I'll research ORLY before writing the preview. Let me gather recent earnings materials, guidance, news, and price data.Let me read the most recent earnings materials (Q1 2026 release and call) plus the year-ago Q2 2025 for comparison.Let me get the year-ago Q2 2025 numbers (the comparison base) and recent stock price performance.Let me check for recent news/analyst context, especially around the notable early-July stock move.I have what I need. Here's the earnings preview.

O'Reilly Automotive (ORLY) — 2026 Q2 Earnings Preview

Reports after the close ahead of the July 29, 2026 conference call

The one-line setup

O'Reilly heads into Q2 with exceptional business momentum but an unusual strategic overhang. The fundamentals are as strong as they've been in years — Q1 comps of +8.1% blew past plan — yet the stock is roughly flat YTD and trading well off its January highs, largely because of a surprise ~$10 billion bid for Genuine Parts' NAPA business. This print is less about whether O'Reilly beats (it likely does) and more about (1) how much management raises guidance and (2) what they say about the NAPA pursuit.

What actually matters most: the NAPA bid

This is the swing factor for the stock and will dominate Q&A. In early July, Bloomberg reported O'Reilly made a cash bid of ~$10 billion or more for Genuine Parts' (GPC) auto-parts unit — the NAPA business with 10,000+ locations — which GPC has said it wants to separate to become a pure-play industrials company.

The market's initial reaction was clearly negative: ORLY fell ~6–7% on July 6 (from ~$90 to ~$84) and remains a debated topic. The bear case from the sell side: - Store overlap / antitrust: UBS estimated ~60% of NAPA's U.S. stores sit within a 10-minute drive of an existing O'Reilly, implying heavy store closures and uncertain FTC scrutiny. - Strategic fit: TD Cowen flagged that O'Reilly likely doesn't want to operate outside North America and "hasn't made a large acquisition since 2008"; Wolfe noted NAPA's franchisee structure and years of supply-chain underinvestment.

What to listen for: O'Reilly rarely comments on M&A speculation, but any framing of (a) capital-allocation discipline, (b) willingness to walk away, or (c) the buyback vs. deal trade-off will move the stock. A relevant tell landed July 10: O'Reilly hired Tractor Supply supply-chain veteran Colin Yankee into a top supply-chain role — a signal the company is building capacity, whether organically or to integrate a large asset.

The Q2 bar

Year-ago Q2 2025 (the comparison base, split-adjusted 15:1):

Metric	Q2 2025 (a)
Comparable store sales	+4.1%
Sales	$4.53B
Gross margin	51.4%
Operating margin	20.2% (seasonally the peak quarter)
Diluted EPS	$0.78 (+11% y/y)
DIY sales / Pro sales	$2,229M / $2,196M

For context on the trajectory, Q1 2026 delivered +8.1% comps, +10.2% total sales, 18.5% operating margin, and $0.72 EPS (+16%) — with management noting the quarter accelerated into an exit rate implied in the double digits, and that April remained strong despite the normal seasonal moderation. That momentum sets an elevated internal bar for Q2.

The key debate: comps and the guidance dilemma

Management kept full-year comp guidance at 3–5% even after the 8.1% Q1, explicitly saying Q1 "pushed us to the top half" of the range but choosing not to raise the top-line. That conservatism creates a clear tension:

Math implies deceleration is baked in. After +8.1% in Q1, hitting even the 5% high end for the year requires the back three quarters to average ~4%. So a strong Q2 (which looks likely given April trends and the inflation tailwind below) would again pressure them to raise — or to explain why they're staying cautious.
Same-SKU inflation is a first-half tailwind. ~6% same-SKU inflation aided Q1 average ticket, and management said the H1 benefit fades in H2 as they lap the larger 2025 price increases starting in Q3. Q2 should still carry most of that tailwind.
The consumer caveat. Management repeatedly flagged caution around fuel prices (Iran conflict / oil supply) potentially shocking the low-to-middle-income core customer, though they've said it takes sustained gas prices "well north of $4/gallon" to dent miles driven — and they hadn't seen that yet.

Base case: Q2 comps land mid-to-high single digits (comfortably above the full-year range), prompting another EPS/comp guidance raise. The risk is that management stays conservative and frames Q1/Q2 strength as partly tax-refund/weather "catch-up," which could temper the reaction.

Margins and SG&A

Gross margin (guide 51.5–52.0%): Watch tariffs, freight, and motor-oil supply/cost tied to the Iran/oil situation — management called out potential pressure on consumer motor oils sourced from the Far East. Offsets: acquisition-cost reductions, DC productivity, and private-label penetration now >50% of revenue, which gives sourcing flexibility.
SG&A: This has been the recent sore spot — elevated insurance/legal liability and healthcare costs pressured the back half of 2025. Management guided per-store SG&A growth of ~3–4% for the full year but warned the first half runs hottest (Q1 was +5.5%/store). Q2 leverage on strong sales is the key margin question; Q2 is the highest-margin quarter (20.2% op margin last year), so any deleverage would stand out.

Business mix: the Pro takeover

The structural story continues: professional (DIFM) posted its third straight quarter of double-digit comps in Q1, while DIY ran mid-single digits. Pro sales have now essentially crossed above DIY sales quarterly (Q1: Pro $2,291M vs. DIY $2,190M). Management insists share gains are broad-based — from small independents and WDs feeling pressure from rates/inventory-carrying costs — and reiterated only ~10% share even in its most mature markets, framing a long runway. Expect continued emphasis on market-share gains "in any backdrop."

Capital return & balance sheet

Buyback: Repurchased 10.0M shares in Q1 at ~$92.45 (~$923M), plus 3.6M more through the release date; ~$1.14B remained on authorization. With the stock now in the ~$85–91 range (below Q1's average repurchase price), aggressive buyback is likely to have continued — watch for pace, remaining authorization, and any new authorization.
Leverage: Adjusted debt/EBITDAR was 2.03x vs. a 2.5x target — meaning ample debt capacity, which is exactly why the NAPA financing question is live.
Full-year FCF guide $1.8–2.1B; capex $1.3–1.4B; 225–235 net new stores (international ramp in Mexico/Canada continuing).

Stock & positioning

ORLY is roughly flat YTD (~$91 vs. ~$90 at year-start), down ~10% from its late-January peak near $101, and still digesting the NAPA-news drop.
Relative: AutoZone (AZO) is down ~6% YTD, while Advance Auto (AAP) has rebounded sharply (~+50%) off a low base — the group is not trading as a monolith.
The flat YTD despite accelerating fundamentals suggests the market is pricing in (a) deal/dilution/integration risk and (b) skepticism that ~8% comps are sustainable. That sets up a potentially asymmetric reaction: a clean beat-and-raise without a costly NAPA commitment could be a positive catalyst; conversely, confirmation of an aggressive, dilutive NAPA pursuit could overshadow good numbers.

What to watch on the call — checklist

NAPA: Any confirmation, framing, capital-allocation discipline, or "walk-away" language. Biggest stock mover.
Guidance: Do they raise comps above 3–5% and lift EPS again? Or hold and cite conservatism?
Q3-to-date comp cadence and how much they attribute Q1/Q2 strength to tax refunds/weather "catch-up" vs. durable share gains.
Same-SKU inflation trajectory into H2 as they lap 2025 price increases.
Gas/oil impact — on demand (miles driven), on motor-oil cost/availability, and on delivery-fleet SG&A.
SG&A per-store growth and whether insurance/liability pressure is stabilizing.
Buyback pace given the depressed price, and remaining authorization.
Pro vs. DIY momentum and the new supply-chain leadership's mandate.

Bottom line: Fundamentally, expect another strong quarter with upside to the year-ago $0.78 EPS and comps well above the full-year range. The stock's reaction, however, hinges on the interplay between a likely guidance raise and how management addresses the NAPA question — the rare instance where a specialty retailer's earnings call is really about a $10 billion capital-allocation decision.

Prepared from O'Reilly's Q1 2026 and Q2 2025 releases/transcripts, recent news flow, and price data through July 28, 2026. Figures are split-adjusted (15:1, effective June 2025). Not investment advice.