Timing correction: ORLY reports after 3:30 p.m. Central Time today, Wednesday, July 29, 2026—not tomorrow. Its earnings call is scheduled for Thursday, July 30 at 10:00 a.m. Central Time.
ORLY enters 2Q26 with a strong first-quarter beat, clear evidence of professional-customer share gains, and full-year guidance that already incorporates a better-than-planned start. The central question for this report is therefore not simply whether the company beats quarterly estimates, but whether the strong 1Q sales momentum held through the spring and early summer without relying too heavily on favorable first-quarter weather and tax-refund effects.
The setup is balanced:
The stock closed at $91.19 on July 28, about 10% below its January 28 high of $101.37 and roughly flat year-to-date. That suggests investors have become more cautious despite ORLY’s operational strength, increasing the importance of management’s commentary on the durability of comps and the path of margins.
In 1Q26, ORLY reported 8.1% comparable-store sales growth, materially ahead of its expectations. Management attributed the outperformance to:
However, management also cautioned against extrapolating first-quarter strength, noting that April trends had moderated seasonally versus March—albeit while remaining better than expected.
For 2Q, investors should focus on:
| Key question | Why it matters |
|---|---|
| Did comp growth remain comfortably above the 3%–5% full-year guide? | Demonstrates that the 1Q strength was durable rather than transient. |
| Is pro still outgrowing DIY? | The pro business has been the principal comp driver and a key source of market-share gains. |
| Are transactions still contributing? | 1Q outperformance came more from transactions than ticket; this is a higher-quality signal than price alone. |
| How is DIY behaving? | DIY remains most exposed to low-/middle-income consumer pressure, gasoline costs, and deferred discretionary work. |
| What is the category mix? | Maintenance and hard parts would support the “necessary repair” thesis; weakness in discretionary accessories would be less concerning unless it broadens. |
The comparison is reasonable but not easy: in 2Q25, ORLY generated a 4.1% comp on top of a 2.3% gain in 2Q24. A healthy 2Q26 result should therefore show continued share capture on a solid base, not merely a favorable comparison.
| Metric | 2Q25 actual | 1Q26 actual | Investor read-through for 2Q26 |
|---|---|---|---|
| Revenue | $4.53B | $4.56B | 2Q normally carries seasonally higher sales and profit; revenue growth should benefit from comps plus rapid unit growth. |
| Comparable-store sales | 4.1% | 8.1% | The most important operating metric. |
| Gross margin | 51.4% | 51.5% | Watch whether sourcing, private label, and distribution productivity offset mix and freight pressure. |
| Operating margin | 20.2% | 18.5% | 2Q is seasonally stronger; margin performance will signal operating leverage quality. |
| Diluted EPS | $0.78 | $0.72 | EPS growth should continue to benefit from operating leverage and buybacks. |
| Store count | 6,483 | 6,644 | New stores are a material incremental sales contributor and a long-run share driver. |
After 1Q, ORLY maintained its full-year 2026 comp guide at 3%–5%, but characterized the strong opening quarter as placing it toward the top half of that range. It increased other elements of its outlook:
A positive report would likely include some combination of:
Conversely, holding guidance is not automatically negative. ORLY has historically been cautious around early-year sales trends, and its 1Q strength included weather and tax-refund benefits. But if the company holds the guide, investors will want a credible explanation that reflects prudent conservatism rather than a deterioration in underlying demand.
ORLY translated 1Q’s sales outperformance into meaningful profitability:
The ingredients behind that performance were improved acquisition costs, distribution productivity, strong sales leverage, and disciplined expense management. Those benefits were partly offset by a greater professional-sales mix—typically lower gross margin than DIY—and higher medical/casualty insurance costs.
Private-label penetration. Management said private label now represents more than 50% of total revenue. That is strategically important: proprietary brands can support margin, customer loyalty, and sourcing flexibility, particularly during periods of trade or supply-chain disruption.
Fuel and freight. ORLY said higher domestic fuel costs could pressure distribution and delivery expense, but management initially viewed that pressure as manageable within its guidance. Commentary on whether these costs have worsened, stabilized, or been passed through will matter.
Oil and commodity exposure. Management acknowledged potential pressure in motor oil and related supply chains. Investors should listen for whether this is a pricing issue, an availability issue, or both.
Tariffs and sourcing. In 1Q, ORLY said net tariff exposure remained relatively stable and that its results and outlook did not assume tariff refunds. The company’s scale and private-label sourcing flexibility are advantages, but any change in acquisition costs or pricing behavior could affect the second-half outlook.
SG&A normalization. First-quarter SG&A per store rose 5.5%, above the company’s full-year expectation of roughly 3%–4%, primarily because 1Q carried the most difficult cost comparisons and because sales volume supported incremental labor and incentive costs. A moderation in per-store SG&A growth during 2Q would reinforce the full-year margin framework.
ORLY’s professional business has posted three consecutive quarters of double-digit comps through 1Q26. Management has also indicated that its internal and external data point to share gains that may be stronger than those seen over the prior several years.
The company’s competitive advantages are particularly relevant in pro:
Investors should listen for more color on whether share gains remain broad-based across mature and newer markets, and whether smaller independents are continuing to cede share amid higher inventory carrying costs, interest rates, and operational complexity.
ORLY opened 59 net new stores in 1Q26, reaching 6,644 total locations across the U.S., Puerto Rico, Mexico, and Canada. The full-year target remains 225–235 net new stores, requiring a sustained acceleration through the balance of the year.
The unit-growth story is important because it provides a second growth engine beyond same-store sales. Domestic new-store performance was described as meeting the company’s high expectations, while Mexico and Canada continue to build scale.
Capital return remains meaningful:
The buyback supports EPS growth, but investors should distinguish between EPS upside driven by reduced shares and upside driven by sales, margin, and cash-flow execution.
ORLY’s 2Q26 report is primarily a proof-of-durability event. The company already demonstrated in 1Q that it can convert strong sales into outsized operating-profit and EPS growth. The key for investors is whether the professional-led share-gain story and resilient repair/maintenance demand continued after first-quarter weather and tax-refund tailwinds faded.
A result showing solid mid-single-digit-or-better comps, sustained pro momentum, normalizing SG&A growth, and confidence in the upper end of the full-year framework would reinforce the long-term thesis. A weaker result would not necessarily undermine ORLY’s structural advantages, but it would raise the risk that the market had over-read 1Q’s exceptional comp performance.
Source material: O’Reilly’s 1Q26 earnings release, 1Q26 earnings-call transcript and Form 10-Q; 2Q25 earnings release; July 1, 2026 earnings-date announcement; July 10, 2026 Form 8-K; and historical ORLY share-price data through July 28, 2026.