Name: O’Reilly Automotive Inc. (NASDAQ:ORLY) | Income Statement
Creator: Stock Analysis on Net

Income Statement

The income statement presents information on the financial results of a company business activities over a period of time. The income statement communicates how much revenue the company generated during a period and what cost it incurred in connection with generating that revenue.

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O’Reilly Automotive Inc., consolidated income statement

US$ in thousands

12 months ended:	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Sales	13,327,563)	11,604,493)	10,149,985)	9,536,428)	8,977,726)
Cost of goods sold, including warehouse and distribution expenses	(6,307,614)	(5,518,801)	(4,755,294)	(4,496,462)	(4,257,043)
Gross profit	7,019,949)	6,085,692)	5,394,691)	5,039,966)	4,720,683)
Selling, general and administrative expenses	(4,102,781)	(3,666,356)	(3,473,965)	(3,224,782)	(2,995,283)
Operating income	2,917,168)	2,419,336)	1,920,726)	1,815,184)	1,725,400)
Interest expense	(144,768)	(161,126)	(139,975)	(122,129)	(91,349)
Interest income	1,971)	2,491)	2,545)	2,521)	2,347)
Other, net	7,543)	5,704)	7,033)	(1,489)	1,406)
Other income (expense)	(135,254)	(152,931)	(130,397)	(121,097)	(87,596)
Income before income taxes	2,781,914)	2,266,405)	1,790,329)	1,694,087)	1,637,804)
Provision for income taxes	(617,229)	(514,103)	(399,287)	(369,600)	(504,000)
Net income	2,164,685)	1,752,302)	1,391,042)	1,324,487)	1,133,804)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

Between 2017 and 2021, a consistent upward trajectory is observed across primary revenue and profit metrics. Sales grew from US$ 8.98 billion to US$ 13.33 billion, representing a steady expansion of the top line. This growth is mirrored in the gross profit, which increased from US$ 4.72 billion to US$ 7.02 billion over the same period, maintaining a stable gross margin of approximately 52% to 53% throughout the five-year window.

Operational Efficiency and Margin Expansion: Operating income demonstrated significant growth, rising from US$ 1.73 billion in 2017 to US$ 2.92 billion in 2021. While selling, general and administrative expenses increased in absolute terms, they did so at a slower pace than total sales. This divergence indicates positive operating leverage, resulting in an expansion of the operating margin from approximately 19.2% in 2017 to 21.9% by 2021.
Net Profitability Trends: Net income exhibited a strong growth pattern, nearly doubling from US$ 1.13 billion in 2017 to US$ 2.16 billion in 2021. The net profit margin improved from 12.6% to 16.2%, suggesting that the company became more efficient at converting sales into actual profit. This trend was supported by the scalable nature of the business model where revenue growth outpaced the growth of fixed and semi-variable costs.
Financial Expenses and Tax Impact: Interest expenses saw a general increase from 2017 to 2020, peaking at US$ 161.1 million before declining to US$ 144.8 million in 2021. Despite the rise in interest obligations, the substantial growth in operating income more than offset these costs. The provision for income taxes fluctuated, reflecting varying effective tax rates, but generally trended upward in alignment with the growth in income before taxes.

The overall financial profile indicates a period of robust scaling characterized by disciplined cost management and expanding profit margins. The ability to maintain a consistent gross margin while increasing operating and net margins suggests a strong competitive position and effective operational execution.

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