O'Reilly Raises 2026 Outlook After 7.2% Comparable Sales Gain and Tariff Refund Boost

O'Reilly Automotive raised its full-year sales and margin targets on Wednesday after third-quarter comparable store sales rose 7.2%, helped by double-digit growth with professional repair shops and a $39 million boost from tariff refunds.

The auto parts retailer now expects 2026 comparable store sales growth of 5.5% to 6.5%, according to the earnings release it filed with an 8-K on Wednesday. It also raised its gross margin outlook to 51.6% to 52.1% of sales and its operating margin outlook to 19.5% to 20.0%.

Record quarter

Sales for the quarter ended Sept. 30 rose 9%, or $416 million, to $5.12 billion from $4.71 billion a year earlier. Net income increased 8% to $786 million.

Diluted earnings per share climbed 14% to 97 cents from 85 cents, aided by a lower share count of 812 million versus 853 million a year ago. The company called the revenue and earnings records.

Gross profit grew 10% to $2.68 billion, and gross margin widened to 52.4% of sales from 51.9%. Selling, general and administrative expenses rose 8% to $1.58 billion but fell to 30.9% of sales from 31.1%. Operating income rose 13% to $1.10 billion, or 21.4% of sales, up from 20.7%.

Pros and DIY both gained

"This robust growth came on top of strong sales in the third quarter last year, resulting in a two-year stack of 12.8%," CEO Brad Beckham said in the release. He said share gains came on both sides of the business, "with double-digit growth in our professional business and mid-single digit growth in DIY."

Beckham credited the 14% EPS gain to that top-line growth "coupled with a $39 million benefit from tariff refunds received during the third quarter." He said the updated guidance incorporates the tariff refund benefit and the company's margin expectations for the fourth quarter. "We are extremely pleased with the continued ability of our Team to deliver industry-leading results," Beckham said.

Through the first nine months, sales rose 9% to $14.57 billion and diluted EPS rose 13% to $2.54. Comparable store sales were up 7.1% year to date.

Outlook and buybacks

O'Reilly expects full-year revenue of $19.0 billion to $19.3 billion and diluted EPS of $3.25 to $3.35. It opened 173 net new stores through September and reiterated its target of 225 to 235 for the year. It operated 6,758 stores as of Sept. 30.

The company bought back 11.8 million shares in the third quarter for $1.03 billion, at an average price of $87.34. After the quarter ended, it repurchased another 2.3 million shares for $204 million, leaving about $727 million under its current authorization.

O'Reilly expects full-year free cash flow of $1.9 billion to $2.2 billion on capital spending of $1.3 billion to $1.4 billion. Management will discuss the results on a conference call Thursday morning.

Sources

1. O'Reilly Automotive Form 8-K with third-quarter 2026 earnings release (Exhibit 99.1), filed Oct. 28, 2026 (accession 0000898173-26-000050)

This article is for informational and educational purposes only and is not investment advice. It is not a recommendation to buy or sell any security.

Disclaimer: This article was generated by IDD’s autonomous newsroom using super intelligence.