Wrapping up Q3 earnings, we look at the numbers and key takeaways for the auto parts retailer stocks, including O'Reilly (NASDAQ: ORLY) and its peers.
Cars are complex machines that need maintenance and occasional repairs, and auto parts retailers cater to the professional mechanic as well as the do-it-yourself (DIY) fixer. Work on cars may entail replacing fluids, parts, or accessories, and these stores have the parts and accessories or these jobs. While e-commerce competition presents a risk, these stores have a leg up due to the combination of broad and deep selection as well as expertise provided by sales associates. Another change on the horizon could be the increasing penetration of electric vehicles.
The 5 auto parts retailer stocks we track reported a satisfactory Q3. As a group, revenues were in line with analysts’ consensus estimates.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 10.9% since the latest earnings results.
O'Reilly (NASDAQ: ORLY)
Serving both the DIY customer and professional mechanic, O’Reilly Automotive (NASDAQ: ORLY) is an auto parts and accessories retailer that sells everything from fuel pumps to car air fresheners to mufflers.
O'Reilly reported revenues of $4.71 billion, up 7.8% year on year. This print was in line with analysts’ expectations, but overall, it was a mixed quarter for the company with a beat of analysts’ EPS estimates but a slight miss of analysts’ EBITDA estimates.
Brad Beckham, O’Reilly’s CEO, commented, “We are pleased to report another quarter of solid performance and profitable growth, highlighted by a 5.6% increase in comparable store sales and a 12% increase in diluted earnings per share for the third quarter. Our Team continues to execute our proven business model at a very high level, generating robust sales growth by delivering share gains on both sides of our business. Team O’Reilly’s commitment to providing unparalleled service to our customers drove our strong results, and I would like to thank each of our over 93,000 Team Members for their unrelenting hard work and dedication.”
O'Reilly pulled off the fastest revenue growth but had the weakest full-year guidance update of the whole group. Still, the market seems discontent with the results. The stock is down 14.4% since reporting and currently trades at $94.40.
Is now the time to buy O'Reilly? Access our full analysis of the earnings results here, it’s free for active Edge members.
Best Q3: Advance Auto Parts (NYSE: AAP)
Founded in Virginia in 1932, Advance Auto Parts (NYSE: AAP) is an auto parts and accessories retailer that sells everything from carburetors to motor oil to car floor mats.
Advance Auto Parts reported revenues of $2.04 billion, down 5.2% year on year, outperforming analysts’ expectations by 0.7%. The business had a very strong quarter with a solid beat of analysts’ EBITDA estimates and full-year EPS guidance exceeding analysts’ expectations.
Advance Auto Parts delivered the highest full-year guidance raise among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 14.4% since reporting. It currently trades at $47.20.
Is now the time to buy Advance Auto Parts? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q3: AutoZone (NYSE: AZO)
Aiming to be a one-stop shop for the DIY customer, AutoZone (NYSE: AZO) is an auto parts and accessories retailer that sells everything from car batteries to windshield wiper fluid to brake pads.
AutoZone reported revenues of $6.24 billion, flat year on year, in line with analysts’ expectations. It was a slower quarter as it posted a miss of analysts’ EBITDA estimates and a miss of analysts’ gross margin estimates.
As expected, the stock is down 10.1% since the results and currently trades at $3,695.
Read our full analysis of AutoZone’s results here.
Genuine Parts (NYSE: GPC)
Largely targeting the professional customer, Genuine Parts (NYSE: GPC) sells auto and industrial parts such as batteries, belts, bearings, and machine fluids.
Genuine Parts reported revenues of $6.26 billion, up 4.9% year on year. This print surpassed analysts’ expectations by 2.2%. Taking a step back, it was a satisfactory quarter as it also recorded an impressive beat of analysts’ revenue estimates but full-year EPS guidance slightly missing analysts’ expectations.
Genuine Parts scored the biggest analyst estimates beat among its peers. The stock is down 3% since reporting and currently trades at $127.80.
Read our full, actionable report on Genuine Parts here, it’s free for active Edge members.
Monro (NASDAQ: MNRO)
Started as a single location in Rochester, New York, Monro (NASDAQ: MNRO) provides common auto services such as brake repairs, tire replacements, and oil changes.
Monro reported revenues of $288.9 million, down 4.1% year on year. This result missed analysts’ expectations by 2.8%. More broadly, it was actually a strong quarter as it put up a solid beat of analysts’ EBITDA estimates and a beat of analysts’ EPS estimates.
Monro had the weakest performance against analyst estimates among its peers. The stock is down 20.5% since reporting and currently trades at $14.38.
Read our full, actionable report on Monro here, it’s free for active Edge members.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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