O'Reilly Automotive Inc. (NASDAQ:ORLY) Q4 2018 Earnings Conference Call Transcript

Feb 07, 2019 • 11:00 am ET


O'Reilly Automotive Inc. (NASDAQ:ORLY) Q4 2018 Earnings Conference Call Transcript


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Welcome to the O'Reilly Automotive Incorporated Fourth Quarter and Full Year 2018 Earnings Conference Call. My name is Vanessa, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a 30-minute question-and-answer session. (Operator Instructions) Please note that this conference is being recorded.

And I will now turn the call over to your host, Tom McFall. Mr. McFall, you may begin.

Tom McFall

Thank you, Vanessa. Good morning everyone, and thank you for joining us. During today's conference call, we will discuss our fourth quarter 2018 results and our outlook for the first quarter and full year of 2019. After our prepared comments, we'll host a question-and-answer period.

Before we begin this morning, I'd like to remind everyone that our comments today contain forward-looking statements and we intend to be covered by and we claim the protection under the safe harbor provisions for forward-looking statements contained in 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. The company's actual results could differ materially from any forward-looking statements, due to several important factors described in the company's latest Annual Report on Form 10-K for the year ended December 31, 2017 and other recent SEC filings. The company assumes no obligation to update any forward-looking statements made during this call.

At this time, I'd like to introduce Greg Johnson.

Greg Johnson

Thanks, Tom. Good morning everyone and welcome to the O'Reilly Auto Parts Fourth Quarter Conference Call. Participating on the call with me this morning are Jeff Shaw, our Chief Operating Officer and Co-President; and Tom McFall, our Chief Financial Officer. David O'Reilly, our Executive Chairman; and Greg Henslee, our Executive Vice Chairman, are also present.

To begin today's call, I would like to recognize the hard work and commitment of all of our team members throughout 2018. Your commitment to our dual market strategy and the O'Reilly culture values drove a 3.8% comparable store sales growth, which was at the top end of our annual guidance range of 2% to 4%, which we said at the beginning of the year. Your dedication to exceptional customer service and expense control yielded a total sales increase of 6.2% over the prior year and an operating profit of 19%, which was also at the top end of our annual guidance range.

For the year, we generated our 26th consecutive year of comparable sales growth, record revenue and operating income, every year since becoming a public company in 1993. And I would like to thank team O'Reilly for your many contributions to support our growth and success in 2019.

Now, I will cover our fourth quarter results and key expectations supporting our 2019 guidance. Our comparable sales for the fourth quarter grew 3.3%, which is in line with our expectations. From a comp store sales progression standpoint, October and November were strong