1st Quarter Financial Results
Sales for the first quarter ended March 31, 2015, increased $174 million, or 10%, to $1.90 billion from $1.73 billion for the same period one year ago. Gross profit for the first quarter increased to $987 million (or 51.9% of sales) from $878 million (or 50.8% of sales) for the same period one year ago, representing an increase of 12%. Selling, general and administrative expenses for the first quarter increased to $637 million (or 33.5% of sales) from $591 million (or 34.2% of sales) for the same period one year ago, representing an increase of 8%. Operating income for the first quarter increased to $350 million (or 18.4% of sales) from $287 million (or 16.6% of sales) for the same period one year ago, representing an increase of 22%.
Net income for the first quarter ended March 31, 2015, increased $39 million, or 22%, to $213 million (or 11.2% of sales) from $174 million (or 10.1% of sales) for the same period one year ago. Diluted earnings per common share for the first quarter increased 28% to $2.06 on 103 million shares versus $1.61 for the same period one year ago on 108 million shares.
Commenting on the Company’s first quarter results, President and CEO Greg Henslee stated, “We are extremely proud to once again report another profitable quarter and a very successful start to 2015. Demand in our industry remained strong throughout the quarter, and our relentless focus on providing unsurpassed levels of service to our customers yielded a very strong 7.2% increase in comparable store sales, which was on top of an increase of 6.3% in the first quarter of 2014. Our ongoing focus on profitable growth successfully translated these impressive top-line results into a record first quarter operating margin of 18.4% and diluted earnings per share of $2.06, which is a 28% increase over the first quarter of 2014. The first quarter of 2015 represents our 25th consecutive quarter of generating diluted earnings per share growth greater than 15%. Our record breaking results are a testament to Team O’Reilly’s unwavering commitment to providing consistently high levels of service to our customers each day, and I would like to thank our over 69,000 Team Members for their hard work and dedication to our ongoing success.”
Mr. Henslee continued, “During the first quarter, we opened 67 new stores across 23 states, in both new and existing markets, and we are on pace to achieve our target of 205 net, new store openings in 2015. One of the keys to our long-term success has been our robust, tiered, regional distribution network that supports our stores with industry leading parts availability. We continually evaluate the capacity in our distribution network and look for opportunities to profitably improve the level of parts availability at our stores. With our eyes on current opportunities and long term growth, we are excited to announce the expansion of our distribution network with the planned addition of a Distribution Center just outside of San Antonio, Texas. Texas continues to be a strong growth market for O’Reilly, and we look forward to the enhanced level of service this Distribution Center will add in the San Antonio and Austin metro markets while also freeing up capacity in our three existing Texas Distribution Centers. We are in the very early stages of this project, and anticipate this facility will open in the second quarter of 2016.”
Share Repurchase Program
During the first quarter ended March 31, 2015, the Company repurchased 0.6 million shares of its common stock, at an average price per share of $207.50, for a total investment of $135 million. Subsequent to the end of the first quarter and through the date of this release, the Company repurchased an additional 0.3 million shares of its common stock, at an average price per share of $216.85, for a total investment of $75 million. The Company has repurchased a total of 47.3 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 $93.58, for a total aggregate investment of $4.43 billion. As of the date of this release, the Company had approximately $570 million remaining under its current share repurchase authorizations.
1st Quarter Comparable Store Sales Results
Comparable store sales are calculated based on the change in sales for stores open at least one year and exclude sales of specialty machinery, sales to independent parts stores and sales to Team Members. Comparable store sales increased 7.2% for the first quarter ended March 31, 2015, versus 6.3% for the same period one year ago.