Q1 2026 - O'Reilly Automotive

Very solid quarter with a +8% comp - some nuances on pent-up demand (tax refunds)

Last Wednesday, O’Reilly reported its Q1 2026 results, and those came in quite ahead of expectations with a much stronger-than-expected comp and EBIT dollar growth. It’s been quite some time since the leading automotive aftermarket retailer beat expectations by this much (>250 bps on the comp and about 4% on EPS) as its quite predictable business model does not lend itself to major surprises - aside from the usual puts and takes on regional performance differences, weather, and timing of tax refunds.

Similar to all previous quarters (talking decades here), management refrained from making any bold predictions on what the next quarter may bring. This time, the tax refund season had a favorable impact and we also believe that previously deferred maintenance got reversed partly.

Nevertheless, the conference call contained some interesting remarks on what the consumer’s been spending on and why O’Reilly’s been quite isolated from the surge in gasoline prices thus far. Long-time followers will recognize the unfavorable near-term impact on demand whenever oil prices spike.

So, let’s take a closer look at the Q1 numbers, the longer-term picture, and our updated valuation model.

Its results likely have implications for AutoZone’s upcoming quarterly release. As you very well know, AutoZone’s fiscal year and quarters differ from O’Reilly’s, and its latest quarter runs from mid-February till early May.