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.
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.
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.
In Thursday’s trading, O’Reilly Automotive is down 20.5% to $175.23.
PEERS ALSO DROPPING:
To read stories similar to this, sign up for a free trial membership to Stockwinners; No credit card required.
The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.