During today's conference call, we will discuss our second quarter results and our updated outlook for the remainder 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%. 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.
Our comp growth of 6% surpassed our expectations, driven by solid results in both our professional and DIY businesses. 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.
Despite this pressure, we believe we're 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.
| Metric | Period | Current guidance |
|---|---|---|
| Comparable store sales | FY2026 | 4%-6% (raised to flow through H1 outperformance; back-half expectation unchanged) |
| Diluted EPS | FY2026 | $3.20-$3.30 (raised on H1 sales/operating performance and share repurchases) |
| Total revenue | FY2026 | $18.9B-$19.2B |
| Gross margin | FY2026 | 51.5%-52% maintained (~16 bps expansion at midpoint) |
| SG&A per store growth | FY2026 | Tightened to 3.5%-4% (moderating in the back half as comparisons ease) |
| Operating profit margin | FY2026 | 19.3%-19.8% reaffirmed |
| Same-SKU inflation | H2 2026 | Moderating to 1%-2% as 2025 tariff-driven pricing is lapped |
| Net new stores / capex / FCF | FY2026 | Reaffirmed: 225-235 net new stores, $1.3B-$1.4B capex, $1.8B-$2.1B free cash flow |
| Metric | YoY | Note |
|---|---|---|
| Comparable store sales | +6% (YTD +7%) | Solid results in both professional and DIY, driven by average-ticket gains (5.5% same-SKU inflation) and robust professional ticket-count growth. |
| Revenue (GAAP) | +8.1% to $4.89B | 6% comp plus a ~$100M non-comp contribution from newer stores not yet in the comp base. |
| GAAP diluted EPS | $0.86 (+10%) | Profitable sales growth, stable margins and share repurchases (post 15:1 split share base). |
| Professional (DIFM) comps | +~10% | Fourth straight double-digit quarter; mid-single-digit ticket counts outpacing forecast plus in-line ticket value, compounding market-share gains. |
| DIY comps | low single digits | Average-ticket strength partially offset by low-single-digit transaction-count declines and soft hot-weather categories. |
| Gross margin | 51.4% (flat) | Acquisition-cost reductions and distribution leverage offset professional-mix pressure and the toughest tariff-timing comp of the year. |
| Operating margin | 20.2% (H1 +21 bps) | H1 expansion split evenly between gross-margin expansion and SG&A leverage, driving 10% operating-profit-dollar growth. |
| Free cash flow (H1) | $1.5B (vs $904M) | Robust operating-income growth and favorable renewable-energy-credit payment timing. |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| M&A speculation / competitor interest | — | CEO Brad Beckham declined to comment on rumors of interest in a competitor and stated flatly there is nothing structural or fundamentally different about O'Reilly's ability to take share by running its organic playbook — with only ~10% of a fragmented North America market, he is 'more convicted than ever' in organic consolidation. | — |
| Inflation lapping / demand outlook | 5.5% same-SKU inflation | Same-SKU inflation moderates to 1-2% in H2 as 2025 tariff pricing is lapped; management expects average ticket to remain the primary comp driver supplemented by ticket counts, and does not agree the industry will structurally slow despite possible short-term volatility. | — |
| Professional (DIFM) share gains | Consistent double-digit comps | Fourth consecutive quarter of double-digit professional comps with mid-single-digit ticket growth 'essentially every quarter' since the pandemic normalized, compounding market-share wins via inventory investment, proximity to customers and delivery service. | — |
| Capital allocation priorities | Reinvest, grow organically, buy back | Priorities unchanged: reinvest in existing store/DC network, open new stores (110 net YTD across 31 states plus Puerto Rico, Mexico, Canada; on track for 225-235), then opportunistic acquisitions and buybacks toward a 2.5x leverage target. | — |
| Tariff / supply-chain management | Navigating choppy tariff regime | O'Reilly pays little direct tariff (suppliers historically importer of record) so there is no big rebate check; instead it shares supplier tariff-refund benefits, diversifies country of origin, and selectively becomes importer of record where advantageous — all managed within cost-of-goods negotiations. | — |
| Industry fundamentals | Healthy | 293M+ light vehicles in the U.S. at a record ~13-year average age and 3.3 trillion miles driven in 2025 underpin a resilient consumer that prioritizes maintaining existing vehicles; similar dynamics in Mexico and Canada. | — |
| Distribution / Analyst Day | New Atlanta DC opened end-2024 | The new 690,000-sq-ft Atlanta DC is unlocking Southeast expansion and import processing; O'Reilly will host its Analyst Day there on September 17, 2026. | — |