Auto parts and accessories retailer O’Reilly Automotive (NASDAQ: ORLY) beat Wall Street’s revenue expectations in Q1 CY2026, with sales up 10.2% year on year to $4.56 billion. On the other hand, the company’s full-year revenue guidance of $18.85 billion at the midpoint came in 0.6% below analysts’ estimates. Its GAAP profit of $0.72 per share was 3.3% above analysts’ consensus estimates.

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Brad Beckham, O’Reilly’s CEO, commented, “We are pleased to report a strong start to 2026, highlighted by an 8.1% increase in comparable store sales and a 16% increase in our first quarter diluted earnings per share. Team O’Reilly delivered comparable store sales results exceeding our expectations in both professional and DIY, with double-digit growth in our professional business and mid-single digit growth in DIY. Our ability to drive productivity in our business and translate robust sales growth into a 14% increase in operating profit is the direct result of our Team’s focus on prudent expense management. I would like to thank all of our Team Members for their incredible hard work in the first quarter and their relentless focus on providing unsurpassed service to our customers each and every day. We look forward to the opportunities we have to grow our market share in 2026 and are encouraged by the stable demand backdrop in our industry.”

Company Overview

Serving both the DIY customer and professional mechanic, O’Reilly Automotive (NASDAQ: ORLY) is an auto parts and accessories retailer that sells everything from fuel pumps to car air fresheners to mufflers.

Revenue Growth

Examining a company’s long-term performance can provide clues about its quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years.

With $18.21 billion in revenue over the past 12 months, O'Reilly is one of the larger companies in the consumer retail industry and benefits from a well-known brand that influences purchasing decisions. However, its scale is a double-edged sword because it’s harder to find incremental growth when you’ve penetrated most of the market. To expand meaningfully, O'Reilly likely needs to tweak its prices or enter new markets.

As you can see below, O'Reilly grew its sales at a tepid 7.1% compounded annual growth rate over the last three years, but to its credit, it opened new stores and increased sales at existing, established locations.

This quarter, O'Reilly reported year-on-year revenue growth of 10.2%, and its $4.56 billion of revenue exceeded Wall Street’s estimates by 2.3%.

Looking ahead, sell-side analysts expect revenue to grow 5.5% over the next 12 months, a slight deceleration versus the last three years. We still think its growth trajectory is attractive given its scale and implies the market is baking in success for its products.

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Store Performance

Number of Stores

O'Reilly sported 6,644 locations in the latest quarter. Over the last two years, it has opened new stores quickly, averaging 3.4% annual growth. This was faster than the broader consumer retail sector.

When a retailer opens new stores, it usually means it’s investing for growth because demand is greater than supply, especially in areas where consumers may not have a store within reasonable driving distance.

Same-Store Sales

The change in a company's store base only tells one side of the story. The other is the performance of its existing locations and e-commerce sales, which informs management teams whether they should expand or downsize their physical footprints. Same-store sales gives us insight into this topic because it measures organic growth for a retailer's e-commerce platform and brick-and-mortar shops that have existed for at least a year.

O'Reilly’s demand has been spectacular for a retailer over the last two years. On average, the company has increased its same-store sales by an impressive 4.4% per year. This performance suggests its rollout of new stores is beneficial for shareholders. We like this backdrop because it gives O'Reilly multiple ways to win: revenue growth can come from new stores, e-commerce, or increased foot traffic and higher sales per customer at existing locations.

In the latest quarter, O'Reilly’s same-store sales rose 8.1% year on year. This growth was an acceleration from its historical levels, which is always an encouraging sign.

Key Takeaways from O'Reilly’s Q1 Results

We enjoyed seeing O'Reilly beat analysts’ EBITDA expectations this quarter. We were also glad its revenue outperformed Wall Street’s estimates. On the other hand, its full-year EPS guidance slightly missed and its full-year revenue guidance fell slightly short of Wall Street’s estimates. Overall, this print was mixed but still had some key positives. The stock traded up 3.6% to $97.50 immediately after reporting.

Is O'Reilly an attractive investment opportunity at the current price? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).