Auto retailers fall after O’Reilly comp sales miss
Shares of auto retailers are falling after O’Reilly Automotive (ORLY) reported second quarter same-store-sales that were below previous expectations.
SSS MISS:
O’Reilly Automotive reported Q2 comparable same-store-sales (SSS) results of 1.7%, which fell short of previously issued Q2 comparable store sales guidance of 3%-5%.
CEO Greg #Henslee stated, “After exiting Q1 and entering April on an improved sales trend, we faced a more challenging sales environment than we expected for the remainder of the quarter.”
Henslee added that the Q2 comp sales results of 1.7% represent an improvement over our Q1, but fell below the 3%-5%, “due to what we believe were continued headwinds from a second consecutive mild winter and overall weak consumer demand.”
The executive said the comparable store sales shortfall will have a “consequent impact on our operating profitability.”
O’Reilly is expected to report full results for the second quarter on July 26 after the market close.
ANALYST COMMENTARY:
Following the lower than expected Q2 preannouncement, Raymond James analyst Dan #Wewer lowered his price target on O’Reilly Automotive to $250 from $310 and said he is bullish long-term, but is disappointed with ongoing sales challenges facing the company and the industry.
BTIG analyst Alan #Rifkin also lowered his price target for O’Reilly to $243 from $310 and said he believes the sustained comp weakness suggests sales are being impacted by factors other than income tax delays and weather.
Nonetheless, the analyst thinks O’Reilly’s long-term fundamentals remain strong.
PRICE ACTION:
In Thursday’s trading, O’Reilly Automotive is down 20.5% to $175.23.
PEERS ALSO DROPPING:
O’Reilly peers also declining include Advance Auto Parts (AAP), down 15%, AutoZone (AZO), down 9.6%, Genuine Parts (GPC) dropping 4.2%, and U.S. Auto Parts (PRTS), down 3.3%.
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