O Reilly Automotive Inc 10-Q for FY2026 Q3

O Reilly Automotive Inc (ORLY)

10-Q 2026-11-06 For: 2026-09-30

Added on November 06, 2026

About this 10-Q

O Reilly Automotive Inc filed this 10-Q on November 6, 2026, covering the quarter ended September 30, 2026 (FY2026 Q3).

O’Reilly Automotive, Inc. reported third-quarter sales up 9% to $5.12 billion and net income up 8% to $786 million, with domestic comparable store sales rising 7.2%. AI summary

Headline figures

Quarter ended September 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $5.12B; up 8.8% from $4.71B a year earlier
Net income: $785.62M; up 8.2% from net income of $725.9M a year earlier
Diluted EPS: $0.97; up 14.1% from $0.85 a year earlier

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Missouri		000-21318		27-4358837
(State or other jurisdiction of		Commission file number		(I.R.S. Employer Identification No.)
incorporation or organization)


Title of Each Class		Trading Symbol(s)	Name of Each Exchange on which Registered
Common Stock,	$0.01 par value	ORLY	The Nasdaq Stock Market LLC
			(Nasdaq Global Select Market)


Large accelerated filer	☒	Accelerated filer	☐	Emerging growth company	☐
Non-accelerated filer	☐	Smaller reporting company	☐

		Page
PART I - FINANCIAL INFORMATION		1
ITEM 1 - FINANCIAL STATEMENTS (UNAUDITED)		1
Condensed Consolidated Balance Sheets		1
Condensed Consolidated Statements of Income		2
Condensed Consolidated Statements of Comprehensive Income		3
Condensed Consolidated Statements of Shareholders’ Equity (Deficit)		4
Condensed Consolidated Statements of Cash Flows		5
Notes to Condensed Consolidated Financial Statements		6
ITEM 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		16
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		22
ITEM 4 - CONTROLS AND PROCEDURES		22
PART II - OTHER INFORMATION		24
ITEM 1 - LEGAL PROCEEDINGS		24
ITEM 1A - RISK FACTORS		24
ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS		24
ITEM 5 - OTHER INFORMATION		24
ITEM 6 - EXHIBITS		25
SIGNATURE PAGES		26


		September 30, 2026			December 31, 2025
		(Unaudited)			(Note)
Assets
Current assets:
Cash and cash equivalents		$	194,445		$	193,793
Accounts receivable, net			462,093			389,793
Amounts receivable from suppliers			200,905			159,900
Inventory			6,165,052			5,731,385
Other current assets			200,805			269,406
Total current assets			7,223,300			6,744,277

Property and equipment, at cost			11,035,437			10,222,249
Less: accumulated depreciation and amortization			4,303,799			3,964,824
Net property and equipment			6,731,638			6,257,425

Operating lease, right-of-use assets			2,493,533			2,391,150
Goodwill			952,900			948,208
Other assets, net			200,508			197,193
Total assets		$	17,601,879		$	16,538,253

Liabilities and shareholders’ deficit
Current liabilities:
Accounts payable		$	7,507,497		$	7,103,684
Self-insurance reserves			198,760			297,304
Accrued payroll			133,882			119,603
Accrued benefits and withholdings			293,232			240,072
Income taxes payable			8,162			13,957
Current portion of operating lease liabilities			458,026			439,907
Other current liabilities			744,009			561,294
Total current liabilities			9,343,568			8,775,821

Long-term debt			7,711,498			6,016,904
Operating lease liabilities, less current portion			2,126,908			2,034,688
Deferred income taxes			244,095			211,210
Other liabilities			268,418			262,982

Shareholders’ equity (deficit):
Common stock, $0.01 par value:
Authorized shares – 1,250,000,000
Issued and outstanding shares –
804,607,512 as of September 30, 2026, and
841,909,238 as of December 31, 2025			8,046			8,419
Additional paid-in capital			1,537,400			1,530,292
Retained deficit			(3,653,266)			(2,328,817)
Accumulated other comprehensive income			15,212			26,754
Total shareholders’ deficit			(2,092,608)			(763,352)

Total liabilities and shareholders’ deficit		$	17,601,879		$	16,538,253


		For the Three Months Ended					For the Nine Months Ended
		September 30,					September 30,
		2026		2025			2026		2025
Sales		$	5,121,290	$	4,705,696		$	14,573,842	$	13,367,678
Cost of goods sold, including warehouse and distribution expenses			2,438,249		2,265,750			7,026,850		6,479,709
Gross profit			2,683,041		2,439,946			7,546,992		6,887,969

Selling, general and administrative expenses			1,584,750		1,463,879			4,621,347		4,255,966
Operating income			1,098,291		976,067			2,925,645		2,632,003

Other income (expense):
Interest expense			(81,850)		(59,566)			(214,466)		(174,467)
Interest income			1,987		1,780			5,324		5,329
Other, net			3,706		5,369			9,795		6,591
Total other expense			(76,157)		(52,417)			(199,347)		(162,547)

Income before income taxes			1,022,134		923,650			2,726,298		2,469,456
Provision for income taxes			236,513		197,754			621,432		536,480
Net income		$	785,621	$	725,896		$	2,104,866	$	1,932,976

Earnings per share-basic:
Earnings per share		$	0.97	$	0.86		$	2.55	$	2.26
Weighted-average common shares outstanding – basic			808,851		848,292			824,100		853,909

Earnings per share-assuming dilution:
Earnings per share		$	0.97	$	0.85		$	2.54	$	2.25
Weighted-average common shares outstanding – assuming dilution			812,201		852,704			827,754		858,452


		For the Three Months Ended September 30, 2026
												Accumulated
							Additional					Other
		Common Stock					Paid-In			Retained		Comprehensive
		Shares		Par Value			Capital			Deficit		Income (Loss)		Total
Balance at June 30, 2026		816,166		$	8,162		$	1,536,955		$	(3,416,414)	$	35,572	$	(1,835,725)
Net income		—			—			—			785,621		—		785,621
Total other comprehensive loss		—			—			—			—		(20,360)		(20,360)
Issuance of common stock under employee benefit plans, net of forfeitures and shares withheld to cover taxes		108			—			8,078			—		—		8,078
Net issuance of common stock upon exercise of stock options		181			2			6,488			—		—		6,490
Share based compensation		—			—			8,258			—		—		8,258
Share repurchases, including fees		(11,847)			(118)			(22,379)			(1,012,384)		—		(1,034,881)
Excise tax on share repurchases		—			—			—			(10,089)		—		(10,089)
Balance at September 30, 2026		804,608		$	8,046		$	1,537,400		$	(3,653,266)	$	15,212	$	(2,092,608)

		For the Nine Months Ended September 30, 2026
												Accumulated
							Additional					Other
		Common Stock					Paid-In			Retained		Comprehensive
		Shares		Par Value			Capital			Deficit		Income (Loss)		Total
Balance at December 31, 2025		841,909		$	8,419		$	1,530,292		$	(2,328,817)	$	26,754	$	(763,352)
Net income		—			—			—			2,104,866		—		2,104,866
Total other comprehensive loss		—			—			—			—		(11,542)		(11,542)
Issuance of common stock under employee benefit plans, net of forfeitures and shares withheld to cover taxes		324			3			25,394			—		—		25,397
Net issuance of common stock upon exercise of stock options		906			9			28,711			—		—		28,720
Share-based compensation		—			—			24,746			—		—		24,746
Share repurchases, including fees		(38,531)			(385)			(71,743)			(3,395,776)		—		(3,467,904)
Excise tax on share repurchases		—			—			—			(33,539)		—		(33,539)
Balance at September 30, 2026		804,608		$	8,046		$	1,537,400		$	(3,653,266)	$	15,212	$	(2,092,608)

		For the Three Months Ended September 30, 2025
												Accumulated
							Additional					Other
		Common Stock					Paid-In			Retained		Comprehensive
		Shares		Par Value			Capital			Deficit		Income (Loss)		Total
Balance at June 30, 2025		850,561		$	8,506		$	1,499,288		$	(2,748,221)	$	8,565	$	(1,231,862)
Net income		—			—			—			725,896		—		725,896
Total other comprehensive income		—			—			—			—		7,059		7,059
Issuance of common stock under employee benefit plans, net of forfeitures and shares withheld to cover taxes		87			1			7,371			—		—		7,372
Net issuance of common stock upon exercise of stock options		466			4			12,737			—		—		12,741
Share based compensation		—			—			7,774			—		—		7,774
Share repurchases, including fees		(4,282)			(43)			(7,586)			(412,381)		—		(420,010)
Excise tax on share repurchases		—			—			—			(3,646)		—		(3,646)
Balance at September 30, 2025		846,832		$	8,468		$	1,519,584		$	(2,438,352)	$	15,624	$	(894,676)

		For the Nine Months Ended September 30, 2025
												Accumulated
							Additional					Other
		Common Stock					Paid-In			Retained		Comprehensive
		Shares		Par Value			Capital			Deficit		Income (Loss)		Total
Balance at December 31, 2024		862,233		$	8,622		$	1,454,518		$	(2,791,288)	$	(42,813)	$	(1,370,961)
Net income		—			—			—			1,932,976		—		1,932,976
Total other comprehensive income		—			—			—			—		58,437		58,437
Issuance of common stock under employee benefit plans, net of forfeitures and shares withheld to cover taxes		267			3			21,306			—		—		21,309
Net issuance of common stock upon exercise of stock options		1,887			19			48,581			—		—		48,600
Share-based compensation		—			—			25,577			—		—		25,577
Share repurchases, including fees		(17,555)			(176)			(30,398)			(1,566,076)		—		(1,596,650)
Excise tax on share repurchases		—			—			—			(13,964)		—		(13,964)
Balance at September 30, 2025		846,832		$	8,468		$	1,519,584		$	(2,438,352)	$	15,624	$	(894,676)


	September 30, 2026				December 31, 2025
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Senior Notes	$	7,261,810	$	6,966,053	$	5,327,587	$	5,308,675


Warranty liabilities, balance at December 31, 2025	$	146,279
Warranty claims		(212,812)
Warranty accruals		238,650
Foreign currency translation		(7)
Warranty liabilities, balance at September 30, 2026	$	172,110


	Foreign		Total Accumulated Other
	Currency ⁽¹⁾		Comprehensive Income (Loss)
Accumulated other comprehensive income, balance at June 30, 2026	$	35,572	$	35,572
Change in accumulated other comprehensive loss		(20,360)		(20,360)
Accumulated other comprehensive income, balance at September 30, 2026	$	15,212	$	15,212


	Shares	Weighted- Average
	(in thousands)	Exercise Price
Outstanding at December 31, 2025	8,184	$	44.70
Granted	936		92.94
Exercised	(906)		31.69
Forfeited or expired	(143)		76.83
Outstanding at September 30, 2026	8,071	$	51.18
Exercisable at September 30, 2026	5,760	$	38.39


		For the Nine Months Ended
		September 30,
Liquidity:		2026		2025
Total cash provided by/(used in):
Operating activities		$	2,598,155	$	2,128,501
Investing activities			(853,020)		(896,565)
Financing activities			(1,744,540)		(1,159,848)
Effect of exchange rate changes on cash			57		2,180
Net increase in cash and cash equivalents		$	652	$	74,268

Capital expenditures		$	860,273	$	899,783
Free cash flow ⁽¹⁾			1,729,669		1,201,004


			For the Twelve Months Ended
			September 30,
			2026			2025
GAAP net income			$	2,710,099		$	2,484,106
Add:	Interest expense			275,063			229,870
	Rent expense ⁽¹⁾			512,992			482,430
	Provision for income taxes			786,914			670,547
	Depreciation expense			544,345			492,631
	Amortization expense			4,249			5,762
	Non-cash share-based compensation			34,296			34,439
Non-GAAP EBITDAR			$	4,867,958		$	4,399,785

	Interest expense		$	275,063		$	229,870
	Capitalized interest			14,666			16,995
	Rent expense ⁽¹⁾			512,992			482,430
Total fixed charges			$	802,721		$	729,295

Consolidated fixed charge coverage ratio				6.06			6.03

GAAP debt			$	7,711,498		$	5,915,530
Add:	Stand-by letters of credit			197,596			156,259
	Unamortized discount and debt issuance costs			38,502			24,470
	Five-times rent expense			2,564,960			2,412,150
Non-GAAP adjusted debt			$	10,512,556		$	8,508,409

Consolidated leverage ratio				2.16			1.93


		For the Twelve Months Ended
		September 30,
		2026		2025
Total lease cost, per ASC 842		$	614,988	$	581,898
Less:	Variable non-contract operating lease components, related to property taxes and insurance		101,996		99,468
Rent expense		$	512,992	$	482,430

Exhibit No.		Description
3.1		Third Amended and Restated Articles of Incorporation of the Registrant, filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K dated May 15, 2025, is incorporated herein by this reference.
3.2		Fourth Amended and Restated Bylaws of the Registrant, filed as Exhibit 3.3 to the Registrant’s Current Report on Form 8-K dated May 19, 2020, is incorporated herein by this reference.
4.1		Seventh Supplemental Indenture, dated as of March 12, 2026, by and between O’Reilly Automotive, Inc. and U.S. Bank Trust Company, National Association, as Trustee, filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K dated March 12, 2026, is incorporated herein by this reference.
4.2		Form of Note for 5.100% Senior Notes due 2036, included in Exhibit 4.1 to the Registrant’s Current Report on Form 8-K dated March 12, 2026, is incorporated herein by this reference.
4.3		Eighth Supplemental Indenture, dated as of August 14, 2026, by and between O’Reilly Automotive, Inc. and U.S. Bank Trust Company, National Association, as Trustee, filed as Exhibit 4.1, to the Registrant’s Current Report on Form 8-K dated August 14, 2026, is incorporated herein by this reference.
4.4		Form of Note for 4.800% Senior Notes due 2029, included in Exhibit 4.1 to the Registrant’s Current Report on Form 8-K dated August 14, 2026, is incorporated herein by this reference.
4.5		Ninth Supplemental Indenture, dated as of August 14, 2026, by and between O’Reilly Automotive, Inc. and U.S. Bank Trust Company, National Association, as Trustee, filed as Exhibit 4.3, to the Registrant’s Current Report on Form 8-K dated August 14, 2026, is incorporated herein by this reference.
4.6		Form of Note for 5.050% Senior Notes due 2031, included in Exhibit 4.3 to the Registrant’s Current Report on Form 8-K dated August 14, 2026, is incorporated herein by this reference.
4.7		Tenth Supplemental Indenture, dated as of August 14, 2026, by and between O’Reilly Automotive, Inc. and U.S. Bank Trust Company, National Association, as Trustee, filed as Exhibit 4.5, to the Registrant’s Current Report on Form 8-K dated August 14, 2026, is incorporated herein by this reference.
4.8		Form of Note for 5.550% Senior Notes due 2037, included in Exhibit 4.5 to the Registrant’s Current Report on Form 8-K dated August 14, 2026, is incorporated herein by this reference.
10.1		O’Reilly Automotive, Inc. 2009 Stock Purchase Plan, as amended and restated effective as of September 30, 2026, filed herewith.
31.1		Certificate of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.
31.2		Certificate of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.
32.1 *		Certificate of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, furnished herewith.
32.2 *		Certificate of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, furnished herewith.
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*		Furnished (and not filed) herewith pursuant to Item 601(b)(32)(ii) of Regulation S-K.


		September 30,
		2026		2025
Risk free interest rate		4.09	%	4.21	%
Expected life		6.7	Years	6.6	Years
Expected volatility		25.5	%	26.8	%
Expected dividend yield		—	%	—	%


	O’REILLY AUTOMOTIVE, INC.

November 6, 2026	/s/	Brad Beckham
Date	Brad Beckham
	Chief Executive Officer
	(Principal Executive Officer)

November 6, 2026	/s/	Jeremy A. Fletcher
Date	Jeremy A. Fletcher
	Executive Vice President and Chief Financial Officer
	(Principal Financial and Accounting Officer)


Date:	November 6, 2026	/s/	Brad Beckham
		Brad Beckham
		Chief Executive Officer
		(Principal Executive Officer)


/s/	Jeremy A. Fletcher
Jeremy A. Fletcher
Chief Financial Officer