(Reuters) – Auto parts distributor O’Reilly Automotive on Wednesday named Brad Beckham as its top boss and raised its annual profit and sales outlook on strong demand for aftermarket products.
Beckham will succeed CEO Greg Johnson who will retire on January 31, 2024.
Inflationary pressures such as high interest rates on leases have led to consumers opting to repair their vehicles instead of buying new ones, bolstering the aftermarket sales of parts suppliers.
Persistent labor and chip shortages have also trimmed the production of new vehicles, keeping ageing cars on the roads for longer.
“We have opened 100 net, new stores across 34 U.S. states, Puerto Rico, and Mexico so far in 2023 and are on pace to meet our goal of 180 to 190 net, new store openings in 2023,” said CEO Johnson.
The company now expects 2023 profit between $37.05 and $37.55 per share, up from prior guidance of $36.50 to $37 per share.
O’Reilly now sees full-year revenue to be between $15.4 billion and $15.7 billion, compared to prior expectation of $15.2 billion to $15.5 billion.
The company also beat its second-quarter results with profit of $10.22 per share, above estimates of $10.09.
Revenue for the quarter ended June 30 was $4.1 billion, skidding past expectations of $3.99 billion.
Shares of the company were down 2.7% in aftermarket trading.
“Given the modest EPS upside and guidance, we expect the stock to see a modestly negative reaction, but in reality nothing is changing fundamentally,” JPM analyst Christopher Horvers said in a note.
(Reporting by Raechel Thankam Job and Anandita Mehrotra in Bengaluru; Editing by Pooja Desai and Arun Koyyur)
