280
Rent expense		$	409,323	$	380,417

	June 30,
	2023			2022
Selected Balance Sheet Ratios:
Inventory turnover (1)		1.7			1.7
Average inventory per store (in thousands) (2)	$	762		$	679
Accounts payable to inventory (3)		134.4	%		131.3	%

		For the Three Months Ended				For the Six Months Ended
		June 30,				June 30,
		2023		2022		2023		2022
Reconciliation of Free Cash Flow (in thousands):
Net cash provided by operating activities		$	937,605	$	702,087	$	1,651,369	$	1,391,973
Less:	Capital expenditures		237,674		124,931		460,942		228,921
	Excess tax benefit from share-based compensation payments		14,612		3,353		18,990		5,819
	Investment in tax credit equity investments		4,149		—		4,149		4,080
Free cash flow		$	681,170	$	573,803	$	1,167,288	$	1,153,153

	For the Three Months Ended		For the Six Months Ended		For the Twelve Months Ended
	June 30,		June 30,		June 30,
	2023	2022	2023	2022	2023	2022
Store Count:
Beginning domestic store count	5,986	5,811	5,929	5,759	5,873	5,710
New stores opened	41	62	100	115	158	164
Stores closed	—	—	(2)	(1)	(4)	(1)
Ending domestic store count	6,027	5,873	6,027	5,873	6,027	5,873
Beginning Mexico store count	43	27	42	25	27	22
New stores opened	1	—	2	2	17	5
Ending Mexico store count	44	27	44	27	44	27
Total ending store count	6,071	5,900	6,071	5,900	6,071	5,900

	For the Three Months Ended				For the Twelve Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
Store and Team Member Information: (4)
Total employment		88,149		84,788
Square footage (in thousands)		45,622		44,072
Sales per weighted-average square foot (5)	$	88.12	$	82.30	$	334.21	$	311.47
Sales per weighted-average store (in thousands) (6)	$	665	$	617	$	2,516	$	2,335

(1) Calculated as cost of goods sold for the last 12 months divided by average inventory.  Average inventory is calculated as the average of inventory for the trailing four quarters used in determining the denominator.

(2) Calculated as inventory divided by store count at the end of the reported period.

(3) Calculated as accounts payable divided by inventory.

(4) Represents O’Reilly’s U.S. and Puerto Rico operations only.

(5) Calculated as sales less jobber sales, divided by weighted-average square footage.  Weighted-average square footage is determined by weighting store square footage based on the approximate dates of store openings, acquisitions, expansions, or closures.

(6) Calculated as sales less jobber sales, divided by weighted-average stores.  Weighted-average stores is determined by weighting stores based on their approximate dates of openings, acquisitions, or closures.

XML

Document and Entity Information Document and Entity Information	Jul. 26, 2023
Cover Page
Document type	8-K
Amendment flag	false
Document period end date	Jul. 26, 2023
Entity registrant name	O Reilly Automotive Inc
Entity central index key	0000898173
Entity incorporation, state	MO
Entity file number	000-21318
Entity tax identification number	27-4358837
Entity address	233 South Patterson Avenue
Entity address, city	Springfield
Entity address, state	MO
Entity address, postal zip code	65802
City area code	417
Local phone number	862-6708
Written communications	false
Soliciting material	false
Pre-commencement tender offer	false
Pre-commencement issuer tender offer	false
Title of 12(b) security	Common Stock
Trading symbol	ORLY
Security exchange name	NASDAQ
Entity emerging growth company	false