AGB 2021.18 - O'Reilly Automotive (ORLY)

Industry Tailwinds + Superior Execution

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O’Reilly Automotive

O’Reilly is the second 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%.

O’Reilly’s core competency is its distribution network. Through its 29 distribution centers (DCs), >350 hub stores and 5,732 total stores (as of June 2021), the company can provide quick access to 22k SKUs in store and same day access to over 159k SKUs from the DC. O’Reilly’s tiered distribution network allows deliveries 5 days per week to the stores and 90% of the stores receive multiple deliveries per day. The quicker moving parts are available at the store while the slower moving parts (and usually larger in size and value) are s…