O’Reilly is the third largest auto parts retailer by revenues and largest by market cap in North America. Products include hard parts, batteries, brakes, tools, supplies and accessories. The company sells to both professional or DIFM (Do it for Me) customers as well as retail or DIY (Do it Yourself) customers. The revenue breakdown from these groups in FY20 was 41%/59%.
EVs will be a bigger risk than you outline IMO. We can argue on the timing, but when it happens its going to affect meaningfully. AZO breaks down products in 3 categories: 1- failure, 2- maintenance, 3- discretionary. The last group will be largely unaffected. If you look into group 1, you will realized that some of those parts dont exist in EVs. Similarly, if you look into group 2, the most frequently sold items like oil etc dont exist in EVs. They dont provide enough breakdown to calculate detailed analysis, but the impact could be around 30-40% of revenues.
Great write up my friend!
On Bonhoffer last letter there is an interesting study on Ausbury, it looks like it is a very good option and probably a target.
EVs will be a bigger risk than you outline IMO. We can argue on the timing, but when it happens its going to affect meaningfully. AZO breaks down products in 3 categories: 1- failure, 2- maintenance, 3- discretionary. The last group will be largely unaffected. If you look into group 1, you will realized that some of those parts dont exist in EVs. Similarly, if you look into group 2, the most frequently sold items like oil etc dont exist in EVs. They dont provide enough breakdown to calculate detailed analysis, but the impact could be around 30-40% of revenues.