O'Reilly Sales Heat Up When the Thermometer Dips

As most of the nation is enduring a harsh, cold, snow-ridden winter, O’Reilly Auto Parts outlook is nothing but sunshine. The auto parts retailer saw its sales numbers rise as the extreme cold forced a rush on car batteries, anti-freeze and wiper blades in the fourth quarter.

The increased demand for cold-weather items is expected to continue into first quarter 2014 and should have lasting implications well into the spring. During the cold winter months there is a lull in do-it-yourself car repair, but when the weather gets warmer the driveways are once again filled with shade-tree mechanics. The retailer expects a better than usually spring season due to the harsh winter and pothole-ridden streets that wreak havoc on automobiles.

"What would be really good is if we have really, really cold weather for two weeks in a row across the country, then one week of warm weather," president and CEO Gregory L. Henslee said. "Then I hope this summer, of course, turns out to be incredibly hot. These extremes drive short-term demand in our business and longer-term damage to cars. So generally, we see it as a positive."

O’Reilly opened 190 new locations in 2013 and plans to unveil another 200 in 2014 mostly in Florida, California, Texas and the Upper Midwest. In addition, the chain has already opened one new distribution center in 2014, and plans to open two more before the year is out. The three new distribution centers will total over 1.1-million square feet combined.

Not only is the quickly-expanding retailer investing in stores and distribution, O’Reilly is dedicating capital to improve the customer experience as well. A loyalty card program was rolled out in all locations in 4Q and 4 million customers already signed up. "In 2014, we'll work to further our engagement with these customers through targeted promotions at a local market level," EVP of store operations and sales Jeff Shaw said. Promotions will be "tailored down to individual customer preferences based on historical purchase activity we're now collecting."

The retailer is in the process of updating its POS system. The new system will be much more flexible and support sales efforts and dynamic targeted promotions. The POS will be easier to learn and use for sales associates, and will give the parts seller tools to quickly address business needs and future development opportunities.

Fuelled by extreme weather and aggressive expansions and investment O’Reilly Auto Parts has enjoyed financial success. Comparable store sales increased 5.4% year-over-year in the 4Q — for the year comparable sales increased 4.3%. The total sales number increased 7.6% to $6.6 billion. Stock prices have been on the rise for years and experienced another bump when the positive 4Q numbers were announced.

For related content:
O'Reilly Automotive Expands Loyalty Program Chainwide in Q4
O'Reilly Auto Updates POS System
Advance Auto Parts Acquires Carquest for $2B
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