O'Reilly Invests in Supply Chain to Facilitate Meteoric Expansion

O'Reilly Automotive continues to outperform the market, reporting over 10% sales growth in 2015, while much of the industry is experiencing less than stellar sales numbers.

To help facilitate this enviable sales growth the auto parts retailer is increasing its brick-and-mortar footprint and its DC infrastructure. In 2015 the surging retailer opened 205 new stores, and plans to cut the ribbon on another 210 locations in 2016.

To help handle the supply needs of the hundreds of new stores coming online the retailer is beefing up its DC network, opening new centers in San Antonio; Chicago; Lakeland, FL; Boston; and a soon-to-be-opened 200,000 square foot facility in Greensboro, North Carolina.

"Our ability to generate sustainable, profitable growth is the direct result of our ability to provide exceptional service, a wide product offering and competitive prices and superior parts availability," said Jeff Shaw, executive vice president of store operations and sales. "This growth doesn’t happen without the dedication of our store, DC and office support teams."

O'Reilly continues to expand into new markets, including the profitable northeast, and is seeing success at every juncture. "Our considerable 2015 market share gains are even more impressive when one considers our four consecutive quarters of 7 plus percent comparable store sales growth comes on top of our strong 2014 results when we generated comparative sales growth in excess of 5% each quarter and a 6% comparable store sales growth for the full year of 2014," president and CEO Greg Henslee said.

For 2016, O'Reilly is increasing its CapEx expenditure to $490 million, up from $460 million, driven primarily by new stores and store technology infrastructure upgrades. In addition to growing its brick-and-mortar footprint through ground-up expansion, O'Reilly is also considering acquisitions as a key factor of its growth strategy, especially in the northeast.

"Up in the Northeast, there are several companies up there," Henslee said. "I won’t run through the list of names because I don’t want them to feel like I’m trying to chase them down or anything, but there’s a lot of companies up there doing business. And we would be interested in some of those that are good geographical and good business model fits for us. There are still chains that are not publicly traded that are 400 stores and several in the 100 to 200 range and some less than that that are high-quality family-owned businesses."

Amid all of this rapid expansion O'Reilly's share price has soared along with its store count, increasing by over 180% over the past four years.
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