ORLY - Earnings call 3 2023 | O'Reilly Automotive, Inc.

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Operator

Welcome to the O'Reilly Automotive, Inc.

Third Quarter 2023 Earnings Call. My name is Holly, and I will be your operator for today's call. [Operator Instructions]

I will now turn the call over to Jeremy Fletcher. Mr. begin. may you Fletcher,

Jeremy Fletcher

Good and Holly. joining you us. morning, you, thank everyone, for Thank

call, our the will results today's host we During conference answer and discuss prepared we outlook period. the a question our and for third remainder After of year. comments, will our XXXX quarter

provisions everyone we the and begin to we this remind be would forward-looking claim today under comments for covered like I we our in harbor of contain Securities and the contained intend safe protection Reform Before Litigation to XXXX. by, the morning, that statements forward-looking statements Private Act

You differ can several would, any statements estimate, company consider, the described by from for SEC year due latest ended statements on materially other company's or report words expect, no XX, may, assumes this project, in anticipate, obligation such filings. The the annual plan, intend forward-looking recent any Form forward-looking XXXX, made update identify and during XX-K December as these statements call. should, similar The to believe, could could, important factors results company's will, words. forward-looking actual to

At would this introduce to Johnson. time, like Greg I

Gregory Johnson

Thanks, to Auto third the conference and everyone, Parts Jeremy. call. O'Reilly morning, quarter Good welcome

David call. me on with our Participating present on and our as Beckham Co-President, Executive Brad Brent also morning the call Vice are the Kirby Fletcher, Chief O'Reilly, this our Financial Chairman; Henslee, Executive are our and Chairman, Jeremy well as Officer; Greg

customers. and commitment business steadfast parts I'd congratulating every is customers' appreciation their of customer express my team deep the XX,XXX of to our excellent Parts for dedication the our results to Auto unwavering like O'Reilly and people to earning quarter today's to third in begin call by O'Reilly day. service professional the outstanding key Team hallmark This to our on over

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over call the turn now I'll Brad to Brad? Beckham.

Brad Beckham

everyone. Thanks, and good morning, Greg,

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up full like sales highlight quarter, remarks finish in performance our I I the year As updated sales to our on would guidance.

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is would company, the to mentor culture. am team follow, tough hard and Before entire tremendous over is has success. to to O'Reilly turn future company's company work our for dedication I again of thank for been our I a Team their excited act our incredible to very Greg an a our O'Reilly the like to leader me for Brent, I but and committed continued the to call and

call Now to I'll turn the Brent. over

Brent Kirby

Brad. Thanks,

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gross with Starting margin.

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distribution and new an the DC Next, new in us area Maryland store distribution an exciting Virginia XXXX. service more for on plan Virginia, that have could a and open O'Reilly will in capacity opportunity this approximately we about XXX operational is what largely expansion site distribution in service and not We feet out And corridor. that be we and The be today. is we progress project our anticipate excited have development untapped by square Stafford, Washington, provides market of will build large be purchased the the began where a to XXX,XXX middle construction stores. D.C., facility is to this will center initial

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third XX XXX for during total XXXX. quarter, new Turning stores openings successfully to opened We store expansion. growth the our year-to-date bringing store net and to

achieve is XXX XXX confident will the XXXX. team goal openings store Our to for we new of net

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store performance distribution that is necessary use investments of and in continues strong to stores infrastructure an Our attractive prove the our stores to support new new those both capital.

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my again want thank our close customers. to for I dedication to O'Reilly once and their Team hard comments, continued To work

to turn over Now I will the call Jeremy.

Jeremy Fletcher

for the like their third I and Brent. Team performance would in quarter. also continued hard thank Thanks, to outstanding O'Reilly work

of cover and XXXX. additional third on will guidance for details our quarter some we the Now results remainder

XXXX For base. yet increased $XX store comparable X.X% a entered and stores driven that not the XXXX quarter, from and sales contribution noncomp in million comp the by sales $XXX million have in an increase opened

of rate XXXX. our pretax the comprised both of of quarter from a compensation rate XX.X% third a benefit share-based with third X.X% in XX.X%, of line components by Our was quarter effective base reduced rate tax income, of with the of

rate with expectations was due our compensation. line from benefits with in expectations share-based below tax to total effective quarter our third higher-than-planned tax the Our rate base

of a the to X.X% share-based For full we expect an from compensation. of rate effective by reduced benefit a XX.X% base comprised rate year XXXX, of tax continue XX.X% of of

Our from fourth tax share-based compensation quarter than be certain the Variations other to benefit tolling tax can effective tax in lower rate. periods. in tax rate quarters X is the create quarterly expected of due to fluctuations our the

Now in XXXX from was reduction renewable drove billion The components for lower as flow in These Free Brent inventory reduction free flow our $X.X period energy in payments net result versus XXXX. remarks benefit months move and the increase in a of results. year partially and for same from working cash X to billion capital that disbursements expenditures of were the his we on in the as and by benefit was in capital the $X.X headwinds income first cash XXXX. of well will a credits. tax discussed favorable timing this tax versus growth offset the

we cash For $X.X free with cash XXXX, flow our expect to the from at to expected billion, CapEx guidance. flow operations increase a continue range an of in increase to offsetting $X.X billion

to Moving end the is in comprised of in compared quarter. on commercial launched We total adjusted X.XXx borrowings increase up the an was with our ratio finished which debt. of to indebtedness paper program, which successfully X.XXx. The debt-to-EBITDA of third ratio XXXX quarter of we under our third

leverage prudently X.Xx continue time. target be below number approach over to plan and We that to our of

price release a the of our XXX,XXX share of share million average $XXX for of yesterday, repurchased We execution $XXX.XX shares pleased X.X at shares quarter, an at press Year-to-date continue price to through total average investment price repurchased $XXX.XX our and repurchase we program be capital buyback million. future the cost for during And effective expected the share remain an third of we of with confident billion. to program business. our flows to by excess total current our tax of discounted our means supported $X of repurchase returning cash excise We investment an that capital of inclusive -- is we as shareholders. a continue view average the very the

not a any includes through the call Brad shares repurchases. include updated As reminder, repurchased share earlier but outlined of additional EPS guidance this impact does by the

the to thank long-term company's up again continued I team success. open questions, dedication before O'Reilly O'Reilly entire their your would Finally, call the to -- like our the for to I

would like will to return the to This concludes your At and to happy the Holly, comments. prepared time, answer ask our to this we operator, be line, I questions.

Operator

Instructions] at is coming for [Operator Michael Lasser Our UBS. first from today question

Michael Lasser

the fourth or anything -- comp? and that the in such influenced implied would Your the would of performance you deceleration of guidance that Outside quarter a weather have guidance the for slowdown uncertainty slowdown associated a the to business. there significant point in the holidays, with the implies is

Brad Beckham

and Michael, guys see up it's Brad. other Great want what to I'll take a with. stab follow question. that the at

to Michael, you I is question, answer As directly really. think the speaking know, your not generally

as always say, we weather you the be from can As the the fourth most know, holidays. from the quarter standpoint, volatile

that far. just October have that almost December up really first the to of think from quarter we're But volumes to X-year going we're the overall. Generally, cautious here. we to with quarter really way consistent to what strong sure happy generally we quarter everything said have to just very are I we can what the do exit half earlier, being speaking, still go. key we finish especially excited the holding and is how is good just remind been saw I the the you and huge feel rate, with we and make a really basis want comparison, with few so weeks about the stack but is X- a

Jeremy Fletcher

the is the all a as going I comp challenging is year. how move to really just Maybe, slowdown that significant timing as business. more naturally characterization just just spoken the get only to through add of year Michael, of in our X-year We've comparisons look thing would we the

to is current pretty While nothing about we how tough And quarter. compares, pace our sales our really, has that's anticipating think reflective changed there we've the quarter, up a pleased been. seeing. in the anything that not as the move we've we're with think been into time some the understanding the spot and performance consistent Unfortunately, where It's in. we business in business. seasonality we of what fourth of the we're the with long, is of all year from finish good against going volume, as about year but some we're left week-to-week also be a really we up When

Michael Lasser

got you. I

compares way obvious the investments that productive tough on but in okay. returns of is on question been SG&A the of For quite is you're O'Reilly, for making life, spending, My outlook light it's a been share generate basis that of O'Reilly market has similar per Are achieving. opportunities you to similar that such XXXX? SG&A a Would on significant the invest expect would returns? rate growth moving through store amounts that a the that's there dollar second have

Brad Beckham

Michael. Thanks,

question Another there. good

Well, seen as we've investing with we're business. pleased the said, extremely in from returns back the we've

for do. that reinvested year As O'Reilly year. our you know this where investments on is a know, expenses. us when difference paying I of we've judiciously never we knew in we very delever expense all huge and there there's seen we happy of in control earlier, a and to ROI the except are part at from big the our between strength, a like said areas this playing with initiatives We case Like that we're are what business we've off. of back some position really just the We're managing

COVID, is a to of As that didn't years to. and know, lot that you we everything quite wanted spend COVID that catch-up of some we from get the

for number, comes So, mid short, we term, with those plan always of and working That mid- when like the to feel on do we it returns. for topline what honestly, to back the and into Michael, middle is in long-term especially the right long then starts we're XXXX. thing and our

yet. 'XX, look careful so to to talking our in forward want just we be we just about but 'XX February talking about plan And

Michael Lasser

Understood. Greg And luck so you good Thank to Johnson. much.

Gregory Johnson

Michael. Thanks,

Operator

Your Bret Jefferies. next question from Jordan from is coming

Bret Jordan

about could the talk got continue you to that And seeing donor in national a smaller be or guess, there's share to I you're from well. market share little accounts? coming guys bit you independents As as both gain space, a obviously, DIFM then, where

So Or things the smaller in also is peers? up are changing you're that WDs picking relative market share larger that to from?

Brad Beckham

Thanks, Bret.

to always moving long Bret, a time, us good hard we -- heard say Another you've it's for the tell question. all Honestly, as pieces.

X, respect take our The have -- extremely the competitors extreme for We big we independents. seriously. all

on both competitors have the DIY our tough execution to opportunities. our we -- always spend We tough, and focusing better. time worst we get have We professional that own are of always business. where the meaning side have competitor, We on areas the

like Honestly, to best bit I levels, store feel above. that everything retention service on turnover. we continuing little feel can, your try our to answer operations, all like the question to execution, of a from the We and work it's

You got to our and team, with brag an comes have availability, chain speak, incredible product to and so it when on continued chain. away chain assortments our job. entire hangover, our getting supply done COVID really just our the just from to improvements Brent the supply supply team

little everything But mentioned. generally you speaking, bit a I think it's of

a standpoint, customer we as I competitor it well. think a from from coming fairly broad-based it's pretty think and probably broad-based where from potentially aspect could be

Bret Jordan

to that you're of and M&A such maybe the you distribution the are dispersion between see to follow-up I there's fill DC. seeing Are you that of that around there side. of Midwest guess of private out there regional execution either on now And have -- geographic sort opportunities, a distributors white large a that, some between space Virginia sort sort in the increased Okay. big any

Brad Beckham

-- I'll that hit I'll I'll there. Sure. Yes. Brent let opportunities. Bret, and of of part the M&A maybe question lead off just your speak on then to the kind first

how looking always of and for the strategic from not acquisitions lot estate dual real companies to we're a when expansion, of know, acquiring that side great market it business those be you people private as that but comes teams sense but only opportunities understand parts locations, -- professional also of greenfield We're make the teaching a to and company.

the next absolutely, we're year as but little that of always like things look regional continue bit potentially and deals, a they store attractive other store the things to hard we the in all things. evolve a that our years, hopeful the little X still plan, we the the we're life. and maybe up But so of And can have true job And the at that in deals don't upper have hopeful to aggressive that X, couple that of Northeast an deals, X get more as come we're way the last X our have Mid-Atlantic or or to some customers looking opportunities than say. more still some valuations exit -- that to store

Brent Kirby

maybe Bret, another certainly our of for be to Certainly, are facility And of we run DCs we're own are you where We we're the way And cars And to our where for excited DCs see the prepared us operate of the the it we my are distribution don't on operate terms or market use more just at untapped exciting and and augment about parts have, located about we're to opportunities I large things. advantage XPLs are. where store always add the they first-in-class our when always to in and the of how tiering that we an supply that see our it's want and and getting people of comments, we as that in as that want looking We side and would big opportunity in, every the I begin are, can at. in DC something it. want availability. how super necessarily hub that the we strength to about to in constantly they and where talked that. DCs we're about distribution take about chain investing news infrastructure, Yes. Mid-Atlantic. our talked Stafford think looking geography us, a opportunity. And We

a continue do We opportunity certainly to we're geography as that. moving So see going forward. continued to that

Operator

from Your next Daniel is Stephens. from today question for Imbro coming

Daniel Imbro

share. market on Follow-up about Bret's question

business new infrastructure Just investment guys Any the Any the customers some curious some in the so limiting of of about? as quickly? you kind learnings that won behind how are of talking bottlenecks that progress. of growth or the are hiccups you onboarding

Jeremy Fletcher

Maybe is our what within there. Yes. is a the This accelerate I'll think start bit business forward. as And move the seen interference your learned impacting focused I really sound. question we how of have But that little share we've we on Jeremy. how around and

of market Every in spend our we're forming relationships. we side up, completely market, business, we customers understanding the shops, are considerable exist understanding on For to increased that we're markets that that the picking sure, a amount volume in. unfamiliar and those of the time are the us the professional new those

help we For that even partnering us, with those for do go businesses customers? to ensure how always create is their be focus them we value do we're as business. the successful we on How

seen seen For years, during business several pandemic, on top more to to sure as customers. is we've of we've course and earn with grow the the the ability especially growth really those course of opportunities last of more the over

just excellent are an ability as we give great opportunity seen has value support that the earlier when within of about just excellent we the professional to being informed provided several availability our what can understand points is demonstrate critical talked able I touch opportunities. provide customers, outstanding work Brad to service quarters and excellent that as to that that Our service, much that And as through really can our think provide to a more support last get and provide service our compound anything, move broader stores extra incredible more the growth. the to value us technical we and people to we've business, continue parts

Daniel Imbro

it's maybe it's how or there a Is efficiency. professional And more. so specific helpful. anything wanted to can you're you little delivery customers that for of dig there you're Are spending driving maybe bit better we clarify That's can unpack SG&A around spending what on, on on sales? what help to initiatives spend tech kind into the I understand just your whether

Jeremy Fletcher

think and Yes. too this. get of think we've see we similar for a sure, about We this continue along we them effort lines. down we're course somewhat how made PTO in think broadly, general the far to play our reluctant to to company, guess, to And team. are period year. item improvements. the spoken work And our of I to investments talked they're out enhanced I how the those within great always, But our store I for manage things and to mean competitively, And a we talked how about concerted we've time. week throughout for that about want just long we've things we've managers XXX(k) their and more benefits, invest just

possible. the our care road we the think vehicles, to our image invest of vehicles And stores ensuring a huge fleet appearance that and We on technology the and the better our continues doing in areas and where get we work teams safest that continue then bring be about support online as of business taking are can investment tools the all to ongoing store customers. our to of

Operator

for from Zach is Wells coming question Fadem next today Your Fargo. from

Zachary Fadem

industry broader of hear aside not? And your and of the a is you lot points data aftermarket? slowdown category or state to for of the a getting extent the slowing a minute, the on think have if mixed outperformance on putting would curious to we're impact what the broader think consumer I

Brad Beckham

a take Brent that, it and and we're not seeing to flip talk those about on to seeing then over I'll I some Brad. stab of what it's Zach, generally Yes. may at fronts.

say count that prepared us. I cited just in really as as for side excited hard imagine, I teams -- you We're When I at But our ticket of well not DIY speaking, the seeing on us results, Zach, that. that positive can the very about the I seeing just look side. data we're comes day generally, of When may see that we're say bit part our and every it's our to professional shops not the in We we from side, that's the call that encouraging street DIY service results our to our our an for as that. as through every sales execution overall review comments, that mean, not slower That's and within our hear than say the on us week little We're to comments come seeing recaps shops. on see space our be what a But CRM. and professional team I have the just with sales comments other that hard we that all that just slowdown. some it's for that. there's

little you side me, excuse times of service may shops could more like less service industry, that share. just or and that losing just are than on seeing that count some the providers side like share, there's some on there some -- there's are a be be car And Again, parts our some taking others. see the aftermarket

overall that seeing we're So to hard really an and all slowdown parse that. when out just not we're it's that say seeing just

Brent Kirby

echo Brad's to comments, would execution to but Zach, testament add the the and Yes. I tremendous a of I culture it's -- really our just mean, to teams there. out

the mean, immune sales just I greater that have of things the as QX many it just seen of the teams, through at Our into we're in but background, we're outstandingly QX high that teams, center an we may effect get to macroeconomic distribution this not they not and continue those and our level that for to. And have happen not seeing results, executed we point.

meeting to serving continue out So and stay like feel And to follow. the the to we're need we going good will there. executing, demand on focused things continue

Jeremy Fletcher

think or get dynamic much expected strong. impacts always cautious the quarter fluctuations challenges past. that The to talked we different vehicle very in encompasses core life are is proposition of cars value vehicle how driven, has We what for and demand with more still existing continue a of think that their a miles drivers so think potential only on with for aftermarket of continues we that more that your I'm add that within But to I be our consumer daily increase. using And our the investing is X. underlying And to resiliency for attractive industry steadily to the of thing. to always people think from it would you we're the outlook. last attractive. near-term a The about cycles sorry, the resilient know moving and kind shocks might the in been one to and view about perspective, I long-term a and consumer of through unchanged. -- on how short-term do We've I is just forward? there

So I focus we longer the think those as think where our that's building our really term, think, about all, we really and as about things are positive business. is

Zachary Fadem

could That's But seems to the WDs those And operating been Great. do early competition, great the be and stock to with pandemic. in industry? Okay. the their double-digit we respect back a businesses some with they particularly post pricing, lap one period hand the you in think ready like tied it in the we lost, with days inflation of entering behind color. of back choppier had the share recapture that now as

Brad Beckham

little Zach, say than across more potentially they're true during felt probably know probably think anecdotally, bit Brad. I we first is, the of the for players to healthier that a I that And have thing like the part, adversity was accurate I came the ever. it when all pandemic. the smaller some Yes, could and would think looking market in supply most it's Well, probably I industry the had it's

is the how our I that, and were think distribution the everything of with key inventory pandemic, and opportunities I we too. Brent operations. us with though, to had to none during down totally We that control, purchasing merchandising we -- performed happy from

knowing how high. and availability important Our at is replenishment bar O'Reilly,

happy we so totally made and we with as And where were well. incremental improvement we've weren't

and when from on the would excuse we to Zach, trust, the business, we especially remember, you've third that to on down. opportunities or when professional up Zach, relationships, we move opportunity fell to and that step very availability, side got to and somebody and takes me, and key business. that else somebody to in were build and that gain be business we that really second be be to stepped know, it else, able norm back the think it through It challenging it when I lack from lose But -- business maybe up is call with it had to with long incredibly or pick would to the service to out as would of of quickly in were you supply able there time a share that relationships that sticky. time takes Those gain

that very remember stable. built, sticky. it's very And that business And that's so once are got we relationships I is think to The just sticky.

price example, that aggressive really as for our out we On pro we We don't down rolled a rifled -- moved lines tell, out lot pricing, further still initiative, when move some folks feel don't and some more down X very live know, was and not compete, were, than will the steppers really those no, that, of an approach, way. we points Zach, you we and that seeing moving a down. We're and where I come can issue the purposely strategically we they north that the that were. of toward geared anyway. just of pricing mean, that maybe of lot forward. see didn't And we of stayed those time but knowing WDs as -- were to volume

just see threat. we that near-term And so don't as a

Brent Kirby

the And from Zach, a comments perspective. has WD couple a what on said maybe of maybe Brad to especially add to already pricing, -- just

think in to some talked more chain about across especially the challenges the do of our various did diversify our brands. supply multiple some Brad that you to get what stronger we through of suppliers we've that we for -- lines, things If about, proprietary COVID continued

continue grow. brands see to our We proprietary

moving out continue gross So those that I feel margins than how there, If seeing to just a able much come we but there -- in is is and to not at terms into does pleased that strategic with and something what irrational it we point. continue be better to our like where we're in we of probably yielding COVID. forward. were this enhance going we're position we're up

Operator

Your next Simeon Gutman today question Stanley. for is from coming from Morgan

Simeon Gutman

step over as It you Anything any and probably gross back to back it on you distribution leverage new Is that we won't anytime a costs? come reinvesting snap soon. that see from up? gross on is investments get the margin. we've some those? can click Are back there accept margin bit price question First of reason

Jeremy Fletcher

Jeremy. it's Simeon, Yes.

to profit growth. continue We on gross focus dollar

our out longer-term about of to stores, a in I the in expenses. we unit DC from as our incrementally look. speak comes we'll stage, to perspective, margins, might really leverage us at to improve do But we this of a hope, 'XX volume which think here, we what think kind where obviously, our helps gross can few months think So

that, obviously, as course challenging the from bit better standpoint do there of the got an I think take pressured normalized chains feel we've like more we a more as and got to pandemic was supply that during opportunity the share. a market

with business supplier value on what growth course them time. ability market is been way year seen to our grow Certainly, the how be And the I always have as focus that share this themselves to communities, partner the and But of an the during think we've we excellent a for I of better our topline some we suppliers do and gain well incrementally continues our drive for cost have to profit our costs to positives sales then be, can and manage acquisition perspective. the how we that there. dollars do and been base that's to to that do favored we so important think, partner status for And their improve availability course -- us. I flow over our from to gross a It has obviously, kind -- of to we of a nation as us high. the work favored think

Simeon Gutman

to year, points, #X distributor made you call share this of penetration, And the -- is I Is ticking is meeting Brad then the had you think, incredible This primary some said or that you of before made that the of it the new around service share is a on being follow-up. that story Jeremy, -- is in market share. market market more accounts clarify a keeps quick higher?

Jeremy Fletcher

hard It's a there. Yes. versus account. there want Thanks new for confusion really be to account that us to question, Simeon. for a I classify non-new bit wouldn't any little

-- are business a relentless in Our they I -- mean, every in store market. understanding they're teams that's dollar done

going We take to we're up and so X. going new to think we're into going to we're going want market, will canvass a app, everybody customer that credit to our -- around an be day sign market, about from you as O'Reilly especially to

wallet. have way the larger that to grow really of heavy accounts foreign the And a So we've think how would what grow is been maybe we O'Reilly we've able status bit the farcical Parts just broad-based had we've little were down is have share what new of already both purchasers of culture like. our It's completely I looked and on customers that all seen, the continue over a concept momentum share for larger that us. to strong you do

there's So we it's is if the pretty broader customer of one think broad-based don't versus any moves I that group for type us. needle population. that know the outside

Operator

with question from today Your for Evercore next Greg ISI. coming Melich is

Michael Montani

into just on about fourth deflation I ask, Greg. the just do sense more outright turning quarter? It's disinflation impact basically us I thinking Mike come the wanted the then Can Montani we you for there? to first a about potential be you to off, could, in? the of And Or in level in should quarter. see if for inflation of give the inflation

Jeremy Fletcher

thanks Yes, for the Mike, question.

anticipate to line what going and low we've the historically a as kind third with and not that what was think kind say, term what don't, we of business. moving has It's price fourth normalized single some the and cost of prices, of would but that's in levels. ratchet year really -- there's long Brad quarter to It's We hold able able tailwind, with we've within a continued been digits, really been our quarter our as that's -- We'll single sort his quarter, a bit means, we've to for improvements, completely anticipate We've within of nondiscretionary the we industry this business. hold forward. down We deflation more environment. expect. huge by in Third consistent be a low we over It's any exited certain our seeing inflation lot have it. to digits, of really inventory realize little think a investment. spend of comments, on -- in even said we some us about seen would

from going become as -- technology, drive value that engineered With the to parts they're the complex an complexity and better, added perspective is have it's overall we better the are the benefit new to changing just And applications continue opportunity to provide customers. how challenge to cause grow tickets great to the then up. our of dynamic our of go on to average tickets parts more those service

Michael Montani

as to fourth head we the quarter any and/or from a perspective from from to know gross anything impact margin the I third And quarter? LIFO wanted that a in into just just comparison, ask

Jeremy Fletcher

No, really.

the how report think -- parts we're and paying of our item. how our in our to as about think the think, LIFO reserves we on what some we nominal is most us to relevant or think for we margin, reported for margin year business, As sheet measurement our and best of changes gross we what and about is externally we as the current our I don't on be be internally really really, continue the about balance guidance view gross we've reflection that to of is think the long today expect reported in all topline maintained view that we stable margin

Operator

is from Horvers JPMorgan. next Your coming question from Chris

Christopher Horvers

models, you other of think little I Best given and Greg. to of trying SG&A that first My congratulations, on can talk and us guess more is about retail how you how more reward naturally luck, the a help variable relative to of in the your SG&A. dial incentivize is bit -- much just employees. question

comps would that store but else NA up like X.X%. adjustment, would to think you ended and growth So per doing PTO What to backed X% if were [ about out you the how of we then holding normalized SG&A X% to X% everything up constant? go that ],

Jeremy Fletcher

like made. Yes. this of a Appreciate pieces things units just a there we've are the operate store And our investments to relatively to when some of year are so lot of We the we've that, that think, still spend Thanks, nature high fixed Chris. done year normal I because as the that that many especially of model continue in it in cadence there. a in the moving are, outside question. relates having cost of teams

a grow out benefit reluctant, little there does as that individual try be to bit sales is us or parse I I to quantify think and those we a So positive. think But numbers.

the of really that year saw a Part lot such is shops in quickly in growth, especially where professional it third Certainly, of we get want comp, of that parts here be requires, ever quarter. level just like activity really an spot seen side in is is, on and the there a of in we business. that to we but what business, and a this a to part of when manage can't we don't that's out our that the acceleration incentive

we be growth been has our have, been a in approach have a is a sure, between bit to gained stable that more opportunity mix a of this kind it priority the in investing normalized that us. accelerate little of for the But that a think momentum we'd two. So environment, as of a sales bit expect pretty key by little we And I -- business we the has in for year place. the

Christopher Horvers

we access to where if the think changed parts, you the has this any always -- changed And to to foreign work private for push way to the label Understood. how a view has capabilities back that time? actually was Do there -- over label of originally there went at like ago, agreed around this XX your amenable? there is aren't have customer's OEM foreign private there nameplate that was more with cars, years side. mechanics on that in view type and didn't particularly was the mechanic's more it's And certain XX nameplates, -- industry parts certain like a that you whether going

Brad Beckham

this is XXs, of into is into but what less last success you with label national national back just a my the the was When to private with overall, sold that your you on exceed. to quality and have unbelievable. back function, And it the company. take maybe the more back going then for decades is think that Brent fit, couple of long, XXth really, XXXXs our speak. think then, boxes exclusive great lot cases think my Brad. think national time flip But only so you private year of experience those commentary long a with said. This there against I'll the of we at and lot quality other company, label. and OE same about in Chris, question, really not a is And I I the in stab then. That's early to and -- they parts for any it brands and it's accurate, a the meet some goes form A quality brands evolved,

And -- not nameplates along a with import think Asian, with confidence is, the we've had so to mean the OE, OE. in in have And into you're more success direct that it's lot about what the of about cases, I talking better with European you we specifically it's going only form function the that's OE again, quality, box. and it fit, than couldn't

over And so that changed I has that some do think decades. the dynamic

we a And of so lot national our really box and into confidence going feel we what's brand have in good. exclusive

to have We share at to continue European gaining shops. opportunity a get in specifically lot the better of

we of a at have been out that We a tremendous good about great that there for all feel really those competitors lot but really long have time, things.

other any thoughts label? the Brent, on So, private

Brent Kirby

Yes.

quality We've for seen. in both more a on something spec But looking of they're meet seeing the continue -- now. designs looking as think direct. and of are line going got the need continue BrakeBest for we build at time for the year. brand, Pro Again, We've quality our break got have our proprietary best. and couple BrakeBest I We called what maybe to We in good, just side. the this and DIY we the those. better, brands to we've both import customers to proprietary need. full We're launched Select of earlier their that's our uptake tremendous and line. other more professional on Brad thoughts just success uptake we private label, see adoption out launched box,

revenue. XX% bit proprietary our about a So little now being penetration talked over of brand we've

number that see to continue We grow.

proprietary We customers. with continue and DIY strong see to our of adoption professional both brands, those

continue strategy, So also of line it and that in design we'll brand continue where to have particular as that lean into part category. think national we'll has relevancy a to our we and

Operator

I have for remarks. We back reached questions. Johnson closing time our over for now will Mr. turn Greg the allotted call to

Brad Beckham

results and our Holly. would We generated we throughout the results you, team fourth unwavering I This like reporting and entire and like your to Thank the today, for have our full forward joining quarter great to dedication thank would thanking to year you today call in XXXX. for our by is you. conclude Brad. everyone call O'Reilly look February. Thank

Operator

conference Thank you. This today's does conclude call.

for and disconnect You a day. time, participation. Thank you phone this your may lines wonderful have at your

O'Reilly Automotive (ORLY) 26 Oct 232023 Q3 Earnings call transcript