O'Reilly Automotive Profile
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. As of December 31, 2023, the company operated various stores in 48 states in the United States and Puerto Rico and various stores in Mexico.
The company’s 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, with diagnostic information, list of possible repair fixes, and referrals to trusted local repair shops provided; 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.
Strategy
The company intends to continue to consolidate the fragmented automotive aftermarket. The company continually strives to improve the service provided to its customers. The company’s intention is to continue to selectively pursue strategic acquisitions that will strengthen its position as a leading automotive aftermarket parts supplier in existing markets and provide a springboard for expansion into new domestic and international markets. The company continually updates the location and condition of its store network through systematic renovation and relocation of its existing stores to enhance store performance. The company’s Omnichannel growth strategies reflect the continued evolution of customer preferences in researching and completing purchases.
Distribution Systems
The company’s tiered distribution model provides industry-leading parts availability and store in-stock positions, while optimizing its inventory investment by controlling the depth of its store stocked inventory. The company’s distribution expansion strategy, supported by its ongoing, significant capital investments, complements its new store opening strategy by supporting newly established clusters of stores, and additional penetration into existing markets, in the regions surrounding each DC.
Distribution Centers
As of December 31, 2023, the company operated regional DCs consisted of approximately 12.6 million operating square feet. The company’s DCs provide five-night-a-week delivery, primarily via a Company-owned fleet, to substantially all of its stores in the continental United States. In addition, stores within an individual DC’s metropolitan area receive multiple daily deliveries from the DC’s city counter, many of which receive this service seven days per week. The company’s DCs provide service to not only the stores they service via their city counters but also to strategic Hub locations, which redistribute products to surrounding stores. The company’s national Hub store network provides additional service throughout the week, and on weekends, to surrounding stores.
As part of its continuing efforts to enhance the company’s distribution network in 2024, it plans to continue to enhance our distribution network through the engineering, design, expansion, or relocation of new or current DCs; continue to utilize routing software to enhance logistics efficiencies; continue to enhance labor management software to improve DC productivity and overall operating efficiency; continue to refine best practices in all DCs; make proven, return-on-investment based capital enhancements to material handling equipment in DCs, including conveyor systems, picking modules, lift equipment, and computer hardware; and continue to augment our robust distribution network, when and where appropriate, through the use of strategically located Hubs.
Hub Stores
The company operates strategically located Hub stores. In addition to serving DIY and professional service provider customers in their markets, Hub stores provide delivery service to the company’s 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 Hubs that average approximately 14,300 square feet and carry an average of 52,000 SKUs, with Hubs in select markets carrying further enhanced inventory levels up to approximately 106,000 SKUs.
Marketing
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 its 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 brands, which it has acquired or developed over time.
The company purchases automotive products in substantial quantities from over 675 suppliers, the five largest of which accounted for approximately 25% of its total purchases in 2023. The company’s largest supplier in 2023 accounted for approximately 8% of its total purchases and the next four largest suppliers each accounted for approximately 3% to 6% of our total purchases.
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 its continued relationships with professional service providers and installers, the company employs Territory Sales Managers in all major markets 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, our professional customer program 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.
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; BRAKEBEST SELECT PRO; CARTEK; CARTEK PRO; CERTIFIED AUTO REPAIR; CHECKER AUTO PARTS; CUSTOMIZE YOUR RIDE; DEPENDABILITY YOU CAN COUNT ON; DO IT RIGHT DEALS; 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; PARTS CITY; PARTS CITY AUTO COLOR PROFESSIONAL PAINT PEOPLE; PARTS CITY AUTO PARTS; PARTS FOR YOUR CAR WHEREVER YOU ARE; PARTS PAYOFF; POWER PERFORMANCE RELIABILITY; 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).
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 (year ended December 31, 2023), its 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.
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. The company was incorporated in 2010.
