O'Reilly Automotive, Inc. reported fourth‑quarter 2025 results that included a $4.41 billion revenue increase of 7.8% year‑over‑year, a diluted earnings per share of $0.71 that missed the $0.72 consensus by $0.01, and a gross margin of 51.9% that improved 27 basis points from the same period a year earlier. Operating income rose to $976 million, up 12% from $829 million in Q4 2024, reflecting stronger sales and a higher‑margin product mix.
The revenue beat was driven by a 5.6% growth in comparable store sales, with the professional service channel expanding at 6.2% and the DIY segment adding 4.3%. The company’s 207 net new store openings in 2025 and a new distribution center in Virginia helped capture market share, while pricing power in high‑margin parts offset modest cost inflation. Compared with the $4.39 billion estimate, the $4.41 billion actual figure represents a $20 million beat, or 0.5% above expectations.
The EPS miss was largely a result of higher SG&A expenses, driven by increased health‑care and casualty‑claim costs for team members. Management noted that SG&A rose 9% to $1.12 billion, exceeding the $1.05 billion forecast. The company also faced higher inventory investment costs, which weighed on operating income in the prior year but were offset by the margin expansion in Q4 2025. The $0.71 EPS, a $0.01 miss, translates to a 1.4% shortfall relative to consensus.
Operating income’s 12% increase to $976 million was supported by a 51.9% gross margin, up from 51.2% in Q4 2024. The margin improvement stemmed from a shift toward higher‑margin professional service sales and a disciplined inventory strategy that reduced carrying costs. Despite the SG&A rise, the company’s cost‑control initiatives and pricing strategy allowed operating income to grow, demonstrating operational resilience amid inflationary pressures.
For 2026, O'Reilly guided to full‑year revenue of $18.7 billion to $19.0 billion, with a midpoint of $18.85 billion, and diluted EPS of $3.10 to $3.20. The revenue guidance is slightly below analyst consensus of $19.0 billion to $19.34 billion, while the EPS guidance falls short of the $3.31–$3.32 consensus. Investors reacted negatively, citing the conservative earnings outlook as a concern for near‑term profitability. The guidance signals management’s caution about rising SG&A costs and a potential slowdown in the DIY channel, even as the professional service segment continues to grow.
CEO Brad Beckham emphasized that the company’s “record revenue and operating income” in 2025 were achieved through “intense focus on customer service and parts availability.” He added that “SG&A expenses again exceeded expectations due to heightened inflation in team‑member health care and casualty claim costs,” but that the company remains “intensely focused on managing expenses.” The company also announced a $2.10 billion share‑repurchase program in 2025 and plans to open 225–235 new stores in 2026, underscoring its commitment to long‑term growth.
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