O’Reilly Automotive Inc. said demand picked up again in the third quarter and it plans to spend $1 billion more on stock buybacks.
The auto-parts retailer reported a profit of $527.3 million, or $7.07 a share, beating expectations from analysts and up compared with earnings of $391.3 million, or $5.08 a share, for the year-earlier period.
Sales increased to $3.21 billion from $2.67 billion and were ahead of the consensus estimate of $3.03 billion.
Comparable sales rose almost 17% in the third quarter–better than the same period in 2019 and higher than the 16.2% gain the company recorded for that metric in the second quarter, when coronavirus-related restrictions were eased and consumers spent stimulus checks.
Consumers choosing to fix up vehicles themselves were a major contributor to the stronger comparable-sales growth, but demand from professional customers beat the company’s expectations for the quarter, Chief Executive Greg Johnson said.
“Our business has continued to perform very well through the first three weeks of October, generating robust comparable store sales in the low double digits,” Mr. Johnson said.
O’Reilly said its board authorized spending an additional $1 billion on stock buybacks over three years. During the first nine months of 2020, the company repurchased 2.6 million shares of its common stock, at an average price of $415.28 a share, for a total investment of $1.09 billion.
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