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Here's How O'Reilly Performed In 2014

William Bias profile picture
William Bias


  • O’Reilly grew its revenue, net income and free cash flow at a solid pace.
  • O’Reilly grew sales by adding locations and boosting business at established stores.
  • O’Reilly kept costs under control.

On Feb. 4 automotive retailer O'Reilly Automotive (NASDAQ: NASDAQ:ORLY) came out with its FY 2014 earnings statement. The company performed very well last year and even beat the Wall Street expectations game both on the top and bottom lines. Let's take a look to see how the company performed.

Revenue and profitability expanded

In 2014, O'Reilly Automotive saw its revenue, net income and free cash flow increase 9%, 16% and 49% respectively year-over-year. The success of any retailing venture comes from two major sources-getting customers to spend money and expansion. O'Reilly Automotive wins on both counts. O'Reilly Automotive saw its same store sales increase 6% year-over-year. In addition the company opened 200 stores in 2014 bringing the total store count to 4,366 vs. 4,166 at the end of 2013 and representing a 5% increase year-over-year.

In the highly competitive world of retailing keeping costs under control is a must. O'Reilly Automotive demonstrated that it could do this by growing revenue faster than expenses. In 2014, O'Reilly Automotive's operating margins came in at 16.5% vs. 13.7% in 2013. Moreover, its net profit margin came in at 10.8% in 2014 vs. 10.1% in 2013. O'Reilly Automotive's net income expansion helped increase free cash flow. Favorable changes in assets and liabilities, especially accounts payable, also contributed heavily to free cash flow expansion.

Slight improvement in balance sheet

O'Reilly Automotive saw a slight improvement in its balance sheet. At the end of 2014, O'Reilly Automotive harbored approximately $251 million in cash and equivalents amounting to 12.4% of stockholder's equity vs. 11.8% at the end of 2013. My personal preference is for a company to have cash amounting to 20% or more of stockholder's equity to get it through rough times.

O'Reilly Automotive's long-term debt at the end of 2014 remained even with the previous

This article was written by

William Bias profile picture
I have been analyzing stocks since 1992 and a freelance writer since 2012.

Analyst’s Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (2)

I think you should read the credit suisse report on orly. it does contradict your analysis. Orly has best management and growth in the industry.
William Bias profile picture
Hi badeconomy,

On a fundamental basis the only concern I have is for the long-term debt levels. My main concern is that the stock price could correct in a major way if it has a disappointing earnings report.

Thanks for reading.

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