O'Reilly Automotive Stock

O’Reilly Automotive, Inc. operates as a specialty retailer of automotive aftermarket parts, tools, supplies, equipment and accessories in the United States (U.S.), selling its products to both do-it-yourself (DIY) and professional service provider customers.

The company operates stores in 47 states in the United States and Mexico. Its stores carry an extensive product line, including new and remanufactured automotive hard parts and maintenance items, such as alternators, batteries, brake system components, belts, chassis parts, driveline parts, engine parts, fuel pumps, hoses, starters, temperature control, water pumps, antifreeze, appearance products, engine additives, filters, fluids, lighting, oil and wiper blades; and accessories, such as floor mats, seat covers and truck accessories.

The company’s stores offer many enhanced services and programs to its customers, such as battery diagnostic testing; battery, wiper and bulb replacement; check engine light code extraction, where allowed by law; custom hydraulic hoses; drum and rotor resurfacing; electrical and module testing; loaner tool program; professional paint shop mixing and related materials; and used oil, oil filter and battery recycling.

The company’s U.S. stores, on average, carry approximately 22,000 SKUs and average approximately 7,500 total square feet in size.

Growth Strategy

The company’s strategies are to aggressively open new stores; grow sales in existing stores; selectively pursue strategic acquisitions; and continually enhance store design and location. The company’s Omnichannel growth strategies reflect the continued evolution of customer preferences in researching and completing purchases.

Distribution Systems

The company operates Hub stores. In addition to serving DIY and professional service provider customers in their markets, Hub stores provide delivery service to its other stores within the surrounding area and access to an expanded selection of SKUs on a same-day basis. The company’s Hub store network consists of 383 Hubs that average approximately 12,700 square feet and carry an average of 49,000 SKUs, with Hubs in select markets carrying further enhanced inventory levels up to approximately 94,000 SKUs.

Products and Purchasing

The company’s stores offer DIY and professional service provider customers a wide selection of products for domestic and imported automobiles, vans and trucks. The company’s merchandise generally consists of nationally recognized, well-advertised, premium name brand products, such as AC Delco, Armor All, Bosch, Castrol, Dorman, Fel-Pro, Gates Rubber, Lucas Oil, Mobil1, Monroe, Moog, Pennzoil, Prestone, Standard, STP, Turtle Wax, Valvoline, Wagner, and Wix, and a wide selection of quality proprietary private label products, which span the entire good, better and best value spectrum, under the company’s BesTest, BrakeBest, Cartek, Import Direct, MasterPro, MicroGard, Murray, Omnispark, O’Reilly Auto Parts, Precision, Power Torque, Super Start, Syntec, and Ultima brands.

The company’s proprietary private label products are produced by respected automotive manufacturers, meet or exceed original equipment manufacturer specifications and consist of house brands and nationally recognized proprietary bands, which it has acquired or developed over time.

Marketing

Retail and Online Marketing

The company’s integrated marketing strategy and Omnichannel efforts include national media channels, in-store, digital and social media activation, as well as marketing the O’Reilly brand through automotive event sponsorships and on-site appearances throughout the country. The company’s O’Rewards loyalty program encourages repeat customers, as they accumulate points from their O’Reilly purchases that are redeemable for rewards at various purchase levels. The company’s marketing efforts also target the Spanish-speaking market through broadcast media, print and sports marketing, as well as sponsorships of local and regional events.

Professional Marketing

To develop the company’s continued relationships with professional service providers and installers, it employs Territory Sales Managers in nearly every market to ensure complete sales territory coverage and personalized service for professional customers. Flyers, quick reference guides and catalogs are distributed on a regular basis to all professional service providers, including paint and body shops and fleet maintenance customers to encourage brand and program awareness. In addition, the company’s professional customer program, First Call, also offers a proprietary ordering and other services platform called www.FirstCallOnline.com, dedicated Professional Service Specialists in stores, multiple daily deliveries and access to training opportunities, shop management, maintenance supplies and the Certified Auto Repair program, which offers professional service providers with the business tools they need to profitably grow and market their business.

Seasonality

To some extent the company’s business is seasonal, primarily as a result of the impact of weather conditions on customer buying patterns. While the company has historically realized operating profits in each quarter of the year, the company’s store sales, profits and inventory levels have historically been higher in the second and third quarters (April through September) than in the first and fourth quarters (October through March) of the year.

Service Marks and Trademarks

The company has registered, acquired and/or been assigned the following service marks and trademarks in the United States: BENNETT AUTO SUPPLY; BESTEST; BETTER PARTS. BETTER PRICES.; BETTER PARTS, BETTER PRICES....EVERYDAY!; BOND AUTO PARTS; BRAKEBEST; BRAKEBEST HD; BRAKEBEST SELECT; CARTEK; CARTEK PRO; CERTIFIED AUTO REPAIR; CHECKER AUTO PARTS; CUSTOMIZE YOUR RIDE; DEPENDABILITY YOU CAN COUNT ON; DO IT RIGHT DEALS; DO IT RIGHT REBATE; EARN POINTS EVERY WAY YOU SHOP; FIRST CALL; FLEET & HEAVY DUTY PROFESSIONAL PARTS PEOPLE; FORMULATED FOR TODAY’S ENGINES; FRIENDLIEST PARTS STORE IN TOWN; FROM OUR STORE TO YOUR DOOR; IMPORT DIRECT; IMPORT DIRECT OE REPLACEMENT PARTS; KRAGEN AUTO PARTS; MASTER PRO; MASTER PRO REFINISHING; MASTERPRO SELECT; MASTERPRO UNDERCAR; MICROGARD; MICROGARD HEPA; MURRAY; MURRAY CLIMATE CONTROL; MURRAY TEMPERATURE CONTROL; MURRAY’S MASCOT (Design only); MURRAY PLUS; MURRAY ULTRA; MURRAY’S AUTO PARTS; O LOW PRICE GUARANTEE! ; O (Shamrock inside of ‘O’); OMNISPARK; O’REILLY; O’REILLY AUTO COLOR PROFESSIONAL PAINT PEOPLE; O’REILLY AUTO PARTS; O’REILLY AUTO PARTS PROFESSIONAL PARTS PEOPLE; O’REILLY AUTOMOTIVE; O’REILLY O’REWARDS; O’REILLY SELECT; O’REWARDS; ORIGINAL BRAND PROXONE EST. 2007; PARTNERSHIP NETWORK; PARTS CITY; PARTS CITY AUTO COLOR PROFESSIONAL PAINT PEOPLE; PARTS CITY AUTO PARTS; PARTS FOR YOUR CAR WHEREVER YOU ARE; PARTS PAYOFF; POWER TORQUE; PRECISION; PRECISION HUB ASSEMBLIES; PROFESSIONAL PARTS PEOPLE; PROFESIONALES EN AUTOPARTES; PROTECTION YOU CAN TRUST; QUIETECH; REAL WORLD TRAINING; ¡SIGUE ADELANTE CON O’REILLY!; SCHUCK’S AUTO SUPPLY; SUPER START; SYNTEC; TOOLBOX; ULTIMA; ULTIMA SELECT; ULTIMA SELECT MOTOR PRODUCTS; WORK AT THE O; and X (design mark associated with PRECISION).

Competition

The company competes primarily with national retail and wholesale automotive parts chains (such as AutoZone, Inc., Advance Auto Parts, CARQUEST and NAPA); wholesalers or jobber stores (some of which are associated with national automotive parts distributors or associations, such as NAPA, CARQUEST, Bumper to Bumper and Auto Value); and mass merchandisers and online retailers that carry automotive replacement parts, maintenance items and accessories (such as Wal-Mart Stores, Inc. and Amazon.com, Inc.).

History

O'Reilly Automotive, Inc. was founded in 1957.