The stocks of the front-runner in auto parts retailing, O’Reilly Automotive (ORLY), increased by 4% at 2 p.m. Eastern Time on Thursday, as indicated by information from S&P Global Market Intelligence.
Yesterday, I observed that O’Reilly reported its second-quarter earnings, where the earnings per share exceeded predictions, but unfortunately, the sales figures narrowly fell short of the target.
Instead, they increased their projected same-store sales growth for 2025 from 3% to 3.75% at the midpoint, which led to a favorable response in the market.
O’Reilly’s 6,483 stores (and counting)
In Q2, O’Reilly consistently demonstrates its top-tier status in the market by registering a 6% increase in sales and a significant 11% jump in earnings per share.
Though O’Reilly is no longer classified as a hypergrowth stock, it continues to present an appealing growth narrative for investors, boasting a total of 6,483 stores.
To date in 2025, the company has established a total of 105 new retail locations, spanning across 34 U.S. states and Mexico. Currently, there are 100 stores operational in Mexico, marking an increase from 69 this time last year. With renewed vigor, O’Reilly is now aggressively expanding its business in the region.
In Mexico, vehicles tend to be about four years older than those in the United States. This could make business expansion in Mexico especially lucrative for O’Reilly.
Despite finding overseas growth enticing, there’s also significant opportunity for our company to expand domestically. For example, by establishing a new distribution center in Stafford, Virginia, O’Reilly is poised to potentially open up to 350 new stores within that region.
In Delaware and New Jersey, there are no existing stores, while the number of stores in Pennsylvania, New York, and Maryland is limited to 48, 47, and 3 respectively (as of 2024). This leaves a significant opportunity for the company to grow further in the Northeastern region.
So is O’Reilly a buy?
Even though I admire O’Reilly, its current price-to-earnings ratio of 36 suggests it’s quite expensive. It might be more suitable for long-term investors who are prepared to hold onto it for a decade or longer.
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2025-07-24 22:51